Accounting Policies of Indian Railway Catering & Tourism Corporation Ltd. Company

Mar 31, 2025

Summary of material accounting policies

The standalone financial statements have been prepared
using the material accounting policies and measurement basis
summarized below. These were used throughout all periods
presented in the financial statements.

a) Statement of Cash Flow

Statement of Cash Flow is made by using the Indirect
Method, whereby profit before tax is adjusted for the
effects of transactions of a non-cash nature and any
deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, financing and
investing activities of the company are segregated.

For the purposes of the statement of cash flow, cash and
cash equivalents include cash in hand, cash at banks and
demand deposits with banks, net of outstanding bank
overdrafts that are repayable on demand are considered
part of the Company’s cash management system.

The company has adopted the amendment to Ind-AS
7, which require the entities to provide disclosures that

enable users of financial statements to evaluate changes
in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes,
suggesting inclusion of a reconciliation between the
opening and closing balances in the balance sheet for
liabilities arising from financing activities, to meet the
disclosures requirement.

b) Foreign Currency

i. Functional and presentation currency

The standalone financial statements are presented
in Indian Rupees (INR), which is functional as well as
presentation currency of the company.

ii. Transaction and balances

Transactions in foreign currencies are recorded at the
exchange rate prevailing on the date of transaction.
Monetary foreign currency assets and liabilities are
translated or converted with reference to the rates of
exchange ruling on the date of the Balance Sheet.

Foreign exchange gains and losses resulting from the
settlement of such transaction and for the translation
of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are
recognised as profit or loss.

c) Property, Plant and Equipment

i. Property, Plant and Equipment are stated at cost of
acquisition including installation charges and other
related expenses if recognition criteria are met.

ii. Cost of replacement, major inspection, repair of
significant parts is capitalized if the recognition
criteria are met.

iii. In case of Computers, the cost of Operating System
software procured along with Computer has been
capitalized with Computers, while regular upgrades
and Annual Maintenance Charges have been
treated as revenue expenditure.

iv. Expenditure on the leased buildings for Office
premises has been capitalized as Leasehold
-Office Development

v. The Luxury Tourist Train has been capitalized
and shown as "Luxury Tourist Train" in Property,
Plant and Equipment, refer policy on government
grant for treatment of grant related to acquisition
of these assets.

vi. Upon sale of assets, cost and accumulated
depreciation are eliminated from the financial
statements and the resultant gains or losses are
recognized in the statement of profit and loss.

) Depreciation & Amortization: -

(a) Depreciation is provided in accordance with the life
specified under Schedule II of the Companies Act,
2013 except for certain items. The Life of certain
assets which has not been taken as per schedule II
of the Companies Act, 2013 is as follows:-

(b) Depreciation is calculated on a straight line basis
from the date of ready to use. Depreciation is
provided up to the date of sale, discard and loss of
the assets during the year.

Each part of an item of Property, Plant and
Equipment related to Company owned Rail Neer
plants is depreciated separately if the cost of part is
significant in relation to the total cost of the item and
useful life of that part is different from the useful life
of remaining asset which is based on the estimates
& certificate of in-house technical expert. Further,
for the PPP plants for which the capital supports
are provided by the Company, the estimated life for
whole Civil work and plant has been estimated as 20
years and 10 years respectively by in house technical
committee. Further ”For the plants that have been
converted from self-operated to PPP mode or vice
versa, the useful life has been adopted based on the
recommendations of the Life Review Committee.

(c) Leasehold-Office developments in respect of office
premises and Leasehold land (for which lease
agreement exists) have been depreciated/amortized
over the lease period. Expenditure incurred on civil
work on premises located on Railway Land (for which
no lease agreement exists) has been accounted as
lease hold improvement and has been depreciated
over a period of ten years. In addition to above,
the life of civil infrastructure on Railway land for rail
neer plants has been taken as per the life review
committee report.

(d) Depreciation methods, useful lives and residual
values are reviewed at each reporting date.

(e) Depreciation is calculated at depreciable amount,
i.e. Cost less its residual value.

(f) In respect of Residential Flats constructed on
leasehold land, depreciation is charged over the
period of the lease of the land. ”The investment
in budget hotels is being depreciated based
on the useful life as recommended by the Life
Review Committee.”

(g) The life as assessed by the Life review committee for
different assets is as per schedule II of company act
except as given below

1) Land for which, IRCTC has lease agreement/
allotment letter with Railway for long term i.e.
More than 10 year :- life has been taken as
per agreement (Parassala and Danapur) for
creating the lease assets

2) Land for which , IRCTC has a lease agreement/
allotment letter with Railway for short term i.e.
less than 10 year or no agreement signed with
Railway :- Life for creating lease (ROU) has
been taken 10 years from FY 2021-22 except
for the land of Nangloi and Ambernath plant

(i) Nangloi Plant set up on Railway land:- Life
has been taken as per actual agreement.

(ii) Ambernath plant set up on Railway land:
- Life has been taken till 31.03.2026 as
per the demand raised by railway for the
lease for the purpose of creating ROU
only due to non availability of agreement
with railway as on date.

3) Buildings on self operated rail neer plant have
the life as per company act i.e. 30 Years except

(i) The building built for plant at Nangloi
due to uncertainty of life and its has been
taken till the expiry of actual agreement
with railways i.e 31.03.2024 as per the
committee recommendation.

(ii) The building built on Ambernath and Palur
plant, where the Life of Building has been
taken 10 years from the beginning of FY
2021-22 i.e. till 31.03.2031 due to non
availability agreement.

(iii) For Building situated on Railway land for
which there is an agreement, the life of
such buildings -have been taken at par
with the agreement with railway.

4) Building and Plants & Machinery for PPP plants
are being depreciated as per the Life assessed
by the committee i.e. Civil construction for
20 years and P&M for 10 Years, except the
Bilaspur plant which is being depreciated as
per the practice followed in company owned
Rail neer plant

5) Life of Leasehold improvement and civil
infrastructure situated at North Zone on Ajmeri
gate side has been taken till 31.03.2024 due to
renovation of station as informed by railways.
Life of Assets earmarked for company owned
other base kitchens i.e. leasehold improvement,
P&M and other Selected office equipment has
been taken till the end of FY 2024-25 i.e. till
31^st March 2025

6) Office on Railway land where there is no
agreement and offices are existed on
01.03.2019, the life has been taken as 10 year
from the FY 2019-20 (initial reorganisation
period /transition period) for creating ROU.

7) Any capital nature expenditure done on Bharat
Gaurav trains - is being amortised during the
lease period of trains under Bharat Gaurav
scheme of Indian Railways

8) Any other expenditure on railway assets - i.e.
being depreciated/amortised at par with the
agreement with Railway and in the absence of
any agreement, it will be 10 years.

9) The useful life of assets related to Base
Kitchens, including civil structures, has been
adopted as per the recommendations of the
Life Review Committee

The estimated useful life of assets for current and
comparative period of significant items of property plant
and equipment which has been taken as per schedule II
of Companies Act, 2013 are as follow:

g) Investments in Joint Arrangements and Subsidiary

Investment in equity instruments of joint ventures and
subsidiary are measured at cost as per Ind AS 27-
Separate Financial Statements.

h) Investment Properties

a) Investment Properties are stated at cost, net of

accumulated depreciation and accumulated

impairment losses, if any.

b) The company depreciates building component

of investment property over the estimated useful
life of the assets as prescribed in property,
plant and equipment.

c) Investment properties are derecognized either

when they have been disposed off or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal.
Difference between the net disposal proceeds and
the carrying amount of the asset is recognised in
profit or loss in the period of de-recognition.

i) Operating cycle for Current and Non Current Assets

Company has classified the assets and liabilities as
current which is expected to realise within the twelve
months after the reporting period and all other assets and
liabilities are classified as noncurrent.

e) Capital Work in Progress/Capital Advances: -

Capital work in progress includes the cost of property,
plant and equipment (PPE) that are not yet ready for
their intended use and the cost of assets not put to use
before the balance Sheet date. Advances paid to acquire
PPE are shown as “Capital Advances” under other “Non
Current Assets”

f) Intangible Assets: -

Intangible assets like software, licenses, web portal,
tourism portal etc. are recorded at the consideration paid
for acquisition and useful life of Intangible Assets has
been assumed as 4 Years.

---

Mar 31, 2024

Corporate Information

Indian Railway Catering and Tourism Company Ltd. (hereinafter referred to as “Company) has been set up by the Ministry of Railways. It is a public limited company domiciled and was incorporated in India on September 27, 1999 with the basic purpose of hiving off entire catering and tourism activity of the railways to the new Company so as to professionalize and upgrade these services with public-private participation. Rail based Tourism in India will be the specific vehicle for achieving high growth in coordination with state agencies, tour operators, travel agents and the hospitality industry. The Company is registered under the Indian Companies Act, 1956 and the registered office of the company is located at 11th floor, B-148 Statesman House Barakhamba Road New Delhi-110001

As on 31st March, 2024, the total shareholding of Ministry of Railways, stood at 62.4%.

Note-2:

Basis of Preparation

a) Statement of Compliance

The standalone financial statements as at and for year ended March 31, 2024 have been prepared on going concern basis in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules 2015 as amended from time to time.

b) Basis of Measurement

The Company is following accrual basis of accounting under historical cost convention and for the following item that have been measured at fair value as required by relevant Ind-AS.

i. Defined benefit Plan and other long term employee benefits

ii. Certain financial assets and liabilities measured at fair value (Refer policy on financial instrument).

c) Use of estimates& Judgments

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of income and expenses. Examples of such estimates includes estimated useful life of property, plant and equipment, employee benefit expenses,

provisions, satisfaction of performance obligation in revenue recognition etc. actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a periodic basis. Future results could differ due to changes in these estimates and difference between the actual result and the estimates are recognized in the period in which the results are known /materialize.

d) All financial information presented in Indian rupees and all values are rounded to the nearest lakh rupees with two decimal points except where otherwise stated.

e) Statutory dues payable and refundable are treated as current liability and current assets due to current in nature.

f) Statement of Cash Flow

Statement of Cash Flow is made by using the Indirect Method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the company are segregated.

For the purposes of the statement of cash flow, cash and cash equivalents include cash in hand, cash at banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand are considered part of the Company’s cash management system.

The company has adopted the amendment to Ind-AS 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosures requirement.

g) Foreign Currency

i. Functional and presentation currency

The standalone financial statements are presented in Indian Rupees (INR), which is functional as well as presentation currency of the company.

ii. Transaction and balances

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary foreign currency assets and liabilities are translated or converted with reference to the rates of exchange ruling on the date of the Balance Sheet.

Foreign exchange gains and losses resulting from the settlement of such transaction and for the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised as profit or loss.

h) Property, Plant and Equipment

i. Property, Plant and Equipment are stated at cost of acquisition including installation charges and other related expenses if recognition criteria are met.

ii. Cost of replacement, major inspection, repair of significant parts is capitalized if the recognition criteria are met.

iii. In case of Computers, the cost of Operating System software procured along with Computer has been

capitalized with Computers, while regular upgrades and Annual Maintenance Charges have been treated as revenue expenditure.

iv. Expenditure on the leased buildings for Office premises has been capitalized as Leasehold -Office Development

v. The Luxury Tourist Train has been capitalized and shown as "Luxury Tourist Train" in Property, Plant and Equipment, refer policy on government grant for treatment of grant related to acquisition of these assets.

vi. Upon sale of assets, cost and accumulated depreciation are eliminated from the financial statements and the resultant gains or losses are recognized in the statement of profit and loss.

(b) Depreciation is calculated on a straight line basis from the date of ready to use. Depreciation is provided up to the date of sale, discard and loss of the assets during the year.

