Notes to Accounts of Rail Vikas Nigam Ltd.

Mar 31, 2025

2.17 Provisions

Provision is recognised when:

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

ii) A probable outflow of resources is
expected to settle the obligation and

iii) A reliable estimate of the amount of the
obligation can be made.

Reimbursement of the expenditure required
to settle a provision is recognised as per
contract provisions or when it is virtually
certain that reimbursement will be received.

Provisions are reviewed at each Balance
Sheet date.

a) 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 recognised as
interest expenses.

Onerous Contract

Present obligations arising under onerous
contracts are recognized and measured as
provisions. An onerous contract is considered
to exist where the company has a contract
under which the unavoidable costs of
meeting the obligations under the contract
exceed the economic benefits expected to
be received under it.

2.18 Contingent Liabilities and Contingent Assets

(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 assets is disclosed where an
inflow of economic benefits is probable.

(c) Contingent Liability and Provisions
needed against Contingent Liability and
Contingent Assets are reviewed at each

Reporting date.

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

2.19 Earnings Per Equity Share

In determining earnings per share the
Company considers the net profit
attributable to equity shareholders. The
number of shares used in computing basic
and diluted earnings per share is the weighted
average number of shares outstanding
during the year.

2.20 Liquidated Damages and Penalties

"Credit items arising on account of
Liquidated Damages and Penalties during
execution of contract or due to termination
of contract etc. are carried as "Retained
Amount for Damages A/c" under "Other
Current Liabilities" until the management
has decided either to levy or waive the same
before financial closure of the project.
Thereafter if these are not levied or waived
by the management before financial closure
of the project such leftover balances of
liquidated damages and penalties etc.
are credited to the total cost of the
concerned project on financial closure of the
project".

2.21 Operating Segment

An operating segment is a component of the
Company that engages in business activities
from which it may earn revenues and incur
expenses, whose operating results are
regularly reviewed by the Company''s Chief
Operating Decision Maker ("CODM") to make
decisions for which discrete financial
information is available. Based on the
management approach as defined in Ind AS
108, the CODM evaluates the Company''s
performance and allocates resources based
on an analysis of various performance
indicators by business segments and
geographic segments.

2.22 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.

Financial Guarantee Contracts

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified debtor
fails to make a payment when due in
accordance with the terms of a debt
instrument. Financial guarantee contracts are
recognised initially as a liability at fair value,
adjusted for transaction costs that are directly
attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the
higher of the amount of loss allowance
determined as per impairment requirements
of Ind AS 109 and the amount recognised less
cumulative amortisation.

2.23 Dividend to equity holders

Dividend paid/payable shall be recognised
in the year in which the related dividends are
approved by shareholders or board of
directors as appropriate.

2.24 Financial instruments:-

(A) Initial recognition and measurement

Financial Instruments are recognized at its fair
value plus or minus transaction costs that are

directly attributable to the acquisition or issue
of the financial instruments.

(B) Subsequent measurement

(i) Financial Assets

Financial assets are classified in following
categories:

a) At Amortised Cost

b) Fair value through Other
Comprehensive Income.

c) Fair value through Profit and loss
account.

a. Debt instrument at Amortised Cost

A financial asset shall be measured at
amortised cost if both of the following
conditions are met:

(a) the financial asset is held within a
business model whose objective is to
hold financial assets in order to collect
contractual cash flows and

(b) 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.

b. Debt instrument at FVTOCI

A debt instrument is classified at FVTOCI
if both of the following criteria are met:

• The objective of the business model
is achieved both by collecting
contractual cash flows and selling
the financial assets and

• The asset''s contractual cash flows
represent SPPI.

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.

c. Debt instrument at 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 at FVTPL.

In addition the Company may elect to
designate financial asset which
otherwise meets amortized cost or
FVTOCI criteria at FVTPL, if doing so
reduces or eliminates a measurement or
recognition inconsistency. The Company
has not designated any financial asset
at FVTPL.

Financial assets included within the
FVTPL category are measured at fair
value with all changes recognized in the
P&L.

Investment in Equity instruments are
measured through FVTOCI.

d. Equity Instrument at 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 setting
financial assets and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are
solely payment of principal and invest
in the principal amount outstanding.

The Company has made an irrevocable
election to present in other
comprehensive income subsequent
changes in the fair value of equity
investments not held for trading.

(ii) Financial liabilities

a) Financial liabilities at Amortised Cost

Financial liabilities at amortised cost
represented by trade and other
payables security deposits and retention

money are initially recognized at fair
value and subsequently carried at
amortized cost using the effective
interest rate method.

b) Financial liabilities at FVTPL

The company has not designated any
financial liabilities at FVTPL.

(C) Derecognition
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 income statement.

(D) Impairment of financial assets

Company applies expected credit loss (ECL)
model for measurement and recognition of
impairment loss. The Company follows
simplified approach for recognition of
impairment loss allowance on trade
receivable. The application of simplified
approach does not require the Company to
track changes in credit risk. Rather it
recognises impairment loss allowance based
on lifetime ECLs at each reporting date right
from its initial recognition

Company assesses on a forward looking basis
the expected credit losses associated with its
assets carried at amortised cost and FVTOCI
debt instruments. The impairment
methodology applies on whether there has
been significant increase in credit risk.

2.25 Investment Property

Properties that are held for long-term rental
yields and / or for capital appreciation are
classified as investment properties.
Investment properties are stated at cost of
acquisition or construction less accumulated
depreciation and impairment, if any.
Depreciation is recognised using the straight
line method so as to amortise the cost of
investment properties over their useful lives
as specified in Schedule II of the Companies
Act, 2013.Transfers to, or from, investment
properties are made at the carrying amount
when and only when there is a change in
use.

An item of investment property is
derecognised upon disposal or when no
future economic benefits are expected to
arise from the continued use of asset. Any gain
or loss arising on the disposal or retirement of
an item of investment property is determined
as the difference between the sales proceeds
and the carrying amount of the property and
is recognised in the Statement of Profit and
Loss.Income received from investment
property is recognised in the Statement of
Profit and Loss on a straight-line basis over
the term of the lease

2.26 Cash and cash equivalents

Cash and cash equivalent comprise cash at
bank and on hand. It includes term deposits
and short term money market deposits with
original maturities of three months or less that
are readily convertible to known amounts of
cash and which are subject to an insignificant
risk of changes in value.

2.27 Prepaid Expenses

Prepaid expenses up to INR 5,00,000/- in each
case are treated as expenditure/income of
the year and accounted for to the
naturalhead of accounts.

2.28 Prior period errors

Errors/omissions discovered in the current year
relating to prior periods are treated as
immaterial and adjusted during the current

year, if all such errors and omissions in
aggregate does not exceed 1% of total
operating revenue as per last audited
financial statement of the Company.

If the error occurred before the earliest period
presented, the opening balances of assets,
liabilities and equity for the earliest period
presented, are restated.

2.29 NEW STANDARDS/ AMENDMENTS AND OTHER
CHANGES EFFECTIVE APRIL 1,2024 OR
THEREAFTER

Pursuant to the notifications issued by the
Ministry of Corporate Affairs dated 9
September 2024 and 28 September 2024, the
Companies (Indian Accounting Standards)
Second Amendment Rules, 2024 and Third
Amendment Rules, 2024 were notified,
amending the following standards effective
for annual reporting periods beginning on or
after 1 April 2024:

(a) Ind AS 117 - Insurance Contracts; and

(b) Ind AS 116 - Leases (amendments
relating to lease liability in sale and
leaseback transactions).

The above amendments have been
evaluated by the Company and did not
have a material impact on the financial
statements for prior periods. Further, they are
not expected to have a significant effect on
the financial statements for the current or
future periods.

2.30 NEW STANDARDS/ AMENDMENTS ISSUED BUT
NOT YET EFFECTIVE

On May 7, 2025, MCA notifies the
amendments to Ind AS 21 - Effects of Changes
in Foreign Exchange Rates. These
amendments aim to provide clearer
guidance on assessing currency
exchangeability and estimating exchange
rates when currencies are not readily
exchangeable. The amendment is effective
from the date of notification. The Company
is currently assessing the probable impact of
these amendments on its financial
statements.

Nature and Purpose of Other Reserves:

(a) Retained Earnings

Retained Earnings represents the undistributed profits of the Company.

(b) General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue
fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for
buy-back of shares.

(c) Items of Other Comprehensive Income

The Company has elected to recognize changes in fair value of investment in equity securities of Indian Port Rail and
Ropeway Corporation Limited in other comprehensive income. The changes are accumulated within the FVTOCI
equity investments reserves within equity. The company transfers amounts from this reserve to retained earnings when
the relevant equity securities are de-recognized.

Terms of Repayment:

(i) There is a moratorium period of 3 years for each year’s loan. During the said moratorium period, no amount on account
of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan shall be
once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make
available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass
through RVNL books.

(ii) The Company has not borrowed any funds during this F.Y 2024-25 (Previous year 2023-24: Rs.Nil) from Indian Railway
Finance Corporation (IRFC). The outstanding borrowing is Rs. 4,492.36 crores as on 31.03.2025 (as at 31.03.2024 : Rs.
4,964.36 crore) , which includes current liability i.e. repayable in next twelve months Rs. 499.51 crores (as at 31.03.2024
: Rs. 472.00 crore).

(iii) The Interest Liability has been assessed on the amount disbursed in the FY 2006-07 to 2024-25 by applying the Interest
rate as advised by the IRFC for each Financial year (2024-25- No disbursement, 2023-24- No disbursement, 2022-23- No
disbursement, 2021-22: 7.64%, 2020-21: 7.73%, 2019-20: 8.42%, 2018-19: 9.17% & 8.93%, 2017-18: 8.82%, 2016-17: 8.19%,
2015-16: 8.68%, 2014-15: 9.56%, 2013-14: 9.60%, 2012-13: 9.41%, 2011-12: 10.12%, 2010-11: 9.12%, 2009-10: 8.92%, 2008-09:
9.96%, 2007-08: 10.24%, 2006-07: 9.73%).The interest accrued but not due on the IRFC loan amount has been shown in
the Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interest non recoverable
in next 12 Months) and the interest payable but not due under the Current Liabilities and Non-Current Liabilities (for the
interest not payable in next 12 Months) payable to IRFC.

(v) The Interest Liability has been assessed on the amount disbursed in the FY 2005-06 to 2019-20 by applying the Interest
rate as advised by the IRFC for each Financial year ( 2019-20:8.45%, 2018-19: 8.75%, 2017-18 : 8.75% , 2016-17 :8.19%,
2015-16 :8.68%, 2014-15 :9.56%, 2013-14 :9.60%, 2012-13 :9.41%, 2011-12 :10.12%, 2010-11 :9.12%, 2009-10 :8.92%, 2008-09
:9.96%, 2007-08 :10.24%, 2006-07 :9.73%,2005-06 :8.06%)The interest accrued but not due on the IRFC loan amount has
been shown in the Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interest
non recoverable in next 12 Months) and the interest payable but not due under the Current Liabilities and Non¬
Current Liabilities (for the interest not payable in next 12 Months) payable to IRFC.

Risk Analysis :

Company is exposed to a number of risks in the defined benefit plan which are as follows:

A) Salary Increases- Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption in
future valuations will also increase the liability.

B) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the
discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan’s liability.

D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can
impact the liabilities.

E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal
rates at subsequent valuations can impact Plan’s liability.

NOTE 30. DIVIDEND

The Board of Directors has recommended the final dividend of Rs. 1.72 per equity share having face value of Rs. 10 each for
the financial year 2024-25, subject to the approval of the shareholders at the ensuing Annual General Meeting.

NOTE 31. CAPITAL MANAGEMENT

The Group manages its capital in a manner to ensure and safeguard their ability to continue as a going concern so that
group can continue to provide maximum returns to shareholders and benefit to other stake holders. Group has paid
dividend as per the guidelines issued by Department of Public Enterprises (DPE) as follows:-

i) The carrying amounts of trade receivables, trade payables, unbilled revenue, cash and cash equivalents and other
short term trade receivables and payables which are due to be settled within 12 months are considered to the same
as their fair values, due to short term nature.

ii) Long term variable rate borrowings and lease receivables are evaluated by Company on parameters such as interest
rates, specific country risk factors and other risk factors. Based on this evaluation the fair value of such payables are not
materially different from their carrying amount.

iii) The fair values of office security deposits, other assets, and items like liquidated damages and penalties is determined
by discounting estimated future cash flows using current market interest rates. For FY 2024-25, a 7.70% SBI fixed deposit
rate is used for financial assets, and a 10.33% SBI lending rate is used for financial liabilities. These are reported under
Level 3 in the fair value hierarchy, given the use of unobservable factors, including credit risk of counterparties.

iv) Investment in unquoted equity of subsidiaries, joint ventures and associates are stated at cost as per exemption
provided by Para 10 of IND-AS 27.

v) Staff loans and advances have been continued at carrying value as measurement implications are immaterial.

vi) RVNL determined fair value of investment those are carried through Other Comprehensive Income through independent
valuer. Valuation of Investment of Indian Port Rail & Ropeway Corporation Limited is based on the latest available
financial statements as on 31 March 2024.

vii) Based on an expert opinion and further analysis of the underlying contractual arrangements, and in accordance with

Paragraph 62(c) of Ind AS 115 - Revenue from Contracts with Customers, the Company has determined that security

deposits and retention money are primarily performance-related. As these do not constitute a significant financing
component, discounting of these balances is no longer considered appropriate. Accordingly, this reassessment has
been classified as a change in accounting estimate under Ind AS 8, applied prospectively from the current financial
year. As a result of the change in accounting estimate, the net impact on the current year’s Statement of Profit and Loss
is a decrease in profit amounting to Rs.1.86 crore. The Company expects that similar treatment will apply to comparable
balances in future periods. However, due to variability in contract terms and differences in timing and structure of
future arrangements, it is impracticable to reliably estimate the exact quantitative impact on future periods.

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 assets or liability, either
directly (i.e. as prices) or indirectly (i.e. derived form prices)

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

Fair value hierarchies of assets and liabilities as on 31 March, 2025 are as follows:

(iii) Financial risk management

The Company’s principal financial liabilities comprise
Borrowings from IRFC, trade payable and other
payables. The Company’s principal financial assets
include trade and lease receivables and cash & cash
equivalents that are derived directly from its
operations. The Company is exposed to market risk,
credit risk and liquidity risk. The Company’s financial
risk activities are governed by appropriate policies
and procedures and that financial risk are identified,
measured and managed in accordance with the
Company’s policies and risk objectives. The board of
directors reviews the policies for managing each of
these risk, which are summarised 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

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 has only loan from IRFC, the
payment of interest and repayment of principal
of that is ensured by the Ministry of Railways;
therefore the risk related to said loan is Nil , debt
servicing will pass through RVNL books only.

ii) Foreign Currency Risk

The Company takes services from countries
outside India for projects and is exposed to foreign
currency risk arising from such foreign currency
transactions. Due to immateriality of foreign
exchange amount group does not hedge any
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 deposits with banks,
financial institutions and other financial instruments.
There is negligible risk for receivable from Ministry of
railways also company does not have any history of
bad debts.

Financial instruments and cash deposits

Credit risk from balances with banks and financial
institutions is managed in accordance with the
Company‘s policy. Investment of surplus are made
with approved counterparty on the basis of the
financial quotes received from the counterparty and
as per the gudilines issued by DPE from time to time.

c) 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
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 33. Key sources of estimation uncertainty

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 with next financial year.

a) Fair valuation measurement and valuation process

Impact of fair valuation of Staff loans and advances
are immaterial therefore it has been continuing at the
carrying value.

The fair values of financial assets and financial liabilities
is measured the valuation techniques including the
DCF model. The inputs to these method are taken from
observable markets where possible, but where this is
not feasible, a degree of judgment is required in
establishing fair values. Judgments 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. See Note 32 for further disclosures.

b) Taxes

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

c ) Borrowings from IRFC and Lease Receivables from
Railway.

Company has borrowed funds from Indian Railway
Finance Corporation for the purpose of construction
of railway projects. There is a moratorium period of 3
years for each year’s loan. During the said moratorium
period, no amount on account of interest and principal
shall be payable. The interest shall be charged on
yearly basis and repayment of loan along with interest
shall made be once in a year (for a period of 12 years)
after the completion of moratorium period. Ministry of
Railways would make available to RVNL the required
funds thereafter, to enable them to do the debt
servicing. The debt servicing will pass through RVNL
books. Accordingly, funds are received by RVNL on
each year from MoR and the same is transferred to
IRFC. Therefore, there is no impact on Statement of
Profit & Loss of the Company.

1%. Customer profile include Ministry of Railways, Public Sector Enterprises and State Owned Companies in India. The
Company’s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation
advance, monthly progress payments with a credit period ranging from 45 to 60 days.

ii) Contract Assets are recognised over the period in which services are performed to represent the Company‘s right to
consideration in exchange for goods or services transferred to the customer. It includes balances due from customers
under construction contracts that arise when the Company receives payments from customers as per terms of the
contracts, however the revenue is recognised over the period under input method. Any amount previously recognised
as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which
is necessary to achieve the billing milestone.

iii) Contract liabilities relating to construction contracts are obligation to transfer goods or services to a customer for which
the entity has received consideration (or the amount is due) from the customer. These mainly arise when a particular
milestone payment exceeds the revenue recognised to date under the input method and advance received in long
term construction contracts, the amount of advance received gets adjusted over the construction period as and
when invoicing is made to the customer.

NOTE 38. CONTINGENT LIABILITIES

38.1 Claims Against the Company not acknowledged as debts:

Iln respect of claims pending under adjudication in arbitration invoked by the Contractor not acknowledged as debts by
the Company are Rs. 4,527.61 crore as at 31 March 2025 (Previous year Rs.3,364.10 crore ) and the cases pending in courts
not acknowledged as debts by the Company involve an amount of Rs.436.31 crore as at 31 March 2025 (Previous year
Rs.551.99 crore ). All the claims in case of MoR Projects, if become payable, will form part of the project cost and reimbursable
by respective clients.

38.2 Direct taxes:

Income- tax demands raised by the Income-tax department as at 31 March 2025 is aggregating to Rs. 28.00 crore (Previous
Year Rs.1241.86 crore ) and Company has not accepted the claim and submitted its appeal to department as follows:-

a) . Service TaxIn respect of Service-tax, the company has received show cause notice from Director General Goods &

Service Tax Intelligence, Delhi Zonal Unit raising a demand of Rs 279.46 crore (Previous year Rs279.46 crore ) for non¬
payment of service tax for the period from July 2012 to June 2017 under forward/reverse charge mechanism on
services provided/ received to/by Ministry of Railway and Zonal Railways contested by the company. The Company
has received order from Additional Director General(Adjudication) dated 24.08.2021 reduced the demand to 148.68
crore plus applicable interest and imposed penalty of Rs. 130.78 crore .The Company has filed an appeal before
CESTAT, New Delhi against the said demand. If the liability is decided against the Company in future ,the same will be
borne by Ministry of Railways.

b) . GST:GST dapartment has rasied demands of Rs. 244.59 crore (Previous Year Rs. 124.38 crore ). However, the Company

has not accepted the demand and submitted its representation/appeal to department as follows:-

NOTE 39. CAPITAL COMMITMENT:

- Office Premise at World Trade Center, Nauroji Nagar New Delhi being constructed by NBCC Rs. 50.54 crore incl. GST
(Previous Year: Rs.60.68 crore)

- Implementation of ERP is Nil (Previous Year: Rs. 1.01 crore)

39.1 Other Commitment

Commitment towards Contractual Payments of Project expenditure is Rs. 42,871.50 crores (Previous Year: Rs.31,763.85 crore).
-Contribution towards share capital in Subsidiaries, Joint Venture & Associates is Rs. 331.49 crore (Previous Year: Rs. 34.96 crore).

