Notes to Accounts of Indian Railway Catering & Tourism Corporation Ltd.

Mar 31, 2025

j) 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.

k) 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 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 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 rendering catering
services to 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 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.

l) 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 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 on Company
Owned plants and for PPP plants, revenue share is
booked @40 of the profits 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 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
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: -

License Fees payable to Indian Railways by
the Company is accounted for on accrual basis
(pro-rata) till the period contract are in operation
on fixed percentage basis.

• 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 on the
basis of operations of trains for the year.

• 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.

m) 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”.

n) 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.

o) 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.

p) 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.

q) Prior period errors/items are considered material if the
items of income/expenditure exceed 1% of the company''s
turnover of the last audited standalone financial
statements. These are dealt with retrospectively by
restating the comparative amounts for the period in which
the error occurred. If the error occurred before the earliest
period presented, the opening balances of assets,
liabilities, and equity for the earliest period presented are
restated. If restating the earliest period is impracticable,
the comparative information is adjusted to apply the
new accounting policy prospectively from the earliest
practicable date.

r) 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.

s) 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).

t) Earnings 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.

u) 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.

v) 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.

w) 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”

x) 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.

y) 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.

(i) Provision for doubtful debts/advances is made on the basis of management''s estimates. During the current financial year, an
amount of H 590.49 (previous year H 0.15) lakhs have been utilized towards bad debts written off.

(ii) Provision for retirement benefits (excluding for pension) is made on the basis of independent actuary’s valuation.

(iii) Provision of Pension in respect of deemed deputationist Optees has been made to make 100% commutation of difference
of pension (IRCTC- Railways)as full and final one time settlement of pensionery liabilities of IRCTC so as to avoid monthly
recurring liability of pension. Provision of Leave Encashment includes H 1.33 lakhs for deemed deputationists Optees.

(iv) Provision for pension represents contribution payable in respect of employees who are yet to open their NPS account as on
31^st March, 2025.

(v) Provision for Claims & Damages includes provision for GST refund to licensees amounting to H 796.59 Lakhs payable as
refund of license fee given to licensees during previous years. During the current financial year, an amount of H Nil (previous
year H 14.46) lakhs have been utilized for payment to licensee as per the awards by Ho''nble high court in favour of licensee.

(ii) Royale Indian Rail Tours Limited (RIRTL) is a Joint Venture of IRCTC and Cox and King (C&K) on the basis of JV agreement
dated 10.12.2008 for running, operating and managing the luxury tourist train, Maharajas’ Express for a minimum period of
15 years on lease to be taken from IRCTC. It operated the train for one season and thereafter dispute arose between the
management of both the companies.

C&K has initiated the Arbitration Proceedings against IRCTC and RIRTL seeking relief inter alia that (i) the JV Agreement be
specifically performed (ii) the termination of the JV agreement be struck down, (iii) pending the hearing and final disposal of
the claim, it be directed that the Train continues to operate as part of RIRTL (iv) IRCTC be permanently restrained from using
the rake/coaches of the Train for any other purpose other than for exclusive use of the JV Company, (v) to execute a formal
lease agreement for the Train in terms of the JV Agreement (vi) IRCTC be directed to pay H 2000 lakhs towards shortfall of

the working capital of the JV Company and (vii) in the alternative and in the unlikely event that specific performance of the JV
Agreement is not granted then claim of damages amounting to H 35,100 lakhs.

During the proceedings dated 26.07.2021, Counsel for Cox and King made a statement that “The Claimant wishes to restrict
its Claim to H 2270 Lakhs along with interest being the cost thrown away in this Contract”. The final arguments in the matter
was heard on 28.02.2023 and the Arbitral tribunal has passed an Award dated 31.07.2023 in favour of IRCTC

As per the awards, IRCTC has wholly prevailed in the arbitration and the reliefs claimed by Cox and Kings (C&K) have not
been fully accepted. Hence, there are no financial implication of the said award on the Company. The arbitral award has
attained finality as no appeal has been preferred by the claimant.

(iii) VAT Case filled Before Hon’ble Supreme Court of India

IRCTC has been paying service tax towards on-board catering services in trains in which catering charges are included in
railway fare. The commissioner of VAT vide order dated 23.03.2006 considered on-board catering service in trains as sale of
goods within the meaning of section 2(zc)(vii) of the said Act.

IRCTC filed an appeal before the Appellate Tribunal Value Added Tax. The Tribunal, while partly allowing the appeal vide
Order dated 07.09.2006, held that the observations pertaining to Central Act were beyond the Commissioner’s jurisdiction as
they pertained to taxability of the goods on sale or purchase taking place in the course of inter-state sale outside the State.

IRCTC assailed the said order by way of filing writ petitions in the Hon’ble High Court of Delhi at New Delhi praying that the
services rendered by IRCTC are not liable to Value Added Tax under the Delhi Value Added Tax Act, 2004 and that on-board
catering services of IRCTC are primarily services in which food and beverages are also provided and are liable to service
tax only. The Hon’ble Delhi High Court upheld the decision of commissioner of VAT and dismissed the petition of IRCTC. The
Hon’ble High Court had stated IRCTC is liable to pay VAT. However, it may take refund of service tax already paid.

Aggrieved by the Judgement, IRCTC has moved to Hon’ble Supreme Court, filing Special leave petition against the judgment
dated 19.7.2010 passed by the Hon’ble High Court of Delhi. SLP 25292-25319 of 2010 had been admitted and awaiting its turn.
The Hon’ble Supreme Court has granted ad-interim direction in the nature of Status Quo on recovery of the demand raised by
VAT authorities. Hence the matter is sub-judice and IRCTC is not liable to pay VAT at present. However, IRCTC has provided VAT
liability (net of service tax) of H 8251.01 Lakhs up to FY 2017-18(upto 30^th June,2017) across India as a matter of prudent accounting
policy and not included in 37.2 (i) above. Corresponding VAT input admissibility is shown as balance with Govt. authorities.

(iv) Certain Licensees who are contractors of IRCTC for providing catering services in trains invoked arbitration clause seeking
compensation on account of difference in rates of regular meal and combo meal as provided in terms of CC 63 of 2013 read
with CC 67 of 2013 circular issued by Indian Railways and further claimed price of welcome drink provided in terms of CC
32 of 2014, for the period from 2014 till date. The arbitrator awarded a sum of H 7471.65 Lakhs (approx.) in 13 petitions for the
aforesaid services for the period from January 2015 to March 2020.

On the basis of appraisal of the factual position, it is matter of record that the claimant never claimed said amount while
submitting invoices for the aforesaid services rendered to the passengers. These all contracts are SBD contracts and were
assigned to IRCTC post Catering Policy 2017. It is also a matter of record that the services were provided to the passengers
of the Indian Railways and the amount so paid is required to be reimbursed to the IRCTC by the Indian Railways. In these
circumstances, there will not be any liability of the IRCTC as a consequence of the award and there is no need to make
provision pursuant to the above awards. As the Company intends to dispute the awards and also has a right of recovery from
Railways, in case the Company is held liable to pay ultimately. However, the same is included in 37.2 (i) above.

The Company has filed objection against Arbitral award and the Hon’ble High Court, Delhi vide Order dated 09.10.2023
directed the Corporation to deposit the awarded amount so as to stay the execution of the Arbitral Award. In compliance of
the aforesaid order, the Corporation deposited a bank Guarantee to the tune of H 8471.65 Lakhs so as to stay the execution
of the said award. The Hon’ble High Court of Delhi set aside and quashed the award of H 4200 Lakhs against IRCTC while
upholding the smaller claim of H 3200 lakhs and the aforesaid Bank guarantee has been released to IRCTC. Aggrieved by the
said decision, the Corporation and the licensee both have separately filed petitions u/s 37 of Arbitration and Conciliation Act,
1996 for challenging the impugned judgment. The Ld. Divisional Bench by way of judgment dated 10.02.2025 has restored
the Arbitral award qua the Claimant''s claim towards second regular meal and welcome drinks. IRCTC has filed SLP against
the judgement dated 10.02.2025 before the Hon''ble Supreme Court.

(v) Demand notice received from National Anti Profiteering Authority for J 5041.44 Lakhs:

IRCTC is a manufacturer of Rail Neer Bottled Drinking Water for exclusive sate to onboard passengers and at Railway Stations
through 4 owned plants(previous year 5 plants owned by company. Bitaspur plant converted to PPP Plant in FY 2022-23)
and 12 Plants on PPP model. Post implementation of GST regime w.e.f. 01.07.2017, the tax liability on the product was reduced
from 24 % (excise 12.5% (with abatement of 45%) VAT 12.5%) to 18% GST. Even though there was no reduction in GST rates
subsequent to GST regime, the Anti profiteering Authority has observed that the benefit of tax has not been passed on to the
consumer and as such issued notice for profiteering amount of H 5041.44 lakhs under section 171 of the CGST Act, 2017.

Rail Neer admittedly falls under controlled price segment like catering services at stations and on-board. It is also a fact that
on the basis of various yardsticks, the price of the Rail Neer is regulated by Ministry of Railways. The present MRP of H 15/- was
fixed in the year 2012 through Railway Board Commercial Circular no. 72 of 2012. However the transfer price of Rail Neer is
H 10 for 0-75 kilo meter, above 75 KM H 10.50 and Ex Rail Neer Plant H 9.33 fixed by the Company. Despite an increase in cost
of raw material, power and HR cost since the year 2012, Ministry of Railways continued to retain subsidised rate as a part
of mandatory government functions and government objectives in supplying standardise Rail Neer at a lower cost than the
market rate. The authority appears to have misinterpreted section 171 of GST Act and there is every likelihood of dropping the
show cause notice against the Central PSU, which is based on conjectures. The show cause notice has been contested by
the Company and matter was argued in August,2022 but final order from Authority still awaited. No provision has been made
for the said amount and the same is also not included in note 37.2 (i) above.

However, as per the notification No. 23/2022-Central tax issued on 23^rd November, 2022(effective from 1^st December, 2022) by
the Government of India, Competition Commission of India (CCI) has been empowered to adjudicate the matter. he proceedings
under the notice issued by NAA therefore stands concluded and now proceedings, if any, will be commenced afresh by the
Competition Commission of India (CCI) and as on date no communication has been received from CCI in this matter.

(vi) Kerala Government has fixed the MRP at H 13/- per 1 ltr. Bottle of Rail Neer under Essential Commodity Act for selling in Kerala
State and advised the Company to sell Rail Neer bottle at H 13/- instead of H 15/-. There is a stay of order against show cause
and seizure vide order dated 27.4.2022 and stay is continuing. No further date has been fixed in this matter as yet. Since, the
financial implication for the same is not ascertainable, the same is not included in note 37.2 (i) above of contingent liabilities.

(vii) The Company has received a show cause cum demand notice dated 18.10.2012 from the Directorate General of Central
Excise Intelligence (DGCEI), Pune, in which the department has raised the demand of H 7902 lakhs (included in Note No.37 (2)

(i) above) on the ground that IRCTC has not paid the service tax on the various services covered under Renting of immovable
property services, Outdoor Catering, business Auxiliary Services, Supply of tangible Goods and Rail Travel Agents.

As per the Department, IRCTC has leased out Food plaza, fast food units and various static units etc. to other catering/vending
contractor for which IRCTC has received license fees. According to DGCEI, service tax is payable on the said license fees
under the service category of “Renting of immovable property”.

In the opinion of the IRCTC, such services do not cover under the service category of ''"''Renting of immovable property””
services as the land is owned by the Indian Railways not by IRCTC and the purpose is to serve the passenger not to earn the
profit. IRCTC filed an appeal before the CESTAT which is under process.

Meanwhile, In the financial year 2019-20. Constitutional validity of the services fall under the “Renting of immovable property”
is challenged through a Special Leave Petition (SLP) by some other aggrieved assesses and the same had been admitted by
the Apex court.

The last hearing on the above mentioned show cause notice was held on 08.05.2019 and the same is adjourned sine die.
Same will be taken up by the CESTAT after the decision of the Honorable Supreme Court in the above mentioned SLP.

Refer Note 37.2 (iv) for right of recovery from Railways in case the Company is made liable to pay these claims ultimately and Note
79 regarding Ex-gratia/Performance related pay to the deputationists.

Note 38 Payment Gateways and Bank Reconciliations

Company is handling Railway reservations through internet for which almost all payment instruments e.g. payment gateways (PG) /
Net Banking / Debit cards / Credit Cards / UPI /Wallets etc. are being used. Out of those, there were some old PG accounts pertains
to old site which were inoperative and pending for reconciliation due to some bank side/technical issues. Final reconciliation of
the same is in process. Pending reconciliation, provision for doubtful of H 164.00 Lakhs (being 100% of debit outstanding) has been
made as on 31^st March, 2025 (31^st March, 2024 H 201.76 lakhs being 100% of debits outstanding).

