Provision is recognised when:
i) The Company has a present obligationas a result of a past event
ii) A probable outflow of resources isexpected to settle the obligation and
iii) A reliable estimate of the amount of theobligation can be made.
Reimbursement of the expenditure requiredto settle a provision is recognised as percontract provisions or when it is virtuallycertain that reimbursement will be received.
Provisions are reviewed at each BalanceSheet date.
a) Discounting of Provisions
Provision which expected to be settledbeyond 12 months are measured at thepresent value by using pre-tax discountrate that reflects the risks specific to theliability. The increase in the provision dueto the passage of time is recognised asinterest expenses.
Present obligations arising under onerouscontracts are recognized and measured asprovisions. An onerous contract is consideredto exist where the company has a contractunder which the unavoidable costs ofmeeting the obligations under the contractexceed the economic benefits expected tobe received under it.
(a) Contingent Liabilities are disclosed ineither of the following cases:
i) A present obligation arising from apast event when it is not probablethat an outflow of resources will berequired to settle the obligation; or
ii) A reliable estimate of the presentobligation cannot be made; or
iii) A possible obligation unless theprobability of outflow of resourceis remote.
(b) Contingent assets is disclosed where aninflow of economic benefits is probable.
(c) Contingent Liability and Provisionsneeded against Contingent Liability andContingent Assets are reviewed at each
Reporting date.
(d) Contingent Liability is net of estimatedprovisions considering possible outflowon settlement.
In determining earnings per share theCompany considers the net profitattributable to equity shareholders. Thenumber of shares used in computing basicand diluted earnings per share is the weightedaverage number of shares outstandingduring the year.
"Credit items arising on account ofLiquidated Damages and Penalties duringexecution of contract or due to terminationof contract etc. are carried as "RetainedAmount for Damages A/c" under "OtherCurrent Liabilities" until the managementhas decided either to levy or waive the samebefore financial closure of the project.Thereafter if these are not levied or waivedby the management before financial closureof the project such leftover balances ofliquidated damages and penalties etc.are credited to the total cost of theconcerned project on financial closure of theproject".
An operating segment is a component of theCompany that engages in business activitiesfrom which it may earn revenues and incurexpenses, whose operating results areregularly reviewed by the Company's ChiefOperating Decision Maker ("CODM") to makedecisions for which discrete financialinformation is available. Based on themanagement approach as defined in Ind AS108, the CODM evaluates the Company'sperformance and allocates resources basedon an analysis of various performanceindicators by business segments andgeographic segments.
Company measures financial instruments atfair value at each reporting date. Fair valueis the price that would be received to sell anasset or paid to transfer a liability in an orderlytransaction between market participants at
the measurement date. The fair valuemeasurement is based on the presumptionthat the transaction to sell the asset or transferthe liability takes place either:
• in the principal market for the asset orliability or
• in the absence of a principal market inthe most advantageous market for theasset or liability.
The principal or the most advantageousmarket must be accessible to the company.The fair value of an asset or a liability ismeasured using the assumptions that marketparticipants would use when pricing theasset or liability assuming that marketparticipants act in their economic bestinterest. The company uses valuationtechniques that are appropriate in thecircumstances and for which sufficient dataare available to measure fair valuemaximizing the use of relevant observableinputs and minimizing the use ofunobservable inputs.
Financial guarantee contracts issued by theCompany are those contracts that require apayment to be made to reimburse the holderfor a loss it incurs because the specified debtorfails to make a payment when due inaccordance with the terms of a debtinstrument. Financial guarantee contracts arerecognised initially as a liability at fair value,adjusted for transaction costs that are directlyattributable to the issuance of the guarantee.Subsequently, the liability is measured at thehigher of the amount of loss allowancedetermined as per impairment requirementsof Ind AS 109 and the amount recognised lesscumulative amortisation.
Dividend paid/payable shall be recognisedin the year in which the related dividends areapproved by shareholders or board ofdirectors as appropriate.
(A) Initial recognition and measurement
Financial Instruments are recognized at its fairvalue plus or minus transaction costs that are
directly attributable to the acquisition or issueof the financial instruments.
(i) Financial Assets
Financial assets are classified in followingcategories:
a) At Amortised Cost
b) Fair value through OtherComprehensive Income.
c) Fair value through Profit and lossaccount.
a. Debt instrument at Amortised Cost
A financial asset shall be measured atamortised cost if both of the followingconditions are met:
(a) the financial asset is held within abusiness model whose objective is tohold financial assets in order to collectcontractual cash flows and
(b) The contractual terms of the financialasset give rise on specified dates to cashflows that are solely payments ofprincipal and interest on the principalamount outstanding.
Financial assets measured at amortised costusing effective interest rate method lessimpairment if any. The EIR amortisation isincluded in finance income in the statementof profit and loss.
b. Debt instrument at FVTOCI
A debt instrument is classified at FVTOCIif both of the following criteria are met:
• The objective of the business modelis achieved both by collectingcontractual cash flows and sellingthe financial assets and
• The asset's contractual cash flowsrepresent SPPI.
