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

A. Provisions: -

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

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

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

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

Discounting of Provisions

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

B. Contingent Liabilities

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

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

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

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

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

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

Contingent Assets

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

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

k) Revenue Recognition: -

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

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

(i) Identify contracts with a customer: - A contract
is defined as an agreement between two or

more parties that creates enforceable rights
and obligations and sets out the criteria for
every contract that must be met.

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

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

(iv) Allocate the transaction price to the performance
obligations in the contract: For a contract that
has more than one performance obligation,
the Company allocates the transaction price to
each performance obligation in an amount that
depicts the amount of consideration to which the
Company expects to be entitled in exchange
for satisfying each performance obligation.

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

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

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

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

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

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

from a customer exceeds the amount revenue
recognized this give rise to a contract liability.

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

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

i. Sales: -

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

ii. Income from Internet Ticketing: -

(a) Income from Service charges: Income from
Service Charges is recognized on the basis
of value of the service charges earned on the
tickets booked by Foreign customer through
Company's Web site(www.irctc.co.in). Gross

service charges earned on the sale of such
tickets on accrual basis have been booked
as income of the Company & Corresponding
railway share is shown as expenses.

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

iii. Income from Catering Services: -

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

• Income from On-board Catering Services:

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

The Income under these heads have been

recognized / accounted as under: -

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

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

• License Fee: -

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

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

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

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

• Income Accrued on termination of Contracts: -

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

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

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

iv. Income from Package Tours: -

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

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

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

v. Income from Train Operations

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

vi. Integration Charges

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

vii. Water vending Machines

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

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

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

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

l) Expenditure: -

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

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

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

The expenditure on account of Railway’s revenue
share is booked @15% of the net profits on Company
Owned plants and for PPP plants, revenue share is
booked @40 of the profits for the year.

(ii) Expenditure on Internet ticketing: -

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

(iii) Catering Charges Paid:

(a) Onboard Catering Charges:

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

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

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

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

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

• License Fee Paid: -

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

• Fine & Penalty payable to Indian Railways is
recognized on accrual basis.

• Custody/Haulage Charges on Train Operations:-

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

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

• Tourism Expenses: -

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

m) Leases: -

Where the Company is the lessee:

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

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

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

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

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

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

Where the Company is the lessor:

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

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

n) Impairment of Assets: -

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

o) Borrowing Cost: -

General and specific borrowing costs directly attributable
to the acquisition, construction or production of qualifying
assets, are capitalised as part of the cost of such assets
till such time the assets are substantially ready for

their intended use. A qualifying asset is an asset that
necessarily requires a substantial period of time to get
ready for its intended use. All other borrowings costs
are recognized in the statement of Profit and Loss in the
period in which they are incurred.

p) Employee Benefits: -

(a) Short Term Employee Benefits

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

(b) Long Term Employee Benefits:

(i) The obligation for long-term employee benefits

such as half pay leave and LTC

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

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

(ii) Leave Encashment

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

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

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

• Company recognizes changes in

the carrying amount of the right to
reimbursement in the Statement of Profit
and Loss for the year.

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

(c) Post-Employment Benefits

(i) Defined contribution plans: The Company

makes defined contribution to the Regional

Provident Fund Commissioner in respect of

provident fund scheme. The contribution paid/
payable under the schemes is recognized
during the period in which the employee
renders the related service.

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

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

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

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

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

r) Inventories:

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

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

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

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

s) Taxation: -

(a) Current Income Tax: -

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

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

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

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

(b) Deferred Tax

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

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

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

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

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

t) Earnings Per Share

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

u) Grants

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

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

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

v) Cash & Cash Equivalents

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

w) Stale Cheques

Cheques which have not been cleared within the validity
period of 3 months are credited to the stale cheque
account. Stale cheques related to Private parties which
are more than 4 years old from the date of transfer to
stale cheque and those related to Government Bodies
which are more than 6 years old from the date of transfer
to stale cheque and which could not be cleared in stale

cheque account are credited to Miscellaneous income.
For any claim arising in future, the same are debited to
Miscellaneous Expenses”

x) Financial Instruments: -

Initial recognition and measurement

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

Financial Asset at Amortized Cost

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

Following financial assets are measured at amortised cost: -

(i) Security deposit

(ii) Retention money

(iii) Cash and cash equivalent

(iv) Advances adjustable with other financial instrument

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

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

Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date
at fair value. Fair value movements are recognized in
the other comprehensive income (OCI). However, the
company recognizes interest income, impairment losses
& reversals and foreign exchange gain or loss in the

P&L. On de-recognition of the asset, cumulative gain or
loss previously recognised in OCI is reclassified from
the equity to P&L. Interest earned is recognised using
the EIR method.