Note :- 39: Balance Confirmations

Trade Receivables

a. Railways Balances

The Railways balances in form of trade receivables, trade payables, advances paid and security deposits are subject to
reconciliation and confirmation with the Railways and includes old balances since the time of takeover of catering from
the railways. The company is in the process of identifying and segregating the railway balances. No balance confirmation
letters were sent to Railways/Government Bodies as their books are maintained on cash basis. The Company has created a
provision of H 11,267.46 Lakhs as on 31^st March, 2025 (31^st March, 2024 H 9047.52 Lakhs) against receivables from Railways/
Other Government parties as per policy which in view of the management are doubtful of recovery.

b. Third Party Balances.

he third party balances are subject to confirmations and reconciliations from the various parties. The balance confirmation
letters has been sent to private parties but the response from the parties is not satisfactory. IRCTC has created a provision of
H 4,323.60 Lakhs as on 31^st March, 2025 (31^st March, 2024 H 5,462.74 Lakhs) against receivables as per policy which in view of
the management are doubtful of recovery.

Trade and Other Payables

These balances are subject to confirmations and reconciliations. Even though IRCTC has sent balance confirmation letters to these
parties but the response is not satisfactory.

Note :- 40 Capital Commitments

Estimated amount of Contracts remaining to be executed on capital account and not provided for amounts to H 4528.87 Lakhs as
at 31^st March, 2025 as against H 7683.47 Lakhs as at 31^st March, 2024.

Note 41

In the opinion of Management, value of Current Asset, Loans and advances, if realized in the ordinary course of business, shall not

be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Trade Receivables/Payables

including Railway Trade Receivables and Trade Payables/other parties and bank balances as stated in the Balance Sheet are

subject to confirmation and reconciliation.

Note :- 42 Employee Benefits

General description of the defined benefit schemes/defined contribution scheme:

(i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render
continuous service of 5 years or more. The gratuity ceiling of H 20 Lakhs has been considered for actuarial valuation. Actuarial
valuation though was made for all employees irrespective of the completion of 5 years of service.

(ii) Leave Encashment: Leave salary is provided for based on valuations, as at the balance sheet date, made by independent
actuary for present value of obligation without netting of fair value of plan assets.

(iii) Half Pay Leave: to eligible employees who have accumulated half pay leaves. Half pay leave is provided for based on
actuarial valuations, as at the balance sheet date.

(iv) Leave Travel Concession(LTC) : to eligible employees is provided for based on actuarial valuations, as at the balance sheet date.

(v) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation
is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporation’s
contribution to provident fund is charged to revenue.

(vi) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists
(employees who have joined the corporation on deputation for a fixed period from Indian Railways or other government
organizations) in terms of Government rules and regulations, is charged to revenue on accrual basis.

(vii) National Pension Scheme: Retirement benefits in the form of NPS is a defined contribution scheme. The company has no
obligation, other than the contribution @10% of Basic pay plus dearness allowance payable under such scheme. The company
recognize contribution payable to such scheme as an expense for the employees while in service.

(viii) Post Retirement Medical Benefit (PRMB): To eligible retired employees, provided for based on actuarial valuation as at the
Balance sheet date.

Mar 31, 2024

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 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 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 rendering catering services to 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 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 (prorata), 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.

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 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 on Company Owned plants and for PPP plants, revenue share is booked @40 of the profits 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 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 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: -

License Fees payable to Indian Railways by the Company is accounted for on accrual basis (pro-rata) till the period contract are in operation on fixed

percentage basis.

• 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 (prorata) 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 on the basis of operations of trains for the year.

• 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) Prior period errors/items are considered material if the items of income/expenditure exceed 1% of the company''s turnover of the last audited standalone financial statements. These are dealt with retrospectively by restating the comparative amounts for the period in which the error occurred. If the error occurred before the earliest period presented, the opening balances of assets, liabilities, and equity for the earliest period presented are restated. If restating the earliest period is impracticable, the comparative information is adjusted to apply the new accounting policy prospectively from the earliest practicable date.

w) 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.

x) 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).

y) 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.

z) 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.

aa) 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 shortterm (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.

bb) 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”

cc) 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 derecognition 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.

dd) 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.

(i) Provision for doubtful debts/advances is made on the basis of management''s estimates. During the current financial year, an amount of H 0.15 lakhs have been utilized towards bad debts written off.

(ii) Provision for retirement benefits (excluding for pension) is made on the basis of independent actuary’s valuation.

(iii) Provision of Pension in respect of deemed deputationist Optees has been made to make 100% commutation of difference of pension (IRCTC- Railways)as full and final one time settlement of pensionery liabilities of IRCTC so as to avoid monthly recurring liablity of pension. Provision of Leave Encashment includes H 1.33 lakhs for deemed deputationists Optees.

(iv) Provision for pension represents contribution payable in respect of employees who are yet to open their NPS account as on 31st March, 2024.

(v) Provision for Claims & Damages includes provision for GST refund to licensees amounting to H 796.59 Lakhs payable as refund of license fee given to licensees during previous years. During the current financial year, an amount of H 14.46 lakhs have been utilized for payment to licensee as per the awards by Ho''nble high court in favour of licensee.

(ii) Royale Indian Rail Tours Limited (RIRTL) is a Joint Venture of IRCTC and Cox and King (C&K) on the basis of JV agreement dated 10.12.2008 for running, operating and managing the luxury tourist train, Maharajas’ Express for a minimum period of 15 years on lease to be taken from IRCTC. It operated the train for one season and thereafter dispute arose between the management of both the companies.

C&K has initiated the Arbitration Proceedings against IRCTC and RIRTL seeking relief inter alia that (i) the JV Agreement be specifically performed (ii) the termination of the JV agreement be struck down, (iii) pending the hearing and final disposal of the claim, it be directed that the Train continues to operate as part of RIRTL (iv) IRCTC be permanently restrained from using the rake/coaches of the Train for any other purpose other than for exclusive use of the JV Company, (v) to execute a formal lease agreement for the Train in terms of the JV Agreement (vi) IRCTC be directed to pay H 2000 lakhs towards shortfall of the working capital of the JV Company and (vii) in the alternative and in the unlikely event that specific performance of the JV Agreement is not granted then claim of damages amounting to H 35,100 lakhs.

During the proceedings dated 26.07.2021, Counsel for Cox and King made a statement that “The Claimant wishes to restrict its Claim to H 2270 Lakhs along with interest being the cost thrown away in this Contract”. The final arguments in the matter was heard on 28.02.2023 and the Arbitral tribunal has passed an Award dated 31.07.2023 in favour of IRCTC

As per the awards, IRCTC has wholly prevailed in the arbitration and the reliefs claimed by Cox and Kings (C&K) have not been fully accepted. Hence, there are no financial implication of the said award on the Company. The arbitral award has attained finality as no appeal has been preferred by the claimant.

(iii) VAT Case filled Before Hon’ble Supreme Court of India

IRCTC has been paying service tax towards on-board catering services in trains in which catering charges are included in railway fare. The commissioner of VAT vide order dated 23.03.2006 considered on-board catering service in trains as sale of goods within the meaning of section 2(zc)(vii) of the said Act.

IRCTC filed an appeal before the Appellate Tribunal Value Added Tax. The Tribunal, while partly allowing the appeal vide Order dated 07.09.2006, held that the observations pertaining to Central Act were beyond the Commissioner’s jurisdiction as they pertained to taxability of the goods on sale or purchase taking place in the course of inter-state sale outside the State.

IRCTC assailed the said order by way of filing writ petitions in the Hon’ble High Court of Delhi at New Delhi praying that the services rendered by IRCTC are not liable to Value Added Tax under the Delhi Value Added Tax Act, 2004 and that on-board catering services of IRCTC are primarily services in which food and beverages are also provided and are liable to service tax only. The Hon’ble Delhi High Court upheld the decision of commissioner of VAT and dismissed the petition of IRCTC. The Hon’ble High Court had stated IRCTC is liable to pay VAT. However, it may take refund of service tax already paid.

Aggrieved by the Judgement, IRCTC has moved to Hon’ble Supreme Court, filing Special leave petition against the judgment dated 19.7.2010 passed by the Hon’ble High Court of Delhi. SLP 25292-25319 of 2010 had been admitted and awaiting its turn. The Hon’ble Supreme Court has granted ad-interim direction in the nature of Status Quo on recovery of the demand raised by VAT authorities. Hence the matter is sub-judice and IRCTC is not liable to pay VAT at present. However, IRCTC has provided VAT liability (net of service tax) of H 8251.01 Lakhs up to FY 2017-18(upto 30th June,2017) across India as a matter of prudent accounting policy and not included in 37.2 (i) above. Corresponding VAT input admissibility is shown as balance with Govt. authorities.

(iv) Certain Licensees who are contractors of IRCTC for providing catering services in trains invoked arbitration clause seeking compensation on account of difference in rates of regular meal and combo meal as provided in terms of CC 63 of 2013 read with CC 67 of 2013 circular issued by Indian Railways and further claimed price of welcome drink provided in terms of CC 32 of 2014, for the period from 2014 till date. The arbitrator awarded a sum of H 7471.65 Lakhs (approx.) in 13 petitions for the aforesaid services for the period from January 2015 to March 2020.

On the basis of appraisal of the factual position, it is matter of record that the claimant never claimed said amount while submitting invoices for the aforesaid services rendered to the passengers. These all contracts are SBD contracts and were assigned to IRCTC post Catering Policy 2017. It is also a matter of record that the services were provided to the passengers of the Indian Railways and the amount so paid is required to be reimbursed to the IRCTC by the Indian Railways. In these circumstances, there will not be any liability of the IRCTC as a consequence of the award and there is no need to make provision pursuant to the above awards. As the Company intends to dispute the awards and also has a right of recovery from Railways, in case the Company is held liable to pay ultimately. However, the same is included in 37.2 (i) above. The Company has filed objection against Arbitral award and the Hon’ble High Court, Delhi vide Order dated 09.10.2023 directed the Corporation to deposit the awarded amount so as to stay the execution of the Arbitral Award. In compliance of the aforesaid order, the Corporation deposited bank Guarantee to the tune of H 8471.65 Lakhs so as to stay the execution of the said award. It is to mention that the Hon’ble High Court, Delhi has reserved the judgment in the said matter

(v) Demand notice received from National Anti Profiteering Authority for H 5041.44 Lakhs:

IRCTC is a manufacturer of Rail Neer Bottled Drinking Water for exclusive sale to onboard passengers and at Railway Stations through 4owned plants(previous year 5 plants owned by company. Bilaspur plant converted to PPP Plant in FY 2022-23) and 12 Plants on PPP model. Post implementation of GST regime w.e.f. 01.07.2017, the tax liability on the product was reduced from 24 % (excise 12.5% (with abatement of 45%) VAT 12.5%) to 18% GST. Even though there was no reduction in GST rates subsequent to GST regime, the Anti profiteering Authority has observed that the benefit of tax has not been passed on to the consumer and as such issued notice for profiteering amount of H 5041.44 lakhs under section 171 of the CGST Act, 2017.

Rail Neer admittedly falls under controlled price segment like catering services at stations and on-board. It is also a fact that on the basis of various yardsticks, the price of the Rail Neer is regulated by Ministry of Railways. The present MRP of H 15/- was fixed in the year 2012 through Railway Board Commercial Circular no. 72 of 2012. However the transfer price of Rail Neer is H 10 for 0-75 kilo meter, above 75 KM H 10.50 and Ex Rail Neer Plant H 9.33 fixed by the Company. Despite an increase in cost of raw material, power and HR cost since the year 2012, Ministry of Railways continued to retain subsidised rate as a part of mandatory government functions and government objectives in supplying standardise Rail Neer at a lower cost than the market rate. The authority appears to have misinterpreted section 171 of GST Act and there is every likelihood of dropping the show cause notice against the Central PSU, which is based on conjectures. The show cause notice has been contested by the Company and matter was argued in August,2022 but final order from Authority still awaited. No provision has been made for the said amount and the same is also not included in note 37.2 (i) above.

However, as per the notification No. 23/2022-Centrat tax issued on 23rd November, 2022(effective from 1st December, 2022) by the Government of India, Competition Commission of India (CCI) has been empowered to adjudicate the matter.The proceedings under the notice issued by NAA therefore stands concluded and now proceedings, if any, will be commenced afresh by the Competition Commission of India (CCI) and as on date no communication has been received from CCI in this matter.

(vi) Kerala Government has fixed the MRP at H 13/- per 1 ltr. Bottle of Rail Neer under Essential Commodity Act for selling in Kerala State and advised the Company to sell Rail Neer bottle at H 13/- instead of H 15/-. There is a stay of order against show cause and seizure vide order dated 27.4.2022 and stay is continuing. No further date has been fixed in this matter as yet. Since, the financial implication for the same is not ascertainable, the same is not included in note 37.2 (i) above of contingent liabilities.

(vii) The Company has received a show cause cum demand notice dated 18.10.2012 from the Directorate General of Central Excise Intelligence (DGCEI), Pune, in which the department has raised the demand of H 7902 lakhs (included in Note No.37 (2)

(i) above) on the ground that IRCTC has not paid the service tax on the various services covered under Renting of immovable property services, Outdoor Catering, business Auxiliary Services, Supply of tangible Goods and Rail Travel Agents.

As per the Department, IRCTC has leased out Food plaza, fast food units and various static units etc. to other catering/vending contractor for which IRCTC has received license fees. According to DGCEI, service tax is payable on the said license fees under the service category of “Renting of immovable property”.

In the opinion of the IRCTC, such services do not cover under the service category of ''"''Renting of immovable property”” services as the land is owned by the Indian Railways not by IRCTC and the purpose is to serve the passenger not to earn the profit. IRCTC filed an appeal before the CESTAT which is under process.