(c) Each part of an item of Property, Plant and Equipment related to Company owned Rail Neer plants is depreciated separately if the cost of part is significant in relation to the total cost of the item and useful life of that part is different from the useful life of remaining asset which is based on the estimates & certificate of in-house technical expert. Further, for the PPP plants for which the capital supports

are provided by the Company, the estimated life for whole Civil work and plant has been estimated as 20 years and 10 years respectively by in house technical committee. Further, the Bilaspur plant was converted to a PPP (Public-Private Partnership) from a company-operated plant in January 2023. Each item of the plant has its own codal life, and these parts need to be replaced by IRCTC after the expiry of their codal life. Therefore, the life of the plant and machinery at the Bilaspur plant should be considered as per the standards for a company-owned plant, despite its conversion to a PPP plant. Additionally, the building of the Bilaspur factory built

by the Company is assessed with a life expectancy of 30 years, starting from 30.03.2017, in accordance with the earlier practices for company-owned Rail Neer plants.

(d) Leasehold-Office developments in respect of office premises and Leasehold land (for which lease agreement exists) have been depreciated/amortized over the lease period. Expenditure incurred on civil work on premises located on Railway Land (for which no lease agreement exists) has been accounted as lease hold improvement and has been depreciated over a period of ten years. In addition to above, the life of civil infrastructure on Railway land for rail neer plants has been taken as per the life review committee report.

(e) Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(f) Depreciation is calculated at depreciable amount, i.e. Cost less its residual value.

(g) In respect of Residential Flats constructed on leasehold land, depreciation is charged over the period of the lease of the land.

(h) The life as assessed by the Life review committee for different assets is as per schedule II of company act except as given below

1) Land for which, IRCTC has lease agreement/ allotment letter with Railway for long term i.e. More than 10 year :- life has been taken as per agreement (Parassala and Danapur) for creating the lease assets

2) Land for which , IRCTC has a lease agreement/ allotment letter with Railway for short term i.e. less than 10 year or no agreement signed with Railway :- Life for creating lease (ROU) has been taken 10 years from FY 2021-22 except for the land of Nangloi and Ambernath plant

(i) Nangloi Plant set up on Railway land:- Life has been taken as per actual agreement.

(ii) Ambernath plant set up on Railway land: - Life has been taken till 31.03.2026 as per the demand raised by railway for the lease for the purpose of creating ROU only due to non availability of agreement with railway as on date.

3) Buildings on self operated rail neer plant have the life as per company act i.e. 30 Years except

(i) The building built for plant on Nangloi due to uncertainty of life and its has been taken till the expiry of actual agreement with railways i.e 31.03.2024

(ii) The building built on Ambernath and Palur plant, where the Life of Building has been taken 10 years from the beginning of FY 2021-22 i.e. till 31.03.2031 due to non availability agreement.

(iii) For Building situated on Railway land for which there is a an agreement, the life of such buildings -have been taken at par with the agreement with railway.

4) Building and Plants & Machinery for PPP plants are being depreciated as per the Life assessed by the committee i.e. Civil construction for 20 years and P&M for 10 Years, except the bilaspur plant which is being depreciated as per the practice followed in company owned Rail neer plant

5) Life of Leasehold improvement and civil infrastructure situated at North Zone on Ajmeri gate side has been taken till 31.03.2024 due to renovation of station as informed by railways. Life of Assets earmarked for company owned other base kitchens i.e. leasehold improvement, P&M and other Selected office equipment has been taken till the end of FY 2024-25 i.e. till 31st March 2025

6) Office on Railway land where there is no agreement and offices are existed on 01.03.2019, the life has been taken as 10 year from the FY 2019-20 (initial reorganisation period /transition period) for creating ROU.

7) Any capital nature expenditure done on Bharat Gaurav trains - is being amortised during the lease period of trains under Bharat Gaurav scheme of Indian Railways

8) Any other expenditure on railway assets - i.e. being depreciated/amortised at par with the agreement with Railway and in the absence of any agreement, it will be 10 years.

The estimated useful life of assets for current and comparative period of significant items of property plant and equipment which has been taken as per schedule II of Companies Act, 2013 are as follow:

are permanently withdrawn from use and no future economic benefit is expected from their disposal. Difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of de-recognition.

n) Operating cycle for Current and Non Current Assets

Company has classified the assets and liabilities as current which is expected to realise within the twelve months after the reporting period and all other assets and liabilities are classified as noncurrent.

j) Capital Work in Progress/Capital Advances: -

Capital work in progress includes the cost of property, plant and equipment (PPE) that are not yet ready for their intended use and the cost of assets not put to use before the balance Sheet date. Advances paid to acquire PPE are shown as “Capital Advances” under other “Non Current Assets”

k) Intangible Assets: -

Intangible assets like software, licenses, web portal, tourism portal etc. are recorded at the consideration paid for acquisition and useful life of Intangible Assets has been assumed as 4 Years.

l) Investments in Joint Arrangements and Subsidiary

Investment in equity instruments of joint ventures and subsidiary are measured at cost as per Ind AS 27-Separate Financial Statements.

m) Investment Properties

a) Investment Properties are stated at cost, net of

accumulated depreciation and accumulated

impairment losses, if any.

b) The company depreciates building component

of investment property over the estimated useful life of the assets as prescribed in property, plant and equipment.

c) Investment properties are derecognized either

when they have been disposed off or when they

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Mar 31, 2023

Note-1: Corporate Information

Indian Railway Catering and Tourism Company Ltd. (hereinafter referred to as “Company) has been set up by the Ministry of Railways. It is a public limited company domiciled and was incorporated in India on September 27, 1999 with the basic purpose of hiving off entire catering and tourism activity of the railways to the new Company so as to professionalize and upgrade these services with public-private participation. Rail based Tourism in India will be the specific vehicle for achieving high growth in coordination with state agencies, tour operators, travel agents and the hospitality industry. The Company is registered under the Indian Companies Act, 1956 and the registered office of the company is located at 11th floor, B-148 Statesman House Barakhamba Road New Delhi-110001

During FY 2019-20 and 2020-21, disinvestment was made by the Government of India to reduce its shareholding by 12.6% and 20% respectively of paid up share capital of the Company to reduce its shareholding to 67.4%.

During FY 2021-22, one equity share of face value of Rs. 10/- each was split into 5 equity shares of Rs. 2/- each fully paid up.

During FY 2022-23, further disinvestment was made by the Government of India by 5% of paid up share capital of the Company through offer for sale resulting total disinvestment by 37.6% and the shareholding of Government of India have been reduced to 62.4% in paid up share capital of the Company.

Note-2: Basis of Preparation

a) Statement of Compliance

The financial statements as at and for year ended March 31, 2023 have been prepared on going concern basis in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules 2015 as amended from time to time.

b) Basis of Measurement

The Company is following accrual basis of accounting under historical cost convention and for the following item that have been measured at fair value as required by relevant Ind-AS.

i. Defined benefit Plan and other long term employee benefits

ii. Certain financial assets and liabilities measured at fair value (Refer policy on financial instrument).

c) Use of estimates & Judgments

The preparation of financial statements in conformity with Ind AS requires management to make judgments,

estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of income and expenses. Examples of such estimates includes estimated useful life of property, plant and equipment, employee benefit expenses, provisions, satisfaction of performance obligation in revenue recognition etc. actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a periodic basis. Future results could differ due to changes in these estimates and difference between the actual result and the estimates are recognized in the period in which the results are known /materialize.

d) All financial information presented in Indian rupees and all values are rounded to the nearest lakh rupees with two decimal points except where otherwise stated.

e) Statutory dues payable and refundable are treated as current liability and current assets due to current in nature.

f) Statement of Cash Flow

Statement of Cash Flow is made by using the Indirect Method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the company are segregated.

For the purposes of the statement of cash flow, cash and cash equivalents include cash in hand, cash at banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand are considered part of the Company''s cash management system.

The company has adopted the amendment to Ind-AS 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosures requirement.

g) Foreign Currency

i. Functional and presentation currency

The financial statements are presented in Indian Rupees (INR), which is functional as well as presentation currency of the company.

ii. Transaction and balances

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary foreign currency assets and liabilities are translated or converted with reference to the rates of exchange ruling on the date of the Balance Sheet.

Foreign exchange gains and losses resulting from the settlement of such transaction and for the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised as profit or loss.

h) Property, Plant and Equipment

i. Property, Plant and Equipment are stated at cost of acquisition including installation charges and other related expenses if recognition criteria are met.

ii. Cost of replacement, major inspection, repair of significant parts is capitalized if the recognition criteria are met.

iii. In case of Computers, the cost of Operating System software procured along with Computer has been

capitalized with Computers, while regular upgrades and Annual Maintenance Charges have been treated as revenue expenditure.

iv. Expenditure on the leased buildings for Office premises has been capitalized as Leasehold -Office Development

v. The tools and plants placed as such at catering units are taken on, as is where is basis. Due to nonavailability of value of such assets, such assets are accounted at Nominal Value of HI/- per item in the Books of Zonal Offices of the Company for the purpose of ensuring physical verification.

vi. The Luxury Tourist Train has been capitalized and shown as "Luxury Tourist Train" in Property, Plant and Equipment, refer policy on government grant for treatment of grant related to acquisition of these assets.

vii. Upon sale of assets, cost and accumulated depreciation are eliminated from the financial statements and the resultant gains or losses are recognized in the statement of profit and loss.

i) Depreciation & Amortization: -
(a) Depreciation is provided in accordance with the life specified under Schedule II of the Companies Act, 2013 except for certain items. The Life of certain assets which has not been taken as per schedule II of the Companies Act, 2013 is as follows:-
Particulars	Useful Life
Expenditure incurred on civil work on premises located on Railway land, other than Railneer Plants, has been accounted as lease hold improvement and has been depreciated over a period of ten years.	10 Year
Residential flats constructed on railway land are on lease for a period of 30 years and the same has been depreciated over that period.	30 Year
The Company has taken land from Railways on lease basis for setting up of Railneer Plants at Nangloi, Danapur, Palur, Ambernath and Parassala. Depreciation on Buildings and Land (under Right of use assets) have been provided for on the basis of tenure of the lease as per the report of life review committee of in house technical expert..	Tenure of the lease as per the lease agreement or specified in demand letters. In the absence of long term lease agreement/demand letters, the tenure is taken as per the life review committee report of in-house technical experts.
Solar power Plant and Electric Substation	25 years
DG Set, Water Blowing Machine, Compressors	10 years
Air Conditioners and chillers for plant	5 years

(b) Depreciation is calculated on a straight tine basis from the date of ready to use. Depreciation is provided up to the date of sale, discard and loss of the assets during the year.

(c) Each part of an item of Property, Plant and Equipment related to Rail Neer is depreciated separately if the cost of part is significant in relation to the total cost of the item and useful life of that part is different from the useful life of remaining asset which is based on the estimates & certificate of in-house technical expert. Further, for the plants for which the capital supports are provided by the Company, the estimated life for whole Civil work and plant has been estimated as 20 years and 10 years respectively by in house technical committee.

(d) Leasehold-Office developments in respect of office premises and Leasehold land (for which lease agreement exists) have been depreciated/amortized over the lease period. Expenditure incurred on civil work on premises located on Railway Land (for which no lease agreement exists) has been accounted as lease hold improvement and has been depreciated over a period of ten years. . In addition to above, the life of civil infrastructure on Railway land for rail neer plants has been taken as per the life review committee report.

(e) Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(f) Depreciation is calculated at depreciable amount, i.e. Cost less its residual value.

(g) In respect of Residential Flats constructed on leasehold land, depreciation is charged over the period of the lease of the land.

(h) The life as assessed by the Life review committee for different assets is as per schedule II of company act except as given below

1) Land for which, IRCTC has lease agreement/ allotment letter with Railway for long term i.e. More than 10 year :- life has been taken as per agreement (Parsala and Danapur) for creating the lease assets

2) Land for which , IRCTC has a lease agreement/ allotment letter with Railway for short term i.e. less than 10 year or no agreement signed with Railway :- Life for creating lease (ROU) has been taken 10 years from FY 2021-22 except for the land of Nangloi and Ambernath plant

(i) Nangloi Plant set up on Railway land:- Life has been taken as per actual agreement due to uncertainty as a going concern for the plant

(ii) Ambernath plant set up on Railway land: -Life has been taken till 31.03.2026 as per the demand raised by railway for the lease for the purpose of creating ROU only due to non availability of agreement with railway as on date.