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

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

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

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

Financial liabilities at Amortised Cost

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

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

The company has not designated any financial
liabilities at FVTPL.

De-recognition
Financial Asset

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

Financial Liability

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

Impairment of Financial Assets

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

y) Fair Value Measurement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Note 38 Payment Gateways and Bank Reconciliations

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

Note :- 39: Balance Confirmations

Trade Receivables

a. Railways Balances

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

b. Third Party Balances.

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

Trade and Other Payables

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

Note :- 40 Capital Commitments

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

Note 41

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

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

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

subject to confirmation and reconciliation.

Note :- 42 Employee Benefits

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

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

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

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

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

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

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

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

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

Note 45 Financial Reporting of Interest in Joint Ventures

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

The Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in
the joint venture company as at 31^st March, 2025 are not available in view of non-finalization of its accounts because of dispute
between the parties, due to which the consolidation of Financial Statements as required under Ind AS 110 could not be done. These
Standalone Financial Statements are the separate financial statements as per Ind AS.

Note 46 Impairment of Assets

IRCTC has made an assessment on 31^st March, 2025 for any indication of impairment in the carrying amount of Company’s Property,
Plant & Equipment (PPE), Intangibles and ROU assets. On the basis of such assessment, in the opinion of the management, no
provision for the impairment of Property, Plant & Equipment and intangible assets of IRCTC is required to be made during the year.

Note 48 Bank Balances other than Cash & Cash Equivalents

IRCTC has availed overdraft facility for H 10,000 Lakhs (previous year H 10,000 Lakh) from State Bank of India against fixed deposit
of H 12,000 Lakhs (previous year H 12,000 Lakhs). The OD facility shall be availed @ 0.35 % higher than the interest rate on fixed
deposit for the period for which OD is being availed. Fixed deposits to that extent are under lien.

Note :- 49 Railway Share

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

(b) As per directive issued by Ministry of Railways, profit from Rail Neer plants run departmentally by the Company shall be
shared between Indian Railways (IR) and Company in the ratio of 15: 85 and profit from Rail Neer plants operated under PPP
model/run by DCO shall be shared between IR and Company in the ratio of 40: 60. Railway Share has been calculated after
charging of the same against the profit from Rail Neer Segment. These matters are subject to reconciliation with the Railways.

Railway Share of H 2,223.81 lakhs (including exceptional item of H 1,451.24 lakh) and H 1411.08 lakhs has been charged in the
FY 2023-24 & FY 2024-25 respectively.

Note 50 Capital Advances For Flats & Land

The following amounts were paid in previous years for Purchase/construction of flats and land which are still pending as on date:¬
- H 635.98 Lakhs paid to Indian Railways in the year 2002-03/2006-07/2021-22/2022-23.

Note :- 51

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

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

The decision taken by the IRCTC was communicated to all DCOs. But certain DCOs have not accepted the decision of the
Company. Accordingly, total amount of H 437.61 Lakhs (Financial Year 2020-21 - H 243.17 Lakhs & Financial Year 2021-22
- H 194.44 Lakhs) was provided for during the year ended 31^st March, 2022 as “Provision for Claims & Damages” towards
shortfall compensation calculated net of License Fee waived off in respect of dissenting DCOs who have not accepted the
decision of EB.

Further, during the Financial year 2022-23, operations have become normal and therefore, shortfall compensation of H 50.41
lakhs has been calculated and accounted for as per contract terms & condition of individual plant. However, no shortfall
compensation is provided for during financial year 2023-24 & 2024-25 in view of the normal operations of the railneer plants.

(b) As per the terms and conditions of the tender, in respect of 4 PPP Railneer plants, the Developer cum Operator (DCOs) are
to be reimbursed the GST on supply of Railneer net of Input Tax Credit availed by them. However, the complete information
of ITC availed by DCOs is not available. As per the information made available by DCOs, an amount of H 388.46 Lakhs has
been accounted for during the year ended 31^st March, 2025 and amount of H 364.83 lakhs was accounted during FY 2023-24.
These DCOs have represented against the claim of the Company for Input Tax Credit. This matter is being examined by the
Management to decide on the future course of action.

Note :- 52

During the Financial Year 2017-18, the Company had received H 1200 lakhs from Ministry of Tourism for Manufacturing of 3 glass top
Coaches on cost to cost basis out of which balance of H 121.66 Lakhs is refundable to Ministry of Tourism.