Meanwhile, In the financial year 2019-20. Constitutional validity of the services fall under the “Renting of immovable property” is challenged through a Special Leave Petition (SLP) by some other aggrieved assesses and the same had been admitted by the Apex court.

The last hearing on the above mentioned show cause notice was held on 08.05.2019 and the same is adjourned sine die. Same will be taken up by the CESTAT after the decision of the Honorable Supreme Court in the above mentioned SLP.

Note 38 Payment Gateways and Bank Reconciliations

Company is handling Railway reservations through internet for which almost all payment instruments e.g. payment gateways (PG) / Net Banking / Debit cards / Credit Cards / UPI /Wallets etc. are being used. Out of those, there were some old PG accounts pertains to old site which were inoperative and pending for reconciliation due to some bank side/technical issues. Final reconciliation of the same is in process. Pending reconciliation, provision for doubtful of H 201.76 Lakhs (being 100% of debit outstanding) has been made during current Financial Year (31st March, 2023 H 291.59 lakhs being 100% of debits outstanding).

Note 39: Balance Confirmations

Trade Receivables

a. Railways Balances

The Railways balances in form of trade receivables, trade payables, advances paid and security deposits are subject to reconciliation and confirmation with the Railways and includes old balances since the time of takeover of catering from the railways. The company is in the process of identifying and segregating the railway balances. No balance confirmation letters were sent to Railways/Government Bodies as their books are maintained on cash basis. The Company has created a provision of H 9047.52 Lakhs as on 31st March, 2024 (31 March''2023 H 6740.52 Lakhs) against receivables from Railways/ Other Government parties as per policy which in view of the management are doubtful of recovery.

b. Third Party Balances.

The third party balances are subject to confirmations and reconciliations from the various parties. The balance confirmation letters has been sent to private parties but the response from the parties is not satissfactory. IRCTC has created a provision of H 5,462.69 Lakhs as on 31st March, 2024 (31 March''2023 H 7184.24 Lakhs) against receivables as per policy which in view of the management are doubtful of recovery.

Trade and Other Payables

These balances are subject to confirmations and reconciliations. Even though IRCTC has sent balance confirmation letters to these parties but the response is not satisfactory.

Note :- 40 Capital Commitments

Estimated amount of Contracts remaining to be executed on capital account and not provided for amounts to H 7683.47 Lakhs as at 31, March 2024 as against H 25182.85 Lakhs as at 31 March 2023.

Note :- 41

In the opinion of Management, value of Current Asset, Loans and advances, if realized in the ordinary course of business, shall not be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Trade Receivables/Payables including Railway Trade Receivables and Trade Payables/other parties and bank balances as stated in the Balance Sheet are subject to confirmation and reconciliation.

Note :- 42 Employee Benefits

General description of the defined benefit schemes/defined contribution scheme:

(i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous

service of 5 years or more. The gratuity ceiling of H 20 Lakhs has been considered for actuarial valuation. Actuarial valuation though was made for all employees irrespective of the completion of 5 years of service.

(ii) Leave Encashment: Leave salary is provided for based on valuations, as at the balance sheet date, made by independent

actuary for present value of obligation without netting of fair value of plan assets.

(iii) Half Pay Leave: to eligible employees who have accumulated half pay leaves. Half pay leave is provided for based on

actuarial valuations, as at the balance sheet date.

(iv) Leave Travel Concession(LTC) : to eligible employees is provided for based on actuarial valuations, as at the balance sheet date.

(v) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporation’s contribution to provident fund is charged to revenue.

(vi) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists (employees who have joined the corporation on deputation for a fixed period from Indian Railways or other government organizations) in terms of Government rules and regulations, is charged to revenue on accrual basis.

(vii) National Pension Scheme: Retirement benefits in the form of NPS is a defined contribution scheme. The company has no obligation, other than the contribution @10% of Basic pay plus dearness allowance payable under such scheme. The company recognize contribution payable to such scheme as an expense for the employees while in service.

(viii) Post Retirement Medical Benefit (PRMB): To eigible retired employees, provided for based on acturial valuation as at the Balance sheet date.

Note 44.3 Transactions with the Government Related entities

IRCTC is a central public sector undertaking controlled by Central Government by holding majority number of shares. Pursuant to paragraph 25 and 26 of IND-AS 24, entity over which the same Government has control or joint control, or signifiicant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms on Arm Length basis. IRCTC has applied the exemptions available for Government related entities and have made limited disclosure in the Standalone financial statements. Such entities with which IRCTC has significant transactions include but not limited to are as follows:-

Note 45 Financial Reporting of Interest in Joint Ventures

The Company had formed a joint venture company with Cox & Kings Limited with 50-50 equal partnership in the name of Royal Indian Rail Tours Limited (RIRTL), by virtue of joint venture agreement dated 10th December 2008. However due to issues between the equity partners, IRCTC terminated the agreement with Cox & Kings Limited as on 12th August 2011, and also withdrawn the train from RIRTL.

The Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company as at 31st March, 2024 are not available in view of non-finalization of its accounts because of dispute between the parties, due to which the consolidation of Financial Statements as required under Ind AS 110 could not be done. These Standalone Financial Statements are the separate financial statements as per Ind AS.

Note 46 Impairment of Assets

IRCTC has made an assessment on 31st March, 2024 for any indication of impairment in the carrying amount of Company’s Property, Plant & Equipment (PPE), Intangibles and ROU assets. On the basis of such assessment, in the opinion of the management, no provision for the impairment of Property, Plant & Equipment and intangible assets of IRCTC is required to be made during the year.

Based on present value of future profitability of Golden Chariot and Bharat Gaurav trains, no impairment of ROU is considered necessary by the management as on March 31, 2024 even though operations of these trains were in losses till March 31, 2024.

Note 48 Bank Balances other than Cash & Cash Equivalents

IRCTC has availed overdraft facility for H 10,000 Lakhs (previous year H 10,000 Lakh) from State Bank of India against fixed deposit of H 12,000 Lakhs (previous year H 12,000 Lakhs. The OD facility shall be availed @ 1 % higher than the interest rate on fixed deposit for the period for which OD is being availed. Fixed deposits to that extent are under lien.

Note :- 49 Railway Share

(a) License fees / service charges are shown at gross value and corresponding share paid/payable to Indian Railways have been shown as expense under note no. 27, 28, 29 & 33.2.

(b) As per MOU dt. 17.01.2007 signed between Railways & IRCTC, the sharing of revenue with Railways on Rail Neer has been mentioned in category I “ Passenger amenities like management of stall, refreshment rooms at railway station, pantry car services, Rail Neer etc. where services are restricted to paid passengers and items for sale and tariff are determined and controlled by Railways. For this activity there is very limited scope of profit to the service provider." In such case the revenue share is payable @ 15% of revenue earned by IRCTC. In case of departmental units, 15% of net profit to be shared with Railways by IRCTC.

Railway Board vide its Letter dated 20.07.2021, has raised the issue of Railway Share and asked the Company to pay Railway Share of all the Rail Neer Plants in

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Mar 31, 2022

Note 37.2 Contingent Liabilities (As ascertained, quantified and certified by the management)

(i) Claim against the Company not acknowledge as debt:

Amount (H in Lakhs)
S.No.	Particulars	As at 31st March, 2022	As at 31st March, 2021
a.	Service Tax	8,560.16	8,148.80
b.	VAT & Other Taxes	3,454.07	3,121.64
c.	Income Tax	59.28	-
d.	GST	164.68	-
e.	Others	10,407.97	769.70
Total		22,646.16	12,040.14

(ii) Royale Indian Rail Tours Limited (RIRTL) is a Joint Venture of IRCTC and Cox and King (C&K) on the basis of JV agreement dated 10.12.2008 for running, operating and managing the luxury tourist train, Maharajas’ Express for a minimum period of 15 years on lease to be taken from IRCTC. It operated the train for one season and thereafter dispute arose between the management of both the companies.

C&K has initiated the Arbitration Proceedings against IRCTC and RIRTL seeking relief inter alia that (i) the JV Agreement be specifically performed (ii) the termination of the JV agreement be struck down, (iii) pending the hearing and final disposal of the claim, it be directed that the Train continues to operate as part of RIRTL (iv) IRCTC be permanently restrained from using the rake/coaches of the Train for any other purpose other than for exclusive use of the JV Company, (v) to execute a formal lease agreement for the Train in terms of the JV Agreement (vi) IRCTC be directed to pay H2000 lakhs towards shortfall of the working capital of the JV Company and (vii) in the alternative and in the unlikely event that specific performance of the JV Agreement is not granted then claim of damages amounting to H3,5100 lakhs.

During the proceedings dated 26.07.2021, Counsel for Cox and King made a statement that “The Claimant wishes to restrict its Claim to H2270 Lakhs along with interest being the cost thrown away in this Contract”. The Arbitration Proceedings are pending for hearing before the arbitral tribunal and are listed for hearing on 08/09-06-2022.

The claim of H2270 Lakhs, included in 37.2 (i) (e) above, has also been denied by IRCTC. The said amount is only speculative and not fixed by any authority/quasi judicial body. As such, there is no requirement for making provision in the books of accounts.

(iii) VAT Case filled Before Hon’ble Supreme Court of India

IRCTC has been paying service tax towards on-board catering services in trains in which catering charges are included in railway fare. The commissioner of VAT vide order dated 23.03.2006 considered on-board catering service in trains as sale of goods within the meaning of section 2(zc)(vii) of the said Act.

IRCTC filed an appeal before the Appellate Tribunal Value Added Tax. The Tribunal, while partly allowing the appeal vide Order dated 07.09.2006, held that the observations pertaining to Central Act were beyond the Commissioner’s jurisdiction as they pertained to taxability of the goods on sale or purchase taking place in the course of inter-state sale outside the State.

IRCTC assailed the said order by way of filing writ petitions in the Hon’ble High Court of Delhi at New Delhi praying that the services rendered by IRCTC are not liable to Value Added Tax under the Delhi Value Added Tax Act, 2004 and that on-board catering services of IRCTC are primarily services in which food and beverages are also provided and are liable to service tax only. The Hon’ble Delhi High Court upheld the decision of commissioner of VAT and dismissed the petition of IRCTC. The Hon’ble High Court had stated IRCTC is liable to pay VAT. However, it may take refund of service tax already paid.

Aggrieved by the Judgement, IRCTC has moved to Hon’ble Supreme Court, filing Special leave petition against the judgment dated 19.7.2010 passed by the Hon’ble High Court of Delhi. SLP 25292-25319 of 2010 had been admitted and awaiting its turn. The Hon’ble Supreme Court has granted ad-interim direction in the nature of Status Quo on recovery of the demand raised by VAT authorities. Hence the matter is sub-judice and IRCTC is not liable to pay VAT at present. However, IRCTC has provided VAT liability net of service tax of H8251.01 Lakhs up to FY 2017-18(upto 30th June,2017) across India as a matter of prudent accounting policy and not included in 37.2 (i) above. Corresponding VAT input admissibility is shown as balance with Govt. authorities.

(iv) Certain Licensees who are contractor of IRCTC for providing catering services in trains invoked arbitration clause seeking compensation on account of difference in rates of regular meal and combo meal as provided in terms of CC 63 of 2013 read with CC 67 of 2013 circular issued by Indian Railways and further claimed price of welcome drink provided in terms of CC 32 of 2014, for the period from 2014 till date. The arbitrator awarded a sum of H7400 Lakhs (approx.) in 13 petitions for the aforesaid services for the period from January 2015 to March 2020. IRCTC has decided to assail the said order before higher court.

On the basis of appraisal of the factual position, it is matter of record that the claimant never claimed said amount while submitting invoices for the aforesaid services rendered to the passengers. These all contracts are SBD contracts and were assigned to IRCTC post Catering Policy 2017. It is also a matter of record that the services were provided to the passengers of the Indian Railways and the amount so paid is required to be reimbursed to the IRCTC by the Indian Railways. In these circumstances, there will not be any liability of the IRCTC as a consequence of the award and there is no need to make provision pursuant to the above awards. As the Company intentds to dispute the awards and also has a right of recovery from Railways, in case the Company is held liable to pay ultimately. However, the same is included in 37.2 (i) above.

(v) Demand notice received from National Anti Profiteering Authority for J5041.44 Lakhs:

IRCTC is a manufacturer of Rail Neer Bottled Drinking Water for exclusive sale onboard and at Railway Stations through 5 owned plants and 10 Plants on PPP model. Post implementation of GST regime w.e.f. 01.07.2017, the tax liability on the product was reduced from 24 % (excise 12.5% (with abatement of 45%) VAT 12.5%) to 18% GST. Even though there was no reduction in GST rates subsequent to GST regime, the Anti profiteering Authority has observed that the benefit of tax has not been passed on to the consumer and as such issued notice for profiteering amount of H5041.44 lakhs under section 171 of the CGST Act, 2017.