3) Buildings on self operated rail neer plant should have the life as per company act i.e. 30 Years except

(i) The building built for plant on nangloi due to uncertainty of life and its should be taken till the expiry of actual agreement with railways i.e 31.03.2024

(ii) The building built on ambernath and palur plant, where the Life of Building has been taken 10 years from the beginning of FY 2021-22 i.e. till 31.03.2031 due to non availability of clear agreement.

(iii) For Building situated on Railway land for which there is a clear agreement, the life of such buildings should be at par with the life of any agreement with railway.

4) Building and Plants on PPP plants should be depreciated as per the Life assessed by the committee i.e. Civil construction for 20 years and P&M for 10 Years, except the bilaspur plant which is being depreciated as per the practice followed in owened Rail neer plant

5) Life of Leasehold improvement and civil infrastructure situated at North Zone on Ajmeri gate side has been taken till 31.03.2024 due to renovation of station as informed by railways.

6) Office on Railway land where there is no agreement and offices are existed on 01.03.2019, the life has been taken as 10 year from the FY 2019-20 (initial reorganisation period /transition period) for creating ROU.

7) Any capital nature expenditure done on Bharat Gaurav should be amortised during the lease period of trains under Bharat Gaurav scheme.

8) Any other expenditure on railway assets should have the life at Par with the agreement with Railway and in the absence of any agreement it should be 10 years.

The estimated useful life of assets for current and comparative period of significant items of property plant and equipment which has been taken as per schedule II of Companies Act, 2013 are as follow:

Particulars	Useful Life
Plant and Machinery	15years
Computers	3 years
Network & Server	6 years
Air Conditioner (Other than Railneer plant)	10 years
Furniture	10 years
Office Equipment''s	5 years
Factory Building	30 Years
Building other than Rail Neer Plant Building	60years
Luxury Tourist train (Bare Shell)	15 years
Intangible Assets	4 years
Electrical Installation & Equipments	10 years

j) Capital Work in Progress/Capital Advances: -

Capital work in progress includes the cost of property, plant and equipment (PPE) that are not yet ready for their intended use and the cost of assets not put to use before the balance Sheet date. Advances paid to acquire PPE are shown as “Capital Advances” under other “Non Current Assets”

k) Intangible Assets: -

Intangible assets like software, licenses, web portal, tourism portal etc. are recorded at the consideration paid for acquisition and useful life of Intangible Assets has been assumed as 4 Years.

l) Investments in Joint Arrangements

Investment in equity instruments of joint ventures are measured at cost as per Ind AS 27- Separate Financial Statements.

m) Investment Properties

a) Investment Properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

b) The company depreciates building component of investment property over the estimated useful life of the assets as prescribed in property, plant and equipment.

c) Investment properties are derecognized either when they have been disposed off or when they are permanently withdrawn from use and no

future economic benefit is expected from their disposal. Difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

n) Operating cycle for Current and Non Current Assets

Company has classified the assets and liabilities as current which is expected to realise within the twelve months after the reporting period and all other assets and liabilities are classified as noncurrent.

o) Use of estimates and judgments - Provisions, Contingent Liabilities and Contingent Assets:

A. Provisions: -

Provisions are recognized in respect of liabilities which can be measured only by using a substantial degree of estimates when:

(a) The Company has a present obligation as a result of a past event.

(b) Probable outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) The amount of the obligation can be reliably estimated. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received Provisions are reviewed at each Balance Sheet date.

Discounting of Provisions

Provision which expected to be settled beyond 12 months are measured at the present value by using pre-tax discount rate that reflects the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expenses.

B. Contingent Liabilities

(a) Contingent Liabilities are disclosed in either of the following cases:

i. A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation; or

ii. A reliable estimate of the present obligation cannot be made; or

iii. A possible obligation, unless the probability of outflow of resource is remote.

(b) Contingent Liability and Provisions needed against Contingent Liability are reviewed at each Reporting date.

(c) Contingent Liability is net of estimated provisions considering possible outflow on settlement.

Contingent Assets

(a) Contingent assets are disclosed where an inflow of economic benefits is probable.

(b) Contingent assets are reviewed at each Reporting date.

p) Revenue Recognition: -

The Company is in the business of managing catering services (both mobile and static units), Operating Departmental Catering Units, Managing Budget Hotels on Public Private Partnership basis, awarding licenses for operating Food Plazas, Static Catering stalls, Water Vending Machines, booking of Rail Tickets through Internet, Managing Rail Sampark-139 Call Centre on Public Private Partnership basis, arranging package tours through reputed tour operators, managing complete tour packages, manufacturing and distribution of Railneer-Packaged Drinking Water, Operation of private trains etc.

a) Company Recognizes revenue from contracts with customers based on a five-step as set out in Ind AS-115:-

(i) Identify contracts with a customer: - A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

(ii) Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

(iii) Determine the transaction price: The transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

(iv) Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that

depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

(v) Recognise revenue when or as the Company satisfies a performance obligation by transferring a promised goods or services to a customer. An asset is transferred when the customer obtains control of that asset.

The Performance obligation is satisfied and recognized revenue overtime, if one of the following criteria is met:

a) The performance does not create an asset with an alternate use and has an enforceable right to payment for performance completed to date.

b) The performance creates or enhances an asset that the customer controls as the asset is created or enhanced.

c) The customer simultaneously receives and consumes the benefits provided.

For performance obligations where one of the above conditions are not met, revenue is recognized at the point in time at which the performance obligation is satisfied. When performance obligation is satisfied by delivering the promised goods or services, it creates a contract based asset on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount revenue recognized this give rise to a contract liability.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the company as part of the contract.

Revenue is recognized to the extent it is probable that the economic benefits will flow and the revenue and costs if applicable can be measured reliably.

i. Sales: -

Sales of Railneer-packaged drinking water, food and beverage items are recognized at the point in time when the goods are sold and services rendered and are recorded net of GST etc. in

terms of Ind AS-115. It does not include interdepot and inter-unit transfers.

ii. Income from Internet Ticketing: -

(a) Income from Service charges: Income from Service Charges is recognized on the basis of value of the service charges earned on the tickets booked by Foreign customer through Company''s Web site(www.irctc.co.in ). Gross service charges earned on the sale of such tickets on accrual basis have been booked as income of the Company & Corresponding railway share is shown as expenses.

(b) Income from Convenience Fee : Income from Convenience Fee is recognized on the basis of value of the Convenience fee earned on the tickets booked by domestic customers through Company''s Web site(www.irctc. co.in).Convenience fees earned on the sale of such tickets on accrual basis have been booked as income of the Company & no Railway share is payable on such income.

The Company has been given a mandate by Railway Board, Ministry of Railways to upgrade and professionalize catering services on trains & other locations. The Company recognizes its income from catering services as per the following policies.

• Income from On-board Catering Services:

The Company is providing catering services on pre-paid trains i.e. Rajdhani, Duranto, Shatabdi, Vande Bharat, Gatiman, Tejas Trains etc. on Indian Railways network. The income is accounted on the basis of bills raised for catering services provided to the passengers of Indian Railways on accrual basis.

• Income from Concession Fees, User Charges and License Fee: -

The Company is receiving the income from the following: -
Sr. No.	Nature of business activity	Nature of Fee received from licensees
1.	Awarding license for providing Catering Services on pre-paid trains	One time Concession Fee for the contract period
	i.e. Rajdhani, Duranto, Shatabdi, Vande Bharat, Gatiman, Tejas	(including renewal period, if any), and Variable
	Trains etc.	License Fee.
2.	Providing Catering Services on trains as awarded by Railways under SBD (Standard Bid Document) agreement and handed over to the Company in terms of Catering Policy, 2017.	Fixed License Fee for the contract period.
3.	Award of license for arranging catering services on Mail/ Jan	Fixed License Fee as per the agreement signed
	Shatabdi /Express Trains.	with the awardees.
4.	Award of license for setting up of Food Plaza and operation thereof	(i) Fixed Monthly User Charges and Variable
	at the Indian Railway premises	License Fee in case of contracts awarded under earlier Policy of the Company.
(ii Fixed Annual License Fee as per the agreement signed with the awardees.
5.	Award of License for Water Vending Machines (WVM) at Railway	Fixed License fee on basis of date of
	Stations.	commencement services of each WVMs.
6.	Award of License for other static units at Railway Stations i.e.	Fixed License Fee as per the agreement
	Refreshment Rooms, Janahar, Executive Lounge, Retiring Room etc.	signed with the awardees from the date of commencement of the unit
7.	Award of license for Re-developing, Operation, Management and	Fixed User Charges and License Fee as per the
	Transfer of Budget Hotels on Indian Railway premises	agreement signed with the awardees. 1.1.1
8	Fine, Penalty & Interest on delayed payment if any.	Fine, Penalty & Interest on delayed payment if any is recognized on its receipt from Licensee and vendors.

The Income under these heads have been recognized / accounted as under: -

> Concession fee: Income is recognized on accrual basis (pro-rata) over the period of time as given in the Ind AS-115 relating to revenue recognition. One-time concession fee (Unexpired Concession Fee) received by the Company has been treated as income received in advance. In case the contracts for the trains are terminated on account of cancellation / withdrawal of the train by Railway Administration, income is recognized over the period, the contract was in force.

> User charges: User Charges payable by the Food Plazas and Budget Hotels Licensees are accounted on accrual basis till the period project was in operation.

> License Fee: -

(a) Fixed license fees received by the Company are accounted on accrual basis (pro-rata) till the period contract is in operation.

(b) Variable License fee is accounted on accrual basis as a fixed percentage of the catering services provided by the contractor.

(c) License fee is accounted on accrual basis as a fixed percentage of the projected turnover of the Budget Hotels operated by the licensees under re-develop, operate, manage and transfer basis. Where additional License Fee is to be received from the Licensee based on the actual turnover of the Licensee as per the audited accounts, the same is accounted on receipt basis.

> Income Accrued on termination of Contracts: -Recognition of income from Catering contracts terminated on account of breach of terms and conditions is made as under:

I. Up to the date of termination, the income is recognized in respect of concession fee over the contract period on pro-rata basis and in case of License fee over the period the train has been in operation on pro-rata basis.

II. Other income: Remaining balance of concession fee, License fee and Security Deposits on termination of contracts are recognized as other income accrued during the year.

iv. Income from Package Tours: -

The Company is engaged in booking of Special Trains, Special Coach Charter and berths under value added tours for promoting the rail-based tourism and booking of Air Tickets. The Company is also engaged in booking of foreign tours on group basis. The income from special trains/ Coach Charters includes Company''s service charge as a fixed percentage of the fare as fixed by the Railways. In case of value added tours, the income includes fare, charges towards On-Board/Off Board Expenses and Company''s service charges. The Income from Air Tickets includes service charges earned from booking of air tickets from customers.

In case of Complete Tour Packages, Buddhist Circuit Special Train, Bharat Darshan Trains and Bharat Gaurav Trains, the income includes the total amount net of GST collected from the customer.

The income is booked on accrual basis (pro-rata), based on date of journey.

v. Income from Train Operations

Company is engaged in the operations of the trains received from the Zonal railways on haulage charge principle basis. The income from the operations of the special train includes the fare collected from the passengers fixed by the Company. The income from operations of trains is recognized over the period of time of the operations of the train as per the requirement of the Ind AS-115.

vi. Integration Charges

One time Integration Charges payable by the Principal Service Provider to the Company for registration and integration with the Company for reserved rail e-ticketing service has been recognized over a period of 20 years.

vii. Water vending Machines

The company is in arbitration proceeding with the Licensee for water vending machines and as per the order of the arbitration, the revenue has been recognized/accrued based on the date of commencement of each of the water vending machines as against immediate recognition of revenue on the date of commission of first WVM under a cluster arrangement with the licensee.

viii. Interest Income from Fixed Deposits including TDRs and Dividend Income: -

Income received as Interest from fixed deposit & TDRs is recognized on accrual basis by using effective rate of interest.