Note :- 53 Segment Reporting

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

• Catering

• Railneer

• Tourism & Train Operation

• Internet Ticketing.

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

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

Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective
segment while the remainder of the costs are allocated to all segments on proportionate basis. The management believes that it is
not practical to provide segment disclosure to Income Tax expense and accordingly these are separately disclosed as unallocated
and adjusted only against the total income of the Corporation.

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

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

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

Fair value hierarchy

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

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

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

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

Note 57 Financial Risk Management

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

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

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in
market prices. Market risk comprises Interest rate risk and foreign currency risk. Financial instruments affected by market risk
includes security deposits, Bank 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 manages its interest risk in accordance with the companies policies and
risk objective. Financial instruments affected by interest rate risk includes deposits with banks. Interest rate risk on these
financial instruments are very low as interest rate is for the period of financial instruments.

ii) Foreign Currency Risk

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

b) Credit risk

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

c) 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 counterparty on the basis of the financial quotes received from the counterparty.

d) Liquidity risk

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

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

Note 59 Estimates and assumptions

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

a) Fair valuation measurement and valuation process

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

b) Taxes

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

c) Defined benefit Obligations

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

d) Useful lives of property, plant and equipment

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

e) Leases

Company uses its judgement in determining whether or not contract contains a lease, extension option of the lease agreement
and termination option of the lease agreement will be exercised or not. For the land on lease from the railways refer Note No.
2A(d) to estimate the future lease term.

Note 60 Train Operations

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

Note :- 61 Ticket Deposit Receipt Refund (TDR) Cases

The TDR refund is made by the Company to the passengers after receipt of the same from Indian Railway. As on 31^st March 2025,
number of cases pending were 37932 (previous year 77731) with value of J 432.41 lakhs (Previous year J 949.60 Lakhs).

Note :- 62 Railneer Plants on PPP Model

In addition to 5 nos. of company owned Rail Neer plants, 15 nos. of Rail Neer Plants are operational at various locations on PPP
model. The Rail Neer Plant at Maneri (Madhya Pradesh) was converted to owned plant w.e.f. 21^st November, 2024.

Note :- 63 Capital Expenditure

The company has incurred Total Capital Expenditure of J 7,893.59 lakhs including CWIP and Capital Advances but excluding ROU
assets ( previous year J 23,960.35 lakhs) .

Note :- 64 CBI Inquiry against Ex-Railway Minister

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

Note:- 65 GST Input Tax Credit

GST Input Tax Credit (net of amounts appearing on GST portal & GST Return 2B) as on 31^st March, 2025 amounting to J 3771.09
Lakhs (previous year J 2283.76 Lakhs) included in “Balances with Government Authorities” in Note 12 is pending for credit in
GSTR 2B as on date.

Note :- 66 Employee advances

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

Note:-67 Setting up, Operation & Maintenance of Railneer Plants

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

Note:-68 License Fee on Water Vending Machines

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

Notes 70 Leases

a) Company as a Lessee

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

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

Right of Use Assets

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

Lease Liabilities

Set out below are the carrying amounts of lease liabilities recognised and the movements during the year:

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

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

The Company has used SBI MCLR as incremental borrowing rate for calculation of lease liability.

b) Company as a Lessor

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

Lease Rental recognized as income during the year is H 273.47 Lakhs (Previous year H 234.98 Lakhs)

Note 71 Tejas and Kashi Mahakal Express trains:

Railway Board had mandated IRCTC to operate 02 rakes of Tejas trains and 01 rake of Kashi Mahakal express trains as passenger
trains to provide passenger with an option of travelling in premium segment private trains during the financial year 2019-20.

However, due to the COVID -19 pandemic, these trains could not run during FY 2020-21. The representations had been made to
Railway Board for waiver of fixed commitments against both Tejas and Kashi Mahakal trains for the non operational period during
the financial year 2020-21. The Railway Board has allowed only partial waive off. IRCTC had again requested Railway Board to
reconsider waiving off the fixed charges (fixed haulage and Custody charges) amounting to J 2793 Lakhs for non-operational
period of the three trains. However, IRCTC had made full provision for that amount during Financial Year 2020-21. Further, during
the financial year 2022-23, Railway Board had further allowed waiver off amounting J 174.91 lakhs relating to Tejas trains on
account of Custody and Fixed Haulage charges out of J 2793 Lakhs. For the balance amount, no communications has been
received from Railway Board till date.