The Concession Agreement was signed between NHAI and M/s Malkanai Paradeep Road Vikas Limited on 10.10.2023 for
“Rehabilitation and Upgradation from 4 to 8 laning of Chandikhole-Paradip Section of NH-53 (Old NH-5A) from Km. 80.000 to
Km. 76.646 (Package-4)(2nd call)" in the state of Odisha on HAM Mode. The Authority awarded the above project to RVNL
at a total project cost of Rs. 808.48 Crore. Malkanai Paradeep Road Vikas Limited entered into an EPC Agreement on
24.04.2024 with Rail Vikas Nigam Limited and agreed to award 100% of the EPC works, for a total of Rs. 661.11 Crores excluding
GST to RVNL for executing the construction. Till date Rs. 59.80 has been paid to RVNL towards achievement of first mile stone.
Balance Rs. 601.36 crores will be delivered in due course.

i) One of the former employees Mr. Devendra Singh on deputation from Indian Railways has filed a writ petition on
22.07.2010 against the Company in respect of dues on account of difference in pay scales. The impact of the same has
not been quantified in the writ.

ii) During the financial year 2014-15, Company received a show cause notice from the Director General of Central Excise
Intelligence, regarding the liability of Service Tax of Rs. 213.59 Crores and interest and penalty thereon. The Company
has not accepted the liability and has submitted its reply to the Show Cause Notice on 06.01.2015. A personal hearing
has also been held in this regard on 21.09.2015 before the Principal Commissioner of Service Tax, Delhi-I. A similar
statement of demand cum show cause notice has also been received for F. Yr. 2014-15 on 05.04.2016 in which a
demand of Rs. 82.07 Crores has been raised. It has also been replied on 24.05.2016. For FY 2015-16, 2016-17, 2017-18
(upto 30.06.2017), the statement of demand cum show cause notice in which a total demand of Rs. 211.66 Crores cum
show cause notice was served on 22.03.2018, which was replied on 18.05.2018. During the current financial year
department has communicated that matter is kept in abeyance in view of the appeal on the identical issue filed by
the department in the case of M/s Mundra port and special economic zone limited before the Hon’ble supreme court.

iii) As per the Construction Agreement for Palanpur-Samakhiali doubling , there is a provision for contingencies of 0.5% as
mentioned in estimated project cost.

iv) As per the Construction Agreement between RVNL and Kutch Railway Company Limited, If expenditure is incurred by
RVNL out of its own funds on the project executed on behalf of KRC, on account of the failure of KRC to make payment
to RVNL within 15 days of dispatch of intimation of requirement of additional funds, then RVNL shall charge interest at
the prevailing Base Rate of SBI 1% on the total amount so expended. The interest to be charged shall be fixed from
the 16th day after dispatch of demand for required funds and charged up to the date of actual payment is received
from KRC During the current financial year, Company has written the letter to the RVNL and challenged the interest
calculation method adopted by the RVNL. Further board of directors in the 106th meeting held on 23th August 2024 is
of the view that the levy of interest by RVNL for delayed payment beyond the original estimate cost of Rs. 1548.66 crores
should not be made on the basis of RVNL demand for funds. Interest should not be charged till the Revised estimate (1st
or 2nd) is sanctioned by KRCL Board and a period of 2 years has passed which is required by KRCL to mobilise the funds
for the cost overrun. Based on this, Company has not accepted the interest charged by the RVNL after Sep 2023
accordingly interest of amounting Rs. 45.37 Crores under the Project of doubling of Palanpur - Samakhyali Section and
interest of amounting Rs. 16.42 Crores under Project of electrification of Palanpur - Samakhyali Section has not been
provided in the Financial statements till FY 2024-25.

v) In case of the Project of electrification of Palanpur - Samakhyali Section the estimated cost of the project is Rs. 755.00
crore , however the company has received the expenditure amounting of Rs 759.52 crores from the RVNL till 31 March
2025. Company has not accepted the liability in excess of the estimated amount of the project cost.

(i) Department has raised demand in respect of alleged offence of evasion of Service Tax amounting to Rs.7.58 Crores
and Rs. 2.86 Crores for financial year 2014-15 and 2015-16 respectively. Also department has raised demand of Rs. 2.95
Crores for the FY 2016-17 and 2017-18 (upto June’17), However Company has not accepted the liability and has
submitted its reply to department. Since the Company had earlier received favourable ruling from CESTAT, it is
confident that no additional liability will devolve on it. Further for the period FY 2011-12 to FY 2013-14, KRCL has
received favourable order from CESTAT for demand of 13.42 Crores. In case of similar companies on same matter
department has moved to Hon’ble Supreme court in this case.

(ii) During the FY 2019-20 Income Tax Department has moved to Hon’ble High Court of Delhi in respect of Tax demand of
Rs. 5.17 Crores for A.Y. 2011-12, Company has already received favourable order from ITAT in this case. Therefore, liability
for this case has not been recorded in the books of Accounts.

(iii) Arbitration proceedings between KRCL and MOR (Respondent) is on going. As against the KRCL’s claim, MoR has also
filed counter claims. It is to be stated that as per Section 42A of The Arbitration and Conciliation Act 1996, Either Arbitral
details of proceedings or of Claims ought to be kept confidential by the parties till the same is concluded. Therefore,
KRCL is not in a position to disclose details of Arbitration proceedings including claims of KRCL/counter claims of MoR in
Financial Statements.

(iv) During the previous years, company has received certain bills under protest from contractor pertaining to phase 1 on
which a future liability may arise. Financial impact of the same is not ascertainable at present.

(v) Contingent liability in respect of departmental charges not claimed by RVNL @ 5% of project cost is estimated at 114.49
Crores.

(i) The Company had received a Show Cause Notice (SCN) during financial year 2014-1 5 from tax authorities in the
matter of applicability of service tax on the Company in respect of apportionedfreight received by the Company from
Railways. The SCN covered a period of three years fromfinancial year 2011-12 to financial year 2013-14 and involved
service tax of Rs. 16.33 Crores plus interest and penalties. The Company contested the SCN and submitted its position
through are joinder thereon to the adjudicating authorities, pleading that no service is rendered by BDRCLto Western
Railway that might warrant liability to pay Service Tax. The Company got relief and favorable order from the Commi
ssioner of Service Tax vide her order dated 25 01.2016 and has therefore not provided for the amount in the aforesaid
claim its books for the above period. However, the department has filed appeal with CESTAT against the order of
Commissioner for 25/03/2019 rejected the appeals filed by department. The Department has filed a appeal in Hon’ble
Supreme Court against the order of CESTAT in response to the same the company has submitted a statement in
Hon’ble Supreme Court.The tax authorities issued another SCN npany on the same grounds of involving a demand of
Rs. 16.38 Crores plus interest and penalties for the FY 2014-15. The company has duly submitted its reply to the
adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in the earlier
rejoinder. Since the Company’s stand is based on sound principles and immutable facts, and it had received a
favourable ruling from the Commissioner of Service Tax. on the earlier occasion, it is confident that no additional
liability on account of Service Tax will devolve on it. The Company has not yet received any adjudication order in the
matter. Further, the tax authorities issued another SCN to the Company on the same grounds involving a demand of
Rs. 16.15 Crores plus interest and penalties for FY 2015-16 on 21 March 2018, the company has duly submitted its reply
to the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in the
earlier rejoinder.

Furthermore, the tax authorities issued another SCN to the Company on the same grounds involving a demand of Rs
8.99 Crores plus interest and penalties for FY 2016-17 & 2017-18 (Upto Jun-17) on 22th April 2019. The company has duly
submitted its reply to the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds
as pleaded in the earlier rejoinder.

(ii) The O & M expenditure pertaining to Bharuch-Chavaj section has been provided in financial statement to the extent
information provided by Western Railway and information available with company, remaining O & M will be provided
in the year in which information will be received from Railways.

(iii) Company has terminated some contractual employees, due to misconduct at workplace and unauthorised absence
from office, aggreived by the decision of the company employees have filed application with labour court for
compensation towards their termination. However, based on the facts of the case, company expects favourable
decision. Financial impact of the same is not ascertainable.

(iv) The Company has received a claim of Rs. 6.96 Crores from Rail Vikas Nigam Limited (RVNL) pertaining to an arbitral
award for the construction of the BDRCL Project under construction agreement for the gauge conversion of the
Bharuch-Samni-Dahej Section. Out of this, Rs. 5.51 crore has been accepted and paid by the Company. However,
the remaining amount of Rs. 1.45 Crores has not been accepted by the Company, and the necessary facts in this
regard have been intimated to RVNL.

(v) The Company had received a claim of Rs 6.96 Crores from Rail Vikas Nigam Limited (RVNL) pertaining to arbitral award
for construction of BDRCL Project under construction agreement for gauge conversion of Bharuch Samni-Dahej Section.
The claim of Rs 5.51 Crores has been accepted and paid by the company. The remaining amount of Rs. 1.45 Crores has
not been accepted by the Company and the necessary facts in this regard have been intimated to RVNL.Till date
there is no details and clarification on the same is received from RVNL

Capital commitment: (Share of RVNL:35.46%)

(i) Capital commitment in respect of S&T Work-project Rs. 4.49 crore (Previous year Rs. 4.59 crore)

(i) During the financials year 2022-23, Company had received a show cause notice dated 23.12.2022 from the Principal
Commissioner (Audit) Central GST & Central Excise Bhubaneshwar ,regarding the liability of irregular availment of ITC
amounting Rs 209.02 Crores along with the interest under section 50 of the CGST Act, 2017 and also Penalty under
Section 73 af the CGST Act. The Company had appeared before the Principal Commissioner (Audit) Central GST &
Central Excise Bhubaneshwar for adjudication. An order has ised by the Adjudicating Authority on 30-11-23 against the
company. Therefore, the Adjudicating authority has imposed interest of Rs. 4.10 Crores and penalty of Rs. 20.90 crores
under GST Act, 2017. However, the company has filed appeal against the order on 7th March, 2024.

(ii) During the financial year 2024-25, the Company received another show cause notice dated 16.01.2025 from the
Additional Commissioner (Adjudicating Authority), GST & Central Excise, Bhubaneswar, confirming a demand of GST of
Rs. 3.31 Crores with interest under Section 50 of the CGST Act, 2017 and penalty under Section 73 of the CGST Act. As
the amount was already paid by utilisation of ITC and the same was also confirmed by the Adjudicating Authority
while passing the order, the Company is in the process of filing an appeal against the order.

(iii) Additionally, during the financial year 2024-25, the Company received a third show cause notice dated 14.02.2025
from the Commissioner (In-Situ Audit), Central GST & Central Excise, Bhubaneswar, regarding the liability for wrongful
availment of ITC amounting to Rs. 12.27 Crores along with interest under Section 50 of the CGST Act, 2017 and penalty
under Section 73 of the CGST Act. The Company has not accepted the liability and has submitted a reply to the notice
with the GST Department.

(iv) Furthermore, an income tax demand of Rs. 0.86 crores and interest of Rs. 0.65 crores for the AY 2017-18 is showing on the
income tax portal. The Company has not agreed with the tax demand and has requested the Income Tax Department
to rectify the mistake under Section 154 of the IT Act.

Capital commitment: (Share of RVNL:36.44%)

The capital commitment in respect of cost to be incurred for assets covered by the Service Concession Arrangement is Rs.

45.73 crore as of 31 March 2024. For comparison, the capital commitment as of 31 March 2023 was Rs. 399.74 crore.

f). Dighi Roha Rail Limited

Note 46.

(a) The Company usually receives advance payment from Joint Venture Companies for incurring expenditure on their
projects. However, in the case of one joint venture company i.e. Krishnapatnam Railway Company Limited (KRCL),
the Company is incurring project expenditures on a regular basis and the total amount receivable from KRCL as on 31
March, 2025 is Rs.1355.72 crore which includes Rs. 889.95 crore on account of Interest. The application of interest has
been changed from compound to simple w.e.f 1 October 2024, whereas KRCL requested for application of simple
interest w.e.f. 01.04.2020. The matter is pending with the Board of Directors of the Company and adjustment if any will
be recognized as and when the matter is finalized.

(b.) In view of the representation made by one of the Joint Venture Company KRCL for the waiver of departmental
charges and pending decision by the Board of Directors of the Parent Company, the claim for departmental charges
5% of the completion cost of the project has not been raised on KRCL by the Company. The matter is pending with the
Board of Directors of the Company and adjustment if any will be recognized as and when the matter is finalized.

Note 47. Segment Reporting as per IND AS 108

General Information

Operating segments are defined as components of an enterprise for which discrete financial information is available which

is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and

assessing performance. Chairman and Managing Director of the company has been identified as CODM.

The company has identified one reportable operating segments as "Development of Rail Infrastructure".

Information about reportable segments and reconciliation to amounts reflected in the financial statement:

Income and expenses directly attributable to segments are reported under the respective operating segment. Income and

Expenses which are not directly identifiable have been disclosed as un-allocable expenses or income.

Note 49. Additional reporting requirement (Schedule III):

(i) The Company does not have any Benami Property and further no proceedings has been initiated or pending against
the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any pending charges or satisaction to be registered with ROC.

(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

( v) The Company does not have any such transaction which is not recorded in the books of accounts that has been

surrendered or disclosed as income during the year in the tax assessments under the Income Act, 1961 (such as search
or survey or any other relevant provisions of the Income Tax Act, 1961).

(vi) The Company has not been classified as willful defaulter by the Bank or Financial Instituitions

(vii) The Realisable Value of financial assets of the Company is not lower than value disclosed in financial statements and
subject to confirmation.

(viii) The following disclosures shall be made where loans or advances in the nature of loans are granted to promoters,
directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any
other persons , that are :

(a) . Repayable on demand; or

(b) . Without specific any terms or period of repayment

Note 50. Operating Cycle

Based on the time involved between the acquisition of assets for processing and their realisation in cash and cash equivalents,
the Company has determined twelve months as its operating cycle for the purpose of classification of its assets and liabilities
as current and non-current in the balance sheet.

Note 51.

Balances of some of the Trade receivables, Other assets, Trade and Other payables accounts are subject to confirmations/
reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever
considered necessary, have been made. However, management does not expect to have any material financial impact
of such pending confirmations/reconciliations.

# Tangible Net worth Total Debt Deferred Tax Liability
## Held as investment as per note 6.1

Capital employed (Rs in crore) 14,012.74 13,855.05

Note 53.

Previous year figures has been reaaranged, reclassified and regrouped to make them confirmatory with current year reported
figures.

As per our Report of even date attached For and on behalf of Board of Directors

For Gandhi Minocha & Co. Sd/- Sd/-

Chartered Accountants Sanjeeb Kumar Pradeep Gaur

Firm Registration No.: 00458N Director Finance Chairman & Managing Director

DIN: 03383641 DIN: 07243986

Sd/- Sd-

(CA Manoj Bhardwaj) Kalpna Dubey

Partner Company Secretary

M.No. 098606 FCS No. F7396

Place : New Delhi
Date: 21.05.2025

---

Mar 31, 2024

The Railway Board has entrusted RVNL the work of construction of residential accommodation for Railway/PSU officers on a plot of Railway Land Near Safdarjung Railway Station in accordance with its Policy No. 15/LML/181/68 dated 19.05.1998 which inter-alia stipulates that total 54 flats are to be constructed and from which 27 flats will be handed over to Railway Board towards cost /usage of land. Out of balance 27 flats, 18 flats will be retained by RVNL on lease of 30 year and 9 flats will be handed over to other PSUs against payment. Accordingly, Right to use asset has been created in respect of 14 flats on completion.

1. Rights, Preferences and Restrictions attaching to shares

Equity Shares: The Company has only one class of Equity Shares having face value of H 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their share holding. All equity shareholders are having right to get dividend in proportion to paid up value of each equity share as and when declared.

(b) General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buy-back of shares.

(c) Items of Other Comprehensive Income

The Company has elected to recognize changes in fair value of investment in equity securities of Indian Port Rail and Ropeway Corporation Limited in other comprehensive income. The changes are accumulated within the FVTOCI equity investments reserves within equity. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are de-recognized.

Terms of Repayment:

(i) There is a moratorium period of 3 years for each year''s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan shall be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass through RVNL books.

(ii) The Company has not borrowed any funds during this F.Y 2023-24 (Previous year 2022-23: HNil) from Indian Railway Finance Corporation (IRFC). The outstanding borrowing is H 4964.36 crores as on 31.03.2024 (as at 31.03.2023 : H 5,341.65 crore), which includes current liability i.e. repayable in next twelve months H 472.00 crores (as at 31.03.2023 : H 377.29 crore).

(iii) The Interest Liability has been assessed on the amount disbursed in the F.Y. 2006-07 to 2023-24 by applying the Interest rate as advised by the IRFC for each Financial year (2023-24- No disbursement, 2022-23- No disbursement, 2021-22: 7.64%, 2020-21: 7.73%, 2019-20: 8.42%, 2018-19: 9.17% & 8.93%, 2017-18: 8.82%, 2016-17: 8.19%, 2015-16: 8.68%, 2014-15: 9.56%, 2013-14: 9.60%, 2012-13: 9.41%, 2011-12: 10.12%, 2010-11: 9.12%, 2009-10: 8.92%, 2008-09: 9.96%, 2007-08: 10.24%, 2006-07: 9.73%).

The interest accrued but not due on the IRFC loan amount has been shown in the Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interest non recoverable in next 12 Months) and the interest payable but not due under the Current Liabilities and Non-Current Liabilities (for the interest not payable in next 12 Months) payable to IRFC.

16.1 Foreign Service Contribution :

Foreign Service Contribution in respect of officers on deputation with RVNL, is recognised on accrual basis in the statement of profit and loss account as per the terms of deputation with their parent organisations.

16.2 For RVNL Employees

The disclosure required under Indian Accounting Standard-19 "Employee Benefit” in respect of defined benefit plan is:

Sensitivity analysis:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the statement of financial position.

Risk Analysis :

Company is exposed to a number of risks in the defined benefit plan which are as follows:

A) Salary Increases- Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan''s liability.

D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

26.1 CSR Expenses

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities.