Debt instruments included within the FVTOCIcategory are measured initially as well as ateach reporting date at fair value. Fair valuemovements are recognized in the OtherComprehensive Income (OCI). However thecompany recognizes interest income
impairment losses & reversals and foreignexchange gain or loss in the P&L. On de¬recognition of the asset cumulative gain orloss previously recognised in OCI is reclassifiedfrom the equity to P&L. Interest earned isrecognised using the EIR method.
FVTPL is a residual category for financialAssets. Any financial assets which doesnot meet the criteria for categorizationas at amortized cost or as FVTOCI isclassified at FVTPL.
In addition the Company may elect todesignate financial asset whichotherwise meets amortized cost orFVTOCI criteria at FVTPL, if doing soreduces or eliminates a measurement orrecognition inconsistency. The Companyhas not designated any financial assetat FVTPL.
Financial assets included within theFVTPL category are measured at fairvalue with all changes recognized in theP&L.
Investment in Equity instruments aremeasured through FVTOCI.
Financial Assets are measured at fairvalue through other comprehensiveincome if these financial assets are heldwithin a business whose objective isachieved by both collectingcontractual cash flows and settingfinancial assets and the contractualterms of the financial asset give rise onspecified dates to cash flows that aresolely payment of principal and investin the principal amount outstanding.
The Company has made an irrevocableelection to present in othercomprehensive income subsequentchanges in the fair value of equityinvestments not held for trading.
(ii) Financial liabilities
a) Financial liabilities at Amortised Cost
Financial liabilities at amortised costrepresented by trade and otherpayables security deposits and retention
money are initially recognized at fairvalue and subsequently carried atamortized cost using the effectiveinterest rate method.
b) Financial liabilities at FVTPL
The company has not designated anyfinancial liabilities at FVTPL.
(C) DerecognitionFinancial Asset
A financial asset (or where applicable a partof a financial asset or part of a group of similarfinancial assets) is derecognized only whenthe contractual rights to the cash flows fromthe asset expires or it transfers the financialassets and substantially all risks and rewardsof the ownership of the asset.
Financial Liability
A financial liability is derecognised when theobligation under the liability is discharged orcancelled or expires. When an existingfinancial liability is replaced by another fromthe same lender on substantially differentterms or the terms of an existing liability aresubstantially modified such an exchange ormodification is treated as a derecognitionof the original liability and the recognition ofa new liability and the difference in therespective carrying amounts is recognised inthe income statement.
(D) Impairment of financial assets
Company applies expected credit loss (ECL)model for measurement and recognition ofimpairment loss. The Company followssimplified approach for recognition ofimpairment loss allowance on tradereceivable. The application of simplifiedapproach does not require the Company totrack changes in credit risk. Rather itrecognises impairment loss allowance basedon lifetime ECLs at each reporting date rightfrom its initial recognition
Company assesses on a forward looking basisthe expected credit losses associated with itsassets carried at amortised cost and FVTOCIdebt instruments. The impairmentmethodology applies on whether there hasbeen significant increase in credit risk.
Properties that are held for long-term rentalyields and / or for capital appreciation areclassified as investment properties.Investment properties are stated at cost ofacquisition or construction less accumulateddepreciation and impairment, if any.Depreciation is recognised using the straightline method so as to amortise the cost ofinvestment properties over their useful livesas specified in Schedule II of the CompaniesAct, 2013.Transfers to, or from, investmentproperties are made at the carrying amountwhen and only when there is a change inuse.
An item of investment property isderecognised upon disposal or when nofuture economic benefits are expected toarise from the continued use of asset. Any gainor loss arising on the disposal or retirement ofan item of investment property is determinedas the difference between the sales proceedsand the carrying amount of the property andis recognised in the Statement of Profit andLoss.Income received from investmentproperty is recognised in the Statement ofProfit and Loss on a straight-line basis overthe term of the lease
Cash and cash equivalent comprise cash atbank and on hand. It includes term depositsand short term money market deposits withoriginal maturities of three months or less thatare readily convertible to known amounts ofcash and which are subject to an insignificantrisk of changes in value.
Prepaid expenses up to INR 5,00,000/- in eachcase are treated as expenditure/income ofthe year and accounted for to thenaturalhead of accounts.
Errors/omissions discovered in the current yearrelating to prior periods are treated asimmaterial and adjusted during the current
year, if all such errors and omissions inaggregate does not exceed 1% of totaloperating revenue as per last auditedfinancial statement of the Company.
If the error occurred before the earliest periodpresented, the opening balances of assets,liabilities and equity for the earliest periodpresented, are restated.
2.29 NEW STANDARDS/ AMENDMENTS AND OTHERCHANGES EFFECTIVE APRIL 1,2024 ORTHEREAFTER
Pursuant to the notifications issued by theMinistry of Corporate Affairs dated 9September 2024 and 28 September 2024, theCompanies (Indian Accounting Standards)Second Amendment Rules, 2024 and ThirdAmendment Rules, 2024 were notified,amending the following standards effectivefor annual reporting periods beginning on orafter 1 April 2024:
(a) Ind AS 117 - Insurance Contracts; and
(b) Ind AS 116 - Leases (amendmentsrelating to lease liability in sale andleaseback transactions).