Note :- 72 The Company has applied for advance ruling for following issues for which decision of AAR
is still awaited:

1. Reimbursement of Service Charges: The Government of India through Ministry of Railways, in the public interest had waived
off the service charges from the passengers for booking of online train tickets through IRCTC's website. The Government of
India has reimbursed consolidated amount of J 8000 Lakhs, J 8800 Lakhs and J 3227 Lakhs for the 2017-18,2018-19 and
2019-20(up to July-19) respectively. Section 15 (2) of CGST Act 2017, excludes the amount of reimbursement of expenses
received from the Central Government and State Governments from the value of taxable supply, hence the amount received
from the Indian Railways being the Central Government towards the reimbursement of expenses incurred for the providing of
same should not be charged to GST. Therefore no GST was paid by IRCTC for above reimbursement.

2. Reimbursement of Travel Insurance: The Government of India has decided to provide travel insurance on free of Cost to
the passengers who have booked the train ticket through online to promote digitalization. Accordingly, IRCTC provided the
Insurance free of Cost for which Ministry of Railway had reimbursed the travel insurance of J 4700 Lakhs on which no GST
was paid by the Company being reimbursement of expenses received from the Central Government.

3. MDR Received from Acquirer Banks. The IRCTC has received J 300 Lakhs in FY 2019-20 from Acquirer Banks towards its
share of MDR charges being rate or fee charged on the merchant service providers The Company has treated this payment as
subsidy and no GST was paid on the aforesaid amount, as subsidy received from Central Government and State Governments
shall be excluded from the value of supply and same shall not form part of consideration for the purpose of levying GST.

4. The IRCTC has received pro-rata Licensee fees from Indian Railways for taken over of catering of SBD trains in the terms of
Catering Policy, 2017 of J 1385 Lakhs, J 7058 Lakhs, J 125 Lakhs for the years 2017-18, 2018-19 & 2019-20 respectively and no
GST was paid on the aforesaid amounts in view of the fact that the GST is not applicable on the aforesaid amount as it was
received from Licensee by the Indian Railways prior to Introduction of GST and service tax was not applicable on the grant of
license for payable to Indian Railways as per Finance Act at the time of its receipt. The proportionate amount paid by Indian
Railways to IRCTC is towards the remaining part of the tender period which was awarded prior to the implementation of GST.
The assigning of license by Indian Railways to its subsidiary i.e. IRCTC does not change the nomenclature of the transaction
as the license has been awarded prior to the implementation of GST. The incidence of tax is the event when the service is
provided/supplied to the service recipient. Thus, the Service being “grant of license” was provided by Indian Railways at the
time when the license was awarded.

Note 73

Railway Board vide Commercial Circular no. CC60 of 2019 has increased the catering tariff for post and pre-paid trains. However,
the effect of enhancement of License Fee for the periods from 18^th November,2019 to 22^nd March, 2020 (for post paid trains) and
27^th November,2021 to 31^st December, 2023 (for post and pre-paid trains) on account of increase in catering tariff stated above has
not been ascertained & recognized pending sale assessment in its entirety. After the resumption of regular train services from 27^th
Nov 2021 onwards, the Company has conducted and completed the sales assessment, for all the trains (post-paid trains as well as
prepaid trains). Further, the company has raised certain demand notices for increased License fee, but some of the licensees have
challenged Company’s decision of increased License fees in respective Hon’ble High Courts of Delhi, Mumbai, Kolkata and Guwahati.
Further, some of the licensees have requested for arbitration. As the matter is sub-judice and the occurrence is dependent on outcome
of certain event in future, the impact of increase in License fees for pre-paid and post paid trains has not been recognized in the
Standalone financial statements for the year ended on 31^st March, 2025 and for previous years up to 31^st March, 2024.

Note :- 74

The menu and tariff of standard meals/items is controlled by Railway Board and these were revised & enhanced vide CC-64
dated 12.12.2019. As per the instructions, these were to be implemented with immediate effect and as an interim measure, sales
assessment in limited units was undertaken to assess the impact of enhancement in License fees. Accordingly, guidelines were
issued on 28.01.2020 for incorporating the impact of enhancement in license fees by adding the weightage assigned to the
License fees of the unit or by undertaking sales assessment within 6 months, whichever is higher. However, unforeseen COVID
pandemic started and lockdown was imposed due to which passenger train operation and stations operations for passengers
were suspended by MoR w.e.f 23.03.2020.