Dividend income is recognized when the company''s right to receive the dividend is established.

ix. Duty Credit License:

The Duty Scrips under Service Exports from India Scheme (SEIS) under Foreign Trade Policy, 2015-20 would be freely transferable and can be monetized. The Scrips issued under Service Exports from India Scheme can only be usable for payment of Basic Customs Duty on imports. The Scrips are redeemable under the Policy.

That Duty credit entitlements are accounted for as receivables upon approval of the same by the concerned department and pending the same the entitlements are shown as contingent assets.

The Foreign Trade Policy (FTP) 2023 is notified by Central Government, in exercise of powers conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992) [FT (D&R) Act], as amended. The incentive scheme of duty credit entitlement is not there in the new policy and accordingly, no income is accrued during the year.

q) Expenditure: -

Items of expenditure are recognized on accrual basis however certain expense/claims, which are not ascertainable are accounted for on their being ascertained.

(i) Expenditure on Railneer -Packaged Drinking Water and Departmental Catering Activity: -

Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities.

The expenditure on account of Railway''s revenue share is booked @15% of the net profits earned from Railneer Segment for the year.

(ii) Expenditure on Internet ticketing: -

Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities

(a) Onboard Catering Charges:

Catering Charges paid to the Contractor are accounted for on accrual basis for catering services provided to the passengers of Indian Railways.

(b) Concession Fees, User Charges, License Fee : -

The Expenditure under this head has been recognized/ accounted for as per the foLLowing:-

• Concession Fee Paid: Concession Fee payabLe to Indian RaiLways in respect of on board catering contract is recognized on accruaL basis (pro-rata) over the contract period. Payment of RaiLway Share on Unexpired Concession Fee to the Indian Railways has been treated as an advance. In case the contracts for the trains are terminated on account of breach of terms and conditions of the contract or cancelation / withdrawal of the train by Railway Administration, expenditure is recognized over the period, the contract was in force.

• User charges Paid: User Charges payabLe to Indian RaiLways in respect of Food PLazas and Budget HoteLs are accounted for on accruaL basis tiLL the period projects were in operation.

• License Fee Paid: -

(a) Fixed License fees payabLe to Indian RaiLways by the Company is accounted for on accruaL basis (pro-rata) tiLL the period contract are in operation.

(b) VariabLe License fee payabLe to Indian RaiLways is accounted on accruaL basis as a fixed percentage of the catering services provided /saLes made.

• Fine & PenaLty payabLe to Indian RaiLways is recognized on accruaL basis.

• Custody/Haulage Charges on Train Operations:-

(a) Fixed yearLy Charges payabLe to ZonaL RaiLways by the Company is accounted for on accruaL basis (pro-rata) tiLL the trains are in operation.

(b) Variable Haulage Charges:- Fee payable to Zonal Railways is accounted on accrual basis as a fixed rate charged for per km and per day of train operation as per the understanding with the railways.

(c) Custody Charge:- Fixed yearly Custody charges payable to Zonal Railways by the Company is accounted for on accrual basis (pro-rata) till the period trains are in operation

• Tourism Expenses: -

In case of complete tour packages, Buddhist Circuit Special Train and Bharat Gaurav Trains, cost of ticket, Service Charges and other On Board/off Board charges are accounted on accrual basis. In case of train operations, the Expenses incurred on account of Fixed/Variable haulage/other charges by Railways and Catering/other expenses are accounted on accrual basis.

r) Leases: -

Where the Company is the lessee:

(i) The Company Recognizes a right-of- use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of lease liability adjusted for any lease payments made at or before the commencement date , plus any initial direct cost incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

(ii) The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-to-use-asset or the end of the lease term. The estimated useful life of the right-to-use asset is determined on the same basis as those of property, plant and equipment. In addition, the right-to-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

(iii) The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or,

if that rate cannot be readily determined, the Company''s incremental borrowing rate.

(iv) The lease liability is measured at amortized cost using the effective interest method, it is re-measured when there is a change in future lease payments from a change in an index or rate. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right -of-use asset, or is recorded in the profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

(v) The Company presents right-of-use asset separately on the face of the Balance Sheet in the “Right of use assets” and lease liabilities in “other financial liabilities” in the Balance Sheet.

(vi) Short term Lease and Leases of low value assets:-The Company has elected not to recognize right-of-use asset and lease liabilities for short term leases that have lease term of 12 months or less and leases of low value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Where the Company is the lessor:

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all the risk and rewards incidental to the ownership of the underlying asset. If this is the case, then the lease is a finance lease, if not then it is an operating lease. As part of the assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Company recognizes lease payments received under operating lease as income on a straight-line basis over the lease term as part of “Other Income”.

s) Impairment of Assets: -

Cash generating units as defined in Ind AS 36 on ‘Impairment of Assets'' on ‘Impairment of Assets'' are identified at the balance sheet date with respect to carrying amount vis-a-vis. recoverable amount thereof and impairment loss, if any, is recognized in the statement of profit and loss account. Impairment loss, if need to be reversed subsequently, is accounted for in the year of reversal.

t) Borrowing Cost: -

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets till such time the assets are substantially ready for their intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowings costs are recognized in the statement of Profit and Loss in the period in which they are incurred.

u) Employee Benefits: -

(a) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, and short- term compensated absences etc. are recognized in the period in which the employee renders the related service.

(b) Long Term Employee Benefits:

(i) The obligation for long-term employee benefits such as half pay leave and LTC

• Accounted for on actuarial valuation made at the end of year.

• The actuarial gains/losses are recognized in the Statement of Profit and Loss for the year.

(ii) Leave Encashment

• Company recognizes Policy taken from Life Insurance Corporation of India for Leave encashment in its balance sheet as a Right to Reimbursement Assets.

• The company recognizes the obligation of a defined benefit plan in its balance sheet as a liability and are determined by actuarial valuation, performed by an independent actuary, at the year end

• Company recognizes components of defined benefit cost in the Statement of Profit and Loss for the year.

• Company recognizes changes in the carrying amount of the right to reimbursement in the Statement of Profit and Loss for the year.

• Actuarial gains/losses are recognized in the Statement of Profit and Loss.

(c) Post-Employment Benefits

(i) Defined contribution plans: The Company makes defined contribution to the Regional Provident Fund Commissioner in respect of provident fund scheme. The contribution paid/ payable under the schemes is recognized during the period in which the employee renders the related service.

(ii) Defined Benefit plans: Company provides post-retirement medical benefits to employees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of minimum service period. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit plans.

(iii) Gratuity is a post-employment defined benefit plan. The liability recognized in the balance sheet is the present value of the defined benefit obligation at the balance sheet date less fair value of plan assets. The defined benefit obligation is calculated by an independent actuary using projected unit credit (PUC) method.

(iv) Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions in respect of defined benefit plans are recognised in period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity.

(d) Provision/liabilities towards Foreign Service Contribution- Pension and Leave Salary are made in terms of Government Rules & Regulations for employees on deputation and charged to statement of Profit and Loss on accrual basis.

v) Inventories:

(i) Inventories are valued at lower of cost and net realizable value.

(ii) In case of raw materials, packing materials, stores, spares and consumables, the cost includes duties and taxes (net of ITC, wherever applicable) and is arrived at on FIFO basis.

(iii) Cost of finished goods and work in process includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.

(iv) PD items (traded goods) are valued at cost or NRV on FIFO basis.

w) Taxation: -

(a) Current Income Tax: -

(i) Taxes including current income-tax are computed using the applicable tax rates and tax laws.

(ii) The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the company operates and generates taxable income.

(iii) Current income tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities Liability for additional taxes, if any, is provided / paid as and when assessments are completed.

(iv) Current tax related to OCI Item are recognized in Other Comprehensive Income (OCI).

(b) Deferred Tax

The Company has accounted for deferred taxation in line with IndAS-12 “Income Taxes” issued by the Ministry of Corporate Affairs.

i. Deferred income tax assets and liabilities are recognized for temporary differences which is computed using the tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

ii. Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

iii. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

iv. Deferred tax related to OCI Item are recognized in Other Comprehensive Income (OCI).

x) Earning Per Share

In determining basic earnings per share, the company considers the net profit attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. In determining diluted earnings per share, the net profit attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

y) Grants

i. Government grants relating to purchase of property, plant and equipment are included in liabilities as deferred income and credited to profit or loss over the on systematic basis over the expected life of the related assets and presented within other income.

ii. Grants relating to the revenue expenditure are adjusted against the related expenses. The unutilized portion of revenue and capital grant is shown as liability.

iii. Government grant in the form of Non-monetary asset is recognized at fair value and presented in balance sheet by setting up the grant as deferred Income.

z) Cash & Cash Equivalents

Cash and cash equivalents comprise cash on hand, drafts/cheques on hand, bank balances, deposits with banks and short term investments, which are short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.

aa) Stale Cheques

Cheques which have not been cleared within the validity period of 3 months are credited to the stale cheque account. Stale cheques related to Private parties which are more than 4 years old from the date of transfer to stale cheque and those related to Government Bodies which are more than 6 years old from the date of transfer to stale cheque and which could not be cleared in stale cheque account are credited to Miscellaneous income. For any claim arising in future, the same are debited to Miscellaneous Expenses

bb) Financial Instruments: -

Initial recognition and measurement

Financial Instruments recognized at its fair value plus or minus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instruments. However Financial Assets (trade receivables) that do not contain a significant financing component are measured at transaction price.

Financial Asset at Amortized Cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets measured at amortised cost using effective interest rate method less impairment, if any. The EIR amortisation is included in finance income in the statement of profit and loss.

Following financial assets are measured at amortised cost: -

(i) Security deposit

(ii) Retention money

(iii) Cash and cash equivalent

(iv) Advances adjustable with other financial instrument

Financial Assets at fair value through other comprehensive income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the

company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned is recognised using the EIR method.

Financial Assets at Fair value through Profit & Loss (FVTPL)

FVTPL is a residual category for financial Assets. Any financial assets, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the company may elect to designate financial asset, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. If doing so reduces or eliminates a measurement or recognition inconsistency.

Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

Financial liabilities at Amortised Cost

Financial liabilities at amortised cost represented by trade and other payables, security deposits, advances refundable and retention money are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest rate method.

Financial liabilities at Fair Value through Profit & Loss (FVTPL)

The company has not designated any financial liabilities at FVTPL.

De-recognition

Financial Asset

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized only when the contractual rights to the cash flows from the asset expires or it transfers the financial assets and substantially all risks and rewards of the ownership of the asset.

Financial Liability

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same

lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of Profit & Loss.

Impairment of Financial Assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the Statement of Profit & Loss Account.

cc) Fair Value Measurement

Company measures financial instruments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The company uses

valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 — Valuation techniques for which the lowest level input that is

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Mar 31, 2022

Note-1: Corporate Information

Indian Railway Catering and Tourism Company Ltd. (hereinafter referred to as “Company) has been set up by the Ministry of Railways. It is a public limited company domiciled and was incorporated in India on September 27, 1999 with the basic purpose of hiving off entire catering and tourism activity of the railways to the new Company so as to professionalize and upgrade these services with public-private participation. Rail based Tourism in India will be the specific vehicle for achieving high growth in coordination with state agencies, tour operators, travel agents and the hospitality industry. The Company is registered under the Indian Companies Act, 1956 and the registered office of the company is located at 11th floor, B-148 Statesman House Barakhamba Road New Delhi-110001

During the FY 2019-20, as per the decision of Government of India to disinvest the shareholding by 12.6% of paid up share capital of the Company, the initial public offer was held on 30th September, 2019 and the shares of the Company were listed on NSE and BSE on 14th October, 2019. Accordingly, 201.6 Lakh (Two hundred one Lakh sixty thousand total share) shares i.e. 12.6% of total capital having face value of H10/- each were offered to public through offer for sale, out of which 1.6 lakh share were reserved for employees(approx. 0.79% of total issue).