The above amendments have beenevaluated by the Company and did nothave a material impact on the financialstatements for prior periods. Further, they arenot expected to have a significant effect onthe financial statements for the current orfuture periods.
On May 7, 2025, MCA notifies theamendments to Ind AS 21 - Effects of Changesin Foreign Exchange Rates. Theseamendments aim to provide clearerguidance on assessing currencyexchangeability and estimating exchangerates when currencies are not readilyexchangeable. The amendment is effectivefrom the date of notification. The Companyis currently assessing the probable impact ofthese amendments on its financialstatements.
Nature and Purpose of Other Reserves:
(a) Retained Earnings
Retained Earnings represents the undistributed profits of the Company.
(b) General Reserve
General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issuefully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve forbuy-back of shares.
(c) Items of Other Comprehensive Income
The Company has elected to recognize changes in fair value of investment in equity securities of Indian Port Rail andRopeway Corporation Limited in other comprehensive income. The changes are accumulated within the FVTOCIequity investments reserves within equity. The company transfers amounts from this reserve to retained earnings whenthe 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 accountof interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan shall beonce in a year (for a period of 12 years) after the completion of moratorium period. Ministry of Railways would makeavailable to RVNL the required funds thereafter, to enable them to do the debt servicing. The debt servicing will passthrough RVNL books.
(ii) The Company has not borrowed any funds during this F.Y 2024-25 (Previous year 2023-24: Rs.Nil) from Indian RailwayFinance Corporation (IRFC). The outstanding borrowing is Rs. 4,492.36 crores as on 31.03.2025 (as at 31.03.2024 : Rs.4,964.36 crore) , which includes current liability i.e. repayable in next twelve months Rs. 499.51 crores (as at 31.03.2024: Rs. 472.00 crore).
(iii) The Interest Liability has been assessed on the amount disbursed in the FY 2006-07 to 2024-25 by applying the Interestrate as advised by the IRFC for each Financial year (2024-25- No disbursement, 2023-24- No disbursement, 2022-23- Nodisbursement, 2021-22: 7.64%, 2020-21: 7.73%, 2019-20: 8.42%, 2018-19: 9.17% & 8.93%, 2017-18: 8.82%, 2016-17: 8.19%,2015-16: 8.68%, 2014-15: 9.56%, 2013-14: 9.60%, 2012-13: 9.41%, 2011-12: 10.12%, 2010-11: 9.12%, 2009-10: 8.92%, 2008-09:9.96%, 2007-08: 10.24%, 2006-07: 9.73%).The interest accrued but not due on the IRFC loan amount has been shown inthe Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interest non recoverablein next 12 Months) and the interest payable but not due under the Current Liabilities and Non-Current Liabilities (for theinterest not payable in next 12 Months) payable to IRFC.
(v) The Interest Liability has been assessed on the amount disbursed in the FY 2005-06 to 2019-20 by applying the Interestrate as advised by the IRFC for each Financial year ( 2019-20:8.45%, 2018-19: 8.75%, 2017-18 : 8.75% , 2016-17 :8.19%,2015-16 :8.68%, 2014-15 :9.56%, 2013-14 :9.60%, 2012-13 :9.41%, 2011-12 :10.12%, 2010-11 :9.12%, 2009-10 :8.92%, 2008-09:9.96%, 2007-08 :10.24%, 2006-07 :9.73%,2005-06 :8.06%)The interest accrued but not due on the IRFC loan amount hasbeen shown in the Balance Sheet as recoverable from MoR under Current Assets & Non-Current assets (for the interestnon recoverable in next 12 Months) and the interest payable but not due under the Current Liabilities and Non¬Current Liabilities (for the interest not payable in next 12 Months) payable to IRFC.
Risk Analysis :
Company is exposed to a number of risks in the defined benefit plan which are as follows:
A) Salary Increases- Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption infuture valuations will also increase the liability.
B) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than thediscount rate assumed at the last valuation date can impact the liability.
C) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan’s liability.
D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation canimpact the liabilities.
E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawalrates at subsequent valuations can impact Plan’s liability.
The Board of Directors has recommended the final dividend of Rs. 1.72 per equity share having face value of Rs. 10 each forthe financial year 2024-25, subject to the approval of the shareholders at the ensuing Annual General Meeting.