The static units at stations were closed and due to lockdown followed by severe restrictions as per Govt. instructions, the sales
assessment of the units could not be conducted. The temporary passenger train operations started w.e.f. 01.06.2020. Only limited
(PAD & RTE) items were permitted for sale @10% license fee w.e.f. 01.06.2020. However, this was limited to few stations only as
passenger movement at most of the stations was restricted due to local restrictions.

On 20.01.2021 guidelines for charging reduced license fees@20% of license fees were issued due to prevailing impact of COVID.
Further, on 04.10.2021 revised guidelines were issued to implement the reduced License fees @ 20% up to 31.10.2021 and new
methodology was implemented for charging of LF w.e.f 01.11.2021 based on footfall. The interim method was followed for ongoing
contracts till 31.05.2022. Instructions were issued for charging 100% license fee w.e.f. 01.06.2022.

The sales assessment for all the static units has been completed in the financial year 2022-23. But some of the licensees have
challenged the company decision on enhanced LF in the Hon’ble High Court of Kerala(WP(C) WP 26745/20,WP26795/20,WP267
21/20,WP26703/20.

As the matter is sub- judice and there is uncertainty and occurrence is dependent on outcome of certain event in future, hence the
impact of increase in License fees for Static units has not been recognized in the books of account for the financial years 2022-23,
2023-24 & 2024-25.

(1) Debt represent only lease liabilities.

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

(3) Lease payment for the current year.

(4) Debt Service Coverage ratio increased due to increase in Earnings and decrease in lease repayments.

Note 76 Exceptional Items

For the current Financial Year 2024-25, Exceptional items represent net income of J 4788.73 lakhs includes: (i) J 220.72 lakhs
towards reversal of RU, Stabling and other charges waived off on Golden Chariot train by KTDC for the previous Financial Years
2022-23 and 2023-24, (ii) J 3988.09 lakhs towards Impact of one time reconciliation of Legacy balances (Refer note 78 (A)) and (iii)
J 579.92 Lakhs being excess provisions written back for previous years relating to various expenses.

For the previous Financial Year 2023-24, net expense on account of Exceptional items amounting to J 5853.03 Lakhs includes: (i)
J 5126.20 Lakhs being provision made towards revised fixed, variable and Custody charges for the two Tejas express trains w.e.f.
13^th August, 2021 to 31^st March, 2023 in line with the letter received from Ministry of Railways even though the Company has made
representation to the Railway Board for waiver of this amount, (ii) H 1451.24 Lakhs being provision made towards the differential
amount of profit sharing @25% (40%-15%) up to 31^st March, 2023 on profits of Railneer plants operated on PPP model and (iii)
J 724.41 Lakhs being excess provisions written back for previous years relating to various expenses.

Note :- 77

During Financial Year 2023-24, the Company got incorporated a company as its wholly owned subsidiary company namely
“IRCTC Payments Ltd." on 10^th February, 2024 with its main object “To carry on the business of providing different types of online
and offline payments related services". The first financial year of the said subsidiary company to be from 10^th February, 2024 to 31^st
March, 2025 as approved by the Board of Directors of IRCTC Payments Ltd. in their meeting held on 4^th March, 2024. However, the
Financial Statements of the subsidiary for the period 10^th February, 2024 to 31^st March, 2024 were prepared only for the purpose
of preparation of consolidated financial statements of IRCTC Ltd. Now the unaudited Financial Statements of the subsidiary for the
period 10^th February, 2024 to 31^st March, 2025 have been prepared and certified by the management. However, for the purpose of
consolidation, management certified financial statements for the year 2024-25 have been considered.

Note 78 Legacy Transactions

(A) During the year ended 31^st March 2025, the Company carried out a one-time reconciliation exercise to identify and resolve
legacy balances that had remained unadjusted over time. These balances had accumulated primarily due to reconciliation
difficulties faced during the earlier transition from the Conventional Accounting System to the New Accounting System.

To ensure accuracy and completeness, each Zonal Office conducted an in-depth review of the third-party balances under its
purview. The exercise aimed to determine whether these balances were still payable or recoverable based on the current
facts and circumstances.

Following this review:

• Certain liabilities were written back where it was determined that no further payments were due.

• Certain receivables and advances were written off where recovery was no longer expected. Most of these had already
been provided for in earlier periods under the Expected Credit Loss model in accordance with Ind AS 109, and hence,
these write-offs did not affect the current year’s profit or loss.

• Some inter-party adjustments (such as between related vendors or internal accounts) were also carried out. These had
no impact on the financial results.

