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Notes to Accounts of Rail Vikas Nigam Ltd.

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.

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.

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.

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

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

Retained Earnings represents the undistributed profits of the Company.

(b) General Reserve

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 yearâs 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 âEmployee Benefitâ in respect of defined benefit plan is:

Sensitivity analysis:

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 Boardâs 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 âothersâ 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.

22.3 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 âs 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 âThe Taxation Laws (Amendment) Act, 2019â 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 Companyâs 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.

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:-

âThe Companyâs principal financial liabilities comprise Borrowings from IRFC, trade payable and other payables. The Companyâs 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 companyâs financial risk activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with the companyâs policies and risk objectives. The board of directors reviews the policies for managing each of these risk, which are summarised below:-â

a) Market Risk

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

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 Companyâs 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.

c) Liquidity risk

âLiquidity 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 companyâs reputation.

The companyâs 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.â

Note 32 Key sources of estimation uncertainty

a) Fair valuation measurement and valuation process

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 yearâs 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 Groupâs 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 companyâs 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 SPVâs 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).

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 Juneâ17), 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 Honâble Supreme court in this case. During the F.Y. 2019-20 Income-tax Department has moved to Honâble 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.

(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:

(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).

(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 Companyâs 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 Companyâs 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.

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 (âshort- term leasesâ) and lease contracts for which the underlying asset is of low value (âlow-value assetsâ).

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

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.

Mar 31, 2018

Note 1 Key sources of estimation uncertainty

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 SPVâs 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.

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

Â 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

Â 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

Â 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 ÂsuppliersÂ 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 SPVÂs 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 ÂSegment ReportingÂ issued by the Institute of Chartered Accountants of India (ICAI) is not applicable.

16. Lease Rentals

The companyÂs 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 yearÂs 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) Â 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 Â 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 yearÂs classification.

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