A. Provisions: -

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

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

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

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

Discounting of Provisions

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

B. Contingent Liabilities

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

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

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

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

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

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

Contingent Assets

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

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

p) Revenue Recognition: -

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

a) Company Recognizes revenue from contracts

with customers based on a five-step as set out

in Ind AS-115:-

(i) Identify contracts with a customer: - A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

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

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

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

Company expects to be entitled in exchange for satisfying each performance obligation.

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

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

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

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

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

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

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

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

i. Sales: -

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

ii. Income from Internet Ticketing: -

(a) Income from Service charges: Income from Service Charges is recognized on the basis of value of the service charges earned on the tickets booked by Foreign customer through Company’s Web site(www.irctc.co.in ). Gross service charges earned on the sale of such tickets on accrual basis have been booked as income of the Company & Corresponding railway share is shown as expenses.

(b) Income from Convenience Fee:Income from Convenience Fee is recognized on the basis of value of the Convenience fee earned on the tickets booked by domestic customers through Company’s Web site(www.irctc.co.in).Convenience fees earned on the sale of such tickets on accrual basis have been booked as

income of the Company & no Railway share is payable on such income.

iii. Income from Catering Services: -

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

• Income from On-board Catering Services:

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

The Income under these heads have been

recognized / accounted as under: -

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

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

> License Fee: -

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

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

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

> Income Accrued on termination of Contracts: - Recognition of income from Catering contracts terminated on account of breach of terms and conditions is made as under:

I. Up to the date of termination, the income is recognized in respect of concession fee over the contract

period on pro-rata basis and in case of License fee over the period the train has been in operation on pro-rata basis.

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

iv. Income from Package Tours: -

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

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

The income is booked on accrual basis (prorata), based on date of journey.

v. Income from Train Operations

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

vi. Integration Charges

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

vii. Water vending Machines

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

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

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

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

Expenditure: -

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

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

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

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

(ii) Expenditure on Internet ticketing: -

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

(iii) Catering Charges Paid:

(a) Onboard Catering Charges:

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

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

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

• Concession Fee Paid: Concession Fee payable to Indian Railways in respect of on board catering contract is recognized

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

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

• License Fee Paid: -

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

percentage basis.

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

• Custody/Haulage Charges on Train

Operations:-

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

(b) Variable Haulage Charges:- Fee

payable to Zonal Railways is

accounted on accrual basis as a

fixed rate charged for per km and per day of train operation as per the understanding with the railways on the basis of operations of trains for the year.

• Tourism Expenses: -

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

r) Leases: -

Where the Company is the lessee:

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

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

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

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

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

(vi) Short term Lease and Leases of low value assets:-The Company has elected not to recognize right-of-use asset and lease liabilities for short term leases that have lease term of 12 months or less and leases

of low value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Where the Company is the lessor:

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

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

s) Impairment of Assets: -

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

t) Borrowing Cost: -

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of the cost of such assets till such time the assets are substantially ready for their intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowings costs are recognized in the statement of Profit and Loss in the period in which they are incurred.

u) Employee Benefits: -

(a) Short Term Employee Benefits

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

(b) Long Term Employee Benefits:

(i) The obligation for long-term employee benefits such as half pay leave and LTC

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

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

(ii) Leave Encashment

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

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

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

• Company recognizes changes in

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

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

(c) Post-Employment Benefits

(i) Defined contribution plans: The Company makes defined contribution to the Regional Provident Fund Commissioner in respect of provident fund scheme. The contribution paid/ payable under the schemes is recognized during the period in which the employee renders the related service.

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

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

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

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

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

w) Inventories:

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

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

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

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

x) Taxation: -

(a) Current Income Tax: -

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

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

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

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

(b) Deferred Tax

The Company has accounted for deferred taxation

in line with IndAS-12 “Income Taxes” issued by the

Ministry of Corporate Affairs.