During FY 2020-21, further disinvestment was made by the Government of India by 20% of paid up share capital of the Company through offer for sale resulting total disinvestment by 32.6% and the shareholding of Government of India have been reduced to 67.4% in paid up share capital of the Company.

Note-2: Basis of Preparation

a) Statement of Compliance

The financial statements as at and for year ended March 31, 2022have been prepared on going concern basis in accordance with Indian Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards) Rules2015as amended from time to time.

b) Basis of Measurement

The Company is following accrual basis of accounting under historical cost convention and for the following item that have been measured at fair value as required by relevant Ind-AS.

i. Defined benefit Plan and other long term employee benefits

ii. Certain financial assets and liabilities measured at fair value (Refer policy on financial instrument).

c) Use of estimates& Judgements

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of income and expenses. Examples of such estimates includes estimated useful life of property, plant and equipment, employee benefit expenses, provisions, satisfaction of performance obligation in revenue recognition etc. actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a periodic basis. Future results could differ due to changes in these estimates and difference between the actual result and the estimates are recognized in the period in which the results are known /materialize.

d) All financial information presented in Indian rupees and all values are rounded to the nearest lakh rupees with two decimal points except where otherwise stated.

e) Statutory dues payable and refundable are treated as current liability and current assets due to current in nature.

f) Statement of Cash Flow

Statement of Cash Flow is made by using the Indirect Method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the company are segregated.

For the purposes of the statement of cash flow, cash and cash equivalents include cash in hand, cash at banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand are considered part of the Company’s cash management system.

The company has adopted the amendment to Ind-AS 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosures requirement.

g) Foreign Currency

i. Functional and presentation currency

The financial statements are presented in Indian Rupees (INR), which is functional as well as presentation currency of the company.

ii. Transaction and balances

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary foreign currency assets and liabilities are translated or converted with reference to the rates of exchange ruling on the date of the Balance Sheet.

Foreign exchange gains and losses resulting from the settlement of such transaction and for the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised as profit or loss.

h) Property, Plant and Equipment

i. Property, Plant and Equipment are stated at cost of acquisition including installation charges and other related expenses if recognition criteria are met.

ii. Cost of replacement, major inspection, repair of significant parts is capitalized if the recognition criteria are met.

iii. In case of Computers, the cost of Operating System software procured along with Computer has been capitalized with Computers, while regular upgrades and Annual Maintenance Charges have been treated as revenue expenditure.

iv. Expenditure on the leased buildings for Office premises has been capitalized as Leasehold -Office Development

v. The tools and plants placed as such at catering units are taken on, as is where is basis. Due to non-availability of value of such assets, such assets are accounted at Nominal Value of H1/- per item in the Books of Zonal Offices of the Company for the purpose of ensuring physical verification.

vi. The Luxury Tourist Train has been capitalized and shown as “Luxury Tourist Train” in Property, Plant and Equipment, refer policy on government grant for treatment of grant related to acquisition of these assets.

vii. Upon sale of assets, cost and accumulated depreciation are eliminated from the financial statements and the resultant gains or losses are recognized in the statement of profit and loss.

i) Depreciation &Amortization: -

(a) Depreciation is provided in accordance with the life specified under Schedule II of the Companies Act, 2013 except for certain items. The Life of certain assets which has not been taken as per schedule II of the Companies Act, 2013 is as follows:-

Particulars	Useful Life
Expenditure incurred on civil work on premises located on Railway land, other than Railneer Plants, has been accounted as lease hold improvement and has been depreciated over a period of ten years.	10 Year
Residential flats constructed on railway land are on lease for a period of 30 years and the same has been depreciated over that period.	30 Year
The Company has taken land from Railways on lease basis for setting up of Railneer Plants at Nangloi, Danapur, Palur, Ambernath and Parassala. Depreciation on Buildings and Land (under Right of use assets) have been provided for on the basis of tenure of the lease.	Tenure of the lease as per the lease agreement
Solar power Plant and Electric Substation	25 years
DG Set , Water Blowing Machine, Compressors	10 years
Air Conditioners and chillers for plant	5 years

(b) Depreciation is calculated on a straight line basis from the date of ready to use. Depreciation is provided up to the date of sale, discard and loss of the assets during the year.

(c) Each part of an item of Property, Plant and Equipment related to Rail Neer is depreciated separately if the cost of part is significant in relation to the total cost of the item and useful life of that part is different from the useful life of remaining asset which is based on the estimates & certificate of inhouse technical expert. Further for the plants for whose the capital support are provided by the Company ,the estimated life for whole Civil work and plant has been estimated as 20 years and 10 years respectively by in house technical committee.

(d) Leasehold-Office developments in respect of office premises and Leasehold land (for which lease agreement exists) have been depreciated/amortized over the lease period. Expenditure incurred on civil work on premises located on Railway Land (for which no lease agreement exists) has been accounted as lease hold improvement and has been depreciated over a period of ten years.

(e) Depreciation methods, useful lives and residual values are reviewed at each reporting date.

(f) Depreciation is calculated at depreciable amount, i.e. Cost less its residual value.

(g) In respect of Residential Flats constructed on leasehold land, depreciation is charged over the period of the lease of the land.

The estimated useful life of assets for current and comparative period of significant items of property plant and equipment which has been taken as per schedule II of Companies Act, 2013 are as follow:

Particulars	Useful Life
Plant and Machinery	15years
Computers	3 years
Network & Server	6 years
Air Conditioner	10 years
Furniture	10 years
Office Equipment’s	5 years

Particulars	Useful Life
Factory Building	30 Years
Building other than Rail Neer Plant Building	60years
Luxury Tourist train (Bare Shell)	15 years
Intangible Assets	4 years
Electrical Installation & Equipments	10 years

j) Capital Work in Progress/Capital Advances: -

Capital work in progress includes the cost of property, plant and equipment (PPE) that are not yet ready for their intended use and the cost of assets not put to use before the balance Sheet date. Advances paid to acquire PPE are shown as “Capital Advances” under other “Non Current Assets”

k) Intangible Assets: -

Intangible assets like software, licenses, web portal, tourism portal etc. are recorded at the consideration paid for acquisition and useful life of Intangible Assets has been assumed as 4 Years.

l) Investments in Joint Arrangements

Investment in equity instruments of joint ventures are measured at cost as per Ind AS 27- Separate Financial Statements.

m) Investment Properties

a) Investment Properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

b) The company depreciates building component of investment property over the estimated useful life of the assets as prescribed in property, plant and equipment.

c) Investment properties are derecognized either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. Difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of de-recognition.

n) Operating cycle for Current and Non Current Assets

Company has classified the assets and liabilities as current which is expected to realise within the twelve months after the reporting period and all other assets and liabilities are classified as noncurrent.

o) Use of estimates and judgements - Provisions, Contingent Liabilities and Contingent Assets:

A. Provisions: -

Provisions are recognized in respect of liabilities which can be measured only by using a substantial degree of estimates when:

(a) The Company has a present obligation as a result of a past event.

(b) Probable outflow of resources embodying economic benefits will be required to settle the obligation; and

(c) The amount of the obligation can be reliably estimated. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received Provisions are reviewed at each Balance Sheet date.

Discounting of Provisions

Provision which expected to be settled beyond 12 months are measured at the present value by using pre-tax discount rate that reflects the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expenses.

B. Contingent Liabilities

(a) Contingent Liabilities are disclosed in either of the following cases:

i. A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation; or

ii. A reliable estimate of the present obligation cannot be made; or

iii. A possible obligation, unless the probability of outflow of resource is remote.

(b) Contingent Liability and Provisions needed against Contingent Liability are reviewed at each Reporting date.

(c) Contingent Liability is net of estimated provisions considering possible outflow on settlement.

Contingent Assets

(a) Contingent assets are disclosed where an inflow of economic benefits is probable.

(b) Contingent assets are reviewed at each Reporting date.

p) Revenue Recognition: -

The Company is in the business ofmanaging catering services (both mobile and static units), Operating Departmental Catering Units, Managing Budget Hotels on Public Private Partnership basis, awarding licenses for operating Food Plazas, Static Catering stalls, Water Vending Machines, booking of Rail Tickets through Internet, Managing Rail Sampark-139 Call Centre on Public Private Partnership basis, arranging package tours through reputed tour operators, managing complete tour packages, manufacturing and distribution of Railneer-Packaged Drinking Water, etc.

a) Company Recognizes revenue from contracts with

customers based on a five-step as set out in Ind

AS-115:-

(i) Identify contracts with a customer: - A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

(ii) Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

(iii) Determine the transaction price: The transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

(iv) Allocate the transaction price to the performance obligations in the contract: For a contract that

	Income from Concession Fees, User Charges and License Fee: - The Company is receiving the income from the following: -
Sr. Nature of business activity No.		Nature of Fee received from licensees
1.	Awarding license for providing Catering Services on Rajdhani and Shatabdi Express Trains.	One time Concession Fee for the contract period (including renewal period, if any), and Variable License Fee.
2.	Providing Catering Services on trains as awarded by Railways under SBD (Standard Bid Document) agreement and handed over to the Company in terms of Catering Policy, 2017.	Fixed License Fee for the contract period.
3.	Award of license for arranging catering services on Mail/ Jan Shatabdi /Express Trains.	Fixed License Fee as per the agreement signed with the awardees.
4.	Award of license for setting up of Food Plaza and operation thereof at the Indian Railway premises	(i) Fixed Monthly User Charges and Variable License Fee in case of contracts awarded under earlier Policy of the Company. (ii) Fixed Annual License Fee as per the agreement signed with the awardees.
5.	Award of License for Water Vending Machines (WVM) at Railway Stations.	Fixed License fee on basis of date of commencement services of each WVMs.
6.	Award of License for static units at Railway Stations	(i) Fixed License fee in case of Contracts awarded under Policy of the Company.
		(ii)Fixed License Fee as per the agreement signed with the awardees.
7.	Award of license for Re-developing, Operation, Management and Transfer of Budget Hotels on Indian Railway premises	Fixed User Charges & License Fee as per the agreement signed with the awardees.
8	Fine, Penalty & Interest on delayed payment if any.	Fine, Penalty & Interest on delayed payment if any is recognized on its receipt from Licensee & Vendor.

has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

(v) Recognise revenue when or as the Company satisfies a performance obligation by transferring a promised goods or services to a customer. An asset is transferred when the customer obtains control of that asset.

The Performance obligation is satisfied and recognized revenue overtime, if one of the following criteria is met:

a) The performance does not create an asset with an alternate use and has an enforceable right to payment for performance completed to date.

b) The performance creates or enhances an asset that the customer controls as the asset is created or enhanced.

c) The customer simultaneously receives and consumes the benefits provided.

For performance obligations where one of the above conditions are not met, revenue is recognized at the point in time at which the performance obligation is satisfied. When performance obligation is satisfied by delivering the promised goods or services, it creates a contract based asset on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount revenue recognized this give rise to a contract liability.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duty.

Revenue is recognized to the extent it is probable that the economic benefits will flow and the revenue and costs if applicable can be measured reliably.

i. Sales: -

Sales of Railneer-packaged drinking water, food and beverage items are recognized at the point in time when the goods are sold and services rendered and are recorded net of GST etc. in terms of Ind AS-115. It does not include inter-depot and inter-unit transfers.

ii. Income from Internet Ticketing: -

(a) Income from Service charges: Income from Service Charges is recognized on the basis of value of the service charges earned on the tickets booked by Foreign customer through Company''s Web site (www.irctc.co.in). Gross service charges earned on the sale of such tickets on accrual basis have been booked as income of the Company & Corresponding railway share is shown as expenses.

(b) Income from Convenience Fee:Income from Convenience Fee is recognized on the basis of value of the Convenience fee earned on the tickets booked by domestic customers through Company''s Web site (www.irctc.co.in). Convenience fees earned on the sale of such tickets on accrual basis have been booked as income of the Company & no Railway share is payable on such income.

iii. Income from Catering Services: -

The Company has been given a mandate by Railway Board, Ministry of Railways to upgrade and professionalize catering services on trains & other locations. The Company recognizes its income from catering services as per the following policies.