• A few third-party balances are currently under legal dispute or, in the view of the respective Zones, may still be adjustable
in the future. These have been left unchanged and will be reviewed further when more clarity is available.

The net impact of this reconciliation was a gain, primarily from the write-back of liabilities, and has been shown as an Exceptional
Item in the Statement of Profit and Loss for the year ended 31^st March 2025. This disclosure is in line with paragraphs 97 and
98 of Ind AS 1, which require separate presentation of items that are significant in nature or size.

Although these balances relate to earlier periods, they do not represent prior period errors. The specific period to which
many of these balances relate could not be determined reliably. For this reason, and in keeping with Ind AS 8, the financial
statements for prior years have not been restated.

(B) The system of classification/identification of liabilities as trade payables including MSME vendors and the aging of payables/
receivables will be revisited and improved in FY 2025-26. Further, identification/Reconciliation/Adjustment of certain
differences between control and subsidiary balances is in progress.

Note :- 79 Ex-gratia/Performance related pay to the deputationists

The C&AG had commented that the payments of ex-gratia either in lieu of PRP or as pay parity to employees on deputation on
CDA scale was in violation of the DPE and DoPT instructions, and thus inadmissible. Further C&AG have recommended that the
payment of ex-gratia/PRP to the deputationists to be stopped and to ensure recovery of the inadmissible payments of J 230.13
Lakhs made to deputationists. Accordingly, no such provision has been made w.e.f. financial year 2022-23 and the provisions
outstanding (net of interim payments made) for financial year 2021-22 of J 30.65 lakhs was written back as on March 31,2023.
However, the Company had represented Railway Board that the performance award paid to the deputationists is not in violation of
the DPE and DoPT instructions. The amount of performance award paid to deputationists is a form of incentive to boost the morale
of the employees and to retain them with the company. As on date no further communication has been received from Ministry of
Railways by the Company. Appropriate decision will be taken on this matter as and when response is received from Ministry of
Railways which is still awaited.

Note 80 Disclosures required under Ind-AS and Schedule III of Companies Act,2013 (as amended)

The Company has made the disclosures at appropriate place regarding the relevant items or transactions of balance sheet and
statement of profit and loss. Any non-disclosure is due to non occurrence of related transaction.

Note :- 81 Borrowings

The company has not taken any borrowings from banks and financial institutions during the year.

Note :- 82 Other Regulatory Information

(i) The Company do not have any Benami property. Accordingly, no proceedings have been initiated or pending against the
Company for holding any Benami property under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules
made thereunder. Accordingly, no disclosure is required to be given.

(ii) The Company do not have any transaction with companies struck off under section 248 of the Companies Act, 2013 or section
560 of Companies Act, 1956 as per the following details for the year ended 31^st March, 2025:-

(iii) The Company do not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.

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

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(vii) The Company has no 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 Tax Act, 1961 (such as, search or survey or any other
relevant provisions of the Income Tax Act, 1961.

(viii) The company is not declared as wilful defaulter by any bank or financial Institution or other lender.

(ix) The company has one subsidiary incorporated on 10^th February, 2024 and the subsidiary has not acquired any other
Company. Accordingly, provisions of clause (87) of section 2 of the Act read with the Companies (Restriction on number of
Layers) Rules, 2017, are complied with.

(x) The Company has not revalued any of its Properties, Plant & Equipment (Including right of use assets) and intangible assets
during the Financial Year 2024-25.

(xi) The Company has not granted any loans or advances in the nature of loans to promotors, Directors, KMPs and the related
parties during the Financial Year 2024-25.

Note 83 Re-grouping, reclassification, prior period items for previous years

The figures for the previous year have been regrouped/reclassified/restated to confirm and make them comparable with those of

current year. The details are as follows:-

Note 84 Approval of Standalone Financial Statements

The Standalone financial statements were approved for issue by the Board of Directors on 28^th May, 2025.

As per our Report of even date attached For and on behalf of :-

For N.K. Bhargava & Co. Indian Railway Catering & Tourism Corporation Limited

Chartered Accountants
Firm Reg. No. : 000429N

CA N.K. Bhargava Sanjay Kumar Jain Rabindra Nath Mishra

Partner Chairman & Managing Director Director (Finance)

M.NO:-080624 DIN:- 09629741 DIN:- 09050821

Sudhir Kumar Suman Kalra

Place : New Delhi GGM (Finance) & CFO Company Secretary

Date : 28^th May, 2025 M.No.FCS9199