A. Gross amount required to be spent by the Company during the Current Year H 28.04 crore (Previous year H 23.68 crore).

The applicable Indian statutory tax rate for financial year 2023-24 is 25.168% and for financial year 202223 was 34.944%.

Pursuant to the introduction of Section 115BAA of the Income Tax Act,1961 ("New Tax Regime"), the Company has an option to pay corporate income tax at a lower rate of 22% plus applicable surcharge and cess as against the earlier applicable rate of 30% plus surcharge and cess,subject to certain conditions. Considering all the provisions under said section 115BAA of the Income Tax Act, 1961, the company has decided to avail the lower rate from F.Y 2023-24, accordingly the company has recognised provision for income tax for the year ended March 31,2024 and remeasured its deferred tax assests on the basis of the rate prescribed in the said section.

NOTE: 29 DIVIDEND

The Board of Directors has recommended the final dividend of H 2.11 per equity share having face value of H 10 each for the financial year 2023-24, subject to the approval of the shareholders at the ensuing Annual General Meeting.

NOTE: 30 CAPITAL MANAGEMENT

The Company manages 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 shareholders and benefit to other stake holders. Company has paid dividend as per the guidelines issued by Department of Public Enterprises (DPE) as follows:-

Further, Company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants. Company has borrowed the funds from IRFC for railway projects. For repayment of IRFC loan, Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass through RVNL books.

In order to achieve the overall objective of the Company''s capital management, amongst other things, aims to ensure that it meet financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2024.

i) The carrying amounts of trade receivables, trade payables, unbilled revenue, cash and cash equivalents and other short term trade receivables and payables which are due to be settled within 12 months are considered to the same as their fair values, due to short term nature.

ii) Long term variable rate borrowings and lease receivables are evaluated by Company on parameters such as interest rates, specific country risk factors and other risk factors. Based on this evaluation the fair value of such payables are not materially different from their carrying amount.

iii) The fair value of Security Deposits, Performance Security Deposit, Miscellaneous Deposit and Retention Money are calculated based on cash flows discounted using current market rate. Average SBI fixed deposit rate i.e 7.58% is being considered as discounting rate for financial Assets and Average SBI Lending rate i.e 10.18% is being considered as discounting rate for financial liability for the FY 2023-24. They are classified as level 3 fair values in fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

iv) Investment in unquoted equity of subsidiaries, joint ventures and associates are stated at cost as per exemption provided by Para 10 of IND-AS 27.

v) Staff loans and advances have been continued at carrying value as measurement implications are immaterial.

vi) RVNL determined fair value of investment those are carried through Other Comprehensive Income based on adjusted intrinsic value, through independent valuer. Valuation of Investment of Indian Port Rail & Ropeway Corporation Limited is based on financial statements for 31^st March 2023 as financial statements for the year ended on 31^st March 2024 of the Indian Port Rail & Ropeway Corporation Limited are not available. Based on the valuation, no changes has been made in the value of investment and investment is shown at its original cost.

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 assets or liability, either

directly (i.e. as prices) or indirectly (i.e. derived form prices)

(iii) Financial risk management

The Company''s principal financial liabilities comprise Borrowings from IRFC, trade payable and other payables. The Company''s principal financial assets include trade and lease receivables and cash & cash equivalents that are derived directly from its operations.

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

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 has only loan from IRFC, the payment of interest and repayment of principal of that is ensured by the Ministry of Railways; therefore the risk related to said loan is Nil, debt servicing will pass through RVNL books only.

ii) Foreign Currency Risk

The Company takes services from countries outside India for projects and is exposed to foreign currency risk arising from such foreign currency transactions. Due to immateriality of foreign exchange amount, Company does not hedge any 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 in respect of financial instruments and the risk is negligible since the receivable are mainly from Ministry of Railways and State Governments. Also Company does not have any history of bad debts.

Financial instruments and cash deposits

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 with counterparty on the basis of the financial quotes received from the counterparty.

c) 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 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 32 Key sources of estimation uncertainty

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 with next financial year.

a) Fair valuation measurement and valuation process

Financial instruments in respect of Security Deposit Asset Office Premise and Miscellaneous are measured initially at fair value and subsequently at amortised cost on the basis of materiality, transaction value upto H 12.00 lakhs are measured at fair value on initial recognition and subsequently at amortised

cost on group basis and Income and amortisation on such financial instruments has been considered on yearly basis. Transaction value of 12.00 lakhs or more are measured at fair value at initial recognition and subsequently at amortised cost on individual transaction basis.

Impact of fair valuation of Staff loans and advances are immaterial therefore it has been continuing at the carrying value.

The fair values of financial assets and financial liabilities is measured the valuation techniques including the DCF model. The inputs to these method are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing 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. See Note 31 for further disclosures.

b) Taxes

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

c) Borrowings from IRFC and Lease Receivables from Railway

Company has borrowed funds from Indian Railway Finance Corporation for the purpose of construction of railway projects. There is a moratorium period of 3 years for each year''s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan along with interest shall made be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass through RVNL books. Accordingly, funds are received by RVNL on each year from MoR and the same is transferred to IRFC. Therefore, there is no major impact on Statement of Profit & Loss of the Company.

i) Trade receivables are non-interest bearing except receivable from related party (other than RVNL-DTCPL JV and Dighi Roha Pvt Ltd) amounting to H 866.68 crore (Previous year H 819.14 crore) which are interest bearing at SBI base rate 1%. Customer profile include Ministry of Railways, Public Sector Enterprises and State Owned Companies in India. The Company''s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days.

ii) Contract Assets are recognised over the period in which services are performed to represent the Company''s right to consideration in exchange for goods or services transferred to the customer. It includes balances due from customers under construction contracts that arise when the Company receives payments from customers as per terms of the contracts, however the revenue is recognised over the period under input method. Any amount previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is necessary to achieve the billing milestone.

iii) Contract liabilities relating to construction contracts are obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. These mainly arise when a particular milestone payment exceeds the revenue recognised to date under the input method and advance received in long term construction contracts, the amount of advance received gets adjusted over the construction period as and when invoicing is made to the customer.

D. Cost to obtain the contract

Amount recognised as asset as at 31 March 2024 is Nil (Previous year: Nil)

Amount of amortisation recognised in the Statement of profit and loss during the year is Nil (Previous year: Nil)

NOTE: 37 CONTINGENT LIABILITIES

37.1 Claims Against the Company not acknowledged as debts:

In respect of claims pending under adjudication in arbitration invoked by the Contractor not acknowledged as debts by the Company are H 3,364.10 crore as at 31 March 2024 (Previous year H3,276.71 crore). The cases pending in courts involve an amount of H 551.99 crore as at 31^st March 2024 (Previous year H551.99 crore). All the claims, if become payable, will form part of the project cost and reimbursable by respective clients.

37.3. Indirect taxes:

a). Service Tax

In respect of Service-tax, the company has received show cause notice from Director General Goods & Service Tax Intelligence, Delhi Zonal Unit raising a demand of H279.46 crore (Previous year H79.46 crore ) for nonpayment of service tax for the period from July 2012 to June 2017 under forward/reverse charge mechanism on services provided/ received to/by Ministry of Railway and Zonal Railways contested by the company. The Company has received order from Additional Director General(Adjudication) dated 24.08.2021 reduced the demand to 148.68 crore plus applicable interest and imposed penalty of H 130.78 crore .The Company has filed an appeal before CESTAT, New Delhi against the said demand. If the liability is decided against the Company in future ,the same will be borne by Ministry of Railways.

37.4 National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) have levied a fine of H1.31 Crore (Upto Previous year H0.99 crore ) for non-compliance with the requirements pertaining to the composition of the Board and its committees upto March 31, 2024. Directors of the Company are appointed by the Government of India and the Company has no role to play in this regard and accordingly has requested Stock exchanges for waiver of fine.

37.5 Amount of Letter of Credit/Bank Guarantee as on 31 March 2024 is H 2475.78 crore (Previous year H 1,191.64 crore)

NOTE: 38 CAPITAL COMMITMENT:

- Contribution towards share capital in Joint Venture is H 34.96 crore (Previous Year: H163.25 crore).

- Contracts awarded for construction of flats is Nil (Previous Year: H2.81 crore ).

- Office Premise at World Trade Center, Nauroji Nagar New Delhi being constructed by NBCC H 60.68 crore incl. GST (Previous Year: H270.28 crore)

- Implementation of ERP is H 1.01 crore (Previous Year: H Nil)

38.1 Other Commitment

Commitment towards Contractual Payments of Project expenditure is H 31,763.85 crores (Previous Year: H 56,019.00 crore).

i) One of the former employees Mr. Devendra Singh on deputation from Indian Railways has filed a writ petition on 22.07.2010 against the Company in respect of dues on account of difference in pay scales. The impact of the same has not been quantified in the writ.

ii) During the financial year 2014-15, Company received a show cause notice from the Director General of Central Excise Intelligence, regarding the liability of Service Tax of H213.59 crore and interest and penalty thereon. The Company has not accepted the liability and has submitted its reply to the Show Cause Notice on 06.01.2015. A personal hearing has also been held in this regard on 21.09.2015 before the Principal Commissioner of Service Tax, Delhi-I. A similar statement of demand cum show cause notice has also been received for F. Yr. 2014-15 on 05.04.2016 in which a demand of H82.07 crore has been raised. It has also been replied on 24.05.2016. For F.Y. 2015- 16, 2016-17, 2017-18 (upto 30.06.2017), the statement of demand cum show cause notice in which a total demand of H211.65 crore cum show cause notice was served on 22.03.2018, which was replied on 18.05.2018. During the current financial year department has communciated that matter is kept in abeyance in view of the appeal on the identical issue filed by the department in the case of M/s Mundra port and special economic zone limited before the Hon''ble supreme court.

iii) Western Railway has carried out the work of elimination of 30 level crossings by converting them into mannad or by construction of RUB /LHS against the estimate of H 21.25 crore. H13.85 crore has been deposited by the company towards this work till 31-03-2021 . For elimination of unmanned level crossing, Railway Board has issued instructions that the cost shall be borne by Railways, Whereas WR is of opinion that this amount should be borne by SPV/Company. Accordingly Company has requested to WR to refund the amount of H13.85 crore paid to WR towards elimination of unmand level crossing.

iv) As per the Construction Agreement for Palanpur-Samakhiali doubling, there is a provision for contingencies of 0.5% as mentioned in estimated project cost.

v) During the Financial year 2017-18 Goods and Service Tax(GST) has subsumed the Service Tax with effect from 1^st July 2017. The company has maintained same stand as was taken in the matter of service tax, with respect to applicability of the taxes on the share of the freight recieved by the company from indian railways and the operations & Maintainence cost recovered by the company. The company is of the view that no supply is involved by the company to the railway and vice-versa in sharing of freight revenue &

cost by Railway with the Company including furnishing of the particulars/Details for the same. However / Ministry of Railways has taken up the issue with Finance Ministry for issuing clarification/exemption.

Further, the matter had also been referred to Ministry of Railways for taking up the case with the Finance Ministry Clarifications/ confirmation and resolution of issue in the best Interest both for Railways and SVPs in this regard. During the current year, Tax Research Unit( TRU) of the Ministry of Finance, Government of India, has conveyed the recommendations of the GST council In its 48^th Meeting held on 17^th December, 2022 to MOR that Indian Railways (IR) and SPV are distinct person and supply of services by SPV to IR by way of allowing IR to use the infrastructure built and owned by them during the concession period against consideration in form of pro rata share of revenue is a taxable supply, Similarly, service of maintenance supplied by IR to SPV is also a taxable service.

TRU in Its decision has concluded the decision based on the fact that there is "supply of services by SPV to IR by way of allowing IR to use the infrastructure built and owned by them during the concession period against consideration in form of pro rata share of revenue.

However in case of company as per Clause 2.2 of concession agreement.""The Parties agree that the Project Assets shall remain the property Assets shall remain the property of MoR, the Project Railway being a Government Railway within the meaning of the Railway Act 1989.

It is clear from reading of above para that assets are not owned by company as well company is Government Railway applied in case of company. Pursuant to this, MOR has made further representations on various dates to ministry of finance, Government of India on the basis of representation made by company requesting them to reconsider the recommendation:

Railway Board has informed to Company that in terms of the ministry of Finance Office Memorandum it would transfer apportioned revenue to Company inclusive of GST.

Further Ministry has also issued guidelines for issuing of invoices for this transaction. Wherein it is provided that revenue shall be inclusive of GST for example, in case of H100 as apportioned revenue.

GST shall be H15.25 and revenue shall be H 84.75 for SPVs. Company has not recorded any GST liability on apportioned revenue and full amount recieved from railways is recorded as revenue, therefore company reported revenue till March 2024 may be reduced in future by 15.25%(ie impact of GST liabilty).

The matter is subjudice before Hon''ble High Court of Delhi an interim stay has been awarded by Delhi High Court, Therefore direction directions of railway board are on hold.

vi) KRCL has received claim of H1.43 Crore, towards expenditure incurred on doubling during the quarter ending December 2023 and March 2024 from RVNL.

However the same has not been accounted, since the same is not approved by board of KRCL and approved for increase in estimate was not taken from KRCL by RVNL. Further, corrosponding interest component on the same has not been accounted.

Capital commitment: (RVNL share- 50%)

H307.60 Crores (Previous Year H666.38 crore)

(i) Landowners (from whom land was purchased) have filed various cases from time to time for enhanced compensation. The amount of claims pending as at year-end is not quantifiable.

(ii) Income-tax amounting H2.77 crore (Previous year H 2.77 crore) pertains to the AY-2013-14. 2014-15, & 2017-18.

(iii) A sum of H33.15 crore up to 31 March 2024 ( Previous year H 44.24 crore ) towards interest and other changes demanded by M/s RVNL.

Capital Commitments: (RVNL Share : 30%)

(i) Estimated amount of works remaining to be executed on capital account (based on EPC cost) and not provided for H150.62 Crores (Previous Year H174.96 crore ).

Contingent liabilities: (Share of RVNL:49.76%)

(i) Department has raised demand in respect of alleged offence of evasion of Service Tax amounting to H 7.58 Crores and H 2.86 Crores for financial year 2014-15 and 2015-16 respectively. Also department has raised demand of H 2.95 Crores for the F.Y. 2016-17 and 2017-18 (upto June''17), However Company has not accepted the liability and has submitted its reply to department. Since the Company had earlier received favourable ruling from CESTAT, it is confident that no additional liability will devolve on it. Further for the period F.Y. 2011-12 to F.Y. 2013-14, KRCL has received favourable order from CESTAT for demand of 13.42 Crores. In case of similar companies on same matter department has moved to Hon''ble Supreme court in this case.

(ii) During the F.Y. 2019-20 Income Tax Department has moved to Hon''ble High Court of Delhi in respect of Tax demand of H 5.17 Crores for A.Y. 2011-12, Company has already received favourable order from ITAT in this case. Therefore, liability for this case has not been recorded in the books of Accounts.

(iii) Arbitration proceedings between KRCL and MOR (Respondent) is on going. As against the KRCL''s claim, MoR has also filed counter claims. It is to be stated that as per Section 42A of The Arbitration and Conciliation Act 1996, Either Arbitral details of proceedings or of Claims ought to be kept confidential by the parties till the same is concluded. Therefore, KRCL is not in a position to disclose details of Arbitration proceedings including claims of KRCL/counter claims of MoR in Financial Statements.

(iv) During the previous years, company has received certain bills under protest from contractor pertaining to phase 1 on which a future liability may arise. Financial impact of the same is not ascertainable at present.

(v) Contingent liability in respect of departmental charges not claimed by RVNL @ 5% of project cost is estimated at 114.49 Crores.

Capital commitment: (Share of RVNL:49.76%) NIL (Previous Year NIL)

(i) The Company had received a Show Cause Notice (SCN) during financial year 2014-15 from tax authorities in the matter of applicability of service tax on the Company in respect of apportioned freight received by the Company from Railways. The SCN covered a period of three years from financial year 2011-12 to financial year 2013-14 and involved service tax of H 16.33 Crores plus interest and penalties. The Company contested the SCN and submitted its position through are joinder thereon to the adjudicating authorities, pleading that no service is rendered by BDRCL to Western Railway that might warrant liability to pay Service Tax. The Company got relief and favorable order from the Commi ssioner of Service Tax vide her order dated 25.01.2016 and has therefore not provided for the amount in the aforesaid claim its books for the above period. However, the department has filed appeal with CESTAT against the order of Commissioner for 25/03/2019 rejected the appeals filed by department. The Department has filed a appeal in Hon''ble Supreme Court against the order of CESTAT in response to the same the company has submitted a statement in Hon''ble Supreme Court. The tax authorities issued another SCN to the Company on the same grounds of involving a demand of H 16.38 Crores plus interest and penalties for the FY 2014-15. The company has duly submitted its reply to the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in the earlier rejoinder. Since the Company''s stand is based on sound principles and immutable facts, and it had received a favourable ruling from the Commissioner of Service Tax. on the earlier occasion, it is confident that no additional liability on account of Service Tax will devolve on it. The Company has not yet received any adjudication order in the matter. Further, the tax authorities issued another SCN to the Company on the same grounds involving a demand of H 16.15 Crores plus interest and penalties for FY 2015-16 on 21^st March 2018, the company has duly submitted its reply to the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in the earlier rejoinder.

Furthermore, the tax authorities issued another SCN to the Company on the same grounds involving a demand of H8.99 Crores plus interest and penalties for FY 2016-17 & 2017-18 (Upto Jun-17) on 22^th April 2019. The company has duly submitted its reply to the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in the earlier rejoinder.

(ii) The O & M expenditure pertaining to Bharuch-Chavaj section has been provided in financial statement to the extent information provided by Western Railway and information available with company, remaining O & M will be provided in the year in which information will be received from Railways.

(iii) Company has terminated some contractual employees, due to misconduct at workplace and unauthorised absence from office, aggreived by the decision of the company employees have filed application with labour court for compensation towards their termination. However, based on the facts of the case, company expects favourable decision. Financial impact of the same is not ascertainable.

(iv) The Company has acquired land for its project. The compensation paid at the time of acquisition was on the basis of collector order. Further, some of the person has disputed the compensation and file a case before the Civil Court. The Civil Court order additional compensation of H315per sq. meter plus increment a 12% PA from the 23-11-2010 to date of award plus 30% solatium plus interest @ 9% for one year from date of possession and thereafter @ 15% pa vide order dated 03-02-2018. The amount of compensation determined by the Civil Court is H0.6074 Crores.The estimated liability of the interest that may arise on the amount of compensation is about H0.7681 Crores upto 31-03-2020. Against the said order, the Company has filed an appeal in Hon''ble High Court of Gujarat. The Hon''ble High Court of Gujarat has instructed for deposit of the 50% of the amount of claim of H0.6074 Crores for admitting the appeal. Accordingly, during the FY 2019-20 the Company has deposited a sum of H0.3037 Crores in lieu of the instruction made by Hon''ble High Court of Gujarat and the appeal has been admitted by the Hon''ble High Court of Gujarat.