The Group manages its capital in a manner to ensure and safeguard their ability to continue as a going concern so thatgroup can continue to provide maximum returns to shareholders and benefit to other stake holders. Group has paiddividend as per the guidelines issued by Department of Public Enterprises (DPE) as follows:-
i) The carrying amounts of trade receivables, trade payables, unbilled revenue, cash and cash equivalents and othershort term trade receivables and payables which are due to be settled within 12 months are considered to the sameas 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 interestrates, specific country risk factors and other risk factors. Based on this evaluation the fair value of such payables are notmaterially different from their carrying amount.
iii) The fair values of office security deposits, other assets, and items like liquidated damages and penalties is determinedby discounting estimated future cash flows using current market interest rates. For FY 2024-25, a 7.70% SBI fixed depositrate is used for financial assets, and a 10.33% SBI lending rate is used for financial liabilities. These are reported underLevel 3 in the fair value hierarchy, given the use of unobservable factors, including credit risk of counterparties.
iv) Investment in unquoted equity of subsidiaries, joint ventures and associates are stated at cost as per exemptionprovided by Para 10 of IND-AS 27.
v) Staff loans and advances have been continued at carrying value as measurement implications are immaterial.
vi) RVNL determined fair value of investment those are carried through Other Comprehensive Income through independentvaluer. Valuation of Investment of Indian Port Rail & Ropeway Corporation Limited is based on the latest availablefinancial statements as on 31 March 2024.
vii) Based on an expert opinion and further analysis of the underlying contractual arrangements, and in accordance with
Paragraph 62(c) of Ind AS 115 - Revenue from Contracts with Customers, the Company has determined that security
deposits and retention money are primarily performance-related. As these do not constitute a significant financingcomponent, discounting of these balances is no longer considered appropriate. Accordingly, this reassessment hasbeen classified as a change in accounting estimate under Ind AS 8, applied prospectively from the current financialyear. As a result of the change in accounting estimate, the net impact on the current year’s Statement of Profit and Lossis a decrease in profit amounting to Rs.1.86 crore. The Company expects that similar treatment will apply to comparablebalances in future periods. However, due to variability in contract terms and differences in timing and structure offuture arrangements, it is impracticable to reliably estimate the exact quantitative impact on future periods.
Fair Value hierarchy
Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2- Inputs other than quoted prices included within Level 1 that are observable for the assets or liability, eitherdirectly (i.e. as prices) or indirectly (i.e. derived form prices)
Level 3- Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
Fair value hierarchies of assets and liabilities as on 31 March, 2025 are as follows:
(iii) Financial risk management
The Company’s principal financial liabilities compriseBorrowings from IRFC, trade payable and otherpayables. The Company’s principal financial assetsinclude trade and lease receivables and cash & cashequivalents that are derived directly from itsoperations. The Company is exposed to market risk,credit risk and liquidity risk. The Company’s financialrisk activities are governed by appropriate policiesand procedures and that financial risk are identified,measured and managed in accordance with theCompany’s policies and risk objectives. The board ofdirectors reviews the policies for managing each ofthese risk, which are summarised below:-
a) Market Risk
Market risk is the risk that the fair value of future cashflows of a financial instruments will fluctuate becauseof changes in market prices. Market risk comprisesInterest rate risk and foreign currency risk. Financialinstruments affected by market risk includes loans andborrowing, deposits and other non derivative financialinstruments.
i) Interest Rate Risk
Interest rate risk is the risk that the fair value offuture cash flows of a financial instruments willfluctuate because of change in market interestrate. The Company has only loan from IRFC, thepayment of interest and repayment of principalof that is ensured by the Ministry of Railways;therefore the risk related to said loan is Nil , debtservicing will pass through RVNL books only.
ii) Foreign Currency Risk
The Company takes services from countriesoutside India for projects and is exposed to foreigncurrency risk arising from such foreign currencytransactions. Due to immateriality of foreignexchange amount group does not hedge anyrisk.
b) Credit risk
Credit risk is the risk of financial loss to the Company if acustomer or counterparty to a financial instrument failsto meet its contractual obligations, and arisesprincipally from the Company’s receivables fromcustomers. The Company is exposed to credit risk fromits financial activities including deposits with banks,financial institutions and other financial instruments.There is negligible risk for receivable from Ministry ofrailways also company does not have any history ofbad debts.
Financial instruments and cash deposits
Credit risk from balances with banks and financialinstitutions is managed in accordance with theCompany‘s policy. Investment of surplus are madewith approved counterparty on the basis of thefinancial quotes received from the counterparty andas per the gudilines issued by DPE from time to time.
c) Liquidity risk
Liquidity risk is the risk that the Company will not beable 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 sufficientliquidity to meet its liabilities when due, under bothnormal and stressed conditions, without incurringunacceptable losses or risk to the Company’sreputation. The Company’s principal sources ofliquidity are cash and cash equivalents and the cashflow that is generated from operations. The Companybelieves that the working capital is sufficient to meetits current operational requirements. Any short term-surplus cash generated, over and above the amountrequired for working capital management and otheroperational requirements, are retained as cash andinvestment in short term deposits with banks. The saidinvestments are made in instruments with appropriatematurities and sufficient liquidity.
The followings are the key assumptions concerning the future,and the key sources of estimation uncertainty at the end ofthe reporting period that may have a significant risk ofcausing a material adjustment to the carrying amount ofassets and liabilities with next financial year.
a) Fair valuation measurement and valuation process
Impact of fair valuation of Staff loans and advancesare immaterial therefore it has been continuing at thecarrying value.