Rail Neer admittedly falls under controlled price segment like catering services at stations and on-board. It is also a fact that on the basis of various yardsticks, the price of the Rail Neer is regulated by Ministry of Railways. The present MRP of H15/- was fixed in the year 2012 through Railway Board Commercial Circular no. 72 of 2012. However the transfer price of Rail Neer is H10 for 0-75 kilo meter, above 75 KM H10.50 and Ex Rail Neer Plant H9.33 fixed by Ministry of Railways. Despite an increase in cost of raw material, power and HR cost since the year 2012, Ministry of Railways continued to retain subsidised rate as a part of mandatory government functions and government objectives in supplying standardise Rail Neer at a lower cost than the market rate. The authority appears to have misinterpreted section 171 of GST Act and there is every likelihood of dropping the show cause notice against the Central PSU, which is based on conjectures. The show cause notice is being contested by engaging a specialised advocate. As the matter is at infancy stage, there is no need for provision of the said amount and the same is also not included in note 37.2 (i) above.

(vi) Kerala Governement has fixed the MRP at H13/- per 1 ltr. Bottle of Railneer under Essential Commodity Act for selling in Kerala State and advised the Company to sell Railneer bottle at H13/- instead of H15/-. The Company has approached the Ho''nable High Court and stay order has been issued by the court. Since, the financial implication for the same is not ascertainable, the same is not included in note 37.2 (i) above as contingent liability for the Financial Year 2021-22.

Note :- 37.3 Contingent Assets

Amount (H in Lakhs)
S. No	Party Name	Particulars	Appellate Authority	Awarded amount
1	A.K. Roy Vs IRCTC	2577-78, 5279-80, 2395-96, 9165/66/67-68, 255556,2569-70, 2213-14,2203-04, 2061-62, 2209-10, 1043-44	Pending in Patiala House Court	21.95
2	CKK Caterers	Suit for recovery	suit pending	102.00
3	Travel Khana	Service provider did not deposit the amount in respect of e-catering	Arbitration	13.29
4	Railways	Passenger Feedback System	NA	638.41
Refer Note 37.2 (iv) for right of recovery from Railways in case the Company is made liable to pay these claims ultimately and Note 56 (b) regarding ITC claim yet to be raised on DCO.

Note 38 Payment Gateways and Bank Reconciliations

Company is handling Railway reservations through internet for which five payment gateways and more than thirty five Net banking / Debit card network of almost all the banks are being used. The volume of transactions in all these accounts is very huge and increasing day by day with increase in booking of tickets. In view of the above, transaction wise reconciliation can not be carried out in the Financial Year 2021-22.

However, there were some old PG accounts pertains to old site which were inoperative and pending for reconciliation due to some bank side/technical issues. Final reconciliation of the same is in process. Pending reconcilliation, provision for doubtful of H418.51 Lakhs (being 100% of net debit outstanding) has been made during current Financial Year (31st March, 2021 H243.50 lakhs being 50% of net debit outstanding).

Note :- 39: Balance Confirmations

Trade Receivables

a. Railways Balances

The Railways balances in form of trade receivables, trade payables, advances paid and security deposits are subject to reconciliation and confirmation with the railways and includes old balances since the time of takeover of catering from the railways. The company is in the process of identifying and segregating the railway balances. For FY 2021-22, the balance confirmation letters has also been sent to Railways/Government Bodies but there is no response from the parties. The Company has created a provision of H5164.45 Lakhs as on 31st March, 2022 (31 March''2021 H5067.05 Lakhs) against receivables from Railways as per policy which in view of the management are doubtful of recovery.

b. Third Party Balances.

The third party balances are subject to confirmations and reconciliations from the various parties. The managment has started the process of obtaining balance confirmation from third parties w.e.f. financial year 2019-20 and shall ensure practice of formalizing the reconciliation procedure and confirmations on frequent basis. For FY 2021-22, the balance confirmation letters has also been sent to private parties but the response from the parties is not satissfactory. IRCTC has created a provision of H5936.22 Lakhs as on 31st March, 2022 (31 March''2021 H4970.15 Lakhs) against receivables as per policy which in view of the management are doubtful of recovery.

Other Payables and Banks

These balances are subject to confirmations and reconciliations. Even though IRCTC has sent balance confirmation letters to these parties but the response is not satisfactory.

Note :- 40 Capital Commitments

Estimated amount of Contracts remaining to be executed on capital account and not provided for amounts to H8114.09 Lakhs as at 31, March 2022 as against H8598.27 Lakhs as at 31 March 2021.

Note :- 41

In the opinion of Management, value of Current Asset, Loans and advances, if realized in the ordinary course of business, shall not be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Trade Receivables/Payables including Railway Trade Receivables and Trade Payables/other parties and bank balances as stated in the Balance Sheet are subject to confirmation and reconciliation.

Note :- 42 Employee Benefits

General description of the defined benefit schemes/defined contribution scheme:

(i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. The gratuity ceiling of H20 Lakhs has been considered for actuarial valuation. Actuarial valuation though was made for all employees irrespective of the completion of 5 years of service.

(ii) Leave Encashment: Leave salary is provided for based on valuations, as at the balance sheet date, made by independent actuary.

(iii) Half Pay Leave: to eligible employees who have accumulated half pay leaves. Half pay leave is provided for based on actuarial valuations, as at the balance sheet date.

(iv) Leave Travel Concession(LTC) : to eligible employees is provided for based on actuarial valuations, as at the balance sheet date.

(v) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporation’s contribution to provident fund is charged to revenue.

(vi) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists including deemed deputationists (employees who have joined the corporation on deputation for a fixed period from Indian Railways or other government organizations) in terms of Government rules and regulations, is charged to revenue on accrual basis.

(vii) National Pension Scheme: Retirement benefits in the form of NPS is a defined contribution scheme. The company has no obligation , other than the contribution @10% of Basic pay plus dearness allowance payable under such scheme. The company recognize contribution payable to such scheme as an expense, when an employee render the related service.

(viii) Post Retirement Medical Benefit (PRMB): To eigible retired employees, provided for based on acturial valuation as at the Balance sheet date.

Note 44.3 Transactions with the Government Related entities

IRCTC is a central public sector undertaking controlled by Central Government by holding majority number of shares. Pursuant to paragraph 25 and 26 of IND-AS 24, entity over which the same Government has control or joint control, or signifiicant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms on Arm Length basis. IRCTC has applied the exemptions available for Government related entities and have made limited disclosure in the financial statements. Such entities with which IRCTC has significant transactions include but not limited to are as follows:-

Name of the Entities: Government of India, through Ministry of Railway (Significant Influence over company)

Rail Vikas Nigam Limited (Controlled through Ministry of Railways)

CRIS (Controlled through Ministry of Railways)

Railtel Corporation of India Limited (Controlled through Ministry of Railways)

Impairment in value of investment has been made for the Company''s share of investment i.e. H250.00 Lakhs as the cumulative losses of RIRTL has wiped out its net worth. Further, the Balance Sheet of RIRTL for 2011-12 to 2021-22 have not been finalized pending dispute with M/s Cox and Kings (India) Ltd.

Note :- 45 Financial Reporting of Interest in Joint Ventures

The Company had formed a joint venture company with Cox & Kings Limited with 50-50 equal partnership in the name of Royal Indian Rail Tours Limited (RIRTL), by virtue ofjoint venture agreement dated 10th December 2008. However due to issues between the equity partners, IRCTC terminated the agreement with Cox & Kings Limited as on 12th August 2011, and also withdrawn the train from RIRTL.

The Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company as at 31st March, 2022 are not available in view of non-finalization of its accounts because of dispute between the parties, due to which the consolidation of Financial Statements as required under Ind AS 110 could not be done. These Financial Statements are the separate financial statements as per Ind AS.

Note 46 Impairment of Assets

IRCTC has made an assessment on 31st March, 2022 for any indication of impairment in the carrying amount of Company’s Property, Plant & Equipment (PPE), Intangibles and ROU assets. On the basis of such assessment, in the opinion of the management, no provision for the impairment of Property, Plant & Equipment and intangible assets of IRCTC is required to be made during the year.

Further, as per the impairment assessment of the ROU Assets as on 31st March, 2022, all the assets are stated at less than its recoverable value. Accordingly, impairment loss amounting H122.97 Lakhs provided during Financial Year 2020-21 for Tejas express (Lucknow-New Delhi- Lucknow) trains, has now been reversed during financial year 2021-22.

Note :- 50 Duty Credit License

During F.Y. 2021-22, the duty credit license has been utilized / redeemed for an amount of HNil (previous year H311.15 lakhs) under “Service Exports from India Scheme (SEIS)”. This is net of discount of HNil and H13.30 Lakhs respectively for Financial Year 2021-22 and 2020-21. However, the Company has received duty credit entitlements for Financial Year 2019-20 for an amount of H164.85 Lakhs which have been accounted for as receivables during Financial Year 2021-22 in line with the policy.

Further, for FY 2020-21 & 2021-22 SEIS scheme is not available at present. As per the Govt. Notification No.57/2015-20 dated 31.03.2020 (DGFT) “for the services rendered w.e.f 1st April 2020, the decision on continuation of the scheme will be taken subsequently and notified accordingly” i.e. for FY 2020-21 and 2021-22, a committee will be formed, who will decide whether this scheme will continue or not. Accordingly, no income/contingent assets has been recognized for the FY 2020-21 and 2021-22.

Note 53 Bank Balances other than Cash & Cash Equivalents

IRCTC has availed overdraft facility for H10,000 Lakhs (previous year H10,000 Lakh) from State Bank of India against fixed deposit of H12,000 Lakhs (previous year H11,892.52 Lakhs. The OD facility shall be availed @ 0.25% higher than the interest rate on fixed deposit for the period for which OD is being availed. Fixed deposits to that extent are under lien.

Note :- 54 Railway Share

(a) License fees / service charges are shown at gross value and corresponding share paid/payable to Indian Railways have been shown as expense under note no. 27, 28, 29 & 33.2.

(b) As per MOU dt. 17.01.2007 signed between Railways & IRCTC, the sharing of revenue with Railways on Railneer has been mentioned in category I “ Passenger amenities like management of stall, refreshment rooms at railway station, pantry car services, Rail Neer etc. where services are restricted to paid passengers and items for sale and tariff are determined and controlled by Railways. For this activity there is very limited scope of profit to the service provider" In such case the revenue share is payable @ 15% of revenue earned by IRCTC. In case of departmental units, 15% of net profit to be shared with Railways by IRCTC.

In the past, Railways raised demands of share of revenue in the years 2011 and 2012 on earning through sale of Rail Neer which was not accepted by the company by stating that Rail Neer Plants being a departmental unit and all departmental catering units put together being in loss, no share is, therefore, payable on Rail Neer sales separately and stated that this disposes of demands of Railways. No further demand was received from Railways on this subject till FY 2020-21 and hence, no provision was made for Railway Share in the books of account till FY 2020-21.

However, Railway Board vide its Letter dated 20.07.2021, has raised the issue of Railway Share and asked the Company to pay Railway Share of all the Rail Neer Plants in accordance with the MoU dt. 19.01.2007.

In response to letter dt. 20.07.2021, Company has represented on the same ground as done in past. However, the Railway Board has not accepted the contention of the Company and advised to share 15% of profit for Departmental plants and 40% revenue share in terms of Catering Policy 2017 for PPP plants being run by licensees vide letter dt. 30.09.2021

The Company has now agreed to share 15% profit for all the plants including PPP plants and informed Railway Board vide letter dated 24.02.2022 and paid dues amounting to H2713.32 Lakhs which was accepted by Railway Board subject to reconciliation. However, the Company contended that PPP Plants are not run on licensee model as these plants are set up by IRCTC and sale of Rail Neer takes place on the invoices of IRCTC only.

Accordingly, Company has booked expenses for an amount of H2713.32 Lakhs as Railway share on Railneer plants up to 31.3.2021 and classified it as an “Exceptional Item" in the statement of Profit & Loss for the year ended March 31, 2022. No Provision for Railway share for the Financial Year 2021-22 is required in the books as the Railneer Segment shows loss for the current year after charging above payment of H2713.32 Lakhs against the profits of Railneer segment.

Note :- 55 Capital Advances For Flats & Land

The following amounts were paid for Purchase/construction of flats and land which are still pending as on date:- H571.43 Lakhs paid to Indian Railways in the year 2002-03/2006-07/2021-22.

- H1374.00 Lakhs to RVNL in the F.Y. 2010-11/2018-19/2021-22.

- H463.93 Lakhs for purchase of flats from AIR INDIA LTD in FY 2018-19.

- H2070.01 Lakhs for purchase of land at Lucknow for Hotel in FY 2021-22.

Note :- 56

(a) In terms of contract agreement of Rail Neer Plants under PPP model, Developer cum Operator (DCO) shall make payment of fixed amount of License Fee (LF) as stipulated in the agreement and IRCTC shall make Volume Shortfall Payments to DCO if actual dispatches in a year are less than Assured dispatch Levels stipulated in the concession agreement.

During the year ended 31st March, 2021, Executive Board (EB) of the IRCTC had decided that no shortfall compensation would be payable during the Covid-19 pandemic. The EB further decided that since this situation pertain to “Non Political Force Majeure" as provided in clause 16.2 of the agreement, licence fee benefit may be given on pro rata basis to the Developer Cum Operator (DCO), correlating with the actual production and installed capacity as per duly executed agreements.

Accordingly, the decision taken by the IRCTC was communicated to all DCOs. But certain DCOs have not accepted the decision of the Company and the financial implication calculated net of License Fee waived off works out to H194.44 lakhs (previous year H243.17 lakhs).