Further, it has come to knowledge that the HC has passed further order vide order dated 30.06.2023, it has been submitted that the remaining 50% amount of the compensation shall be deposited within a period of four weeks from 30.06.2023. The Court shall disburse the 50% amount to the claimants and remaining 50% amount shall be Invested in a 1 cumulative fixed deposit initially for a period of five years to he renewed from time to time till final disposal of the appeals in the name of claimants.

Accordingly, the Company has provided a cheque an amount of H 30,37,214/- with the High Court of Ahmedabad, for the same.

(v) The Company had received a claim of H6.96 Crores from Rail Vikas Nigam Limited (RVNL) pertaining to arbitral award for construction of BDRCL Project under construction agreement for gauge conversion of Bharuch Samni-Dahej Section. The claim of H5.51 Crores has been accepted and paid by the company. The remaining amount of H 1.45 Crores has not been accepted by the Company and the necessary facts in this regard have been intimated to RVNL.Till date there is no details and clarification on the same is received from RVNL

Capital commitment: (Share of RVNL:35.46%)

(i) Capital commitment in respect of S&T Work-project H 4.59 crore (Previous year H 1.87 crore)

Contingent liabilities: (Share of RVNL:34.06%)

(i) During the financials year 2022-23, Company had received a show cause notice dated 23.12.2022 from the Principal Commissioner (Audit) Central GST & Central Excise Bhubaneshwar ,regarding the liability of irregular availment of ITC amounting H 209.02 Crores along with the interest under section 50 of the CGST Act, 2017 and also Penalty under Section 73 of the CGST Act. The Company had appeared before the Principal Commissioner (Audit) Central GST & Central Excise Bhubaneshwar for adjudication.

An order has issued by the Adjudicating Authority on 30-11-23 against the company. Therefore, the Adjudicating authority has imposed interest of H 4,09,41,732 and penalty of H 20,90,15,258 under GST Act, 2017. However, the company has filed appeal against the order on 7^th March, 2024.

Capital commitment: (Share of RVNL:34.06%)

H 167.11 Crore (Previous Year H 399.74 Cr. ).

Contingent liabilities: (Share of RVNL:50.00%) RVNL has incurred project expenditure of HNil crore (Previous year H Nil).

Capital commitment: (Share of RVNL:50.00%) H 0.42 Crores (previous year: Nil)

4. Company has no commitments towards Leases yet to be commenced as on 31.03.2024.

5. The company has not sub-leased any of the assets taken on lease.

II. The Company elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (''short- term leases'') and lease contracts for which the underlying asset is of low value (''low-value assets'').

Note 45.

Based on the upto date reconciliation of GST accounts as per financial books with the GST portal and considering the outcome of GST proceedings for F.Y 2017-18 and F.Y 2018-19, Company has reviewed its likely liability on account of GST for the pending assessments.

Company has also accepted and accounted for liability of 0.88 crores in the books of accounts for F.Y 2017-18 and F.Y 2018-19. In cases, where based on the opinion obtained from experts, the company has filed appeal in respect of adjudication orders passed during the assessment proceedings for F.Y 2017-18 and F.Y 2018-19.

In respect of pending assessments, based on the experts advice company does not foresee further GST liability for the company for the amount not exceeding H2.60 crores for the pending assessment years. Accordingly the provision of H 2.60 Crores has been made in the financial accounts for the F.Y 2023-24 in line with the concept of conservatism and as a prudent measure. The above amount of provision has been made after considering the accounting of RVNL for GST which has been strengthened on implementation of auto populated GSTR-2A/2B by the authority. Demand raised by department which, in the opinion of Management and based on the experts advice is not likely to sustain amounting to H124.38 Crores has been shown as contingent liability. (Refer Note no 37.3)

In respect of Krishnapatnam Railway Company Limited (KRCL), RVNL is entitled for departmental charges @ 5% of the total cost of work as per the detailed estimate/revised estimate/completion estimate as provided in paragraph 1137 of the Code for Engineering Department of Indian Railways. RVNL has received representation from KRCL for waiver of the aforesaid departmental charges apart from other relaxations from contractual obligations. Based on the representation made by KRCL, the management of the Company has decided to keep in abeyance the claim of the said departmental charges pending detailed review of the subject matter by the Board of Directors of the Company.

Note 47. Segment Reporting as per IND AS 108 General Information

Operating segments are defined as components of an enterprise for which discrete financial information is available which is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assessing performance. Chairman and Managing Director of the company has been identified as CODM.

The company has identified one reportable operating segments as "Development of Rail Infrastructure".

Information about reportable segments and reconciliation to amounts reflected in the financial statement:

Income and expenses directly attributable to segments are reported under the respective operating segment. Income and Expenses which are not directly identifiable have been disclosed as un-allocable expenses or income.

Information about major customer:

During the year ended March 31, 2024, Operating Revenue of approximately 89.39% (Previous Year 93.29%) derived from a single external customer in Domestic Segment.

Note: 48. Additional reporting requirement (Schedule 111):

(i) The Company does not have any Benami Property and further no proceedings has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any pending charges or satisaction to be registered with ROC.

(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

(v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Act, 1961 (such as search or survey or any other relevant provisions of the Income Tax Act, 1961).

(vi) The Company has no loans and advances which are either repayable on demand or are without specifying any terms or period of repayment.

(vii) The Company has not been classified as willful defaulter by the Bank or Financial Instituitions.

(viii) The Realisable Value of financial assets of the Company is not lower than value disclosed in financial statements and subject to confirmation.

Note 49. Operating Cycle

Earlier, the operating cycle of the Company was more than 12 months and extends upto 5 to 6 years based on the time required from initiation of the project to completion of the project. Now the operating cycle of the Company is 12 months after change in procedure order of MoR in respects of transfer of PWIP as per the note no 9.

Note 50. Securities released to State Electricity Board/Public Companies

Securities paid to Electricity Boards/ Public Companies towards provision of High Tension Power Lines for electricity connections are booked as project expenditure being part of the project cost.

Note 51. The President of India, acting through and represented by the Ministry of Railways, disinvested 5.36% (Offer Shares) of its holdings through an Offer for Sale (OFS) to retail and non-retail investors on July 26, 2023, and July 27, 2023. The OFS was successful.

Additionally, the Department of Investment and Public Asset Management, via a letter dated August 1, 2023 offered 5,58,785 equity shares of H 10 each to employees, representing approximately 0.5% of the ""Offer Shares,"" i.e., 5.36% of RVNL. Against the offer, employees exercised an option for 200 shares. The total holding of the Government of India as of March 31,2024, is 72.84% (compared to 78.20% in the previous year).

Note 52. Balances of some of the Trade receivables, Other assets, Trade and Other payables accounts are subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis.

Provisions, wherever considered necessary, have been made. However, management does not expect to have any material financial impact of such pending confirmations/reconciliations.

Previous year figures has been reaaranged, reclassified and regrouped to make them confirmatory with current year reported figures.

---

Mar 31, 2022

1. Rights, Preferences and Restrictions attaching to shares

Equity Shares: The Company has only one class of Equity Shares having face value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their share holding. All equity shareholders are having right to get dividend in proportion to paid up value of each equity share as and when declared.

(a) Retained Earnings

Retained Earnings represent undistributed profits of the Company.

(b) General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buy-back of shares.

(c) Items of Other Comprehensive Income

The Company has elected to recognize changes in fair value of investment in equity securities of Indian Port Rail and Ropeway Corporation Limited in other comprehensive income. The changes are accumulated within the FVTOCI equity investments reserves within equity. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are de-recognized.

Terms of Repayment:

(i) There is a moratorium period of 3 years for each year''s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan shall be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing . The debt servicing will pass through RVNL books.

(ii) The Company has borrowed funds of Rs 700 crore (Previous year 2020-21: Rs.1429.69 crore) during this Period from Indian Railway Finance Corporation (IRFC). The outstanding borrowing is Rs 5621.60 crore (as at 31.03.2021 : Rs.5151.89 crore), which includes current liability i.e. repayable in next twelve months Rs 279.95 crore (as at 31.03.2021: Rs.230.29 crore).

(iii) The Interest Liability has been assessed on the amount disbursed in the F.Y 2006-07 to 2021-22 by applying the Interest rate as advised by the IRFC for each Financial year (2021-22: 7.73%, 2020-21: 7.73%, 2019-20: 8.42%, 2018-19: 9.17% & 8.93%, 2017-18 : 8.82%, 2016-17 :8.19%, 2015-16 :8.68%, 2014-15 :9.56%, 2013-14 :9.60%, 2012-13 :9.41%, 2011-12: 10.12%, 2010-11 :9.12%, 2009-10 :8.92%, 2008-09 :9.96%, 2007-08 :10.24%, 2006-07 :9.73%).

The interest accrued but not due on the IRFC loan amount has been shown in the Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interest non recoverable in next 12 Months) and the interest payable but not due under the Current Liabilities and Non-Current Liabilities (for the interest not payable in next 12 Months) payable to IRFC.

Foot Note16.1 Foreign Service Contribution :

Foreign Service Contribution in respect of officers on deputation with RVNL, is recognised on accrual basis in the statement of profit and loss account as per the terms of deputation with their parent organisaions .

16.2 For RVNL Employees

The disclosure required under Indian Accounting Standard-19 "Employee Benefit" in respect of defined benefit plan is: Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

Sensitivity analysis:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the statement of financial position.

20.1 In accordance with Railway Board''s letter No. 2004/W-1/RVNL/15 dated 04.01.2012 RVNL has accounted Consolidated Management fee @ 9.25% in case of Metro Projects and 8.5% in case of Other Plan Heads on the expenditure incurred by RVNL on MoR projects. As per the directions of MoR, all expenditure in the nature of consultancies related to Project Management are being charged directly to project. D&G charges payable to Railway up to 0.25 % of cost of projects are allocated to the projects on actual funds released to the respective Zonal Railway, Expenditure incurred on D&G (Supervision) are being charged to the Statement of Profit & Loss. The miscellaneous receipts from sale proceeds of Tender and other income has been credited to the Statement of Profit & Loss.

20.2 In respect of SPV projects, construction works have been undertaken by RVNL as per the terms and conditions of the Model Construction agreement for execution of SPV Projects issued by MoR and revenue recognised accordingly.

22.1 Expenditure against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer.

22.2 Expenditure of execution of projects done by the Zonal Railways on behalf of the Company on MoR projects is accounted for on the basis of statement of estimated expenditure received from respective Zonal Railways and is adjusted allocation-wise as and when the final expenditure statement is received.

22.3 With the rationalisation of the revenue stream of RVNL, the expenses incurred on supervision and monitoring directly allocable to the projects have been reviewed in terms of Railway Board ''s letter no 2004/W-1/RVNL/ 15 dated 04/01/2012, the pattern of booking of expenditure on Zonal Railways and general accounting practices. The expenditure incurred on this account related to execution of Deposit Works (for JV''s and others) have been charged to the Statement of Profit and Loss.

The tax rate used for the FY 2021-22 reconciliations above are the corporate tax rate of 34.944% payable by corporate entities in India on taxable profits under the Indian tax laws. Government of India through "The Taxation Laws (Amendment) Act, 2019" has inserted Section 115BAA of the Income Tax Act, 1961, whereby a domestic company has an irrevocable option of exercising for a lower corporate tax rate along with consequent forego of certain tax deductions and incentives, including accumulated MAT credit eligible for set-off in subsequent years. The company is in the process of evaluating the benefit of exercising the option for a lower corporate tax rate vis-avis the existing provisions. Pending exercising of the option, the company continues to recognize the taxes on income for year ended March 31,2022 as per the earlier provisions.

NOTE: 29 DIVIDEND

The Board of Directors has recommended the final dividend of Rs 0.25 per equity share having face value of Rs. 10 each for the financial year 2021-22, subject to the approval of the shareholders at the ensuing Annual General Meeting. This is in addition to the interim dividend of Rs. 1.58 per equity share paid during the year.

NOTE: 30 CAPITAL MANAGEMENT

The company manages 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 shareholders and benefit to other stake holders. Company has paid dividend as per the guidelines issued by Department of Public Enterprises (DPE) as follows:-

i) The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other short term trade receivables and payables which are due to be settled within 12 months are considered to the same as their fair values, due to short term nature.

ii) Long term variable rate borrowings and lease receivables are evaluated by company on parameters such as interest rates, specific country risk factors and other risk factors. Based on this evaluation the fair value of such payables are not materially different from their carrying amount.

iii) The fair value of Security Deposits and Earnest Money Deposit, Performance Security Deposit, Miscellaneous Deposit and Retention Money are calculated based on cash flows discounted using current market rate. Interest rate of fixed deposits as on the beginning of financial year is being considered as discounting rate, for FY 2021-22 rate used is 5.15% They are classified as level 3 fair values in fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

iv) Investment in unquoted equity of subsidiaries and joint ventures are stated at cost as per exemption provided by Para 10 of IND-AS 27.

V) Staff loans and advances have been continued at carrying value as measurement implications are immaterial.

vi) RVNL determined fair value of investment those are carried through Other Comprehensive Income based on

adjusted intrinsic value, through independent valuer. Valuation of Investment of Indian Port Rail & Ropeway Corporation Limited is based on financial statements for 31st March 2021 as financial statements for the year ended on 31.03.2022 of the Indian Port Rail & Ropeway Corporation Limited are not available. Based on the valuation no changes has been made and investment is shown at its original cost.

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 assets or liability, either

directly (i.e. as prices) or indirectly (i.e. derived form prices)

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

(iii) Financial risk management

The Company''s principal financial liabilities comprise Borrowings from IRFC, trade payable and other payables. The Company''s principal financial assets include trade and lease receivables and cash & cash equivalents that are derived directly from its operations.The Company is exposed to market risk, credit risk and liquidity risk. The company''s financial risk activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with the company''s policies and risk objectives. The board of directors reviews the policies for managing each of these risk, which are summarised 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

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 has only loan from IRFC, the payment of interest and repayment of principal of that is ensured by the Ministry of Railways; therefore the risk related to said loan is Nil, debt servicing will pass through RVNL books only.

ii) Foreign Currency Risk

The company takes services from countries outside India for projects and is exposed to foreign currency risk arising from such foreign currency transactions. Due to immateriality of foreign exchange amount company does not hedge any 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 in respect of financial instruments and the risk is negligible since the receivable are mainly from ministry of railways and state governments. also company does not have any history of bad debts.

Financial instruments and cash deposits

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 with counterparty on the basis of the financial quotes received from the counterparty.

c) 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 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 32 Key sources of estimation uncertainty

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 with next financial year.

a) Fair valuation measurement and valuation process

Financial instruments are measured initially at fair value and subsequently at amortised cost on the basis of materiality, transaction value upto Rs.12.00 lakhs are measured at fair value on initial recognition and subsequently at amortised cost on group basis by considering that the amount is recoverable or payable at a average period of 5 years and Income and amortisation on such financial instruments has been considered on yearly basis. Transaction value of Rs. 12.00 lakhs or more are measured at fair value at initial recognition and subsequently at amortised cost on individual transaction basis. Impact of fair valuation of Staff loans and advances are immaterial therefore it has been continuing at the carrying value.

The fair values of financial assets and financial liabilities is measured the valuation techniques including the DCF model. The inputs to these method are taken from observable markets where possible, but where this is not feasible, a degree ofjudgment is required in establishing fair values. Judgments 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. See Note 31 for further disclosures.

b) Taxes

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

c ) Borrowings and Lease Receivables from Railway against Completed Projects

Company has borrowed funds from Indian Railway Finance Corporation for the purpose of construction of railway projects. There is a moratorium period of 3 years for each year''s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan along with interest shall be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass through RVNL books. Accordingly, funds are received by RVNL on each year from MoR and the same is transferred to IRFC. Therefore, there is no impact on Statement of Profit & Loss of the Company.

Note 34.1. Company has adopted IndAS 115 (Revenue from Contract with Customers) in accordance with requirement of applicable financial reproting framework. Due to adoption of this, there is no material impact on financial statements of the Company.

i) Trade receivables are non-interest bearing except receivable from related party amounting to Rs 846.35 crore (Previous year 870.94 crore) which are interest bearing at SBI base rate 1%. Customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India. The Group''s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days.

ii) Contract Assets are recognised over the period in which services are performed to represent the Company''s right to consideration in exchange for goods or services transferred to the customer. It includes balances due from customers under construction contracts that arise when the Company receives payments from customers as per terms of the contracts, however the revenue is recognised over the period under input method. Any amount previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is necessary to achieve the billing milestone.

iii) Contract liabilities relating to construction contracts are balances due to customers, these arise when a particular milestone payment exceeds the revenue recognised to date under the input method and advance received in long term construction contracts. The amount of advance received gets adjusted over the construction period as and when invoicing is made to the customer.

NOTE: 37 CONTINGENT LIABILITIES37.1 Claims Against the Company not acknowledged as debts:

In respect of claims pending under adjudication in arbitration invoked by the Contractor not acknowledged as debts by the company are Rs 2295.56 crore as at 31 March 2022 (Previous year Rs. 2028.44 crore). The cases pending in courts involve an amount of Rs 551.17 crore as at 31st March, 2022 (Previous year Rs. 625.59 crore) . All the claims, if become payable, will form part of the project cost and reimbursable by respective clients.

37.3. Indirect taxes: a). Service Tax

In respect of Service-tax, the company has received show cause notice from Director General Goods & Service Tax Intelligence, Delhi Zonal Unit raising a demand of Rs 233.83 crore (Previous year Rs 233.83 crore) for non-payment of service tax for the period from July 2012 to June 2017 under forward/reverse charge mechanism on services provided/ received to/by Ministry of Railway and Zonal Railways contested by the company. The company has received order from Additional Director General(Adjudication) dated 24.08.2021 reduced the demand to 148.68 crore plus applicable interest and imposed penalty of Rs. 130.78 crore .The Company has filed an appeal before CESTAT, New Delhi against the said demand. If the liability is decided against the company in future, the same will be borne by Ministry of Railways.

37.4 National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) have levied a fine of Rs.0.59 crore (Previous year Rs. 0.05 crore) for non-compliance with the requirements pertaining to the composition of the Board and its committees for the year ended 31 March 2021 and 31 March 2022. Directors of the Company are appointed by the Government of India and the Company has no role to play in this regard and accordingly has requested Stock exchanges for waiver of fine.