The fair values of financial assets and financial liabilitiesis measured the valuation techniques including theDCF model. The inputs to these method are taken fromobservable markets where possible, but where this isnot feasible, a degree of judgment is required inestablishing fair values. Judgments includeconsiderations of inputs such as liquidity risk, credit riskand volatility. Changes in assumptions about thesefactors could affect the reported fair value of financialinstruments. See Note 32 for further disclosures.
b) Taxes
Deferred tax assets are recognized for unused tax lossesand unabsorbed depreciation to the extent that it isprobable that taxable profit will be available againstwhich losses can be utilised. Significant managementjudgment is required to determine the amount ofdeferred tax asset that can be recognised, basedupon the likely timing and level of future taxable profittogether with future tax planning strategies.
c ) Borrowings from IRFC and Lease Receivables fromRailway.
Company has borrowed funds from Indian RailwayFinance Corporation for the purpose of constructionof railway projects. There is a moratorium period of 3years for each year’s loan. During the said moratoriumperiod, no amount on account of interest and principalshall be payable. The interest shall be charged onyearly basis and repayment of loan along with interestshall made be once in a year (for a period of 12 years)after the completion of moratorium period. Ministry ofRailways would make available to RVNL the requiredfunds thereafter, to enable them to do the debtservicing. The debt servicing will pass through RVNLbooks. Accordingly, funds are received by RVNL oneach year from MoR and the same is transferred toIRFC. Therefore, there is no impact on Statement ofProfit & Loss of the Company.
1%. Customer profile include Ministry of Railways, Public Sector Enterprises and State Owned Companies in India. TheCompany’s average project execution cycle is around 24 to 36 months. General payment terms include mobilisationadvance, 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 toconsideration in exchange for goods or services transferred to the customer. It includes balances due from customersunder construction contracts that arise when the Company receives payments from customers as per terms of thecontracts, however the revenue is recognised over the period under input method. Any amount previously recognisedas a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service whichis necessary to achieve the billing milestone.
iii) Contract liabilities relating to construction contracts are obligation to transfer goods or services to a customer for whichthe entity has received consideration (or the amount is due) from the customer. These mainly arise when a particularmilestone payment exceeds the revenue recognised to date under the input method and advance received in longterm construction contracts, the amount of advance received gets adjusted over the construction period as andwhen invoicing is made to the customer.
38.1 Claims Against the Company not acknowledged as debts:
Iln respect of claims pending under adjudication in arbitration invoked by the Contractor not acknowledged as debts bythe Company are Rs. 4,527.61 crore as at 31 March 2025 (Previous year Rs.3,364.10 crore ) and the cases pending in courtsnot acknowledged as debts by the Company involve an amount of Rs.436.31 crore as at 31 March 2025 (Previous yearRs.551.99 crore ). All the claims in case of MoR Projects, if become payable, will form part of the project cost and reimbursableby respective clients.
38.2 Direct taxes:
Income- tax demands raised by the Income-tax department as at 31 March 2025 is aggregating to Rs. 28.00 crore (PreviousYear Rs.1241.86 crore ) and Company has not accepted the claim and submitted its appeal to department as follows:-
a) . Service TaxIn respect of Service-tax, the company has received show cause notice from Director General Goods &
Service Tax Intelligence, Delhi Zonal Unit raising a demand of Rs 279.46 crore (Previous year Rs279.46 crore ) for non¬payment of service tax for the period from July 2012 to June 2017 under forward/reverse charge mechanism onservices provided/ received to/by Ministry of Railway and Zonal Railways contested by the company. The Companyhas received order from Additional Director General(Adjudication) dated 24.08.2021 reduced the demand to 148.68crore plus applicable interest and imposed penalty of Rs. 130.78 crore .The Company has filed an appeal beforeCESTAT, New Delhi against the said demand. If the liability is decided against the Company in future ,the same will beborne by Ministry of Railways.
b) . GST:GST dapartment has rasied demands of Rs. 244.59 crore (Previous Year Rs. 124.38 crore ). However, the Company
has not accepted the demand and submitted its representation/appeal to department as follows:-
- Office Premise at World Trade Center, Nauroji Nagar New Delhi being constructed by NBCC Rs. 50.54 crore incl. GST(Previous Year: Rs.60.68 crore)
- Implementation of ERP is Nil (Previous Year: Rs. 1.01 crore)
39.1 Other Commitment
Commitment towards Contractual Payments of Project expenditure is Rs. 42,871.50 crores (Previous Year: Rs.31,763.85 crore).-Contribution towards share capital in Subsidiaries, Joint Venture & Associates is Rs. 331.49 crore (Previous Year: Rs. 34.96 crore).