Further, during the year ended 31st March, 2022, the Company has again approached to the DCOs for providing acceptance of the decision but certain DCOs have not provided the same. Executive Board (EB) of the IRCTC now decided to provide for the financial implications in the books of accounts. Accordingly total amount of H437.61 Lakhs has been provided for during the year ended 31st March, 2022 as “Provision for Claims & Damages”.

(b) As per the terms and conditions of the tender, in respect of 4 nos. of PPP railneer plants, the DCOs are to be reimbursed the GST on sale net of Input Tax Credit (ITC) availed by them. But, erroneously, GST on sale has been reimbursed without considering ITC claimed by DCOs of 3 plants.

During the current financial year 2021-22, the amount of ITC claimed by DCOs for 2 plants has been recognized by reducing cost of purchase of Rail Neer by H186.48 Lakhs in current financial year and H65.47 Lakhs recognized as reduction in prior period expenses for the previous financial year. Due to non-availability of figures of ITC claimed by DCO of Rail Neer Plant at Hapur for the period 01.04.2020 to 31.3.2022, the same could not be estimated and accounted for in the financial year 2021-22.

Note :- 57

During the Financial Year 2017-18, the Company had received H1200 lakhs from Ministry of Tourism for Manufacturing of 3 Class Coaches on cost to cost basis out of which balance of H121.66 Lakhs is refundabe to Ministry of Tourism.

Note :- 58 Segment Reporting

The CODM & Manager for corporate planning examines the business performance on the basis of the nature of the services rendered by the company, organization structure & internal reporting system and has identified five reportable segments of its business as follows:-

• Catering

• Railneer

• Tourism & Train Operation

• State Teertha

• Internet Ticketing.

The accounting principles used in the preparation of the financial statements is consistently applied to record revenue & expenditure in individual segments, as set out in the note of significant accounting policies.

Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective segment while the remainder of the costs are categorized as unallocated expenses .The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income of the Corporation. The overall percentage of such unallocable expenses to total revenue is not material.

Assets and Liabilities used in the company''s business are not identified to any of the reportable segments as these are used interchangeably between segments. The company believes that it is currently not practicable to provide segmental disclosure relating to total assets and liabilities since a meaningful segregation of the available data could be onerous.

Note 60 Capital management

The company objective to manage its capital in a manner to ensure and safeguard their ability to continue as a going concern so that company can continue to provide maximum returns to share holders and benefit to other stake holders. Company does not have any borrowings as at 31st March 2022.

Further, company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants. No changes were made in the objectives, policies or processes of managing capital during the year ended 31st March 2022.

a. The carrying amounts of trade receivables, trade payables, Short term Security Deposit, cash and cash equivalents and other short term receivables and other payables are considered to be same as their fair values, due to short term nature.

b. The fair value of long term security deposits were calculated on the cash flows discounted using current market rate of fixed deposits. They are classified as level-3 of fair values hierarchy due to inclusion of unobservable inputs.

Fair value hierarchy

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis and at amortised cost

c) Financial Instruments and cash

Credit risk from balances with banks and financial institutions is managed in accordance with the company''s policy. Investment of surplus are made only with approved counterparty on the basis of the financial quotes received from the counterparty.

d) Liquidity risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they become due. The company manages its liquidity risk by ensuring , as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the company''s reputation.

The company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The company has no bank borrowings. The company believes that the working capital is sufficient to meet its current operational requirements. Any short term- surplus cash generated, over and above the amount required for working capital management and other operational requirements, are retained as cash and investment in short term deposits with banks. The said investments are made in instruments with appropriate maturities and sufficient liquidity.

Note 62 Financial Risk Management

The Company’s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the company’s operations and to provide guarantees to support its operation. The Company’s principal financial assets include trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The company financial risk activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with the companies policies and risk objectives. The board of directors reviews and agrees policies for managing each of these risk, which are summarized below:-

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices. Market risk comprises Interest rate risk and foreign currency risk. Financial instruments affected by market risk includes loans and borrowing, deposits and other non derivative financial instruments.

i) Interest Rate Risk

*1. The ECL provision on dispiuted receivables of H1493.82lakhs for WVM contracts , in the event of non realization of claim from the licensee at the time of due

settlement, liability to pay correspnding 40% Railways share shall also lapse. Hence, the provision has been made on 60% of the amount receivable by the company.

*2. Disputed Receivables of H1579.86 lakhs upto 3 years, includes outstanding claimes from Licensee''s pertaining to increased license fee on sales assessment,

on Tea and Coffee serving and hike in meal tariff rate. That in the event of non realization of claim from the licensee at the time of dipute settlement, liability to pay corresponding 45% Railways share (including maintenance charges) shall also lapse. Hence, the Provision has been made on 55% of the amount receivable by the company.

3. The ECL provsion for more than 05 years on undisputed receivable from Private party has been provided @ 100%(previous year 50%) and ECL provision for more than 05 years on undisputed receivable from Railways and Governement has been provided @ 75%(Previous year 50%). This resulted in increase in provision for doubtful debts by H1380.47 Lakhs for the Financial Year 2021-22.

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of change in market interest rate. The company manages its interest risk in accordance with the companies policies and risk objective. Financial instruments affected by interest rate risk includes deposits with banks. Interest rate risk on these financial instruments are very low as interest rate is for the period of financial instruments.

ii) Foreign Currency Risk

The company operates internationally. In view of low volume of foreign currency transactions, no material exposure exists from foreign currency risk arising form foreign currency transactions. Company does not hedge any foreign currency risk.

b) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers. The company is exposed to credit risk from its financial activities including trade receivable, deposits with banks, financial institutions and other financial instruments. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Note 64 Estimates and assumptions

The followings are the key assumptions concerning the future, and the key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within next financial year.

a) Fair valuation measurement and valuation process

The fair values of financial assets and financial liabilities are measured using the valuation techniques including DCF model. The inputs to these methods are taken from observable markets where possible, but where this it is not feasible, a degree of judgement is required in arriving at fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Note :- 64 Estimates and assumptions

b) Taxes

Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which losses can be utilized Significant management judgement is required to determine the amount of deferred tax asset that can be recognized, based upon the likely timing and level of future taxable profit together with future tax planning strategies.

c) Defined benefit Obligations

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date

d) Useful lives of property, plant and equipment

The estimated useful lives of property, plant and equipment is as given in the Note 2(n). Estimated useful lives of property, plant and equipment are based on number of factors including the effects of obsolescence, demand, competition, and other economic factors The Company reviews the useful life of property, plant and equipment at the end of each reporting date.

e) Leases

Company uses its judgement in determining whether or not contract contains a lease, extension option of the lease agreement and termination option of the lease agreement will be exercised or not. Further company uses estimation in calculating the appropriate discount rate to use and lease term of the leases. The land on lease from the railways have no defined lease term period and are likely to continue. In the absence of any defined term, a period of 10 Years have been taken as future lease term effective as on date of transition of IND-AS 116.

Note :- 65 Train Operations

The 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 basic fare collected from the passengers, catering charges and other charges as 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.

Note :- 66 Ticket Deposit Receipt Refund (TDR) Cases

The TDR refund is made by the Company to the passengers after receipt of the same from Indian Railway. As on 31st March 2022, number of cases pending were 25614 (previous year 14101) with value of H232.48 lakhs (Previous year H153.91 Lakh).

Note :- 67 Railneer Plants on PPP Model

In addition to 5 nos. of self operated Rail Neer Plants, the company had decided to set up 15 nos. of Rail Neer Plants at various locations on PPP model. Out of these 15 plants, 10 plants are in operation and other 5 Rail Neer plants will start in coming years. For these plants, a capital support will be provided by IRCTC to the contractors as per the contract agreement with the respective plant operators.

Note :- 68

The company has incurred Total Capital Expenditure of H5199.07 lakhs including CWIP and Capital Advances but excluding ROU assets ( previous year H7734.12 lakhs) .

Note :- 69

The company does not foresee any financial liability with regards to the CBI Enquiry against the Ex-Railway Minister involving the Ex-Senior Official of IRCTC as per reports in the media.

Note:- 70

GST Input Tax Credit (net of amounts appearing on GST portal & GST Return 2B) as on 31st March, 2022 amounting to H433.52 Lakhs included in “Balances with Government Authorities” in Note 12 is pending for credit in GSTR 2B as on date.

Note :- 71

The employee advances are paid to avoid genuine employee hardships to meet official expenses. The expenses are reimbursed to the employees separately subsequently. Accordingly although the advances are non-refundable until employment, the same have not be discounted and deemed as current in nature.

Note:-72

IRCTC has entered into in agreement with private parties “the operator” wherein operator is responsible for Set Up (Building & Plant Machinery), Operation and Maintenance of water treatment Plant on the land owned by IRCTC against consideration for procurement of Rail Neer, CFA and Transportation services by IRCTC. Terms of agreement provides that at the end of contract period the commissioned assets at plant along with building shall be transferred to IRCTC. Since the contract for such O & M Contractor is tendered and selection is made based on commercial bids, in absence of sufficient information to ascertain the additional consideration towards cost of building and plant and conservative approach, assets has not been recognized. Accordingly such assets shall be accounted for in the books of accounts based on technical assessment at the time of takeover.

Note:-73

That Licensee Fee as per Note 27, includes contingent provision of 25 % Railway Share ( 15% as per Circular 36/2015 ) against license fee received on Water Vending Machines, pending clarification from the railway board under the Catering Policy 2017.

Notes :- 75 Leases

a) Company as a Lessee

The Company as a lessee has entered into various lease contracts, which includes lease of land, office space, and vehicles. Before the adoption of Ind AS 116, the Company classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease.

The Company also has certain leases of offices and guest house with lease terms of 12 months or less. The Company applies the ‘short-term lease’ recognition exemptions for these leases.

Right of Use Assets

The carrying amounts of right-of-use assets recognised and the movements during the year are disclosed in Note 5B.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management and align with the Company’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

Gain/loss from sale and leaseback transactions is not applicable to the Company.

b) Company as a Lessor

The Company has given its Assets on the leases, details of the same are given under the Note 5 Investment Property.

Lease Rental recognized as income during the year is H234.98 Lakhs (Previous year H234.98 Lakhs)

3. MDR Received from Acquirer Banks. The IRCTC has received H300 Lakhs in FY 2019-20 from Acquirer Banks towards its share of MDR charges being rate or fee charged on the merchant service providers The Company has treated this payment as subsidy and no GST was paid on the aforesaid amount, as subsidy received from Central Government and State Governments shall be excluded from the value of supply and same shall not form part of consideration for the purpose of levying GST.

4. The IRCTC has received pro-rata Licensee fees from Indian Railways for taken over of catering of SBD trains in the terms of Catering Policy, 2017 of H1385 lakh, H7058 lakh., H125 Lakhs for the years 2017-18, 2018-19 & 2019-20 respectively and no GST was paid on the aforesaid amounts in view of the fact that the GST is not applicable on the aforesaid amount as it was received from Licensee by the Indian Railways prior to Introduction of GST and service tax was not applicable on the grant of licence for payable to Indian Railways as per Finance Act at the time of its receipt. The proportionate amount paid by Indian Railways to IRCTC is towards the remaining part of the tender period which was awarded prior to the implementation of GST. The assigning of licence by Indian Railways to its subsidiary i.e. IRCTC does not change the nomenclature of the transaction as the licence has been awarded prior to the implementation of GST. The incidence of tax is the event when the service is provided/supplied to the service recipient. Thus, the Service being “grant of licence” was provided by Indian Railways at the time when the licence was awarded.

Note 76 Tejas and Mahakal Express trains:

Railway Board had mandated IRCTC to operate 02 rakes of Tejas trains and 01 rake of Kashi Mahakal express trains as passenger trains to provide passenger with an option of travelling in premium segment private trains. IRCTC has inaugurated both the trains on 4th Oct, 2019 and 17th Jan,2020 on the sector Lucknow -New Delhi-Lucknow and Admedabad -Mumbai-Ahmedabad respectively.

In the financial year 2020-21, both Tejas trains have been run from the month of October, 2020 and stopped due to the COVID -19 pandemic and suspension of passenger''s trains services. The representations have been made to Railway Board for waiver of fixed commitments against both Tejas and Kashi Mahakal trains for the non operational period during the financial year 2020-21 due to present pandemic. Railway Board vide letter no TC-II/2910/20/Trains dated 11.5.2021 has only agreed to waive off the component of "loss of paths to Good trains” in calculation and charging of fixed cost for IRCTC passenger trains for non -operational period up to 31.12.2020 and has decided that other charges applicable will remain the same. IRCTC has again requested Railway Board to reconsider waiving off the fixed charges (fixed haulage and Custody charges) amounting to H2793 Lakhs for non-operational period of the three trains considering it as a force majeure situation , as the lockdown and restriction imposed by Government of India due to COVID-19 pandemic was beyond control of IRCTC. However, IRCTC has made full provision for the fixed charges for both the Tejas trains and Kashi Mahakal express trains train in the Financial Year 2020-21. The matter is pending.