• Income from On-board Catering Services:

The Company is providing catering services on Rajdhani, duranto and Shatabdi Express Trains on Indian Railways network. The income is accounted on the basis of bills raised for catering services provided to the passengers of Indian Railways on accrual basis.

The Income under these heads have been recognized / accounted as under: -

• Concession fee: Income is recognized on accrual basis (pro-rata) over the period of time as given in the Ind AS-115 relating to revenue recognition. One-time concession fee (Unexpired Concession Fee) received by the Company has been treated as income received in advance. In case the contracts for the trains are terminated on account of cancellation / withdrawal of the train by Railway Administration, income is recognized over the period, the contract was in force.

• User charges: User Charges payable by the Food Plazas and Budget Hotels Licensees are accounted on accrual basis till the period project was in operation.

• License Fee: -

(a) Fixed license fees received by the Company are accounted on accrual basis (pro-rata) till the period contract is in operation.

(b) Variable License fee is accounted on accrual basis as a fixed percentage of the catering services provided by the contractor.

(c) License fee is accounted on accrual basis as a fixed percentage of the projected turnover of the Budget Hotels operated by the licensees under redevelop, operate, manage and transfer basis. Where additional License Fee is to be received from the Licensee based on

the turnover of the Licensee as per the audited accounts, the same is accounted on receipt basis.

• Income Accrued on Forfeiture of Contracts: -

Recognition of income from Catering contracts terminated on account of breach of terms and conditions was made as under:

I. Up to the date of termination, the income is recognized in respect of concession fee over the contract period on pro-rata basis and in case of License fee over the period the train has been in operation on pro-rata basis.

II. Other income: Remaining balance of concession fee, License fee and Security Deposits on forfeiture of contracts are recognized as other income accrued during the year.

iv. Income from Package Tours: -

The Company is engaged in booking of Special Trains, Special Coach Charter and berths under value added tours for promoting the rail-based tourism and booking of Air Tickets. The Company is also engaged in booking of foreign tours on group basis. The income from special trains/ Coach Charters includes Company’s service charge as a fixed percentage of the fare as fixed by the Railways. In case of value added tours, the income includes fare, charges towards On-Board/Off Board Expenses and Companys service charges. The Income from Air Tickets includes service charges earned from booking of air tickets from customers.

In case of Complete Tour Packages, Buddhist Circuit Special Train and Bharat Darshan Trains, the income includes the total amount net of GST collected from the customer.

The income is booked on accrual basis (pro-rata), based on date of journey.

v. Income from Train Operations

Company is engaged in the operations of the trains received from the Zonal railways on haulage charge principle basis. The income from the operations of the special train includes the fare collected from the passengers fixed by the

Company. The income from operations of trains is recognized over the period of time of the operations of the train as per the requirement of the Ind AS-115.

vi. Integration Charges

One time Integration Charges payable by the Principal Service Provider to the Company for registration and integration with the Company for reserved rail e-ticketing service has been recognized over a period of 20 years.

vii. Water vending Machines

The company is in arbitration proceeding with the Licensee for water vending machines and as per the order of the arbitration, the revenue has been recognized/accrued based on the date of commencement of each of the water vending machines as against immediate recognition of revenue on the date of commission of first WVM under a cluster arrangement with the licensee.

viii. Interest Income from Fixed Deposits including TDRs and Dividend Income: -

Income received as Interest from fixed deposit & TDRs is recognized on accrual basis by using effective rate of interest.

Dividend income is recognized when the company’s right to receive the dividend is established.

ix. Duty Credit License:

The Duty Scrips under Service Exports from India Scheme (SEIS) under Foreign Trade Policy, 2015-20 would be freely transferable and can be monetized. The Scrips issued under Service Exports from India Scheme can only be usable for payment of Basic Customs Duty on imports. The Scrips are redeemable under New Policy.

That Duty credit entitlements are accounted for as receivables upon approval of the same by the concerned department and pending the same the entitlements are shown as contingent assets.

q) Expenditure: -

Items of expenditure are recognized on accrual basis however certain expense/claims, which are not ascertainable are accounted for on their being ascertained.

(i) Expenditure on Railneer -Packaged Drinking Water and Departmental Catering Activity: -

Expenses are accounted on accrual basis and

provision is made for all known losses and Liabilities.

The expenditure on account of Railway’s revenue share is booked @15% of the net profits earned from Railneer and Departmental Catering Segment for the year.

(ii) Expenditure on Internet ticketing: -

Expenses are accounted on accrual basis and

provision is made for all known losses and Liabilities

(iii) Catering Charges Paid:

(a) Onboard Catering Charges:

Catering Charges paid to the Contractor are accounted for on accrual basis for catering services provided to the passengers of Indian Railways.

(b) Concession Fees, User Charges, License Fee : -

The Expenditure under this head has been recognized/ accounted for as per the following:-

• Concession Fee Paid: Concession Fee payable to Indian Railways in respect of on board catering contract is recognized on accrual basis (pro-rata) over the contract period. Payment of Unexpired Concession Fee to the Indian Railways has been treated as an advance. In case the contracts for the trains are terminated on account of breach of terms and conditions of the contract or cancellation / withdrawal of the train by Railway Administration, expenditure is recognized over the period, the contract was in force.

• User charges Paid: User Charges payable to Indian Railways in respect of Food Plazas and Budget Hotels are accounted for on accrual basis till the period projects were in operation.

• License Fee Paid: -

(a) Fixed license fees payable to Indian Railways by the Company is accounted for on accrual basis (pro-rata) till the period contract are in operation.

(b) Variable License fee payable to Indian Railways is accounted on accrual basis as a fixed percentage of the catering services provided /sales made.

• Custody/Haulage Charges on Train Operations:-

(a) Fixed yearly Charges payable to Zonal Railways by the Company is accounted for on accrual basis (pro-rata) till the trains are in operation.

(b) Variable Haulage Charges:- fee payable to Zonal Railways is accounted on accrual basis as a fixed rate charged for per km and per day of train operation as per the understanding with the railways.

(c) Custody Charge:- Fixed yearly Custody charges payable to Zonal Railways by the Company is accounted for on accrual basis (pro-rata) till the period trains are in operation

• Tourism Expenses: -

In case of complete tour packages and Buddhist Circuit Special Train, cost of ticket, Service Charges and other On Board/off Board charges are accounted on accrual basis. In case of train operations, the Expenses incurred on account of Fixed/Variable haulage/other charges by Railways and Catering/other expenses are accounted on accrual basis.

r) Leases: -

Where the Company is the lessee:

(i) The Company Recognizes a right-of- use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of lease liability adjusted for any lease payments made at or before the commencement date , plus any initial direct cost incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

(ii) The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-to-use-asset or the end of the lease term. The estimated useful life of the right-to-use asset is determined on the same basis as those of property, plant and equipment. In addition, the right-to-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

(iii) The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate.

(iv) The lease liability is measured at amortized cost using the effective interest method, it is remeasured when there is a change in future lease payments from a change in an index or rate. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right -of-use asset, or is recorded in the profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

(v) The Company presents right-of-use asset separately on the face of the Balance Sheet in the “Right of use assets” and lease liabilities in “other financial liabilities” in the Balance Sheet.

(vi) Short term Lease and Leases of low value assets:-The Company has elected not to recognize right-of-use asset and lease liabilities for short term leases that have lease term of 12 months or less and leases of low value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Where the Company is the lessor:

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all the risk and rewards incidental to the ownership of the underlying asset. If this is the case, then the lease is a finance lease, if not then it is an operating lease. As part of the assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Company recognizes lease payments received under operating lease as income on a straight-line basis over the lease term as part of “Other Income”.

s) Impairment of Assets: -

Cash generating units as defined in Ind AS 36 on ‘Impairment of Assets’ on ‘Impairment of Assets’ are identified at the balance sheet date with respect to carrying amount vis-avis. recoverable amount thereof and impairment loss, if any, is recognized in the statement of profit and loss account. Impairment loss, if need to be reversed subsequently, is accounted for in the year of reversal.

t) Borrowing Cost: -

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets till such time the assets are substantially ready for their intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowings costs are recognized in the statement of Profit and Loss in the period in which they are incurred.

u) Employee Benefits: -

(a) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, and short- term compensated absences etc. are recognized in the period in which the employee renders the related service.

(b) Long Term Employee Benefits:

The obligation for long-term employee benefits such as long-term compensated absences, half pay leave& LTC is recognized in the same manner as in the case of defined benefit plans as mentioned in (c)(ii) below

(c) Post-Employment Benefits

(i) Defined contribution plans: The Company makes defined contribution to the Regional Provident Fund Commissioner in respect of provident fund scheme. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.

(ii) Defined Benefit plans: Company provides post-retirement medical benefits to employees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of minimum service period. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit plans.

(iii) Gratuity is a post-employment defined benefit plan. The liability recognized in the balance sheet is the present value of the defined benefit obligation at the balance sheet date less fair value of plan assets. The defined benefit obligation is calculated by an independent actuary using projected unit credit (PUC) method.

(iv) Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions in respect of defined benefit plans are recognised in period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity.

(d) Provision/liabilities towards Foreign Service Contribution- Pension and Leave Salary are made in terms of Government Rules & Regulations for employees on deputation/Deemed Deputation and charged to statement of Profit and Loss on accrual basis.

v) Inventories:

(i) Inventories are valued at lower of cost and net realizable value.

(ii) In case of raw materials, packing materials, stores, spares and consumables, the cost includes duties and taxes (net of ITC, wherever applicable) and is arrived at on FIFO basis.

(iii) Cost of finished goods and work in process includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.

(iv) PD items (traded goods) are valued at cost or NRV on FIFO basis.

w) Taxation: -

(a) Current Income Tax: -

(i) Taxes including current income-tax are computed using the applicable tax rates and tax laws.

(ii) The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the company operates and generates taxable income.

(iii) Current income tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities Liability for additional taxes, if any, is provided / paid as and when assessments are completed.

(iv) Current tax related to OCI Item are recognized in Other Comprehensive Income (OCI).

(b) Deferred Tax

The Company has accounted for deferred taxation in line with IndAS-12 “Income Taxes” issued by the Ministry of Corporate Affairs.

i. Deferred income tax assets and liabilities are recognized for temporary differences which is computed using the tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

ii. Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

iii. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

iv. Deferred tax related to OCI Item are recognized in Other Comprehensive Income (OCI).

x) Earning Per Share

In determining basic earnings per share, the company considers the net profit attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. In determining diluted earnings per share, the net profit attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

y) Grants

i. Government grants relating to purchase of property, plant and equipment are included in liabilities as deferred income and credited to profit or loss over the on systematic basis over the expected life of the related assets and presented within other income.

ii. Grants relating to the revenue expenditure are adjusted against the related expenses. The unutilized portion of revenue and capital grant is shown as liability.

iii. Government grant in the form of Non-monetary asset is recognized at fair value and presented in balance sheet by setting up the grant as deferred Income.

z) Cash & Cash Equivalents

Cash and cash equivalents comprise cash on hand, drafts/ cheques on hand, bank balances, deposits with banks and short term investments, which are short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.

aa) Stale Cheques

Cheques which have not been cleared within the validity period of 3 months are credited to the stale cheque account. Stale cheques related to Private parties which are more than 4 years old from the date of transfer to stale cheque and those related to Government Bodies which are more than 6 years old from the date of transfer to stale cheque and which could not be cleared in stale cheque account are credited to Miscellaneous income. For any claim arising in future, the same are debited to Miscellaneous Expenses”

bb) Financial Instruments: -

Initial recognition and measurement

Financial Instruments recognized at its fair value plus or minus, in the case of a financial instrument not at fair value through profit or loss,transaction costs that are directly attributable to the acquisition or issue of the financial instruments.

Financial Asset at Amortized Cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets measured at amortised cost using effective interest rate method less impairment, if any. The EIR amortisation is included in finance income in the statement of profit and loss.