37.5 Amount of Letter of Credit/Bank Guarantee as on 31 March 2022 is Rs. 407.39 crore (Previous year 79.50 crore)

- Contribution towards share capital in Joint Ventures is Rs 7.55 crore as at 31 March 2022 (Previous Year: Rs.73.45 crore)

- Implementation of ERP is Rs 5.53 crore as at 31 March 2022 (Previous Year: Rs. 5. 55 crore)

- Contracts awarded for construction of flats is Rs.11 crore as at 31 March 2022 (Previous Year : Rs.26.94 crore)

- Office Premise at World Trade Center, Narouji Nagar New Delhi being constructed by NBCC Rs 321.32 crore (Previous Year Rs.423.42 crore )

38.1 Other Commitment

Commitment towards Contractual Payments of Project expenditure is Rs 49, 786.51 crore (Previous Year: Rs.63, 621.43 crore).

i) One of the former employees Mr. Devendra Singh on deputation from Indian Railways has filed a writ petition on 22.07.2010 against the Company in respect of dues on account of difference in pay scales. The impact of the same has not been quantified in the writ.

ii) During the financial year 2014-15, Company received a show cause notice from the Director General of Central Excise Intelligence, regarding the liability of Service Tax of Rs.106.80 crore and interest and penalty thereon. The Company has not accepted the liability and has submitted its reply to the Show Cause Notice on 06.01.2015. A personal hearing has also been held in this regard on 21.09.2015 before the Principal Commissioner of Service Tax, Delhi-I. A similar statement of demand cum show cause notice has also been received for F. Yr. 2014-15 on 05.04.2016 in which a demand of Rs.41.04 crore has been raised. It has also been replied on 24.05.2016. For F.Y. 2015- 16, 2016-17, 2017-18 (upto 30.06.2017), the statement of demand cum show cause notice in which a total demand of Rs.105.83 crore cum show cause notice was served on 22.03.2018, which was replied on 18 .05. 2018.

iii) Western Railway has carried out the work of elimination of 30 level crossings by converting them into mannad or by construction of RUB /LHS against the estimate of Rs. 10.63 crore. Rs.8.21 crore has been deposited by the company towards this work till 31-03-2021 . For elimination of unmanned level crossing, Railway Board has issued instructions that the cost shall be borne by Railways, Whereas WR is of opinion that this amount should be borne by SPV/Company. Accordingly Company has requested to WR to refund the amount of Rs. 8.21 crore paid to WR towards elimination of unmand level crossing.

iv) As per the Construction Agreement for Palanpur-Samakhiali doubling, there is a provision for contingencies of 3% as mentioned in estimated project cost.

Share in Capital commitment: Rs 544.16 crore (Previous Year Rs. 590.46 crore)

Share in Contingent liabilities:

(i) Landowners (from whom land was purchased) have filed various cases from time to time for enhanced compensation. The amount of claims pending as at year-end is not quantifiable.

(ii) Income-tax amounting Rs 0.89 crore (Previous year Rs. 0.89 crore) pertains to the AY-2010-11.2013-14, 2014-15 & 2017-18.

(iii) A sum of Rs 6.65 crore up to 31 March 2022 ( Previous year Rs.15.79 crore ) towards interest and other changes demanded by M/s RVNL.

(i) Department has raised demand in respect of alleged offence of evasion of Service Tax amounting to Rs. 3.77 crore and Rs. 1.42 crore for financial year 2014-15 and 2015-16 respectively. Also department has raised demand of Rs. 1.47 crore for the F.Y. 2016-17 and 2017-18 (upto June''17), However Company has not accepted the liability and has submitted its reply to department. Since the Company had earlier received favorable ruling from CESTAT, it is confident that no additional liability will devolve on it. Further for the period F.Y. 2011-12 to F.Y. 2013-14, KRCL has received favourable order from CESTAT for demand of Rs.6.68 Crore, In case of similar companies on same matter department has moved to Hon''ble Supreme court in this case.During the F.Y. 2019-20 Income-tax Department has moved to Hon''ble High Court of Delhi in respect of Tax demand of Rs.2.57 crore for A.Y. 2011-12, Company has already received favorable order from ITAT in this case. Therefore, liability for this case has not been recorded in the books of Accounts. Arbitration proceedings are going with MoR.

(ii) During the previous years, company has received certain bills under protest from contractor pertaining to phase 1 on which a future liability may arise. Financial impact of the same is not ascertainable at present.

(iii) Contingent liability in respect of departmental charges not claimed by RVNL @ 5% of project cost is estimated at Rs 56.79 crore.

(i) In respect of Land dispute in Gujarat Court is Rs.0.49 crore (Previous Year Rs. 0.49 crore) against which company has deposited Rs.0.11 crore (Previous Year Rs 0.11 crore) in lieu of instructions made by High Court of Gujrat for admission of appeal.

(ii) Contingent liability related to service tax for the FY (2011-12 to 2017-18) Rs. 20.51 crore (Previous Year Rs. 20.51 crore).

(iii) The O & M expenditure pertaining to Bharuch-Chavaj section has been provided in financial statement to the extent information provided by Western Railway and information available with company, remaining O & M will be provided in the year in which information will be received from Railways.

(iv) Company has terminated some contractual employees, due to misconduct at workplace and unauthorised absence from office, aggreived by the decision of the company employees have filed application with labour court for compensation towards their termination. However, based on the facts of the case, company expects favourable decision. Financial impact of the same is not ascertainable.

(v) M/s RVNL has demanded management fees of Rs. 6.51 crore (Rs. 6.51 crore upto 31 March 2016 ) upto (1 April 2015 Rs.6.43 crore) towards construction of projects.

Share in Capital commitment:

Capital commitment in respect of S&T Work-project Rs 0.66 crore (Previous year Rs. 1.63 crore)

Share in Contingent liabilities:

In respect of claims not acknowledged as debt by the company are as follow:

(i) A Y 2014-15 NIL (Previous year Rs.0.21 crore (Addition of Interest on Mobilisation advance of Rs.0.15 crore & Interest on fixed deposits of Rs.1.25 crore)).

(ii) A Y 2013-14 NIL (Previous year Rs. 0.16 crore (Addition of Interest on Mobilisation advance of Rs.0.22 crore & Interest on fixed deposits of Rs.0.35 crore)).

Share in Capital commitment:

Cost to be incurred for assets covered by Service concession arrangement are Rs 126.74 crore (Previous Year Rs.298.15 crore).

Share in Contingent liabilities: RVNL has incurred project expenditure of Rs 0.11 crore (Previous year Rs. 0.11 crore). No bill has been raised. Therefore, it is not recognised in books of accounts.

Share in Capital commitment: Rs 0.21 crore (Previous year Rs. 0.21 crore) for acqusition of land.

1. The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due

2. During the year ended 31 March 2022, the Company incurred expenses amounting to Rs 13.28 crore on account of short-term leases and leases of low-value assets.

3. The company does not have any lease restrictions and commitment towards variable lease rent as per the contract.

4. Company has no commitments towards Leases yet to be commenced as on 31.03.2022.

5. The company has not sub-leased any of the assets taken on lease.

2. The Company elected to use the recognition exemptions for lease contracts that, at the commencement

date, have a lease term of 12 months or less and do not contain a purchase option (''short- term leases'') and lease contracts for which the underlying asset is of low value (''low-value assets'').

NOTE: 45. Change in Accounting policy

During the year, company has changed its accounting policy in case of IRFC funded projects. Amount of interest accrued for the year on the Loan is shown as ''Finance Cost'' and the same amount which is receivable from Ministry of Railways is shown as recovery from MoR under the head ''Other Income''.

On account of change of above accounting policy as on 31.03.2022, the interest on IRFC loan amounting to Rs. 529.72 crore ( previous year Rs.429.87 crore) payable to IRFC and recoverable from Ministry of Railways (MOR), which was netted off untill the previous year, has now been shown in the ''Finance Cost'' and ''Other Income'' respectively. However, there is no impact of the such change on financial statements.

Note 46. Operating Cycle

Earlier, the operating cycle of the Company was more than 12 months and extends upto 5 to 6 years based on the time required from initiation of the project to completion of the project. Now the operating cycle of the Company is 12 months after change in procedure order of MoR in respects of transfer of PWIP as per the note no 9.

Note 47. Securities released to State Electricity Board/Public Companies

Securities paid to Electricity Boards/ Public Companies towards provision of High Tension Power Lines for electricity connections are booked as project expenditure being part of the project cost.

Note 48

Department of Investment and Public Asset Management vide letter dated 31.03.2021 offered to the employees 100, 46, 696 equity shares of Rs.10 each representing approximately 0.48% of total paid up equity capital. Against this, disinvestment of 127, 923 equity shares was done through Employees-OFS on 08.04.2021 by Government of India, realising an amount of Rs. 0.35 crore. Total holding of Government of India as on 31.03.2022 is 78.20%.

Note 49.

Balances of some of the Trade receivables, other assets, Trade and other payables accounts are subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made. However, management does not expect to have any material financial impact of such pending confirmations/reconciliations.

NOTE: 52. Impact of COVID-19

The Company has considered the possible effects that may result from the COVID-19 pandemic in the preparation of these financial statements including the recoverability of carrying amounts of it''s assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of the COVID-19 pandemic, the Company has, at the date of approval of these financial statements, used internal and external sources of information and expects that the carrying amount of these assets will be recovered.

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Mar 31, 2021

(i) Lease receivable represents the amount receivable from Ministry of Railway in respect of the projects which was IRFC funded and has already been transferred to concerned zonal railways. Lease Receivable has been recognised after adjusting the funds received from MoR for the transferred amounts of the projects. (Refer Note 32 (c))

(ii) Lease receivables are interest bearing equal to the amount which has been charged by IRFC in respect of the borrowings outstanding for projects.

Note : # RVNL has accumulated MAT credit of Rs. 23.75 crore as on 31 March 2021,during the year amounting Rs. 32.70 crore of MAT credit utilized for the purpose of Income tax liability for the year 2020-21. (Mat credit available Previous year Rs. 28.01 crore)

##Previous year ''0.35 Lakh

# The company has acquired built up area of 116972 sq. ft. for its office at World Trade Centre, Nauroji Nagar, New Delhi, through open bid by NBCC on 08.05.2020. It is to be developed by M/s NBCC and expected to be completed within a period of 42 months from the date of allotment letter i.e. 20.05.2020, at a total cost of Rs. 525.51 crore which is payable in thirteen instalments on completion of defined milestones. So far RVNL has paid three instalments up to 31.03.2021

(i) Receivable from MOR is against the revenue recognised against execution, monitoring, completion and commissioning of the projects assigned to RVNL by Ministry of railways.

(ii) Other receivable includes Rs. 415.99 crore (Previous year Rs.310.37 crore) in respect of Interest due form Krishnapatnam Railways Company Limited.

(i) Advance given to Railways and Zonal Railways, Utility Advances and other Railways Advances of Rs. 1119.98 crore ( Previous Year Rs.1106.43 crore) are subject to confirmation.

(ii) Unbilled revenue represents , the revenue recognised for work executed upto 31st March 2021. These are billed in subsequent periods as per the terms of the billing plans/ contractual arrangements. Unbilled revenue includes Rs. 434.89 crore (Previous Year Rs.322.27 crore ) for related parties.

1. Rights, Preferences and Restrictions attaching to shares

Equity Shares: The Company has only one class of Equity Shares having face value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their share holding. All equity shareholders are having right to get dividend in proportion to paid up value of each equity share as and when declared.

Nature and Purpose of Other Reserves:(a) Retained Earnings

Retained Earnings represents the undistributed profits of the Company.

(b) General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buy-back of shares.

(c) Items of Other Comprehensive Income

The Company has elected to recognize changes in fair value of investment in equity securities of Indian Port Rail and Ropeway Corporation Limited in other comprehensive income. The changes are accumulated within the FVTOCI equity investments reserves within equity. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are de-recognized.

Proposed dividend

Board of Directors have recommended the payment of a final dividend of Rs 0.44 per fully paid equity share. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting. For the Financial year 2020-21 total dividend declared is Rs 329.43 crore (FY 2019-20 : Rs 237.69 crore), out of which Rs 237.69 crore (FY 2019-20 : NIL) were paid as interim dividend and balance Rs.91.74 crore (FY 2019-20 : Rs 237.69 crore) is recommended as final dividend.

Terms of Repayment:

(i) There is a moratorium period of 3 years for each year’s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan shall be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing . The debt servicing will pass through RVNL books.

(ii) Company has borrowed funds Rs. 1,429.69 crore (Financial year 2019-20: Rs.1407.96 crore) during this Period from Indian Railway Finance Corporation (IRFC). The outstanding borrowing is Rs 5151.89 crore (as at 31.03.2020 : Rs.3987.94 crore) , which includes current liability i.e. repayable in next twelve months Rs.230.29 crore (as at 31.03.2020: Rs.265.74 crore).

(iii) The Interest Liability has been assessed on the amount disbursed in the F.Y. 2006-07 to 2020-21 by applying the Interest rate as advised by the IRFC for each Financial year (2020-21: 7.72% , 201920: 8.42%, 2018-19: 9.17% & 8.93%, 2017-18 : 8.82% , 2016-17 :8.19%, 2015-16 :8.68%, 2014-15 :9.56%, 2013-14 :9.60%, 2012-13 :9.41%, 2011-12: 10.12%, 2010-11 :9.12%, 2009-10 :8.92%, 200809 :9.96%, 2007-08 :10.24%, 2006-07 :9.73%). The interest accrued but not due on the IRFC loan amount has been shown in the Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interest non recoverable in next 12 Months) and the interest payable but not due under the Current Liabilities and Non-Current Liabilities (for the interest not payable in next 12 Months) payable to IRFC.

Foot Note17.1 Foreign Service Contribution :

Foreign Service Contribution in respect of officers on deputation with RVNL , is recognised on accrual basis in the statement of profit and loss account as per the terms of deputation with their parent organisations.

17.2 For RVNL Employees

The disclosure required under Indian Accounting Standard-19 “Employee Benefit” in respect of defined benefit plan is:

Sensitivity analysis:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the statement of financial position.

20.1 In accordance with Railway Board’s letter No. 2004/W-1/RVNL/15 dated 04.01.2012 RVNL has accounted Consolidated Management fee @ 9.25% in case of Metro Projects and 8.5% in case of Other Plan Heads on the expenditure incurred by RVNL on MoR projects. As per the directions of MoR, all expenditure in the nature of consultancies related to Project Management are being charged directly to project. D&G charges payable to Railway up to 0.25 % of cost of projects are allocated to the projects on actual funds

released to the respective Zonal Railway, Expenditure incurred on D&G (Supervision) are being charged to the Statement of Profit & Loss account. The miscellaneous receipts from sale proceeds of Tender and other income has been credited to the Statement of Profit & Loss.

20.2 In respect of SPV projects, construction works have been undertaken by RVNL as per the terms and conditions of the Model Construction agreement for execution of SPV Projects issued by MoR and revenue recognised accordingly. In respect of Kutch Railways Company Limited (KRCL), revenue is recognised based on bills raised and payments received as per acceptance of Formal Construction Agreement by KRCL is signed.

# Interest income from “others” includes interest from Special Purpose Vehicles (SPVs) against balances outstanding and interest on mobilization advance.

## The company on humanitarian grounds framed a policy and issued a circular to that effect, to provide help to workers at various worksites during COVID-19, such as arrangement for their lodging, food, separation of patients from others, moving to hospitals etc. with a view to prevent migration of workers from worksites and accordingly made a provision of Rs. 50 crores in the financial statements for year ended 31 March 2020. However, during the financial year 2020-21 it was decided that the expenditure on this account has to be borne by the contractors and hence it is concluded that there is no liability on RVNL and the provision made in previous year now written back.

22.1 Expenditure against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer.

22.2 Expenditure of execution of projects done by the Zonal Railways on behalf of the Company on MoR projects is accounted for on the basis of statement of estimated expenditure received from respective Zonal Railways and is adjusted allocation-wise as and when the final expenditure statement is received.

22.3 With the rationalisation of the revenue stream of RVNL, the expenses incurred on supervision and monitoring directly allocable to the projects have been reviewed in terms of Railway Board ‘s letter no 2004/W-1/RVNL/15 dated 04/01/2012, the pattern of booking of expenditure on Zonal Railways and general accounting practices. The expenditure incurred on this account related to execution of Deposit Works (for SPV and others) have been charged to the Statement of Profit and Loss.

The tax rate used for the FY 2020-21 reconciliations above are the corporate tax rate of 34.944% payable by corporate entities in India on taxable profits under the Indian tax laws. Government of India through “The Taxation Laws (Amendment) Act, 2019” has inserted Section 115BAA of the Income Tax Act, 1961, whereby a domestic company has an irrevocable option of exercising for a lower corporate tax rate along with consequent forego of certain tax deductions and incentives, including accumulated MAT credit eligible for set-off in subsequent years. The company is in the process of evaluating the benefit of exercising the option for a lower corporate tax rate vis-a-vis the existing provisions. Pending exercising of the option, the company continues to recognize the taxes on income for year ended March 31,2021 as per the earlier provisions.

# Final dividend for the FY 2019-20 : Rs. 237.69 crore and interim dividend for the FY 2020-21: Rs. 237.69 crore

Further, company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants. Company has borrowed the funds form IRFC for railway projects, for repayment of IRFC loan Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing . The debt servicing will pass through RVNL books.

In order to achieve the overall objective of the Company’s capital management, amongst other things, aims to ensure that it meet financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2021.

i) The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other short term trade receivables and payables which are due to be settled within 12 months are considered to the same as their fair values, due to short term nature.

ii) Long term variable rate borrowings and lease receivables are evaluated by company on parameters such as interest rates, specific country risk factors and other risk factors. Based on this evaluation the fair value of such payables are not materially different from their carrying amount.

iii) The fair value of Security Deposits and Earnest Money Deposit, Performance Security Deposit, Miscellaneous Deposit and Retention Money are calculated based on cash flows discounted using current market rate. Interest rate of fixed deposits as on the beginning of financial year is being considered as discounting rate, for FY 2020-21 rate used is 5.15%. They are classified as level 3 fair values in fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

iv) Staff loans and advances have been continued at carrying value as measurement implications are immaterial.

v) RVNL determined fair value of investment those are carried through Other Comprehensive Income based on adjusted intrinsic value , through independent valuer. Valuation of Investment of Indian Port Rail & Ropeway Corporation Limited is based on financial statements for 31st March 2020 as financial statements for the year ended on 31.03.2021 of the Indian Port Rail & Ropeway Corporation Limited are not available on account of unknown contingencies due to COVID 19. Based on the valuation amount of Rs. 3 Lakh diminuted earlier has been reversed and investment is shown at it is original cost.

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 assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived form 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 amortised cost/Fair Value:-

“The Company’s principal financial liabilities comprise Borrowings from IRFC, trade payable and other payables. The Company’s principal financial assets include trade and lease receivables and cash & cash equivalents that are derived directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk. The company’s financial risk activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with the company’s policies and risk objectives. The board of directors reviews the policies for managing each of these risk, which are summarised 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

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 has only loan from IRFC, the payment of interest and repayment of principal of that is ensured by the Ministry of Railways; therefore the risk related to said loan is Nil , debt servicing will pass through RVNL books only.

ii) Foreign Currency Risk

The company takes services from countries outside India for projects and is exposed to foreign currency risk arising from such foreign currency transactions. Due to immateriality of foreign exchange amount company does not hedge any 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 in respect of financial instruments and the risk is negligible since the receivable are mainly from ministry of railways and state governments also company does not have any history of bad debts.