The Concession Agreement was signed between NHAI and M/s Malkanai Paradeep Road Vikas Limited on 10.10.2023 for“Rehabilitation and Upgradation from 4 to 8 laning of Chandikhole-Paradip Section of NH-53 (Old NH-5A) from Km. 80.000 toKm. 76.646 (Package-4)(2nd call)" in the state of Odisha on HAM Mode. The Authority awarded the above project to RVNLat a total project cost of Rs. 808.48 Crore. Malkanai Paradeep Road Vikas Limited entered into an EPC Agreement on24.04.2024 with Rail Vikas Nigam Limited and agreed to award 100% of the EPC works, for a total of Rs. 661.11 Crores excludingGST to RVNL for executing the construction. Till date Rs. 59.80 has been paid to RVNL towards achievement of first mile stone.Balance Rs. 601.36 crores will be delivered in due course.
i) One of the former employees Mr. Devendra Singh on deputation from Indian Railways has filed a writ petition on22.07.2010 against the Company in respect of dues on account of difference in pay scales. The impact of the same hasnot been quantified in the writ.
ii) During the financial year 2014-15, Company received a show cause notice from the Director General of Central ExciseIntelligence, regarding the liability of Service Tax of Rs. 213.59 Crores and interest and penalty thereon. The Companyhas not accepted the liability and has submitted its reply to the Show Cause Notice on 06.01.2015. A personal hearinghas also been held in this regard on 21.09.2015 before the Principal Commissioner of Service Tax, Delhi-I. A similarstatement of demand cum show cause notice has also been received for F. Yr. 2014-15 on 05.04.2016 in which ademand of Rs. 82.07 Crores has been raised. It has also been replied on 24.05.2016. For FY 2015-16, 2016-17, 2017-18(upto 30.06.2017), the statement of demand cum show cause notice in which a total demand of Rs. 211.66 Crores cumshow cause notice was served on 22.03.2018, which was replied on 18.05.2018. During the current financial yeardepartment has communicated that matter is kept in abeyance in view of the appeal on the identical issue filed bythe department in the case of M/s Mundra port and special economic zone limited before the Hon’ble supreme court.
iii) As per the Construction Agreement for Palanpur-Samakhiali doubling , there is a provision for contingencies of 0.5% asmentioned in estimated project cost.
iv) As per the Construction Agreement between RVNL and Kutch Railway Company Limited, If expenditure is incurred byRVNL out of its own funds on the project executed on behalf of KRC, on account of the failure of KRC to make paymentto RVNL within 15 days of dispatch of intimation of requirement of additional funds, then RVNL shall charge interest atthe prevailing Base Rate of SBI 1% on the total amount so expended. The interest to be charged shall be fixed fromthe 16th day after dispatch of demand for required funds and charged up to the date of actual payment is receivedfrom KRC During the current financial year, Company has written the letter to the RVNL and challenged the interestcalculation method adopted by the RVNL. Further board of directors in the 106th meeting held on 23th August 2024 isof the view that the levy of interest by RVNL for delayed payment beyond the original estimate cost of Rs. 1548.66 croresshould not be made on the basis of RVNL demand for funds. Interest should not be charged till the Revised estimate (1stor 2nd) is sanctioned by KRCL Board and a period of 2 years has passed which is required by KRCL to mobilise the fundsfor the cost overrun. Based on this, Company has not accepted the interest charged by the RVNL after Sep 2023accordingly interest of amounting Rs. 45.37 Crores under the Project of doubling of Palanpur - Samakhyali Section andinterest of amounting Rs. 16.42 Crores under Project of electrification of Palanpur - Samakhyali Section has not beenprovided in the Financial statements till FY 2024-25.
v) In case of the Project of electrification of Palanpur - Samakhyali Section the estimated cost of the project is Rs. 755.00crore , however the company has received the expenditure amounting of Rs 759.52 crores from the RVNL till 31 March2025. Company has not accepted the liability in excess of the estimated amount of the project cost.
(i) Department has raised demand in respect of alleged offence of evasion of Service Tax amounting to Rs.7.58 Croresand Rs. 2.86 Crores for financial year 2014-15 and 2015-16 respectively. Also department has raised demand of Rs. 2.95Crores for the FY 2016-17 and 2017-18 (upto June’17), However Company has not accepted the liability and hassubmitted its reply to department. Since the Company had earlier received favourable ruling from CESTAT, it isconfident that no additional liability will devolve on it. Further for the period FY 2011-12 to FY 2013-14, KRCL hasreceived favourable order from CESTAT for demand of 13.42 Crores. In case of similar companies on same matterdepartment has moved to Hon’ble Supreme court in this case.
(ii) During the FY 2019-20 Income Tax Department has moved to Hon’ble High Court of Delhi in respect of Tax demand ofRs. 5.17 Crores for A.Y. 2011-12, Company has already received favourable order from ITAT in this case. Therefore, liabilityfor this case has not been recorded in the books of Accounts.