Following financial assets are measured at amortised cost: -

(i) Security deposit

(ii) Retention money

(iii) Cash and cash equivalent

(iv) Advances adjustable with other financial instrument

Financial Assets at fair value through other comprehensive income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned is recognised using the EIR method.

Financial Assets at Fair value through Profit & Loss (FVTPL)

FVTPL is a residual category for financial Assets. Any financial assets, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the company may elect to designate financial asset, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. If doing so reduces or eliminates a measurement or recognition inconsistency.

Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

Financial liabilities at Amortised Cost

Financial liabilities at amortised cost represented by trade and other payables, security deposits, advances refundable and retention money are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest rate method.

Financial liabilities at Fair Value through Profit & Loss (FVTPL)

The company has not designated any financial liabilities at FVTPL.

De-recognition Financial Asset

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized only when the contractual rights to the cash flows from the asset expires or it transfers the financial assets and substantially all risks and rewards of the ownership of the asset.

Financial Liability

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of Profit & Loss.

Impairment of Financial Assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the Statement of Profit & Loss Account.

cc) Fair Value Measurement

Company measures financial instruments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to the company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

- Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

At the reporting date, the Company analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the accounting policies. For this analysis, the Company verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The Company also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

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Mar 31, 2011

A. BASIS FOR PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared in accordance with the generally accepted accounting principles in India and comply with Accounting Standards issued by the Institute of Chartered Accountants of India under Section 211(3C) of the Companies Act, 1956.

B. METHOD OF ACCOUNTING

The Corporation is following accrual basis of accounting except License Fee on GDP basis with effect from 1st November, 2006 from the Licensees of static catering stalls, to whom the contract was awarded by Railways, on the basis of receipt, under historical cost convention.

C. USE OF ESTIMATES

In preparing the financial statements in conformity with accounting principals generally accepted in India, management is required to make estimates and assumptions that affects the reported amount of assets and liabilities and the disclosures of contingent liabilities as at the date of the financial statements and the amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognized in the period of their determination.

D. REVENUE RECOGNITION

The Corporation is in the business of managing catering services (both mobile and static units), Bedroll services in mobile units, operating Departmental Catering Units, Managing Rail Yatri Niwas and Railway Hotels on Public Private Partnership basis, awarding licenses for operating Food Plazas, Static Catering stalls, Automatic Vending Machines, booking of Rail Tickets through Internet, Managing Rail Sampark-139 Call Centre on Public Private Partnership basis, arranging package tours through reputed tour operators, managing complete tour packages, manufacturing and distribution of Railneer-Packaged Drinking Water, etc.

1. Sales:-

Sales of Railneer-packaged drinking water, food and beverage items are recognized when the goods are sold and services rendered and are recorded net of excise duties wherever applicable, VAT etc. in terms of AS 9. It does not include inter-depot and inter- unit transfers.

2. Income from Internet Ticketing:-

Income from Internet ticketing is recognized on the basis of value of the service charges earned on the sale of tickets sold through Corporation''s Web-site (www.irctc.co.in). Service charges earned on the sales of such tickets on accrual basis have been booked as income of the Corporation.

3. Income from Catering Services:-

The Corporation has been given a mandate by Railway Board, Ministry of Railways to upgrade and professionalize catering services on trains & other locations. The Corporation recognizes its income from catering services as per the following policies.

(a) Income from Onboard Catering Services:

The corporation is providing catering services on Rajdhani and Shatabdi Express Trains on Indian Railways network. The income is accounted on the basis of bills raised for catering services provided to the passengers of Indian Railways on accrual basis.

The Income under these heads have been recognized / accounted as under: -

(i) Concession fee: Income is recognized on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) over the contract period as per proportionate completion method contained in Accounting Standard (AS-9) relating to revenue recognition. One time concession fee (Unexpired Concession Fee) received by the Corporation has been treated as income received in advance. In case the contracts for the trains are terminated on account of cancellation / withdrawal of the train by Railway Administration, income is recognized over the period, the contract was in force.

(ii) User charges: User Charges payable by the Food Plazas and Budget Hotels Licensees are accounted on accrual basis till the period project were in operation.

(iii) License Fee:-

(a) Fixed yearly license fees received by the Corporation are accounted on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) till the period project were in operation.

(b) Variable License fee is accounted on accrual basis as a fixed percentage of the catering services provided by the contractor.

(c) License fee is accounted on accrual basis as a fixed percentage of the projected turnover of the Rail Yatri Niwas and Railway Hotels operated by the licensees under re-develop, operate, manage and transfer basis.

(iv) Income Accrued on Forfeiture of Contracts: - Recognition of income from Catering contracts terminated on account of breach of terms and conditions was made as under: -

(a) Up to the date of termination, the income is recognized in respect of concession fee over the contract period on monthly pro-rata basis and in case of License fee over the period the train has been in operation on monthly pro-rata basis.

(b) Other income: Remaining balance of concession fee, License fee and Security Deposits on forfeiture of contracts are recognized as other income accrued during the year.

4. Income from Package Tours:-

The Corporation is engaged in booking of Special Trains, Special Coach Charter and berths under value added tours for promoting the rail-based tourism. The income from special trains/ Coach Charters includes basic fare, other charges levied by the railway administration and Corporation''s service charge as a fixed percentage of the basic fare. In case of value added tours, the income includes fare, block booking charges, other charges levied by the railway administration and Corporations service charges as fixed percentage of the fare.

In case of Complete Tour Packages, Buddhist Circuit Special Train and Bharat Darshan Trains, the income includes the total amount net of service tax collected from the customer.

5. Interest Income from Fixed Deposits including TDRs: -

Income received as Interest from fixed deposit & TDRs is recognized on accrual basis.

6. Duty Credit License:

A non-transferable duty credit license under the ''Served from India Scheme'' (SFIS) has been received as per foreign trade policy 2004-2009 The said license can be used against payment of excise & import duty for prescribed items.

E. EXPENDITURE: -

Items of expenditure are recognised on accrual basis however certain expense/claims, which are not ascertainable are accounted for on their being ascertained.

1. Expenditure on Railneer - Packaged Drinking Water and Departmental Catering Activity: -

Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities.

2. Expenditure on Internet ticketing: -

Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities.

3. Catering Charges Paid:-

(a) Onboard Catering Charges:

Catering Charges paid to the Contractor are accounted for on the basis of bills raised on Corporation for catering services provided to the passengers of Indian Railways.

(b) Concession Fees, User Charges, License Fee and Haulage Charges :-

The Expenditure under this head has been recognized/accounted for as per the following:

i) Concession Fee Paid: Concession Fee payable to Indian Railways in respect of on board catering contract, Automatic Vending Machines, Static Units etc. is recognized on accrual basis on monthly pro-rata basis (fraction ofthe month, if any, has been treated as full month) over the contract period. Payment of Unexpired Concession Fee to the Indian Railways has been treated as an advance. In case the contracts for the trains are terminated on account of breach of terms and conditions of the contract or cancellation withdrawal of the train by Railway Administration, expenditure is recognized over the period, the Contract was in force.

ii) User charges Paid: User Charges payable to Indian Railways in respect of Food Plazas and Budget Hotels are accounted for on accrual basis till the period projects were in operation.

iii) License Fee Paid:-

a) Fixed yearly license fees payable to Indian Railways by the Corporation is accounted for on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) till the period project were in operation.

(b) Variable License fee payable to Indian Railways is accounted on accrual basis as a fixed percentage of the catering services provided /sales made.

iv) Tourism Expenses: -

The Cost of Ticket, other charges, if any, levied by the Indian Railways and Service charges on booking of the special train / coach charter/ berths are accounted on accrual basis.

In case of complete tour packages and Buddhist Circuit Special Train, cost of train ticket, Service Charges and other charges, if any levied by Indian Railways, Road Travel expenses and accommodation and meal charges etc are accounted on accrual basis.

4. Prior Period Expenses:

Income / expenditure relating to prior period, which do not exceed Rs1, 00,000/- in each case, are treated as income /expenditure of current year.

F. FIXED ASSETS AND INTANGIBLE ASSETS: -

(i) Fixed assets are stated at cost of acquisition including installation charges and other related expenses.

(ii) In case of Computers the cost of Operating System software procured along with Computer has been capitalized with Computers, while regular upgrades and Annual Maintenance Charges; have been treated as revenue expenditure.

(iii) Expenditure on the leased buildings for Office premises has been capitalized as Leasehold Office Development.

(iv) Intangible assets are recorded at the consideration paid for acquisition. The Software Development Charges, web portal, tourism portal expenditure, which was capitalized with Computers in earlier years, has now been capitalized under the head Intangibles as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India dated 9th January, 2009. Useful life of Intangible Assets has been assumed 4 Years.

(v) The tools and plants placed at such catering units are taken on, as is where basis is. Due to non-availability of value of such assets, such assets are accounted at Nominal Value of Rs 1/- per item in the Books of Zonal Offices of the Corporation for the purpose of ensuring physical verification.

(vi) The Luxury Tourist Train has been capitalized and shown as " Luxury Tourist Train " in Fixed Assets Schedule.

G. CAPITAL WORK IN PROGRESS: -

The Expenditure on Budget Hotels, pending works at Railneer Plant at Palur etc. are classified under capital work in progress and will be allocated to respective heads after completion of the work.

H. DEPRECIATION: -

(i) The Corporation is following the straight-line method of depreciation in respect of

buildings and plant and machinery of Railneer Plants located at Nangloi and Danapur and intangible assets and written down value method in respect of other assets. Depreciation is provided at the rates as specified under schedule XIV of the Companies Act, 1956. Depreciation is calculated on a pro-rata basis from the date of put to use. Depreciation is provided up to the date of sale, discard and loss of the assets during the year.

(ii) Individual assets whose actual cost of acquisition during the year does not exceed Rs 5000/- (Rupees five thousand only) have been depreciated @100 % in terms of schedule XIV of the Companies Act, 1956.

(iii) Leasehold-Office developments in respect of office premises and Leasehold land have been depreciated over the lease period.

(iv) Useful life of the Intangible Assets has been assumed at four years and such assets have been depreciated @25 % per annum on straight line method.

(v) The depreciation on Luxury Tourist Train has been arrived on following basis:

- Coaches (Bare Shell) and Interior Furnishing has been taken @ 4.75% per annum and @ 13.58 % per annum respectively on straight line method with residual value remaining 5% of the original cost.

- Depreciation on Air Conditioners has been taken @ 13.91% per annum on written down value with residual value remaining 5% of the original cost.

(vi) In respect of Residential Flats constructed on leasehold land, depreciation is charged over the period of the lease of the land.

I. INVENTORIES: -

(i) Inventories are valued at lower of cost and net realizable value.

(ii) In case of raw materials, packing materials, stores, spares and consumables, the cost includes duties and taxes (net of CENVAT, wherever applicable) and is arrived at on FIFO basis.

(iii) Cost of finished goods and work in process includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.

(iv) PD items (traded goods) are valued at cost on FIFO basis.

J. INVESTMENTS: -

Long term investments are carried at cost less provisions, if any, for permanent diminution in the value of such investment.

K. EMPLOYEES BENEFITS: -

(i) The provisions/ liabilities towards, Gratuity and Leave encashment are made on the basis of actuarial valuation at the end of the year and charged to Profit and Loss Account.

(ii) Provision/ liabilities towards Foreign Service Contribution- Pension and Leave Salary are made in terms of Government Rules & Regulations for employees on deputation/ Deemed Deputation and charged to Profit and Loss Account on accrual basis.

L. GRANTS:-

Grants relating to the acquisition of a specific asset are adjusted against the cost of the concerned asset. Grants relating to the revenue expenditure are adjusted against the related expenses

M. TAXATION: -

The corporation has accounted for deferred taxation in line with accounting standard (AS) 22 on "accounting for taxes on income" issued by the Institute of Chartered Accountant of India.

The deferred tax on timing differences between book profit and taxable profit for the year is accounted for applying the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is a reasonable certainty that the assets can be realized in future.

N. SUNDRY DEBTORS/ADVANCES: -

Sundry debtors/advances are stated after writing off debts considered as bad. Adequate provision is made for debts/advances considered doubtful.