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 with counterparty on the basis of the financial quotes received from the counterparty.

c) 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 tressed 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 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 32 Key sources of estimation uncertainty

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 with next financial year.

a) Fair valuation measurement and valuation process

Financial instruments are measured initially at fair value and subsequently at amortised cost on the basis of materiality, transaction value upto Rs.12.00 lakhs are measured at fair value on initial recognition and subsequently at amortised cost on group basis by considering that the amount is recoverable or payable at a average period of 5 years and Income and amortisation on such financial instruments has been considered on yearly basis. Transaction value of Rs. 12.00 lakhs or more are measured at fair value at initial recognition and subsequently at amortised cost on individual transaction basis. Impact of fair valuation of Staff loans and advances are immaterial therefore it has been continuing at the carrying value.

The fair values of financial assets and financial liabilities is measured the valuation techniques including the DCF model. The inputs to these method are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments 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. See Note 31 for further disclosures.

b) Taxes

Deferred tax assets are recognized for unused tax losses and unabsorbed depreciation to the extent that it is probable that taxable profit will be available against which losses can be utilised significant management judgment is required to determine the amount of deferred tax asset that can be recognised, based upon the likely timing and level of future taxable profit together with future tax planning strategies.

c ) Borrowings and Lease Receivables from Railway against Completed Projects

Company has borrowed funds from Indian Railway Finance Corporation for the purpose of construction of railway projects. There is a moratorium period of 3 years for each year’s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan along with interest shall be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass through RVNL books. Accordingly, funds are received by RVNL on each year from MoR and the same is transferred to IRFC immediately. Therefore, there is no impact on Profit & Loss of RVNL i.e.. on the debit side of Profit & Loss finance cost is charged and by the same amount interest income is recognised in Statement of Profit and Loss.

i) Trade receivables are non-interest bearing except receivable from related party amounting to Rs 870.94 crore which are interest bearing at SBI base rate 1%. Customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. The Group’s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days.

ii) Contract Assets are recognised over the period in which services are performed to represent the Company''s right to consideration in exchange for goods or services transferred to the customer. It includes balances due from customers under construction contracts that arise when the Company receives payments from customers as per terms of the contracts however the revenue is recognised over the period under input method. Any amount previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is necessary to achieve the billing milestone

iii) Contract liabilities relating to construction contracts are balances due to customers, these arise when a particular milestone payment exceeds the revenue recognised to date under the input method and advance received in long term construction contracts. The amount of Advance received gets adjusted over the construction period as and when invoicing is made to the customer.

NOTE: 37A CONTINGENT LIABILITIES37.A.1 Claims Against the Company not acknowledged as debts:

In respect of claims pending under adjudication in arbitration invoked by the Contractor not acknowledged as debts by the company are Rs.2028.44 crore as at 31 March 2021(Previous year Rs. 2745.67 crore). During the period, the arbitration claims worth Rs.1043.02 crore were settled as at 31 March 2021 (Previous year: Rs.1156.65 crore ). The cases pending in courts involve an amount of Rs. 625.59 crore as at 31 March 2021 (Previous year Rs. 575.52 crore) . All the claims if payable will form part of the project cost and reimbursable by respective clients.

37.A.2 Direct taxes: Income- tax demands as reflected on the website of Income-tax department as at 31 March 2021 aggregate to Rs. 24.31 crore (Previous Year Rs. 17.97 crore) and company has not accepted the claim and submitted its representation to department as follows:-

('' in crore)
Sr. No.	Authority	Assessment Year	As at 31 March 2021	As at 31 March 2020
1	Rectification application pending with Assessing Officer	2008-09	-	0.15
3		2012-13 #	-	-
4		2014-15 #	-	-
5		2015-16 #	-	-
6		2017-18	-	17.58
8		2018-19##	0.02	0.24
9		2019-20##	24.29	-
		Total	24.31	17.97

# In Current Year, for Assessment Year 2014-15 Rs. 2050,2015-16 Rs.3000.

# In Previous Year, for Assessment Year 2012-13 Rs. 5960, 2014-15 Rs. 2050,2015-16 Rs.3000.

## Against total liability of Rs. 24.31 crore, Income Tax Department has made adjustment of Rs.10.13 crore towards the refund due to the company for the Assessment year 2020-21.

37.A.3. Indirect taxes: In respect of Service-tax, the company has received show cause notice from Director General Goods & Service Tax Intelligence, Delhi Zonal Unit raising a demand of Rs 233.83 crore of nonpayment of service tax for the period from July 2012 to June 2017 under forward/reverse charge mechanism on services provided/ received to/by Ministry of Railway and Zonal Railways contested by the company. If the liability is decided against the company in future ,the same will be borne by Ministry of Railway.

37.A.4 National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) both have levied a fine of Rs.0.05 crore each for Non-compliance with the requirements pertaining to the composition of the Board for the quarter ended 31st December, 2020. Directors in RVNL are appointed by the Government of India and the Company has no role to play in this regard and accordingly has requested Stock exchanges for waiver of fine. BSE has waived the fine . There exist contingent liability of Rs.0.05 crore as on 31 March 2021.

37.A.5 Amount of Letter of Credit as on 31 March 2021 is Rs. 79.50 crore NOTE: 37 B CONTINGENT ASSETS

In respect of counter claims under adjudication in arbitration invoked by the Company are Rs. 759.46 crore as at 31 March 2021(Previous year : Rs. 860.84 crore ).

In respect of company’s counter claims pending in the court are 499.05 crore as at 31 March 2021 (Previous year :Rs. 499.05 crore)

NOTE: 38 CAPITAL COMMITMENT:

-Contribution towards share capital in SPV’s is Rs. 73.45 crore as at 31 March 2021 (Previous Year: Rs. 90.57 crore)

-Implementation of ERP is Rs 5.55 crore as at 31 March 2021 (Previous Year: Rs. 5.18 crore) -Contracts awarded for construction of flats is Rs 26.94 crore as at 31 March 2021 (Previous Year : Rs. 34.40 crore)

-Office Premise at World Trade Center, Narouji Nagar New Delhi being constructed by NBCC Rs. 423.42 crore (Previous Year Rs.Nil crore )

38.1 Other Commitment

Commitment towards Contractual Payments of Project expenditure is Rs 63621.43 crore (Previous Year: Rs. 21414.18 crore).

i) One of the former employees Mr. Devendra Singh on deputation from Indian Railways has filed a writ petition on 22.07.2010 against the Company in respect of dues on account of difference in pay scales. The impact of the same has not been quantified in the writ.

ii) During the financial year 2014-15, Company received a show cause notice from the Director General of Central Excise Intelligence, regarding the liability of Service Tax of Rs.106.80 crore and interest and penalty thereon. The Company has not accepted the liability and has submitted its reply to the Show Cause Notice on 06.01.2015. A personal hearing has also been held in this regard on 21.09.2015 before the Principal Commissioner of Service Tax, Delhi-I. A similar statement of demand cum show cause notice has also been received for F. Yr. 2014-15 on 05.04.2016 in which a demand of Rs.41.04 crore has been raised. It has also been replied on 24.05.2016. For F.Y. 2015- 16, 2016-17, 2017-18 (upto 30.06.2017), the statement of demand cum show cause notice in which a total demand of Rs.105.83 crore cum show cause notice was served on 22.03.2018, which was replied on 18 .05. 2018.

iii) Western Railway has carried out the work of elimination of 30 level crossings by converting them into mannad or by construction of RUB /LHS against the estimate of Rs. 10.63 crore. Rs.5.43 crore has been deposited by the company towards this work till 31-03-2019 . For elimination of unmanned level crossing, Railway Board has issued instructions that the cost shall be borne by Railways, Whereas WR is of opinion that this amount should be borne by SPY/Company. Accordingly Company has requested to WR to refund the amount of Rs. 5.43 crore paid to WR towards elimination of unmand level crossing.

iv) As per the Construction Agreement for Palanpur-Samakhiali doubling, there is a provision for contingencies of 3% as mentioned in estimated project cost.

Share in Contingent liabilities:

(i) Landowners (from whom land was purchased) have filed various cases from time to time for enhanced compensation. The amount of claims pending as at year-end is not quantifiable.

(ii) Income-tax amounting Rs.0.83 crore pertains to the AY-2013-14, 2014-15 & 2017-18 (Previous Year Rs.0.85 crore pertains to AY 2013-14, 2014-15 & 2017-18).

(iii) A sum of Rs.10.65 crore up to 31 March 2021 ( Previous year Rs.9.05 crore ) towards interest and other changes demanded by M/s RVNL.

Share in Capital Commitments:

(i) Estimated amount of works remaining to be executed on capital account (based on EPC cost) and not provided for Rs.10.35 crore (Previous Year Rs.48.57 crore).

Share in Contingent liabilities:

(i) Department has raised demand in respect of alleged offence of evasion of Service Tax amounting to '' 3.77 crore and ''1.42 crore for financial year 2014-15 and 2015-16 respectively. Also department has raised demand of ''1.47 crore for the F.Y 2016-17 and 2017-18 (upto June’17), However Company has not accepted the liability and has submitted its reply to department. Since the Company had earlier received favorable ruling from CESTAT, it is confident that no additional liability will devolve on it. Further for the period F.Y. 2011-12 to F.Y. 2013-14, KRCL has received favorable order from CESTAT for demand of Rs.6.68 Crore, Department has moved to Hon’ble Supreme court in this case. During the F.Y. 2019-20 Income-tax Department has moved to Hon’ble High Court of Delhi in respect of Tax demand of Rs.2.57 crore for A.Y. 2011-12, Company has already received favorable order from ITAT in this case. Therefore, liability for this case has not been recorded in the books of Accounts. Arbitration proceedings are going with MoR.

(ii) During the previous years, company has received certain bills under protest from contractor pertaining to phase 1 on which a future liability may arise. Financial impact of the same is not ascertainable at present.

(iii) Contingent liability in respect of departmental charges not claimed by RVNL @ 5% of project cost is estimated at Rs.56.79 crore.(Previous Year Rs. 56.13 crore).

Share in Capital commitment: Nil (Previous Year NIL)

Capital commitment for project related assets is under review for September 2020.

During the year no material foreseeable losses incurred on any Long term contracts.

Share in Contingent liabilities:

(i) In respect of Land dispute in Gujarat Court is Rs.0.49 crore (Previous Year Rs. 0.49 crore) against which company has deposited Rs.0.11 crore (Previous Year Rs 0.11 crore) in lieu of instructions made by High Court of Gujrat for admission of appeal.

(ii) Contingent liability related to service tax for the FY (2011-12 to 2017-18) Rs. 20.51 crore (Previous Year Rs. 20.51 crore).

(iii) The O & M expenditure pertaining to Bharuch-Chavaj section has been provided in financial statement to the extent information provided by Western Railway and information available with company, remaining O & M will be provided in the year in which information will be received from Railways.

(iv) Company has terminated some contractual employees, due to misconduct at workplace and unauthorised absence from office, aggreived by the decision of the company employees have filed application with labour court for compensation towards their termination. However, based on the facts of the case, company expects favourable decision. Financial impact of the same is not ascertainable.

(v) M/s RVNL has demanded management fees of Rs. 6.51 crore (Rs. 6.51 crore upto 31 March 2016 ) upto (1 April 2015 Rs.6.44 crore) towards constructions of the project.

NOTE: 44. Impact of COVID-19

Despite continuation of pandemic COVID-19 globally and in India, Company has been able to registered a growth of 6% in turnover. In view of the Management assessment, likely impact on the business of the Company is only for short term and no medium to long term risks is perceived which will have an impact on Company’s ability to continue as a going concern. In FY 2020-21, there was no significant impact on financial performance of the Company. Based on the internal and external information upto the date of approval of

these financial statements ,the company expects to recover the carrying amount of its assets , investments, trade receivables, contract assets . The Company has assessed the impact of COVID-19 on financial and physical performance in 2021-22, which may be due to (i) provision of inadequate funds, (ii) unavailability of labourers and goods during lock down period, (iii) impact of restrictions on transportation etc., impact so assessed is not much significant. Further, considering the Company’s business plans and the assurance of the Ministry of Railways to provide adequate funds for project execution in 2021-22, the Management do not foresee any uncertainty in continuing its business operations. However, Company will continue to monitor developments to identify significant uncertainties relating to business operations in future periods.

1. The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

2. During the year ended 31 March 2021, the Company incurred expenses amounting to Rs. 12.36 crore on account of short-term leases and leases of low-value assets.

3. The company does not have any lease restrictions and commitment towards variable lease rent as per the contract.

4. Company has no commitments towards Leases yet to be commenced as on 31.03.2021.

5. The company has not sub-leased any of the assets taken on lease.

Note 45.2.

The Company adopted Ind AS 116 using the modified retrospective method of adoption with the date of initial application of 1 April 2019. Under this method, the standard is applied prospectively with the cumulative effect of initially applying the standard recognised at the date of initial application.

Further, the Company elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (‘short- term leases’) and lease contracts for which the underlying asset is of low value (‘low-value assets’).

The financial statements has been approved for issue by the Board of Directors on 29.07.2020.

NOTE: 46. Approval of financial statement

The financial statements has been approved for issue by the Board of Directors on 29.06.2021.

Note 47. Operating Cycle

Earlier, the operating cycle of the Company was more than 12 months and extends upto 5 to 6 years based on the time required from initiation of the project to completion of the project. Now the operating cycle of the Company is 12 months after change in procedure order of MoR in respects of transfer of PWIP as per the note no 9.

Note 48. Securities released to State Electricity Board/Public Companies

Securities paid to Electricity Boards/ Public Companies towards provision of High Tension Power Lines for electricity connections are booked as project expenditure being part of the project cost.

Note 50

Govt of India through Department of Investment and Public Asset Management (DIPAM) O.M. dated

23.03.2021 directed the rVnL to have the Offer for Sale (OFS) of a base size of 10% of paid-up Equity Shares with an option to sell additional shares up-to 5% of paid up capital in case of over subscription. Floor price was fixed at Rs.27.50 per share. Disinvestment of 2009,33,926 equity shares (9.64%) was done from 24.03.2021 to 25.03.2021.The proceeds amounting to Rs.552.60 crore have been realised by Govt. of India. Further vide Department of Investment and Public Asset Management letter dated 31.03.2021 100,46,696 equity shares of Rs.10 each , approximately 0.48% of total paid up equity capital were to be offered to employees. Disinvestment of 127,923 equity shares was done through Employees-OFS on

08.04.2021 realising an amount of Rs. 0.35 crore (0.006% of total paid up equity capital).Total disinvestment made up to 31.03.2021 is 21.79 % ( FY 2019-20 12.16%).Total disinvestment after the employee OFS on

08.04.2021 is 21.80%.

Note 51. Employees Contributory Pension Scheme

During the current financial year 2020-21 company has approved adoption of Employees Contributory Pension Scheme 2017 under NPS for regular employees including Board level executives of RVNL w.e.f. 01.01.2017. At present 13% of the Basic pay DA being contributed to the Corpus for post-superannuation medical benefits .Now Board has approved 10% of Basic DA to be allocated to the RVNL Employees Contributory Pension Scheme and 3% of Basic pay DA towards Corpus for post-superannuation medical benefits .The Scheme will be implemented on selection of Fund Manager which is under process.

Note 52. RVNL Employees Gratuity Trust

During the current Financial Year 2020-21 company approved the formation of RVNL Employees Gratuity Trust. This will be implemented on selection of Fund Manager which is under process.

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Mar 31, 2018

Note 1 Key sources of estimation uncertainty

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 with next financial year.

a) Fair valuation measurement and valuation process

Financial instruments are measured initially at fair value and subsequently at amortized cost on the basis of materiality, transaction value up to Rs, 12.00 lakhs are measured at fair value on initial recognition and subsequently at amortized cost on group basis by considering that the amount is recoverable or payable at a average period of 5 years and Income and amortization on such financial instruments has been considered on yearly basis. Transaction value of Rs, 12.00 lakhs or more are measured at fair value at initial recognition and subsequently at amortized cost on individual transaction basis. Impact of fair valuation of Staff loans and advances are immaterial therefore it has been continuing at the carrying value.

The fair values of financial assets and financial liabilities is measured the valuation techniques including the DCF model. The inputs to these method are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments 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. See Note 31 for further disclosures.

b) Taxes

Deferred tax assets are recognized for unused tax losses and unabsorbed depreciation to the extent that it is probable that taxable profit will be available against which losses can be utilized significant management judgment 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) Borrowings and Lease Receivables from Railway against Completed Projects

Company has borrowed funds from Indian Railway Finance Corporation for the purpose of construction of railway projects. There is a moratorium period of 3 years for each year''s loan. During the said moratorium period, no amount on account of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan along with interest shall be once in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will pass through RVNL books. Accordingly, funds are received by RVNL on each year from MoR and the same is transferred to IRFC immediately. Therefore, there is no impact on Profit & Loss of RVNL i.e.. on the debit side of Profit & Loss finance cost is charged and by the same amount interest income is recognized in Statement of Profit and Loss.

34.1 Works being executed for SPVs and others parties are treated as a Deposit Work. The corresponding current assets and liabilities in respect of such projects have been recognized on the basis of expenditure incurred plus supervision charges as agreed. The advance received is disclosed under Current Liabilities and the amount recoverable on account of project execution under Sundry Debtors.

Note 37 A. Contingent Liabilities

37.A.1 In respect of claims by the contractor on account of arbitration not acknowledged as debts by the Company is Rs, 3,81,835.09 Lakhs (as at 31.3.2017: Rs, 3,19,352.17 Lakhs during 2017-18 contractors claims worth Rs, 8998.14 Lakhs were settled). A claim if any will be form part of the project cost and reimbursable by respective Clients.

37.A.2 In respect of Income Tax Demand as reflected on the website of Income Tax Department is Rs, 15.28 (as at 31.3.2017: Rs, 70.61 Lakhs) and company has not accepted the claim and submitted its representation to department as follows:-

Note 37 B. Contingent Assets

In respect of counter claims by the Company on account of arbitration is Rs, 1,14,923.41 Lakhs (as at 31.3.2017: Rs, 484,15.06 Lakhs).

Company has received show cause notice from Director General Goods & Service Tax Intelligence, Delhi Zonal Unit showing a demand of Rs, 211.08 crore of non-payment of service tax for the period from July''12 to June''2017 under forward/reverse charge mechanism on services provided to Ministry of Railway and/or services received by Zonal Railways. In this regard, the company has appointed a counsel to represent the case before Adjudicating Authority. If the liability is decided against the company in future, the same will be borne by Ministry of Railway.

Note 38. Capital Commitment

Capital commitment towards share capital in SPV’s is as at 31.03.2018 Rs, 2,041.00 Lakhs (as at 31.3.2017: Rs,2,041.00 lakhs), towards implementation of ERP is Rs,3806.91 Lakhs as at 31.03.2018 (as at 31.03.2017: Rs, 4,352.15 Lakhs).

38.1 Other Commitment

Commitment towards Contractual Payments of Project expenditure is Rs, 10,99,836.03 lakhs (as at 31.3.2017: Rs, 10,66,640.75 lakhs).