(iii) Arbitration proceedings between KRCL and MOR (Respondent) is on going. As against the KRCL’s claim, MoR has alsofiled counter claims. It is to be stated that as per Section 42A of The Arbitration and Conciliation Act 1996, Either Arbitraldetails of proceedings or of Claims ought to be kept confidential by the parties till the same is concluded. Therefore,KRCL is not in a position to disclose details of Arbitration proceedings including claims of KRCL/counter claims of MoR inFinancial Statements.
(iv) During the previous years, company has received certain bills under protest from contractor pertaining to phase 1 onwhich a future liability may arise. Financial impact of the same is not ascertainable at present.
(v) Contingent liability in respect of departmental charges not claimed by RVNL @ 5% of project cost is estimated at 114.49Crores.
(i) The Company had received a Show Cause Notice (SCN) during financial year 2014-1 5 from tax authorities in thematter of applicability of service tax on the Company in respect of apportionedfreight received by the Company fromRailways. The SCN covered a period of three years fromfinancial year 2011-12 to financial year 2013-14 and involvedservice tax of Rs. 16.33 Crores plus interest and penalties. The Company contested the SCN and submitted its positionthrough are joinder thereon to the adjudicating authorities, pleading that no service is rendered by BDRCLto WesternRailway that might warrant liability to pay Service Tax. The Company got relief and favorable order from the Commissioner of Service Tax vide her order dated 25 01.2016 and has therefore not provided for the amount in the aforesaidclaim its books for the above period. However, the department has filed appeal with CESTAT against the order ofCommissioner for 25/03/2019 rejected the appeals filed by department. The Department has filed a appeal in Hon’bleSupreme Court against the order of CESTAT in response to the same the company has submitted a statement inHon’ble Supreme Court.The tax authorities issued another SCN npany on the same grounds of involving a demand ofRs. 16.38 Crores plus interest and penalties for the FY 2014-15. The company has duly submitted its reply to theadjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in the earlierrejoinder. Since the Company’s stand is based on sound principles and immutable facts, and it had received afavourable ruling from the Commissioner of Service Tax. on the earlier occasion, it is confident that no additionalliability on account of Service Tax will devolve on it. The Company has not yet received any adjudication order in thematter. Further, the tax authorities issued another SCN to the Company on the same grounds involving a demand ofRs. 16.15 Crores plus interest and penalties for FY 2015-16 on 21 March 2018, the company has duly submitted its replyto the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same grounds as pleaded in theearlier rejoinder.
Furthermore, the tax authorities issued another SCN to the Company on the same grounds involving a demand of Rs8.99 Crores plus interest and penalties for FY 2016-17 & 2017-18 (Upto Jun-17) on 22th April 2019. The company has dulysubmitted its reply to the adjudicating authorities for withdrawal of the claim in the aforesaid SCN on the same groundsas pleaded in the earlier rejoinder.
(ii) The O & M expenditure pertaining to Bharuch-Chavaj section has been provided in financial statement to the extentinformation provided by Western Railway and information available with company, remaining O & M will be providedin the year in which information will be received from Railways.
(iii) Company has terminated some contractual employees, due to misconduct at workplace and unauthorised absencefrom office, aggreived by the decision of the company employees have filed application with labour court forcompensation towards their termination. However, based on the facts of the case, company expects favourabledecision. Financial impact of the same is not ascertainable.
(iv) The Company has received a claim of Rs. 6.96 Crores from Rail Vikas Nigam Limited (RVNL) pertaining to an arbitralaward for the construction of the BDRCL Project under construction agreement for the gauge conversion of theBharuch-Samni-Dahej Section. Out of this, Rs. 5.51 crore has been accepted and paid by the Company. However,the remaining amount of Rs. 1.45 Crores has not been accepted by the Company, and the necessary facts in thisregard have been intimated to RVNL.
(v) The Company had received a claim of Rs 6.96 Crores from Rail Vikas Nigam Limited (RVNL) pertaining to arbitral awardfor construction of BDRCL Project under construction agreement for gauge conversion of Bharuch Samni-Dahej Section.The claim of Rs 5.51 Crores has been accepted and paid by the company. The remaining amount of Rs. 1.45 Crores hasnot been accepted by the Company and the necessary facts in this regard have been intimated to RVNL.Till datethere is no details and clarification on the same is received from RVNL
Capital commitment: (Share of RVNL:35.46%)
(i) Capital commitment in respect of S&T Work-project Rs. 4.49 crore (Previous year Rs. 4.59 crore)
(i) During the financials year 2022-23, Company had received a show cause notice dated 23.12.2022 from the PrincipalCommissioner (Audit) Central GST & Central Excise Bhubaneshwar ,regarding the liability of irregular availment of ITCamounting Rs 209.02 Crores along with the interest under section 50 of the CGST Act, 2017 and also Penalty underSection 73 af the CGST Act. The Company had appeared before the Principal Commissioner (Audit) Central GST &Central Excise Bhubaneshwar for adjudication. An order has ised by the Adjudicating Authority on 30-11-23 against thecompany. Therefore, the Adjudicating authority has imposed interest of Rs. 4.10 Crores and penalty of Rs. 20.90 croresunder GST Act, 2017. However, the company has filed appeal against the order on 7th March, 2024.