Note :- 77 The Company has applied for advance ruling for following issues for which decision of AAR is still awaited:

1. Reimbursement of Service Charges: The Government of India through Ministry of Railways, in the public interest had waived off the service charges from the passengers for booking of online train tickets through IRCTC''s website. The Government of India has reimbursed consolidated amount of H8000 lakh, 8800 Lakhs and 3227 Lakhs for the 2017-18,2018-19 and 2019-20(up to July-19) respectively. Section 15 (2) of CGST Act 2017, excludes the amount of reimbursement of expenses received from the Central Government and State Governments from the value of taxable supply, hence the amount received from the Indian Railways being the Central Government towards the reimbursement of expenses incurred for the providing of same should not be charged to GST. Therefore no GST was paid by IRCTC for above reimbursement.

2. Reimbursement of Travel Insurance: The Government of India has decided to provide travel insurance on free of Cost to the passengers who have booked the train ticket through online to promote digitalization. Accordingly, IRCTC provided the Insurance free of Cost for which Ministry of Railway had been reimbursed the travel insurance of H4700 Lakhs on which no GST was paid by the Company being reimbursement of expenses received from the Central Government.

(b) Further, pursuant to the instructions issued by Railway Board dated 23.02.2021, IRCTC vide letter dated 02.03.2021 & 04.03.2021 has terminated all the existing SBD contracts under IRCTC.

(c) The said decision was assailed by way of filing WP 6253 and 6254 of 2020 by Catering Associations and the Hon’ble High Court of Madras quashed the termination orders. The said decision was challenged by way of WA 1895 and 1896 of 2021 wherein Hon’ble High Court has directed to maintain status quo. Solicitor General is representing RB and IRCTC in the WA and was expected to be listed shortly.

(d) Railway Board further vide letter no. 2020/Catering/600/05/Pt. dated 19.11.2021 has advised that a review has been conducted by the Board regarding catering services in trains in light of prevailing factors such as the pandemic witnessing a declining trend, resumption of cooked in restaurants, public eateries and airline and assessment of passenger demand, Board has decided that service of cooked food be resumed and RTEs may also continue.

(e) Vide letters no. 2019/Catering/600/04 dated 19.11.2021, Railway Board has advised for vacation of status quo order and withdrawal of Appeals no. 1895 and 1896 of 2021 before the High Court of Madras and has withdrawn Board’s letter dated 23.02.2021 for termination of all existing contracts of mobile catering involving scope of work of providing cooked food to passengers.

(f) Accordingly, in compliance to the above Railway Board’s orders, IRCTC has issued letter for withdrawal of terminations vide letters dated 21.11.2021.

Note 79

a. Ministry of Railway vide CC-60/2019 dated 14.11.2019 had revised Menu and Tariff of Catering Services on Rajdhani/Shatabdi/ Duronto and Standard Meals on Indian Railways which come into force w.e.f. 18.11.2019 for Mail/Express trains. However, the said instructions could not be implemented in Rajdhani/Shatabdi/Duronto trains due to suspension of regular passengers train services by Ministry of Railways, on account of COVID-19 pandemic.

b. The license fee (LF) is to be revised by IRCTC in Mail/Express trainsas as per the terms & conditions of the contracts i.e. reassessment of sales (for the period 18.11.2019 to 22.03.2020). However, the reassessment could not be carried out on account of suspension of regular train services as there was a change in the scope of work of catering services post Covid 19 and the assessment under the present contracts was not feasible.

c. In view of above facts, the Company decided to increase the License Fee on @15.50 % on quoted license fee for SBD Trains on account of increase of catering tariff for mail express train as per the CC-60/2019 and accordingly all the Licensees were advised to pay the enhanced LF.

d. M/s Griham Food & Hotel Pvt. Ltd. had filed a W.P. (C) No. 2979/2021 i.e. Indian Railways Onboard Catering Contractors Asso. &Anr. -Vs-The Union of India & 2 ors at Hon’ble Guwahati High Court, wherein Hon’ble High Court passed the following order at Para-19, which is reproduced as under,

“Accordingly, while the Railway authorities would be at liberty to dispose of the representation dated 27.05.2021 submitted by the petitioner No. 2 within a period of 2 (two) weeks from today, this Court directs that, in the interim and until further order, the Railway authorities shall not resort to any coercive action against the petitioner No. 2 in terms of the impugned demand notice dated 25.05.2021 read with impugned decision dated 13.05.2021".

e. As the matter is sub- judice and there is an uncertainty and occurrence is dependent on outcome of certain event in future, the tentative amount of enhanced LF is approx H1491.36 Lakhs based onthe average percentage increase in LF after implementation of CC-60/2019 of 15.50 % was not recognized as revenue.

Further, the Company has started the process of Sales Assessment for all the contracts. Accordingly, the revised License Fee on account of tariff increase as per CC-60 will be implemented as and when the sales assessment is finalized.

Note :- 80

The menu and tariff of standard meals/items is controlled by Railway Board and these were revised & enhanced vide CC-64 dated 12.12.2019. As per the instructions, these were to be implemented with immediate effect and as an interim measure, sales assessment in limited units was undertaken to assess the impact of enhancement in License fees. Accordingly, guidelines were issued on 28.01.2020 for incorporating the impact of enhancement in license fees by adding the weightage assigned to the License fees of the unit or by undertaking sales assessment within 6 months, whichever is higher. However, unforeseen COVID pandemic started and passenger train operation was suspended w.e.f 23.03.2020. The units were closed and due to severe restrictions, sales assessment could not be conducted. On 20.01.2021 guidelines for charging reduced license fees @ 20% of license fees were issued as impact of COVID was prevailing. Further, on 04.10.2021 revised guidelines were issued to implement the reduced Licensee fees @ 20% upto 31.10.2021 and new methodology to be implemented for charging of LF w.e.f 01.11.2021 based on footfall.

This interim method was to be followed for ongoing contracts till normalisation when sales assessment of the operational contracts will be undertaken which was not followed in such contracts. Accordingly, the income was not fully recognised in F/Y 19-20 and F/Y 20-21. For Exit contracts during COVID, the interim method has been followed.

The Company has now recognised revenue of H164.01 lakhs which includes H113.14 Lakhs for earlier years and treated as prior period income.

Note :- 81 - Impact of COVID-19 on the Company

Financial performance

The Company believes that for the year 2021-22, there has been no material impact of Covid 19 pandemic on the financial performance of the Company in terms of revenue and profitability of the Company.

Liquidity

The Company has access to sufficient liquidity for its operation.

The Company expects to recover the carrying amount of its assets comprising property, trade receivables, deferred taxes, other financial and non-financial assets etc. in the ordinary course of business based on information available on current economic conditions.

Estimation of the future impact of CoVID-19

Management does not expect significant impact on Revenue and Profitability during FY 2022-23 due to restrictions, if any, imposed by various State Governments due to COVID-19. However, the impact of the restrictions will have to be assessed from time to time and communicated as we progress during the current financial year. A lot depends on the success of the various pandemic containment efforts being undertaken by the State and Central Governments and Health authorities including vaccination. It is therefore premature to forecast the spread of COVID-19 and its future impact with credibility at this stage.

The actual impact of the global health pandemic may be different from that which has been estimated, as the COVID 19 situation evolves in India and globally. However, the Company will continue to closely monitor any material changes to future economic conditions. In view of sufficinet liquidity, profitability and improvement expected in operations during 2022-23, no major disruption in operations are expected in future and IRCTC expects to continue its operations in future without any material uncertainly.

(1) Debt represent only lease liabilities.

(2) Net profit after taxes Non-cash operating expenses/Income plus Interest other adjustment like losss on sale of Fixed assets.

(3) Lease payment for the current year.

(4) EBITDA has increased substantially in current FY 2021-22, due to ease of COVID-19 restrictions and opening of economic activities after COVID-19, as compared to increase in Lease payments.

(5) Net profit after tax has ben increased substantially during the FY 2021-22 , as compared to FY 2020-21.

Note:- 82 Ratios (Contd..)

(6) Sale has increased more than twice during the FY 2021-22 as compared to FY 2020-21 after lifting of COVID-19 restrictions and reduction in Inventory by almost 25%.

(7) Revenue from Operations has increased more than twice during the FY 2021-22 as compared to FY 2020-21 after lifting of COVID-19 restrictions whereas there is reduction in average trade receivables by 15% approx.

(8) Cost of sales & purchase of services increased by more than twice as compared to 10% increase in average trade payables.

(9) There is substantial increase in Revenue in FY 2021-22 as compared to FY 2020-21 whereas increase in working capital is lower in proportion to increase in revenue.

(10) Net profit increased by 3.5 times whereas Revenue increased by 2.5 times.

(11) Net profit increased by 3.5 times whereas capital Employed increased by 1.3 times.

Note :- 83 Exceptional Items

For the current Financial Year 2021-22, net expenses on account of Excepti

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Mar 31, 2011

1. CONTINGENT LIABILITIES:-

Claims against the Corporation pending appellate/judicial decisions:

(Rs in Lac)

S. Particulars As at 31st As at 31st No. March, 2011 March, 2010 a. Income Tax 38.12 49.13

b. VAT 21.49 --

c. Employee Court Case - SCZ 9.20 --

Total 68.81 49.13

2. Estimated amount of Contracts remaining to be executed on capital account and not provided for amounts to Rs 192.31 Lac as against Rs 1000.70 Lac in the previous year.

(ii) Departmental Catering: -

The departmental catering units include both Railway catering as well as outdoor catering engaged in preparing various cooked items. However as the items prepared are heterogeneous in nature, it is not possible to give break-up of each class of items produced/ prepared.

* Included PD items purchased for resale. PD items are Proprietary Distribution items purchased, in the packed form, from the market and sold at Railway Stations/Outdoor Catering Units such as Namkeen, Biscuits and Mineral Water etc.

(iii) Departmental Catering- Bedroll and Cleaning Services

The bedroll services have been withdrawn from the Company with effect from 1st August, 2007 vide letter No. 2006/TG-III/645/4 dated 01.08.2007, except for few trains managed through licensee catering due to contractual obligations, as the contracts were under comprehensive services. Moreover, some of the Zonal Railways has not taken over the bedroll services in few trains. Due to the same, the income of Rs1235.28 Lac (Previous YearRs 1780.75 Lac) has been booked in this account.

3. In the opinion of Management, value of Current Assets, Loans and advances, if realized in the ordinary course of business, shall not be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Debtors including Railway Debtors and Creditors as stated in the Balance Sheet are subject to confirmation.

4. EMPLOYEE BENEFITS:

General description of the defined benefit schemes/defined contribution scheme:

(i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. The gratuity ceiling of Rs10 Lac has been considered for actuarial valuation.

(ii) Leave Encashment: Payable on separation to eligible employees who have accumulated earned leave. Leave salary is provided for based on valuations, as at the balance sheet date, made by independent actuary.

(iii) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporation''s contribution to provident fund is charged to revenue.

(iv) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists including deemed deputationists (employees who have joined the corporation on deputation for a fixed period from Indian Railways) for the year2010-11 in terms of Government rules and regulations is charged to revenue on accrual basis.

Other disclosures, as required under Accounting Standard(AS)-15(revised) on ''Employee Benefits'' in respect of defined obligations are:

(b) Actuarial Method

Projected unit credit (PUC) actuarial method is used to assess the plan''s liabilities of exit employees for retirement, death-in-service and withdrawal and also compensated absence while in service.

(c) Plan Assets.

(i) Changes in the fair value of plan assets

11. None of the suppliers/creditors have reported that they are registered under the Micro, Small and Medium Enterprises Development Act 2006. Hence there are no principle / Interest amounts due to Micro & Small Enterprises.

5. Tools and Plants of Rs 0.06 Lac (Previous Year Rs 0.24 Lac), which were accounted at Nominal Value of Rs 1/- per item are lying with the Company. During the year, tools and plants valuing Rs0.18 Lac were returned to Railways.

6. During the year 2010-11, the sharing with various Zonal Railways has been made in terms of Memorandum of Understanding dated 17.01.2007, executed with the Ministry of Railways.

The provision for diminution in investment has been made for IRCTC share of investment i.e. Rs 250.00 lacs as the cumulative losses of RIRTL has wiped out its net worth. Further, pending execution of lease agreement with RIRTL, lease rent income of Rs 320.36 lacs has been recognized on provisional basis on the basis of joint venture agreement and memorandum of understanding entered into with M/s Cox and Kings (India) Ltd.

7. Pursuant to Accounting Standard (AS 28) impairment of Assets issued by the Institute of Chartered Accountants of India, the Corporation made an assessment on 31st March, 2011 for any indication of impairment in the carrying amount of Corporation''s Fixed Assets. On the basis of such assessment, in the opinion of the management no provision for the impairment of Fixed Assets of the Corporation is required to be made during the year.

8. Pursuant to the Accounting Standard (AS 29) relating to Provisions, Contingent Liabilities and Contingent Assets, the disclosure relating to provisions made in the accounts for the year ended31st March, 2011 is as follows:-

Note:

(i) Provision for doubtful debts/advances is made on the basis of management''s estimates.

(ii) Provision for retirement benefits is made on the basis of independent actuary''s valuation.

(iii) Provision of Pension in respect of deemed deputationist Optees has been made for Rs 373.29 Lac to make 100% commutation of difference of pension( IRCTC- Railways) as full and final one time settlement of pensionery liabilities of IRCTC so as to avoid monthly recurring liability of pension.