Note 42. Related Party disclosures as required by Ind-AS 24 "Related party Disclosure

42.1 Key Management Personnel:

Name Designation

Sh. S.C. Agnihotri Managing Director

Sh. Ashok Krishna Ganju Director Finance (up to 31.10.2017)

Ms. Gita Mishra Director Personnel

Sh. Vijay Anand Director Projects

Sh. Arun Kumar Director Operation

Sh. Ashok Kumar Chaudhary Chief Financial Officer (From 01st Nov, 2017)

Ms.Kalpana Dubey Company Secretary

Sh.Vinayak Bhalchandra Karanjikar Independent Director

Sh.Kailash KumarAggarwal Independent Director

Sh.Shiv Kumar Gupta Independent Director

Sh.Rajen Habib Khwaja Independent Director

Ms Sabita Pradhan Independent Director

Sh.Sukhmal Chand Jain Independent Director

42.2 Enterprises in which Directors interest exist:

High Speed Rail Corporation of India Limited

42.3 Joint Ventures

Kutch Railway Company Limited Haridaspur Paradip Railway Company Limited Krishnapatnam Railway Company Limited Bharuch Dahej Railway Company Limited Angul Sukinda Railway Limited Dighi Roha Rail Limited

42.4 Subsidiary

High Speed Rail Corporation of India Limited

42.5 Superannuation Trust

RVNL Medical and Welfare Trust

Contingent liabilities: ^15.32 Lakh (Financial year 2016-17 f Nil)

Capital commitment: ^ 42.18 lakhs (as at 31-03-2017: ^ 42.18 lakhs)

Note 1.Lease Arrangements 44.1 Financial Lease

The value of assets given on lease is reflected against contra liability payable to IRFC towards loan on completed projects as appearing in note 5, which is liquidated progressively through loan repayment to IRFC being arranged by MoR.

Note 2. Approval of financial statement

The financial statements has been approved for issue by the Board of Directors on 13.08.2018.

Note 3. Operating Cycle

Earlier, the operating cycle of the Company was more than 12 months and extends up to 5 to 6 years based on the time required from initiation of the project to completion of the project. Now the operating cycle of the Company is 12 months after change in procedure order of MoR in respects of transfer of PWIP as per the note no 9(e).

Note 4. Securities released to State Electricity Board/Public Companies

Securities paid to Electricity Boards/ Public Companies towards provision of High Tension Power Lines for electricity connections are booked as project expenditure being part of the project cost.

Note 5. Previous year figures has been rearranged, regrouped and reclassified to make them confirmatory with current year figures.

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Mar 31, 2011

1. Inventories

i. Land cost included in Project Work in Progress represents payments made to various Zonal Railways for the purpose of acquisition of land. The total payment made amounts to Rs 190.17 crore (Previous year: Rs 151.12 crore).The land so acquired is in the name of the Zonal Railway.

ii. The Company is executing projects transferred by MOR under the MoU. In some of the projects, initially transferred to the Company, work was already in progress and some of the Zonal Railways had incurred expenditure on those projects prior to their transfer to the Company. The expenditure made by the concerned Railways prior to the formation of the Company has not been taken into account.

iii. In the opinion of the Management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these have been stated in the Balance Sheet.

2. Revenue

i. The Company has accounted for income from Project execution @ 2% on the expenditure incurred by it on MOR projects, which are being directly implemented by the Company as per the directions of MOR. Accordingly, management fees amounting to Rs 22.21 crore (Previous YearRs 21.45 crore) has been recognized as income.

ii. In addition, from the financial year 2009-2010, MOR has decided to allow an incentive of 0.5% for the Company. This incentive shall be allowed to RVNL based upon the grading awarded by the Department of Public Enterprises every year. Accordingly, RVNL would be eligible for the full incentive of 0.5% if it achieves the grading of "Excellent", 0.4% incentive if it achieves grading of "Very Good" and 0.3% incentive for the grading of "Good". No incentive would be allowed if the grading is less than "Good". The amount of incentive has been calculated on the basis of the latest grading of "Very Good" communicated by DPE on the annual expenditure incurred on Railway projects by RVNL. Accordingly, an incentive amounting to Rs4.44 crore (Previous Year Rs4.29 crore) has been recognized as income.

iii. Expenditure on work in progress against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer.

iv. Expenditure of execution of projects done by the Zonal Railways on behalf of the Company on MOR projects is accounted for on the basis of statement of a estimated expenditure received from respective Zonal Railways and is adjusted allocation-wise as and when the final expenditure statement is received.

3 Deposit Works (SPVs and others)

i. Works being executed for SPVs and others are treated as a deposit work. The advance received is disclosed under Current Liabilities and the amount recoverable on account of project execution under Sundry Debtors.

ii. The Company is executing projects for SPVs of the Company and other parties as a deposit work, the corresponding current assets and liabilities in respect of such projects have been recognized on the basis of expenditure incurred plus D&G charges as agreed.

4 As decided by MOR the Company has cumulatively borrowed funds aggregating to Rs 1,971 crore (Previous year Rs 1,871 crore) from Indian Railway Finance Corporation (IRFC). After cumulative repayment of Principal of Rs 123.83 crore (Previous YearRs43.17 crore). The net borrowing is Rs 1,847.17 (Previous Year is Rs 1827.83).The interest liability has been assessed at the rate as advised by IRFC from time to time. For 2010-11, the rate advised by IRFC is 8.92% (Previous Year 8.73%). MOR has decided to bear full responsibility of the repayment of principal and cost of borrowing (interest) on the entire sum of the borrowed funds. The interest accrued but not due on the IRFC loan amount has been shown as recoverable from MOR under Current Assets and the interest payable amount under the Current Liabilities in the Balance Sheet.

5 Funds received by the Company from Government of India, MOR are utilized for executing projects transferred by MOR. After physical completion of a project, the assets are to be transferred to the concerned zonal railway who would add the value of assets in their block account.

6 The total cost of projects executed for MOR by the Company is Rs 7,604.80 crore (Previous Year Rs 6,395.32 crore). Out of this Rs 1,831.18 crore (Previous Year Rs 1,758.70 crore) worth of projects has been executed by Zonal Railways on behalf of the Company.

7 The value of projects commissioned / completed and put to use by Railways up-to year ended 31st March 2011 amounted to Rs 4,061.43 crore (Previous year Rs 3,899.89 crore). Out of the same the value of completed projects funded through MOR sources of funds i.e. Capital is Rs 739.39 crore and Capital Fund is Rs 1,235.1 1 crore and IRFC funded (including project part funded by Tamil Nadu Government) is Rs 2,086.93 crore.

As some projects have been physically completed by RVNL and handed over to the respective Zonal Railways for operation, the financial adjustments for such projects have been carried out against Project Advance (Capital) and Project Advance (Capital Fund) respectively in the Balance Sheet leading to a reduction in Loan Funds and Project Work in Progress to the tune of Rs 1,974.50 crore. As some minor works may still be required, the expenditure incurred on projects subsequent to the date of financial adjustments will be cleared at the time of drawing the completion reports.

With regard to the IRFC funded projects, the expenditure incurred on these projects is to be retained on the Balance Sheet of RVNL till the loan amount is liquidated.

8 RVNL in its Letter No. RVNL/F&A/Revenue Stream dated 19.10.2010 addressed to Railway Board has intimated that RVNL will restrict its expenditure at 5% on items which are chargeable to Direction & General (D & G) charges i.e. supervision charges in the Railways. In order to bring parity with the pattern of booking of D & G charges with the Zonal Railways, the expenditure incurred in RVNL on rent (office and residential including related expenses), travel and lodging expenses and a certain element of medical expenses have been booked directly to the projects under the head Project Work in Progress. The expenditure incurred on this account in 2010-11 is Rs11.87 crore. The expenditure incurred on this account related to execution of SPV and Deposit work has been charged to the Profit and Loss account.

9 The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and medium enterprises Development Act, 2005 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act is not ascertainable presently.

10 Contingent liability in respect of claims not acknowledged as debts by the Company is Rs 161.71 crore (Previous yearRs42.26 crore).

11 Capital commitment towards share capital in SPV''s is Rs 173.93 crore (Previous yearRs 194.93 crore).

Includes Rs 30,81,253 (Previous year Rs 44,41,254) for Directors who are on deputation from Ministry of Railways.

13 Employee Benefits

(a) The majority of the officers/staff employed in RVNL are on deputation from Indian Railways. RVNL is paying Foreign Service Contribution to the Indian Railways towards retirement benefits.

(b) For RVNL employees

The disclosure required under Accounting Standard- 15 "Employees Benefit" in respect of defined benefit plan is:

Gratuity Benefit is payable to employees on retirement or resignation or death. The amount of gratuity payable is based on past service and salary at time of exit as per Payment of Gratuity act, 1972. There is a vesting period of 5 years on the benefit.

14 Income Tax:

(a) Provision for Income tax has been calculated on the interest income received/ accrued and on D&G charges levied on project execution for SPV and other parties during the year.

(b) The Company has calculated deferred tax asset due to the timing difference between book depreciation and tax depreciation as Rs 0.43 crore and deferred tax liability on provision for retirement benefits and FSC as Rs 1.03 crore. Thus, the net impact after adjusting opening balance of Rs 1.17 crore is a deferred tax asset of Rs 0.57 crore as on 31st March 2011. In compliance with provisions of Accounting Standard and based on general prudence, the company has not recognized the deferred tax assets while preparing the accounts of current year.

* See note No. 12

** These represent amount recoverable on account of expenditure incurred on various projects of Joint Ventures.

Contingent liabilities: Rs Nil (Previous year Rs Nil)

Capital commitment: Rs 16.50 crore (Previous year Rs 18.77 crore)

Contingent liabilities: Rs Nil (Previous year Rs Nil)

Capital commitment: Rs Nil, (Previous year Rs Nil)

Contingent liabilities: Rs Nil (Previous year Rs Nil)

Capital commitment: Rs Nil, (Previous year Rs Nil)

Contingent liabilities: Rs Nil (Previous year Rs Nil)

Capital commitment: Rs Nil, (Previous year Rs Nil)

Contingent liabilities: Rs Nil (Previous year Rs Nil)

Capital commitment: Rs Nil, (Previous year Rs Nil)

15. Business Segment

As the Company business activity falls within a single segment viz. construction of Railway projects being in the domestic market, the disclosure requirement of AS-17 on ''Segment Reporting'' issued by the Institute of Chartered Accountants of India (ICAI) is not applicable.

16. Lease Rentals

The company''s leasing arrangements in respect of offices and residential premises are in the nature of operating lease. The rent is being charged on rates agreed to between HUDCO and RVNL based on letter of offer received from HUDCO and agreed to by RVNL. The formal lease agreement between the Company and HUDCO for lease of Corporate Office, New Delhi has not been executed and is under approval of Ministry of Urban Development.

17. Previous year figures have been restated/regrouped/ reclassified wherever considered necessary to conform to the current year''s classification.

---

Mar 31, 2010

1. Inventories

i. Land com included in Project Work In Progress represent* payments made to various Zonal Railways for the purpose of acquisition of land The total payment made amounts to Rs 151.12 crore I Previous year Rs 79.31 crore).The land so acquired is In the name of the Zonal Railway,

ii. The Company is executing projects transferred by MOR under the MOU In some of the protects, initially transferred to the Company, work was already in progress and some of the Zonal Railways had incurred expenditure on those projects prior to their transfer to the Company The expenditure made by the concerned Railways prior to the formation of the Company has not been taken into account The policy regarding liability of the Company for such expenditure, which took place prior to formation of the Company, shall be decided at the time of transfer of protects to the Railways

iii. In the opinion of the Management, the value of current assets, loans and advances on realized in the ordinary course of business, will not be less than the value at which those have been stated in the Balance Sheet

2. Revenue

i. The Company has accounted for Income from Project execution 2% (Previous Year V 1%| on the expenditure incurred by it on MOR projects, which are being directly implemented by the Company as per the directions of MOR Accordingly, management fees amounting to Rs. 21 45 crore (Previous Year Rs 13 18 crore) has been recognised as income

ii. In addition, from the financial year 2009-2010, MOR has decided to allow an Incentive of 05% for the Company This incentive she I be allowed to RVNL based upon the grading awarded by the Department of Public Enterprises every year Accordingly, RVNL would be eligible for the full incentive of 0.5% If it achieves the grading of *Excellent", 0 4% incentive if it achieves grading of "Very Good'' and 0.3% Incentive for the grading of Good" No Incentive would be allowed If the grading is less than ''Good'', The amount of incentive has been calculated on the basis of the latest grading of "Very Good" communicated by DPE on the annual expenditure incurred on Railway projects by RVNL Accordingly, an incentive amounting to Rs 4,29 crore (Previous Year Rs Nil) has been recognized as Income

iii. Expenditure on work m progress against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer,

iv. Expenditure of execution of protects done the Zonal Railways on behalf of the Company on MOR projects is accounted for on the basis of statement of a estimated expenc Mure received from respective Zonal Railways and is adjusted allocation-wise as and when the final expenditure statement is received

v. Expenditure against advances given to various agencies for execution of works on cost plus basis as deport works Is accounted for on the basis of statement of estimated expenditure received from the concerned agency and is adjusted as and when the final expenditure statement Is received

3 Deposit Works (SPVs and others)

i. Works being executed for SPVs and others are treated as a deposit work The advance received Is disclosed under Current Liabilities and the amount recoverable on account of project execution under Sundry Debtors

ii. The Company is executing projects for SPVs of the Company and other parties as a deposit work either directly or through different Zonal Ra4ways Project work in progress is shown under Profit & Loss Account and the corresponding current assets and liabilities in respect of such projects have been recounted on the basis of expenditure incurred plus D&G charges as agreed

4 As decoded by MOR the Company has borrowed funds aggregating to Rs 1,827.83 croro (Previous year Rs 1501,00 crore from Indian Railway Finance Corporation (IRFC) The interest liability has been assessed at the rate as advised by IRFC from time to time For 2009-10, the rate advised by IRK Is 8 73% (Previous **r 9 72%) MOR has deeded to bear full responsibility of the repayment of principal and cost of borrowing Merest) on the entire sum of the borrowed funds. The interest accrued but not due on the IRFC loan amount has been shown as recoverable from MOR under Current Assets and the Interest payable amount under the Current Liabilities h the Balance Sheet

5 Funds received by the Company from Government of hdla, MOR as equity casual are utlllied for executing projects of National Rail Vikas Vojna After physical completion of a project, the assets are to be transferred to the concerned loan rail way who world add the value of assets in their block account The modalities of transfer of such assets are being worked out with the Ministry of Railways

6 The Company has not received any mtlmabon from "suppliers''1 regarding their status under the Micro, Small and Medium enterprises Development Act 2005 and hence disclosures, any, relating to amounts unpaid as at the year-end together with interest paid/ payable as required under the said Act is not ascertainable presently.

7 The value of projects commissioned / completed and put to use by Railways up-to year ended 31st March 2010 amounted to Rs. 3,956.21 crore (Previous year Rs 1,862.77 crore) While sections have been opened for traffic, some minor works may still be required and financial adjustments are yet to be carried out The projects are treated as completed only after the work has been completed In all respects and the completion reports have been drawn after reconciliation and finaiiration of the accounts The adjustment for the expenditure on completed projects shall be carried out after finaliiation of the modalities for transfer of completed projects to Zonal Railways in consultation with Ministry of Railways.

8 The total cost of protects executed for MOR by the Company is Rs 6.395.32crore (Previous Year Rt 5,046.14 crore) Out of this Rs 1,758,70 crore (Previous Year Rs 1,507,55 crore) worth of execution has been done by Zonal Railways on behalf of the Company.

9 During the year the Company has revised the depreciation rates on mobile phones from 31.67% to 47 50% prospectnmly w.e f. 23rd September 2009 The additional depreciation charged in the books due to change in the rate of depreciation Is Rs 1.95 Lace

11. Contingent liability In respect of claims not acknowledged at debtt by the Company:

Rs. 42,25.56.588 /- (Previous year Rs. 7,12,576/ )

12. Capital commitment towards share capital In SPV''s is Rs 194.93 crore (Previous year Rs.43 66 crore)

Includes Rs 44 41,254 (Previous year Rs. 26,61,799) for Directors who are on deputation from Ministry of Railways

13. Employee Benefit

(a) The majority of the officers/staff employed in RVNL are on deputation from Indian Railways. RVNL is paying Foreign Service Contribution to the Indian Railways towards retirement benefits

(b) For RVNL employees

The disclosure required under Accounting Stranded -

14 "employees Benefit" in respect of defined benefit plan is:

Gratuity Benefit Is payable to employees on retirement or resignation or death The amount of gratuity payable is based on past service and salary at time of out as per Payment of Gratuity act 1972.

15. Income Tax:

(a) Provision for Income tax has been calculated on the interest Income reserved / accrued and on D&G charges levied on project execution for other parties during the year

(b) Breakup of deferred tax Assets to major components of the respective balances is as under''

(c) Enterprises m which Directors Interest edit:

Haridaspur Paradip Railway Company limited - holding Directorship and are interested In Coin any Sh Marsh Chandra, Of/RVNL up to 16.12.2C09 Sh Raman Kumar)am. OO/RVM up to 31 OB 2009 Sh S C Agnihotri. DP/RVNl from 07 09.2009 up to 16.12.2009

* See note No 11

** Their represent amount recoverable on account ol expenditure incurred on various projects of Joint Ventures

Contingent liabilities : Rs Nil (Previous year Rs, Nil)

Capital commitment Rs Nil (Previous year Rs Nil)

Contingent liabilities Rs Nil (Previous year Rs, Nil)

Capital commitment: Rs. Nil, (Previous year Rs. Nil)

Contingent liabilities: Rs Nil (Previous year Rs. Nil)

Capital commitment: Rs. Nil, (Previous year Rs. Nil)

Contingent liabilities: Rs Nil (Previous year Rs Nil)

Capital commitment. Rs. Nil, (Previous year Rs. Nil)

16. Business Segment

As the Company business activity falls within a vnglc segment vn. construction of Railway projects being in the domestic market, the disclosure requirement of AS- 17 on ''Segment Reporting'' issued by the Institute of Chartered Accountants of India (ICAI) is not applicable.

17. lease Rentals

The company''s leasing arrangements In respect of offices and residential premises are In the nature of operating lease The aggregate lease rental payable a being allocated to project work in progress and administrative expenses in the Profit & loss Account. The rent is being charged on rates agreed to between HUOCO and RVNI based on letter of offer received from HUDCO and agreed to by RVNI The formal lease agreement between the Company and HUOCO for lease of Corporate Office, New Delhi has not been executed and Is under approval of Ministry of Urban Development

18. Previous year figures have been restated / regrouped / reclassified wherever considered necessary to conform to the current year''s classification.