(ii) During the financial year 2024-25, the Company received another show cause notice dated 16.01.2025 from theAdditional Commissioner (Adjudicating Authority), GST & Central Excise, Bhubaneswar, confirming a demand of GST ofRs. 3.31 Crores with interest under Section 50 of the CGST Act, 2017 and penalty under Section 73 of the CGST Act. Asthe amount was already paid by utilisation of ITC and the same was also confirmed by the Adjudicating Authoritywhile passing the order, the Company is in the process of filing an appeal against the order.
(iii) Additionally, during the financial year 2024-25, the Company received a third show cause notice dated 14.02.2025from the Commissioner (In-Situ Audit), Central GST & Central Excise, Bhubaneswar, regarding the liability for wrongfulavailment of ITC amounting to Rs. 12.27 Crores along with interest under Section 50 of the CGST Act, 2017 and penaltyunder Section 73 of the CGST Act. The Company has not accepted the liability and has submitted a reply to the noticewith the GST Department.
(iv) Furthermore, an income tax demand of Rs. 0.86 crores and interest of Rs. 0.65 crores for the AY 2017-18 is showing on theincome tax portal. The Company has not agreed with the tax demand and has requested the Income Tax Departmentto rectify the mistake under Section 154 of the IT Act.
Capital commitment: (Share of RVNL:36.44%)
The capital commitment in respect of cost to be incurred for assets covered by the Service Concession Arrangement is Rs.
45.73 crore as of 31 March 2024. For comparison, the capital commitment as of 31 March 2023 was Rs. 399.74 crore.
f). Dighi Roha Rail Limited
(a) The Company usually receives advance payment from Joint Venture Companies for incurring expenditure on theirprojects. However, in the case of one joint venture company i.e. Krishnapatnam Railway Company Limited (KRCL),the Company is incurring project expenditures on a regular basis and the total amount receivable from KRCL as on 31March, 2025 is Rs.1355.72 crore which includes Rs. 889.95 crore on account of Interest. The application of interest hasbeen changed from compound to simple w.e.f 1 October 2024, whereas KRCL requested for application of simpleinterest w.e.f. 01.04.2020. The matter is pending with the Board of Directors of the Company and adjustment if any willbe recognized as and when the matter is finalized.
(b.) In view of the representation made by one of the Joint Venture Company KRCL for the waiver of departmentalcharges and pending decision by the Board of Directors of the Parent Company, the claim for departmental charges5% of the completion cost of the project has not been raised on KRCL by the Company. The matter is pending with theBoard of Directors of the Company and adjustment if any will be recognized as and when the matter is finalized.
General Information
Operating segments are defined as components of an enterprise for which discrete financial information is available which
is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and
assessing performance. Chairman and Managing Director of the company has been identified as CODM.
The company has identified one reportable operating segments as "Development of Rail Infrastructure".
Information about reportable segments and reconciliation to amounts reflected in the financial statement:
Income and expenses directly attributable to segments are reported under the respective operating segment. Income and
Expenses which are not directly identifiable have been disclosed as un-allocable expenses or income.
(i) The Company does not have any Benami Property and further no proceedings has been initiated or pending againstthe Company for holding any Benami property.
(ii) The Company does not have any transactions with companies struck off.
(iii) The Company does not have any pending charges or satisaction to be registered with ROC.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
( v) The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Act, 1961 (such as searchor survey or any other relevant provisions of the Income Tax Act, 1961).
(vi) The Company has not been classified as willful defaulter by the Bank or Financial Instituitions
(vii) The Realisable Value of financial assets of the Company is not lower than value disclosed in financial statements andsubject to confirmation.
(viii) The following disclosures shall be made where loans or advances in the nature of loans are granted to promoters,directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with anyother persons , that are :
(a) . Repayable on demand; or
(b) . Without specific any terms or period of repayment
Based on the time involved between the acquisition of assets for processing and their realisation in cash and cash equivalents,the Company has determined twelve months as its operating cycle for the purpose of classification of its assets and liabilitiesas current and non-current in the balance sheet.
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, whereverconsidered necessary, have been made. However, management does not expect to have any material financial impactof such pending confirmations/reconciliations.
# Tangible Net worth Total Debt Deferred Tax Liability## Held as investment as per note 6.1
Capital employed (Rs in crore) 14,012.74 13,855.05
Previous year figures has been reaaranged, reclassified and regrouped to make them confirmatory with current year reportedfigures.
As per our Report of even date attached For and on behalf of Board of Directors
For Gandhi Minocha & Co. Sd/- Sd/-
Chartered Accountants Sanjeeb Kumar Pradeep Gaur
Firm Registration No.: 00458N Director Finance Chairman & Managing Director
DIN: 03383641 DIN: 07243986
Sd/- Sd-
(CA Manoj Bhardwaj) Kalpna Dubey
Partner Company Secretary
M.No. 098606 FCS No. F7396
Place : New DelhiDate: 21.05.2025