9. As per Accounting Standard (AS22) - Accounting for Taxes on Income issued by Institute of Chartered Accountants of India, the deferred tax arising on account of timing differences, being the difference between taxable incomes and accounting income has resulted into deferred tax asset to the tune of Rs 2337.11 lac. Keeping in view, the more prudence policy, the management has decided not to recognize deferred tax asset. Since the management is not sure about the virtual certainty for realizing the asset. Further the deferred tax asset created during the previous year has also been adjusted.

10. Licensee managed static catering stalls, which were awarded by Railways, were transferred to IRCTC. As per directive of Ministry of Railways, IRCTC has advised licensees of static catering stalls for payment of license fee on GDP basis w. e. f. 1st November 2006. However, no written contract with regard to the same exists between IRCTC and licensees of catering stalls.

It has been noticed that many of the licensees are not paying license fee fixed on GDP basis and they have gone to court challenging the fixation of license fee on GDP basis and have obtained stay order from the Hon''ble Supreme Court. There are uncertainties regarding the determination of the amount to be realized from the licensees. The Corporation has recognized income as per Accounting Standard (AS-9) in respect of such licensee catering stalls on the basis of old licensee fees fixed by Indian Railways or amount actually received from licensees, whichever is higher.

11. 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 often years.

12. IRCTC has taken land from Railways on lease basis for setting up of Railneer Plant at Nangloi and Danapur for which lease period has not been fixed by Railway authorities.

As per the policy of the Railways the maximum period of lease can be for a period of 35 years which is further renewable for a period of 35 years. Depreciation on buildings of Railneer Plants at Nangloi and Danapur has been provided on straight line basis as per accounting policy being followed consistently. IRCTC has written to concerned Railways to confirm the maximum period of lease of such land provided to IRCTC, reply of which is awaited.

13. An amount of Rs 912 Lac has been provided as haulage charges in respect of Mobile Pantry Cars on pro-rata basis up to 20th July 2010, the date on which Catering Policy for theyear2010-11 became effective. (Previous Year Rs 3,000 Lac).

14. Ministry of Railways vide letter no. 2006/LMB/09/03, dated 22.11.06 has directed that water charges for catering and vending units are required to be paid by IRCTC. Provision for Water charges for the departmental catering units is made @0.1 % of the turnover in respect of units where bills have not been received from Zonal Railways. Provision for Electricity Charges for the departmental catering units, where the bills have not been received from respective Railways is being provided @ 2.5 % of a turnover.

15. Segment Reporting (AS-17):

The corporation has disclosed business segment as the primary segment. The segment has been identified taking into account the nature of services rendered, organization structure and internal reporting system.

The corporation''s operations predominantly relate to arranging:

- Licensee Catering

- Departmental Catering

- Railneer

- Tourism

- Internet Ticketing.

The corporation caters mainly to the needs of the domestic market. As such there are no reportable geographical segments.

The accounting principles used in the preparation of the financial statements is consistently applied to record revenue & expenditure in individual segments, as set out in the note of significant accounting policies.

Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective segment while the remainder of the costs are categorized as unallocated expenses .The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income ofthe Corporation. The overall percentage of such UN allocable expenses to total revenue is not material.

Assets and liabilities contracted are allocated to different segments based on their individual identity. The fixed assets of corporate/ Zonal/ Regional office have been allocated on the basis of usage and assets / liabilities, which cannot classify to segments, are shown as unallocated assets/ liability. The overall percentage of such unallocable Assets/Liabilities to total Assets/Liabilities is not material.

16. Following Agreements are yet to be executed in respect of:

(a) Office premises located at 7th Floor and 9th Floor, Bank of Baroda Building.

In under noted cases leases have expired and are awaiting renewals:-

(a) Office space of 2300 Sq.Ft 31.03.2008 at Patna.

17. Ministry of Railways vide letter no 2009/TG-III/600/25 Dt 21.07.10 has issued catering policy 2010 which stipulates that:

(i) Railway shall progressively take over management of all mobile catering services including base kitchen and mobile catering through departmental catering in a phased manner.

(ii) IRCTC will primarily responsible for running of Food Plaza, Food Courts, Fast Food units within the ambit of this policy.

In line with above policy, most of the licensee catering business has been transferred. Hence income from such transferred business has been accounted for till the date of handing over.

18. Previous year figures have been re-arranged /regrouped and re-casted, where ever necessary to make them comparable with the current year figure.

19. Schedules I to XXV forms an integral part of the Balance Sheet and Profit & Loss Account.

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Mar 31, 2010

1. CONTINGENT LIABILITES:-

Claim against the Corporation pending appellate/judicial decisions.

(Rs in lac)

S. Particulars As at 31st As at 31st No. March, 2010 March, 2009

a. Income Tax 49.13 41.70

b. Saless Tax/VAT* - 3137.40

Total 49.13 3179.10

Claim against the Corporation not acknowledged as debt

(Rs in lac)

S. Particulars As at 31st As at 31st No. March, 2010 March, 2009

a. Service Tax 472.88 -

Total 472.88 -

* Demand of Rs 3137.40 Lac for VAT including interest & penalty were received from Delhi Value Added Tax Department. The same was challenged in the Hon''ble High Court at Delhi by way of a writ petition, whereby it was up held that providing of food and beverage to passengers on-board train is a transaction of sale, not a contract for providing service. The total liability on account of VAT workout to Rs 7732.76 Lac. Moreover, a refund of Rs 3813.56 lac is required to be claimed from Service Tax Department in view of above judgment. The Corporation is going to challenge the said judgment in Supreme Court by way of special leave petition. However, as a matter of prudent accounting policy, the Corporation has provided the liability of VAT after adjusting service tax for the F.Y. 2005-06 to 2009-10 amounting to Rs3919.20 Lac.

2. Estimated amount of Contracts remaining to be executed on capital account and not provided for amounts to Rs1000.70 Lac as against Rs 3064.76 Lac in the previous year.

* The installed capacity is based on three-shift basis for 327 Days.

** Installed Capacity of Rail Neer Plant, Danapur increased from 66000 bottles per day to 102000 bottles per day from Jan''2010.

(ii) Departmental Catering: -

The departmental catering units engaged in catering activities are preparing various cooked items as per the menu prescribed by Indian Railways. The said menu varies from one Zonal Railway to another Zonal Railway. Installed capacity for a particular prepared item is not ascertainable. Moreover, the items prepared are heterogeneous in nature, it is not possible to give break-up of each class of items produced/ prepared.

Departmental catering units are engaged in supply of food and beverage to Railway Passengers at various stations, where the catering business is taken over by the Corporation, which are heterogeneous in nature. Hence it is not practicable to give quantitative breakup of each class of goods indicating quantities thereof for purchases, sales, opening and closing stocks.

The bedroll services have been withdrawn from the Corporation with effect from 1st August, 2007 vide letter No. 2006/TG-III/645/4 dated 01.08.2007 except for few trains managed through licensee due to contractual obligations, as the contracts were under the comprehensive services. Moreover, some of the Zonal Railways has not taken over the bedroll services in few trains. Due to the same, the income of Rs 17.81 crore has been booked in this account.

The departmental units engaged in catering activities are consuming innumerable numbers of raw material items required for manufacturing of the cooked items prescribed in the menu by Indian Railways. The said menu varies from one Zonal Railway to another Zonal Railway. Similarly, the number of raw materials required will also vary. The items used as raw materials are heterogeneous in nature; it is not possible to give quantitative break-up of each class of items consumed.

3 In the opinion of the Board of Directors, value of Current Assets, Loans and advances, if realized in the ordinary course of business, shall not be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Debtors including Railway Debtors and Creditors as stated in the Balance Sheet are subject to confirmation.

4 EMPLOYEE BENEFITS:

General description of the defined benefit schemes/defined contribution scheme:

(i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. The gratuity ceiling of Rs 10 Lac has been considered for actuarial valuation.

(ii) Leave Encashment: Payable on separation to eligible employees who have accumulated earned leave. Leave salary is provided for based on valuations, as at the balance sheet date, made by independent actuary.

(iii) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporation''s contribution to provident fund is charged to revenue.

(iv) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists including deemed deputationists (employees who have joined the corporation on deputation for a fixed period from Indian Railways) for the year 2009-10 in terms of Government rules and regulations is charged to revenue on accrual basis.

(b) Actuarial Method

Projected unit credit (PUC) actuarial method has been used to assess the plan''s liabilities of exit employees for retirement, death-in-service and withdrawal and also compensated absence while in service.

5 In terms of the requirements of the Micro, Small and Medium Enterprises Development Act 2006, Based on the information available with the company there are no principle / Interest amounts due to Micro & Small Enterprises.

6 Tools and Plants of Rs 0.24 Lac (Previous Year 0.88 Lac), which were accounted at Nominal Value of Rs 1/- per item are lying with the Company. During the year, tools and plants valuing Rs 0.64 Lac were returned to Railways.

7 During the year 2009-10, the sharing with various Zonal Railways has been made in terms of Memorandum of Understanding dated 17.01.2007, executed with the Ministry of Railways.

8 Pursuant to Accounting Standard (AS 28) impairment of Assets issued by the Institute of Chartered Accountants of India, the Corporation made an assessment on 31st March, 2010 for any indication of impairment in the carrying amount of Corporation''s Fixed Assets. On the basis of such assessment, in the opinion of the management no provision for the impairment of Fixed Assets of the Corporation is required to be made during the year.

Note:

(i) Provision for doubtful debts/advances is made on the basis of management''s estimates.

(ii) Provision for retirement benefits is made on the basis of independent actuary''s valuation.

(iii) Provision of Pension of Rs 284.17 Lac( Previous Year NIL) has been made for the period Jan''07 to Mar''10 as DPE Circular no. 2/(70)/08-DPE (WC).

9. The Corporation has recognized deferred tax arising on account of timing differences, being the difference between taxable incomes and accounting income, that originates in one period and is capable of reversal in one or more period(s) in compliance with Accounting Standard (AS22) - Accounting for Taxes on Income issued by Institute of Chartered Accountants of India. The major components of the deferred tax liability and asset arising on account of timing difference as at 31.3.2010 are as follows:

10. Licensee managed static catering stalls, which were awarded by Railways, were transferred to IRCTC. As per directive of Ministry of Railways, IRCTC has advised licensees of static catering stalls for payment of license fee on GDP basis w. e. f. 1st November 2006. However, no written contract with regard to the same exists between IRCTC and licensees of catering stalls.

It has been noticed that many of the licensees are not paying license fee fixed on GDP basis and many of the licensees have gone to court challenging the fixation of license fee on GDP basis and have obtained stay order from the Hon''ble Supreme Court. There are uncertainties regarding the determination of the amount to be realized from the licensees. The Corporation has recognized income as per Accounting Standard (AS-9) in respect of such licensee catering stalls on the basis of old licensee fees fixed by Indian Railways or amount actually received from licensees, whichever is higher.

11. 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.

12. IRCTC has taken land from Railways on lease basis for setting up of Railneer Plant at Nangloi and Danapur for which lease period has not been fixed by Railway authorities. As per the policy of the Railways the maximum period of lease can be for a period of 35 years which is further renewable for a period of 35 years. Depreciation on buildings of Railneer Plants at Nangloi and Danapur has been provided on straight line basis as per accounting policy being followed consistently. IRCTC has written to concerned Railways to confirm the maximum period of lease of such land provided to IRCTC, reply of which is awaited.

13. An amount of Rs 3,000 Lac has been provided as haulage charge for the year 2009-10 in respect of Mobile Pantry Cars. (Previous Year Rs 3,000 Lac).

14. Ministry of Railways vide letter no. 2006/LMB/09/03, dated 22.11.06 has directed that water charges for catering and vending units are required to be paid by IRCTC. No demand for water charges has been received from Ministry of Railways or Zonal Railways. Provision for Water charges for the departmental catering units is made on assumed basis as was the practice followed by the Zonal Railways @ 0.1 % of the sales turnover.

Provision for Electricity Charges for the departmental catering units, where the bills have not been received from respective Railways is being provided @ 2.5 % of a turnover.

15. Segment Reporting (AS-17) :

The corporation has disclosed business segment as the primary segment. The segment has been identified taking into account the nature of services rendered, organization structure and internal reporting system.

The corporation''s operations predominantly relate to arranging:

- Licensee Catering

- Departmental Catering

- Railneer

- Tourism

- Internet Ticketing.

The corporation caters mainly to the needs of the domestic market. As such there are no reportable geographical segments.

The accounting principles used in the preparation of the financial statements is consistently applied to record revenue & expenditure in individual segments, as set out in the note of significant accounting policies.

Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective segment while the remainder of the costs are categorized as unallocated expenses .The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income of the Corporation. The overall percentage of such UN allocable expenses to total revenue is not material.

Assets and liabilities contracted are allocated to different segments based on their individual identity. The fixed assets of corporate/ Zonal/ Regional office have been allocated on the basis of usage and assets / liabilities, which can not classify to segments, are shown as UN allocable assets/ liability. The overall percentage of such unallocable Assets/ Liabilities to total Assets/ Liabilities is not material.

16. Following Agreements are yet to be executed in respect of :

Office premises located at 7th Floor and 9th Floor, Bank of Baroda Building.