---

Mar 31, 2009

1. Inventories

i. Land cost included in Project Work in Progress represents payments made to various Zonal Railways for the purpose of acquisition of land. The total payment made amounts to Rs.79.31 crore (Previous year: Rs.62.12 crore).The land so acquired is in the name of the Zonal Railway.

ii. The Company is executing projects transferred by MOR under the MoU. In some of the projects, initially transferred to the Company, work was already in progressandsomeoftheZonalRailwayshadincurred expenditure on those projects prior to their transfer to the Company. The expenditure made by the concerned Railways prior to the formation of the Company hasnotbeen taken intoaccount. Thepolicy regarding liability of the Company for such expenditure, which took place prior to formation of the Company, shall be decided at the time of transfer of projects to the Railways.

iii. In the opinion of the Management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these have been stated in the Balance Sheet.

2. Revenue

i. The Company has accounted for income from Project Execution @ 1% on the expenditure incurred by it on MOR projects which are being directly implemented by the Company as per the directions of the MOR vide their letter No. 2004\W- I\RVNL\15 dated 24th April 2006.

ii. Expenditure on work in progress against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer.

iii. Execution done by the Zonal Railways on behalf of the Company on MOR projects is accounted for on the basis of statement of estimated expenditure received from respective Zonal Railways and shall be adjusted as and when the final expenditure statement is received.

iv. Expenditure against advances given to various agencies for execution of works on cost plus basis as deposit works is accounted for on the basis of statement of estimated expenditure received from the concerned agency and is adjusted as and when the final expenditure statement is received.

3 Deposit Works (SPVs and others)

i. Works being executed for SPVs and others are treated as a deposit work. The advance received is disclosed under Current Liabilities and the amount recoverable on account of project execution under Sundry Debtors.

ii. The Company is executing projects for SPVs of the Company and other parties as a deposit work either directly or through different Zonal Railways. Project work in progress is shown under Profit & Loss Account and the corresponding current assets and liabilities in respect of such projects have been recognized on the basis of expenditure incurred plus D&G charges as agreed.

4 As decided by MoR the Company has borrowed funds aggregating toRs.1501crorefrom IndianRailwayFinance Corporation (IRFC). The interest liability has been assessed at the rate as advised by IRFC from time to time. For 2008-09, the rate advised by IRFC is 9.72%. MoR has decided to bear full responsibility of the repayment of principal and cost of borrowing (interest) on the entire sum of the borrowed funds. The interest accrued but not due on the IRFC loan amount has been shown as recoverable from MoR under Current Assets and the interest payable amount under the Current Liabilities in the Balance Sheet.

5 FundsreceivedbytheCompanyfromGovernmentofIndia, MOR as equity capital are utilized for executing projects of National Rail Vikas Yojna. After physical completion of a project, the assets are to be transferred to the concernedzonalrailwaywhowouldaddthevalueofassets in their block account. The modalities of transfer of such assets are being worked out with the Ministry of Railways.

6 The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and medium enterprises Development Act, 2005 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act is not ascertainable presently.

7 The total project cost executed for MOR by the Company isRs.5,046.14crores(PreviousYearRs.3,648.99crores). Out of this Rs. 1,507. crores (Previous Year Rs. 1,371 crores) worth of execution has been done by Zonal Railways on behalf of the Company. Accordingly, project execution income @ 1% on the expenditure on MOR projects which are being directly implemented by the Company worth Rs. 3,539.14 crores (Previous Year Rs. 2,278 crores) as per the directions of the MOR vide their letter No. 2004\W-I\RVNL\15 dated 24th April 2006 have been recognized as income.

9. Contingent liability in respect of claims not acknowledged as debts by the Company: Rs. 7,12,576/- (Previous year Nil)

10. Capital commitment towards share capital in SPVs is Rs. 43.66 crore (previous year Rs.149.50 crore)

12. Employee Benefits

(a) The majority of the officers/staff employed in RVNL are on deputation from Indian Railways. RVNL is

paying FSC to the Indian Railways towards retirement benefits.

(b) For RVNL employees

– Provision for Gratuity liability for Rs.2,09,681 has been made as per Actuarial Valuation during the year and total liability as on 31-03- 2009 is Rs. 2,81,130

– Provision for Leave Encashment liability for Rs.3,40,516 has been made as per Actuarial Valuation during the year and total liability as on 31-03-2009 is Rs. 4,37,615

– The disclosure required under Accounting standard-15 "Employees Benefit" in respect of defined benefit plan is :

"Gratuity Benefit is payable to employees on retirement or resignation or death. The amount of gratuity payable is based on past service and salary at time of exit as per Payment of Gratuity act, 1972. There is a vesting period of 5 years on the benefit."

13. Income Tax :

(a) Provision for Income tax has been calculated on the interest income received / accrued and on D&G charges levied on project execution for other parties during the year.

15. Related Party Disclosures (AS-18) :

a) Joint Ventures : Kutch Railway Company Limited

: Haridaspur Paradip Railway Company Limited

: Krishnapatnam Railway Company Limited

: Bharuch Dahej Railway Company Limited

b) Key Management Personnel

D.C. Mitra Managing Director

Harish Chandra Director/Finance

Ranjan Kumar Jain Director/Operations S.C. Agnihotri Director/Projects

Geeta Mishra Director/Personnel

(From 13-10-2008)

c) Enterprises in which Directors interest exist:

Haridaspur Paradip Railway Company Limited - holding Directorship and are interested in Company.

d) Disclosure of transactions with related parties:

17. Business Segment

As the Company business activity falls within a single segment viz. construction of Railway projects being in the domestic market, the disclosure requirement of AS-17 on Segment Reporting issued by the Institute of Chartered Accountants of India (ICAI) is not applicable.

18. Lease Rentals

The companys leasingarrangements inrespectof offices and residential premises are in the nature of operating lease.

The aggregate lease rental payable is being allocated to project work in progress and administrative expenses in the Profit & Loss Account. The rent is being charged on rates agreed to between HUDCO and RVNL based on letter of offer received from HUDCO and agreed to by RVNL.

The formal lease agreement between the Company and HUDCO for lease of Corporate Office, New Delhi has not been executed and is under approval of Ministry of Urban Development.

19. Previous year figures have been restated/ regrouped / reclassified wherever considered necessary to conform to the current years classification.

---

Mar 31, 2008

1. Inventories

i. Land cost included in Project Work in Progress represents payments made to various Zonal Railways for the purpose of acquisition of land. The total payment made amounts to Rs.62.12 crore (Previous year: Rs.46.79 crore).

ii. As per the MOU between Ministry of Railways (MOR) and the company, land and building were to be leased to the later for project execution. However, the land is still in the possession of respective Zonal Railways and the lease agreement is yet to be entered into. The lease rental, if any, payable is not accounted for.

iii. The Company is executing financially viable projects identified by MOR under two components viz. Golden Quadrilateral Strengthening and Port connectivity of National Rail Vikas Yojna (NRVY). In some of the projects, initially transferred to the Company, work was already in progress and some of the Zonal Railways had incurred expenditure on those projects prior to their transfer to the Company. The expenditure made by the concerned Railways prior to the formation of the Company has not been taken into account. The policy regarding liability of the Company for such expenditure, which took place prior to formation of the Company, will be decided after the assets are handed over to the Company.

2. Revenue

i. The Company has accounted for income from Project Execution @ 1% on the expenditure done by it on MOR projects which are being directly implemented by the Company as per the directions of the MOR vide their letter No. 2004\W-I\RVNL\15 dated 24th April 2006.

ii. Expenditure on work in progress against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer.

iii. Execution done by the Zonal Railways on behalf of the Company on MOR projects is accounted for on the basis of statement of estimated expenditure received from respective Zonal Railways and shall be adjusted as and when the final expenditure statement is received.

iv. Expenditure against advances given to various agencies including Zonal Railways for execution of works on cost plus basis as deposit works is accounted for on the basis of statement of estimated expenditure received from the concerned agency and is adjusted as and when the final expenditure statement is received.

3. DEPOSIT WORKS (SPVs and others)

i. Works being executed for SPVs and others are treated as a deposit work. The advance received is disclosed under Current Liabilities and the amount recoverable on account of project execution under Sundry debtors.

ii. The Company is executing some of projects for SPVs of the Company and other parties as deposit work either directly or through different Zonal Railways. Project work in progress shown under Profit & Loss Account and the corresponding current assets and liabilities in respect of such projects have been recognized on the basis of expenditure incurred plus D& G charges as agreed. Execution done by the Zonal Railways is accounted for on the basis of statement of estimated expenditure received from respective Zonal Railways and shall be adjusted as and when the final expenditure statement is received.

4. The Company has borrowed funds aggregating to Rs. 1208 crore from Indian Railway Finance Corporation (IRFC). The interest liability has been assessed @ 7.90% for the financial year 2005-2006 and @ 9.50% for the financial year 2006-2007 vide IRFC letter dated 21.5.2007 No. IRFC/RVNL/2007-2008. For 2007-08, the rate has been advised by IRFC to 9.99% The MOR has already decided to bear full responsibility of the payment of principal and cost of borrowing (interest & processing charges) on the entire sum of the borrowed funds. The interest charges have been shown in the Profit & Loss Account as pass through transaction since they are recoverable from MOR. In the Balance Sheet, the recoverable amount has been classified under the head Loan and Advances and payable amount under the head Sundry creditors.

5. Funds received by the Company from Government of India, MOR as equity capital are meant for executing projects of National Rail Vikas Yojna. After physical completion of a project, the assets are to be transferred to the concerned zonal railway who would add the value of assets in their block account. The modalities of transfer of such assets are being worked out with the Ministry to ascertain whether the transfer of assets would be on receipt of cash consideration or otherwise.

6. The Company has not received any intimation from “suppliers” regarding their status under the Micro, Small and medium enterprises Development Act, 2005 and hence disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act have not been given.

7. The total project cost executed for MOR by the Company is Rs. 3,648.98 crores (Previous Year Rs. 2,356.52 crores). Out of this Rs. 1,371 crores (Previous Year Rs. 1,196 crores) worth of execution has been done by Zonal Railways on behalf of the Company. Accordingly, project execution income @ 1% on the expenditure on MOR projects which are being directly implemented by the Company worth Rs. 2,278 crores (Previous Year Rs. 1,133 crores) as per the directions of the MOR vide their letter No. 2004\W-I\RVNL\15 dated 24th April 2006 have been recognized as income.

8. The company has changed the accounting policy relating to interest earned on Fixed Deposits. In the previous year, the income was being credited to the work-in-progress. However, from the current year, the same has been shown as a separate head in the P&L Account. This has resulted in an increase of profit by Rs.12.98 crore during the current year (previous year Rs.7.67 crore). This has resulted in an increase in the amount of work in progress of the corresponding amount.

9. In line with Accounting Standard 26, has changed the accounting policy relating to charging depreciation on software (Intangible Assets). The Company was earlier following the accounting policy for charging depreciation on computer software from 31.67% per annum on straight line method. This has been changed to amortization of computer software over a period of 3 years or useful life of the software whichever is lower. This has resulted in the lower charge of depreciation by Rs.25,375/- in previous years. The same has been charged in the current year.

10. In line with Accounting Standard 15, the Company has changed the accounting policy relating to provision for gratuity and other retirement benefits. In the previous years, the Company was making provision on actual basis. From the current year, the Company has provided as per actuarial valuation of these benefits. As a result of this, the provision for gratuity and other retirement benefits has been reduced by Rs. 96,150/- as compared to the previous year.

11. The State Government of Tamil Nadu has provided a Grant of Rs.112 crore for execution of Cuddalore-Vridhachalam- Attur-Salem Gauge Conversion Project which was paid to Southern Railway. The project was transferred to RVNL and now it is being partly executed by Southern Railway and partly by RVNL. RVNL received a credit of Rs.11.42 crore from Southern Railway representing the unspent amount of the Grant pertaining to the Project. In the Annual Accounts 2006-07, this amount had been shown in the Capital Reserve. As this amount is to be adjusted after reconciliation against the project cost at the time of transfer of the project to the Zonal Railway, this amount has now been included under current liabilities as advance against projects.

12. Contingent liability in respect of claims not acknowledged as debts by the Company:

(a) Rs. NIL (Previous year Rs.4.15) in respect of income tax for the A.Y. 2005-06

(b) Rs. NIL (Previous year Rs.118.18) in respect of pending arbitration cases and court cases connected with the arbitration

13. Capital commitment towards share capital in SPV’s is Rs. 149.50 crore (previous year Nil)

14. Income Tax :

(a) Provision for Income tax has been calculated on the interest income received / accrued and on D&G charges levied on project execution for other parties during the year. In view of the legal opinion and expert advice received by the Company, no provision has been made on income from MOR project execution other than income from project on deposit basis, as the same is deductible as per the provisions laid u/s 80IA sub - section (4) of the Income Tax Act, 1961.

(b) Breakup of deferred tax liability into major components of the respective balances is as under:

15. Business Segment

As the Company business activity falls within a single segment viz. construction of Railway projects being in the domestic market, the disclosure requirement of AS-17 on ‘Segment Reporting’ issued by the Institute of Chartered Accountants of India (ICAI) is not applicable.

16. Lease Rentals

The company’s leasing arrangements in respect of offices and residential premises are in the nature of operating lease. The aggregate lease rental payable is being allocated to project work in progress and administrative expenses in the Profit & Loss Account. The lease agreement between the Company and HUDCO for lease of Corporate Office, New Delhi is yet to be finalized.

17. Sixth Pay Commission has made certain recommendations for increase in pay and terms relating to employments. Any impact towards liability of the company will be made after the recommendations become binding on the Company. The recommendations of the 2nd Wage Revision Committee for executives and non-unionised supervisors of PSUs will also be treated similarly.

18. Previous year figures have been restated / regrouped / reclassified wherever considered necessary to conform to the current year’s classification.

---

Mar 31, 2007

1. PROJECTS WORK IN PROGRESS

a) Land under the head Project Work in Progress represents the value of payments made to various Zonal Railways for the purpose of acquisition. The total payment made amounts to Rs. 46.73 crore (Previous year: Rs.20.17 crore), which will be adjusted when the final value of land is determined and the final payment is made.

b) In Terms of Memorandum of Understanding (MOU) entered with Ministry of Railways (MOR) Company has been entrusted with the task of developing rail infrastructure under the initiative of strengthening of Golden Quadrilateral. In accordance with the MOU the Company was to be leased Land and Buildings for the above-mentioned work, but no such lease has been entered into between the Company and MOR during the year. All such land and buildings where the projects are continue still in the possession of respective Zonal Railways and no liability towards lease rent, if any, have been provided for.

c) The Company is executing financially viable projects identified by MOR under two components viz. Golden Quadrilateral Strengthening and Port connectivity of National Rail Vikas Yojna (NRVY). In some of the projects, initially transferred to the Company, work was already in progress and some of the Zonal Railways had incurred expenditure on those projects prior to their transfer to the Company. The expenditure made by the concerned Railways prior to the formation of the Company has not been taken into account. The policy regarding liability of the Company for such expenditure, which took place prior to formation of the Company, will be decided after the assets are handed over to the Company.

d) The Company has accounted for income from Project Execution @ 1% on the expenditure done by it on MOR projects which are being directly implemented by the Company as per the directions of the MOR vide their letter no. 2004\W-I\RVNL\15 dated 24th April 2006.

e) Expenditure on work in progress against contracts awarded by the Company is recognized on completion of measurements and testing certified by the Engineer.

f) During the year the Company reclassified Capital work in progress hitherto shown under Fixed Assets to Current Assets. This has resulted in decrease of fixed assets by Rs. 2,565.73 cr. (Previous year Rs. 1,534.89 cr.) approx. with corresponding increase in current assets. Overall there is no impact on the total assets and total liabilities of the Company.

2. DEPOSIT WORKS

a) The Company is getting some of projects executed through different Zonal Railways as deposit work. Project work in progress/corresponding current assets and liabilities in respect of such projects have been recognized on the basis of accepted statement of estimated expenditure received from respective Zonal Railways and shall be adjusted as and when the final expenditure statement is received.

b) Expenditure against advances given to various agencies including Zonal Railways for execution of works on cost plus basis as deposit works is accounted for on the basis of statement of estimated expenditure received from the concerned agency and is adjusted as and when the final expenditure statement is received.

3. The Company has borrowed funds aggregating to Rs. 968 crore from Indian Railway Finance Corporation (IRFC). The interest liability has been assessed @ 7.90% for the financial year 2005-2006 and @ 9.50% for the financial year 2006-2007 vide IRFC letter dated 21.5.2007 no. IRFC/RVNL/2007-2008. The MOR has already decided to bear full responsibility of the payment of principal and cost of borrowing (interest & processing charges) on the entire sum of the borrowed funds. The interest charges have been shown in the Profit & Loss Account as pass through transaction since they are recoverable from MOR. In the Balance Sheet, the recoverable amount has been classified under the head Loan and Advances and payable amount under the head Sundry creditors.

4. During the year the Company has changed the depreciation rates on fixed assets (Refer Significant Accounting Policy No.6). As a result of this change additional depreciation of Rs. 46,73,438/- has been provided in the books of the Company with corresponding impact on net assets of the Company. Out of the additional depreciation Rs. 15,57,813/- being 1/3rd of the total depreciation is attributable to profit and loss account and balance is taken to Project work in progress.

5. Contingent liability in respect of claims not acknowledged as debts by the Company:

a) Rs. NIL (Previous year Rs. 1,94,15,707) in respect of various supplies and services.

b) Rs. NIL (Previous year Rs. 1,45,39,392) towards cess under The Building and other Construction Workers Welfare Cess Act, 1996. Any provision, if required will be made when liability is liquidated against the Company.

c) Rs. 4,15,133/- (Previous year Rs. NIL) in respect of income tax for the A.Y. 2004-05

d) Rs. 1,18,18,013/- (Previous year Rs. NIL) in respect of pending arbitration cases and court cases connected with the arbitration

6. Contingent Assets in respect of Rs. NIL (Previous year Rs. 1,45,39,392) towards cess under The Building and other Construction Workers Welfare Cess Act, 1996 will be recoverable from various contractors, if the Company has to pay in future claims not acknowledged as debts by the Company.

7. The Company has only one Segment i.e. Railway Project and all are geographically located in India. Hence, no details have been separately disclosed.

8. INCOME TAX

(a) Provision for Income tax has been calculated on the interest income received /accrued during the year. In view of the legal opinion and expert advice received by the Company, no provision has been done on income from project execution, as the same is deductible as per the provisions laid u/s 80IA sub - section (4) of the Income Tax Act, 1961.

(b) Further the Income tax department has raised a demand for Rs. 4,15,133/- (including interest) for assessment year 2004-2005. No liability for the same has been provided since the matter is under appeal with CIT (Appeals) – XVIII, New Delhi. The Company is hopeful of getting relief for the same. However, the Company has deposited Rs. 3,82,852/- and included the same under Current Assets, Loans and Advances.

9. The Company has not created deferred tax assets as a matter of prudence in terms of Accounting Standard – 22 on Accounting of Taxes on Income issued by The Institute of Chartered Accountants of India.

10. Previous year figures have been regrouped / reclassified wherever considered necessary to confirm to the current year’s classification.