O. IMPAIRMENT OF ASSETS:

Cash generating units as defined in AS-28 on ''Impairment of Assets'' are identified at the balance sheet date with respect to carrying amount vis-a-vis. recoverable amount thereof and impairment loss, if any, is recognized in the profit and loss account. Impairment loss, if need to be reversed subsequently, is accounted for in the year of reversal.

P. FOREIGN CURRENCYTRANSACTIONS:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Foreign currency assets and liabilities are translated or converted with reference to the rates of exchange ruling on the date of the Balance Sheet.

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Mar 31, 2010

BASIS FOR PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared in accordance with the generally accepted accounting principles in India and comply with Accounting Standards specified to be mandatory by the Institute of Chartered Accountants of India under Section 211(3C) of the Companies Act, 1956.

METHOD OF ACCOUNTING:-

The Corporation is following accrual basis of accounting except License Fee on GDP basis with effect from 1st November, 2006 from the Licensees of static catering stalls, to whom the contract was awarded by Railways, on the basis of receipt, under historical cost convention.

USE OF ESTIMATES

In preparing the financial statements in conformity with accounting principals generally accepted in India, management is required to make estimates and assumptions that affects the reported amount of assets and liabilities and the disclosures of contingent liabilities as at the date of the financial statements and the amount of revenues and expenses during the reported period. Actual results could differ from those esti- mates. Any revision to such estimates is recognized in the period of their determination.

REVENUE RECOGNITION:-

The Corporation is in the business of managing catering services (both mobile and static units), Bedroll services in mobile units, operating Departmental Catering Units, Managing Rail Yatri Niwas and Railway Hotels on Public Private Partnership basis, awarding licenses for operating Food Plazas, Static Catering stalls, AVMS, booking of Rail Tickets through Internet, Managing Rail Sampark-139 Call Centre on Public Private Partnership basis, arranging package tours through reputed tour operators, managing Complete Tour Packages, manufacturing and distribution of Railneer-Packaged Drinking Water, etc.

1. Sales:-

Sales of Railneer-packaged drinking water, food and beverage items are recognized when the goods are sold and services rendered and are recorded net of excise duties wherever applicable, VAT etc. in terms of AS 9. It does not include inter-depot and inter-unit transfers.

2. Income from Internet Ticketing: -

Income from Internet ticketing is recognised on the basis of value of the service charges earned on the sale of tickets sold through Corporation''s Web-site (www.irctc.co.in). Service charges earned on the sales of such tickets on accrual basis have been booked as income of the Corporation.

3. Income from Catering Services: -

The Corporation has been given a mandate by Railway Board, Ministry of Railways to upgrade and professionalize catering services on trains & other locations. The Corporation recognizes its income from catering services as per the following policies.

(a) Income from Onboard Catering Services:

The corporation is providing catering services on Rajdhani and Shatabdi Express Trains on Indian Railways network. The income is accounted on the basis of bills raised for catering services provided to the passengers of Indian Railways on accrual basis.

(b) Income from Concession Fees, User Charges and License Fee: -

The Corporation is receiving the income from the following: -

(i) Concession fee: Income is recognized on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) over the contract period as per proportionate completion method contained in Accounting Standard (AS-9) relating to revenue recognition. One time concession fee (Unexpired Concession Fee) received by the Corporation has been treated as income received in advance. In case the contracts for the trains are terminated on account of cancellation / withdrawal of the train by Railway Administration, income is recognized over the period, the contract was in force.

(ii) User charges: User Charges payable by the Food Plazas and Budget Hotels Licensees are accounted on accrual basis till the period project were in operation.

(iii) License Fee: -

(a) Fixed yearly license fees received by the Corporation are accounted on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) till the period project were in operation.

(b) Variable License fee is accounted on accrual basis as a fixed percentage of the catering services provided by the contractor.

(c) License fee is accounted on accrual basis as a fixed percentage of the projected turnover of the Rail Yatri Niwas and Railway Hotels operated by the licensees under re-develop, operate, manage and transfer basis.

(iv) Income Accrued on Forfeiture of Contracts: - Recognition of income from Catering contracts terminated on account of breach of terms and conditions was made as under: -

(a) Up to the date of termination, the income is recognized in respect of concession fee over the contract period on monthly pro-rata basis and in case of License fee over the period the train has been in operation on monthly pro-rata basis.

(b) Other income: Remaining balance of concession fee, License fee and Security Deposits on forfeiture of contracts are recognized as other income accrued during the year.

4. Income from Package Tours: -

The Corporation is engaged in booking of Special Trains, Special Coach Charter and berths under value added tours for promoting the rail-based tourism. The income from special trains/ Coach Charters includes basic fare, other charges levied by the railway administration and Corporation''s service charge as a fixed percentage of the basic fare. In case of Value added tours, the income includes fare, block booking charges, other charges levied by the railway administration and Corporations service charges as fixed percentage of the fare.

In case of Complete Tour Packages, Buddhist Circuit Special Train and Bharat Darshan Trains, the income includes the total amount net of service tax collected from the customer.

5. Interest Income from Fixed Deposits including TDRs: -

Income received as Interest from fixed deposit & TDRs is recognized on accrual basis.

6. DUTY CREDIT LICENCE:

A non - transferable duty credit license under the ''Served from India Scheme'' (SFIS) has been received as per foreign trade policy 2004-2009 . The said license can be used against payment of excise & import duty for prescribed items.

EXPENDITURE: -

Items of expenditure are recognised on accrual basis however certain expense/claims, which are not ascertainable are accounted for on their being ascertained.

1. Expenditure on Railneer -Packaged Drinking Water and Departmental Catering Activity: -

Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities

2. Expenditure on Internet ticketing: -

Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities

3. Catering Charges Paid:

(a) Onboard Catering Charges:

Catering Charges paid to the Contractor are accounted for on the basis of bills raised on Corporation for catering services provided to the passengers of Indian Railways.

(b) Concession Fees, User Charges, License Fee and Haulage Charges : -

The Expenditure under this head has been recognized/ accounted for as per the following:

i) Concession Fee Paid: Concession Fee payable to Indian Railway in respect of on board catering contract, AVMs, Static Units etc. is recognized on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) over the contract period. Payment of Unexpired Concession Fee to the Indian Railway has been treated as an advance. In case the contracts for the trains are terminated on account of breach of terms and conditions of the contract or cancellation / withdrawal of the train by Railway Administration, expenditure is recognized over the period, the contract was in force.

ii) User charges Paid: User Charges payable to Indian Railway in respect of Food Plazas and Budget Hotels are accounted for on accrual basis till the period projects were in operation.

iii) License Fee Paid: -

(a) Fixed yearly license fees payable to Indian Railway by the Corporation is accounted for on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) till the period project were in operation.

(b) Variable License fee payable to Indian Railway is accounted on accrual basis as a fixed percentage of the catering services provided /sales made.

iv) Tourism Expenses: -

The Cost of Ticket, other charges, if any, levied by the Indian Railway and Service charges on booking of the special train / coach charter / berths are accounted on accrual basis.

In case of complete tour packages and Buddhist Circuit Special Train, cost of train ticket, Service Charges and other charges, if any levied by Indian Railway, Road Travel expenses and accommodation and meal charges etc are accounted on accrual basis.

4. PRIOR PERIOD EXPENSES :

Income / expenditure relating to prior period, which do not exceed Rs 1, 00,000/- in each case, are treated as income / expenditure of current year.

FIXED ASSETS AND INTANGIBLE ASSETS: -

(i) Fixed assets are stated at cost of acquisition including installation charges and other related expenses.

(ii) In case of Computers the cost of Operating System software procured along with Computer has been capitalized with Computers, while regular upgrades and Annual Maintenance Charges; have been treated as revenue expenditure.

(iii) Expenditure on the leased buildings for Office premises has been capitalized as Leasehold -Office Development.

(iv) Intangible assets are recorded at the consideration paid for acquisition. The Software Development Charges, web portal, tourism portal expenditure, which was capitalized with Computers in earlier years, has now been capitalized under the head Intangibles as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India dated 9th January, 2009. Useful life of Intangible Assets has been assumed 4 Years.

(v) The tools and plants placed at such catering units are taken on, as is where basis is. Due to non- availability of value of such assets, such assets are accounted at Nominal Value of Rs.1/- per item in the Books of Zonal Offices of the Corporation for the purpose of ensuring physical verification.

(vi) The Luxury Tourist Train has been capitalized and shown as " Luxury Tourist Train " in Fixed Assets Schedule .

CAPITAL WORK IN PROGRESS: -

The Expenditure on Budget Hotels, pending works at Railneer Plant at Palur etc. are classified under capital work in progress and will be allocated to respective heads after completion of the work.

DEPRECIATION: -

(i) The Corporation is following the straight-line method of depreciation in respect of buildings and plant and machinery of Railneer Plants located at Nangloi and Danapur and intangible assets and written down value method in respect of other assets. Depreciation is provided at the rates as specified under schedule XIV of the Companies Act, 1956. Depreciation is calculated on a pro-rata basis from the date of put to use. Depreciation is provided up to the date of sale, discard and loss of the assets during the year.

(ii) Individual assets whose actual cost of acquisition during the year does not exceed Rs 5000/- (Rupees five thousand only) have been depreciated @ 100 % in terms of schedule XIV of the Companies Act, 1956.

(iii) Leasehold-Office developments in respect of office premises and Leasehold land have been depreciated over the lease period.

(iv) Useful life of the Intangible Assets has been assumed at four years and such assets have been depreciated @ 25 % per annum on straight line method.

(v) The depreciation on Luxury Tourist Train has been arrived on following basis:

- Coaches (Bare Shell) and Interior Furnishing has been taken @ 4.75% per annum and @ 13.58 % per annum respectively on straight line method with residual value remaining 5% of the original cost.

- Depreciation on Air Conditioners has been taken @ 13.91% per annum on written down value with residual value remaining 5% of the original cost.

(vi) In respect of Residential Flats constructed on leasehold land, depreciation is charged over the period of the lease of the land.

INVENTORIES: -

(i) Inventories are valued at lower of cost and net realizable value.

(ii) In case of raw materials, packing materials, stores, spares and consumables, the cost includes duties and taxes (net of CENVAT, wherever applicable) and is arrived at on FIFO basis.

(iii) Cost of finished goods and work in process includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.

(iv) PD items (traded goods) are valued at cost on FIFO basis.

INVESTMENTS: -

Long term investments are carried at cost less provisions, if any, for permanent diminution in the value of such investment.

EMPLOYEES BENEFITS:

(i) The provisions/ liabilities towards, Gratuity and Leave encashment are made on the basis of actuarial valuation at the end of the year and charged to Profit and Loss Account.

(ii) Provision/ liabilities towards Foreign Service Contribution- Pension and Leave Salary are made in terms of Government Rules & Regulations for employees on deputation/ Deemed Deputation and charged to Profit and Loss Account on accrual basis.

GRANTS:

Grants relating to the acquisition of a specific asset are adjusted against the cost of the concerned asset. Grants relating to the revenue expenditure are adjusted against the related expenses

TAXATION: -

(i) The corporation has accounted for deferred taxation in line with accounting standard (AS) 22 on "accounting for taxes on income" issued by the Institute of Chartered Accountant of India.

The deferred tax on timing differences between book profit and taxable profit for the year is accounted for applying the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is a reasonable certainty that the assets can be realized in future.

SUNDRY DEBTORS/ADVANCES: -

Sundry debtors/advances are stated after writing off debts considered as bad. Adequate provision is made for debts/advances considered doubtful.

IMPAIRMENT OF ASSETS:

Cash generating units as defined in AS-28 on ''Impairment of Assets'' are identified at the balance sheet date with respect to carrying amount vis-a-vis. recoverable amount thereof and impairment loss, if any, is recognized in the profit and loss account. Impairment loss, if need to be reversed subsequently, is accounted for in the year of reversal.

FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Foreign currency assets and liabilities are translated or converted with reference to the rates of exchange ruling on the date of the Balance Sheet.