Land for 2100 Sq.Mtr. for solar pond at Rail Neer plant at Nangloi.

In under noted cases leases have expired and are awaiting renewals:- 5000 Sq. Mtrs. Land at Rail Neer Plant at Nangloi expired on 23.05.2003;

(a) Office space of 2300 Sq.Ft 31.03.2008 at Patna.

28. During the 2008-09, IRCTC had entered into an agreement with M/s Cox & Kings (India) Ltd. to form a joint venture company called "Royale Indian Rail Tours Limited" for operation and management of a Pan India Luxury Tourist Train, which has began commercial operation from 6th March 2010. The total cost of said train is Rs 5046.57 Lac. The Tourism Ministry has sanctioned capital subsidy of Rs 1237.00 Lac. Hence the Train has been capitalized in the books of IRCTC at Rs 3809.57 Lac (Total Cost minus capital subsidy) . Pending the execution of lease agreement with RIRTL and few days of operations mainly for FAM trips during the year 09-10 , no income has been apportioned from advance lease rental .

17. Ministry of Railways vide Letter no 2009/TG-III/600/25 Dt 21.07.10 has issued catering policy 2010 which stipulates that :

(i) Railway shall progressively take over management of all mobile catering services including base kitchens and mobile catering through departmental catering in a phased manner.

(ii) IRCTC will primarily responsible for running of Food Plaza, Food Courts, Fast Food units within the ambit of this policy.

Further, Railway Minister in her budget speech for FY 2010-11 has reduced service charges for booking e- tickets through IRCTC from Rs 40 to Rs 20 for AC classes and from Rs 20 to Rs 10 for Sleeper class. The estimated financial impact for the same would be decline in gross Internet Ticketing Revenue by Rs 32 crore. These decisions of the Ministry of Railways will have adverse impact on financial position of the company during 2010-11.

18. As advised during last year Audit by Comptroller & Auditor General of India, A suitable mechanism has been devised to record the income and expenses of Call Centre separately.

19. Previous year figures have been re-arranged /regrouped and re-casted, where ever necessary to make them comparable with the current year figure.

20. Schedules I to XXV forms an integral part of the Balance Sheet and Profit & Loss Account.

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Mar 31, 2008

1. CONTINGENT LIABILITES:-

(i) Estimated remaining amount of Contracts to be executed on capital account and not provided for amounts to Rs.154.20 Lac as against Rs.396.73 Lac in the previous year.

(ii) Income tax demand of Rs.30.69 Lac for the Assessment year 2004-05 was raised against the Corporation. Accordingly, an appeal under section 246A (1)(a) of the Income Tax Act, 1961 has been filed against order of the assessing officer.

(iii) An amount of Rs.11.01 lac has been wrongly disallowed on account of provision for bad and doubtful debts for the assessment year 2005-06. Accordingly, an appeal under section 246 (1)(a) of the Income Tax Act, 1961 has been filed against order of the assessing officer.

(iv) A demand notice for the year 2004-05 of Sales Tax of Rs.2.06 lac was received from West Bengal Sales Tax Authorities, of which Rs.0.88 lac has been paid and an appeal has been filed for the balance amount of Rs.1.17 lac.

(v) Catering services provided by IRCTC in Rajdhani/Shatabdi Express Trains are charged to service tax as per the Finance Act, 2004. Now, Sales/VAT department, Delhi has treated the service rendered along with food & beverage as sales of goods liable to sales tax/VAT in Delhi. Huge demand has been raised amounting to Rs. 1175.63 lac on account of tax, interest and penalty for the period April’07 to October’07. Both service tax and sales tax/VAT has been levied on the same transaction. VAT officer has levied VAT on such services, contrary to VAT Law/Constitution of India. Service Tax & VAT cannot be imposed on the same activity simultaneously.

IRCTC has taken legal advice and has been advised that providing of service of catering in trains amounts to services rendered like an outdoor caterer and is liable to pay service tax. The services does not amount to sale of goods and therefore no sales tax/VAT could be imposed upon the said services.

In view of the same, IRCTC has challenged the levy of VAT , by Sales Tax Authorities under Delhi Value Added Tax Act, 2004 on the catering services rendered in Rajdhani and Shatabdi Express Trains, upon which, Service Tax has already been paid, by way of Writ in Hon’ble High Court of Delhi on 28th July 2008.

2. DEFERRED REVENUE EXPENSES:-

Balance lying under Deferred Revenue Expenditure is Rs. Nil (Previous year Rs.9.40 lac).

3. PRODUCTION :

(ii) Departmental Catering: -

The departmental catering units are engaged in preparing various cooked items as per the menu prescribed by Indian Railways. The said menu varies from one Zonal Railway to another Zonal Railway Items are prepared as per menu. Installed capacity for a particular prepared item is not ascertainable. Moreover, the items prepared are heterogeneous in nature, it is not possible to give break-up of each class of items prepared.

4. In the opinion of the Board of Directors, value of Current Assets, Loans and advances, if realized in the ordinary course of business, shall not be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Debtors and Creditors/Advances as stated in the Balance Sheet are subject to confirmation.

5. Sundry creditors include amount due to small-scale industries of Rs. Nil (previous year Rs. Nil).

6. Provision for Bad and Doubtful Debts: -

The Corporation has made provision for Bad and Doubtful Debts as under:

(a) Rs.7.90 lac (Previous year Rs. 7.98 lac) being 100% of the total outstanding in respect of charge back/reversal cases reported by the payment gateways for rail tickets booked through Internet during the year 2007-08 is provided for Bad and Doubtful Debts.

(b) In addition Rs. 4.66 lac (Previous year Rs. 10.12 lac) was admitted for charge back and is fully charged as bad debt.

7 Pursuant to the directive of the Ministry of Railways, Railway Board, the Corporation took over the entire departmental Catering business including Rail Yatri Niwas and Railway Hotels of Indian Railways, from Railways. The tools and plants placed at such 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 Rs.1/ -per item amounting to Rs. 1.90 lac ( Previous Year Rs. Nil) in the books of Zonal Offices of the Corporation for the purpose of ensuring physical verification. No depreciation has been charged during the year on these assets. Further no new assets were taken over from Railways during the year. However, the Corporation is maintaining such assets and revenue share, if any, is being made with the Railways as per the MOU entered with Ministry of Railways on dated 17.01.2007.

8. During the year 2007-08, the sharing with various Zonal Railways has been made in terms of Memorandum of Understanding dated 17.01.2007, executed with the Ministry of Railways.

9. The details of related party with whom transactions have taken place during the year and the nature of relationship is as under:_

S. No. Name of related Parties Designation Nature of relationship

1. Dr. P. K. Goel, Managing Director Key Management person

2. Dr. Nalin Shinghal Director (T&M) Key Management person

3. Shri V. K. Jain Director (Finance) Key Management person

4. Shri Vinod Asthana Director (Catering Services) Key Management person

10. Pursuant to Accounting Standard (AS 28) impairment of Assets issued by the institute of Chartered Accountants of India, the Corporation made an assessment on 31st March, 2008 for any indication of impairment in the carrying amount of Corporation’s Fixed Assets. On the basis of such assessment, in the opinion of the management no provision for the impairment of Fixed Assets of the Corporation is required to be made during the year.

11. Licensee managed static catering stalls, which were awarded by Railways, were transferred through assignment deed by various zonal railways to IRCTC. As per directive of Ministry of Railways, IRCTC has advised licensees of static catering stalls for payment of license fee on GDP basis we.f. 1st November 2006.

It has been noticed that many of the licensees are not paying license fee fixed on GDP basis and many of the licensees have gone to court challenging the fixation of license fee on GDP basis and have obtained stay order from the Hon’ble Supreme Court. There are uncertainties regarding the determination of the amount to be realized from the licensees. The Corporation has recognized income as per Accounting Standard (AS-9) in respect of such licensee catering stalls in the following manner:-

- The revenue for static catering stalls which were taken over from Indian Railways and for which tenders have not yet been finalized on earlier basis on which the income was accrued during previous year.

- Wherever the payment has been realized on GDP basis, the same has been accrued on GDP basis.

- Efforts would be made to realize the licence fee of static catering stalls on GDP basis and the same would be recognized as income in the year of receipt.

12. Expenditure incurred on civil work on lease hold premises has been accounted as lease hold improvement and depreciation has been calculated on the basis of lease period as per the agreement of lease.

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.

13. IRCTC has taken land from Railways on lease basis for setting up of Railneer Plant at Nangloi and Danapur for which lease period has not been fixed by Railway authorities. As per the policy of the Railways the maximum period of lease can be for a period of 35 years which is further renewable for a period of 35 years. Depreciation on buildings of Railneer Plants at Nangloi and Danapur has been provided on straight line basis as per accounting policy being followed consistently. IRCTC has written to concerned Railways to confirm the maximum period of lease of such land provided to IRCTC, reply of which is awaited.

14. Ministry of Railways vide letter no.2005/TG-III/675/14, dated 8/15th May, 2008 has directed that haulage charges of Rs. 30 crore (Previous Year Rs. 30.21 crore) for pantry cars are to be paid by IRCTC for the financial year 2007-08, which has been provided as haulage charge for the year 2007-08.

15. Ministry of Railways vide letter no. 2006/LMB/09/03, dated 22.11.06 has directed that water charges for catering and vending units are required to be paid by IRCTC. No demand for water charges has been received from Ministry of Railways or Zonal Railways. Provision for Water charges for the departmental catering units is made on assumed basis as was the practice followed by the Zonal Railways @ 0.1 % of the sales turnover.

Provision for Electricity for the departmental catering units where the bills have not been received from respective Railways is made on assumed basis as was the practice followed by the Zonal Railways @ 0.3 % of the sales turnover.

16. IRCTC is providing catering services on Mail Express trains and on other locations as per mandate given by Ministry of Railways. Wherever, the business is handled departmentally run units, the sales and expenditure is booked as per accrual basis. In other cases, where the business is managed through licensees, only Concession fee/ licence fee/user charges, quoted by the successful bidder are taken as revenue as per Accounting Standard (AS 9).

17. Segment Reporting:

The corporation has disclosed business segment as the primary segment. The segment has been identified taking into account the nature of services rendered, organization structure and internal reporting system.

The corporation’s operations predominantly relate to arranging:

- On board catering services, Comprehensive Onboard services and awarding licenses for static units, station vending, mail express trains and food plazas.

- Booking of Rail Tickets through Internet.

- Arranging tours.

- Manufacturing and Distributing Railneer-Packaged Drinking Water,

- Operating catering services, Rail Yatri Niwases and Railway Hotels under departmental catering activity taken over by the Corporation, till they were handed over to private licencees. Thereafter they have been included under Income from tourism.

a) The corporation caters mainly to the needs of the domestic market. As such there are no reportable geographical segments.

b) Segment revenue includes Sales of Railneer-Packaged Drinking Water, Food & Beverages through Departmental Catering activity, Railway Tickets through Internet and Income from Tourism. It also includes Concession fee, License fee in case of awarding of license in Rajdhani, Shatabdi, Jan Shatabdi, Mail Express and User charges, & Service charges in case of awarding license for setting up of Food Plazas at Railway Premises.

The accounting principles used in the preparation of the financial statements is consistently applied to record revenue & expenditure in individual segments, as set out in the note of significant accounting policies.

Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective while the remainder of the costs are categorized as unallocated expenses The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income of the Corporation. The Overall percentage of such unallocable expenses to total revenue is not material.

Assets and liabilities contracted are allocated to different segments based on their individual identity. The fixed assets of corporate/ Zonal/ Regional office have been allocated on the basis of usage and assets/ liabilities, which can not be classified to segments are shown as unallocable assets/ liability. The overall percentage of such unallocable Assets/ Liabilities to total Assets/ Liabilities is not material.

18. Income Tax assessment up to the Assessment year 2005-06 of the Corporation has been completed. All adjustments relating to the same have been made in the books of account of the Corporation.

19. The entire paid-up share capital of the Corporation is held by Ministry of Railways.

20. Previous year figures have been re-arranged /regrouped and re-casted, where ever necessary to make them comparable and better presentable with the current year figure.

21. Bedroll and cleaning business, which was entrusted to IRCTC during the year 2006-07, has been withdrawn by Ministry of Railways vide letter no.2006/TG.III/645/4, dated 01.08.2007. Entire income and expenditure has been booked on accrual basis.

22. During the year, the Corporation introduced Soft Furnishing Policy for various category of officers starting grade from E0 to E7 and granted advance to the tune of Rs.278.46 Lac, which has been shown under the head of Loan and Advances. The recoveries from the staff @ 2.5 % of the basic salary have been credited to the said account. The employees are compulsorily required to buy back items procured under soft furnishing policy. The shortfall in the advance amount and buy back amount shall be treated as Staff Welfare expense in the period, in which buy back happens.

23. (i) An amount of Rs.19.40 lac was deposited as an excess sales tax with West Bengal Sales Tax Authorities for the year 2005-06. Refund of the same is awaited from Sales Tax Authorities.

(ii) An amount of Rs.4.03 lac was deposited as an excess works contract tax with Delhi Sales Tax Authorities for the year 2002-03. Refund of the same is awaited from Delhi Sales Tax Authorities.

24. Schedules I to XXVI forms an integral part of the Balance Sheet and Profit & Loss Account.