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

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

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

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

y) Earning Per Share

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

z) Grants

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

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

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

aa) Cash & Cash Equivalents

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

bb) Stale Cheques

Cheques which have not been cleared within the validity period of 3 months are credited to the stale cheque account. Stale cheques related to Private parties which are more than 4 years old from the date of transfer to stale cheque and those related to Government Bodies which are more than 6 years old from the date of transfer to stale cheque and which could not be cleared in stale cheque account are credited to Miscellaneous income. For any claim arising in future, the same are debited to Miscellaneous Expenses”

cc) Financial Instruments: -

Initial recognition and measurement

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

Financial Asset at Amortized Cost

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

Following financial assets are measured at amortised cost: -

(i) Security deposit

(ii) Retention money

(iii) Cash and cash equivalent

(iv) Advances adjustable with other financial instrument

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

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

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned is recognised using the EIR method.

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

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

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

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

Financial liabilities at Amortised Cost

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

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

The company has not designated any financial liabilities at FVTPL.

De-recognition Financial Asset

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

Financial Liability

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

Impairment of Financial Assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing

component is measured at an amount equal to lifetime ECL. For all other financial assets, ECLs are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the Statement of Profit & Loss Account.

dd) Fair Value Measurement

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

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

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

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

Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows,

based on the lowest level input that is significant to the fair value measurement as a whole:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Note 38 Payment Gateways and Bank Reconciliations

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

Note 39: Balance Confirmations

Trade Receivables

a. Railways Balances

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

b. Third Party Balances.

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

Trade and Other Payables

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

Note :- 40 Capital Commitments

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

Note :- 41

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

Note :- 42 Employee Benefits

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

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

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

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

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

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

actuarial valuations, as at the balance sheet date.

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

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

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

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

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

Note 44.3 Transactions with the Government Related entities

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

Note 45 Financial Reporting of Interest in Joint Ventures

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

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

Note 46 Impairment of Assets

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

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

Note 48 Bank Balances other than Cash & Cash Equivalents

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

Note :- 49 Railway Share

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

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

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

In response to letter dated 20.07.2021, Company has represented on the same ground as done in past. However, the Railway Board has not accepted the contention of the Company and advised to share 15% of profit for Departmental plants and 40% revenue share in terms of Catering Policy 2017 for PPP plants being run by Developer Cum Operator (DCO) vide letter dt. 30.09.2021. However, the Company contended that PPP Plants are not run on licensee model as these plants are set up by IRCTC and sale of Rail Neer takes place on the invoices of IRCTC only.

The Company had agreed to share 15% profit for all the plants including PPP plants and informed Railway Board vide letter dated 24.02.2022 and paid dues amounting to H 2713.32 Lakhs which was accepted by Railway Board subject to reconciliation. The company has recognised Railway Share amounting to H 546.60 Lakhs.@ 15% of profit of Rail Neer Segment for the financial year 2022-23. No Railway Share was recognised for the financial year 2021-22 due to loss in Rail Neer Segment on account of Railway Share of H 2713.32 Lakhs for previous years up to financial year 2020-21 charged against the profits of Rail Neer Segment during the financial year 2021-22.

In a further development during Financial Year 2023-24, the Railway board clarified that for Rail Neer plants run departmentally by the Company, the profits between IR and Company shall be shared in the ratio of 15: 85 and for plants operated under PPP model/run by DCO, profits between IR and Company shall be shared in the ratio of 40: 60. Accordingly, the company has recognized profit Share amounting to H 320.33 Lakhs being 15% of profit of Departmentally run Railneer plants and H 452.25 Lakhs being 40% of the profits of plants run on PPP model during the year ended 31st March, 2024 after charging profit Share amounting H 1451.24 lakhs towards differential profit Share @25% on profits from PPP plants for previous years. Provision for the differential amount of profit sharing @25% (40%-15%) up to 31st March, 2023 amounting H 1451.24 Lakhs is shown as an exceptional item for the year ended 31st March, 2024, even though the Company has made representation to the Railway Board for sharing of profit at uniform ratio of 15:85 for all Railneer plants till FY 2022-23. Response from Railway Board is still awaited. These matters are subject to reconciliation with the Railways.

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.

- H 90.32 Lakhs for purchase of flats from AIR INDIA LTD in FY 2018-19.

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

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 31st 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 current financial year 2023-24 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 Rail Neer plants, the Developer cum Operator (DCOs) are to reimburse the taxes on sales at actuals. In the absence of information of ITC availed by DCOs, the ITC receivable amounting to H 364.83 lakhs has been accounted for during the year ended on 31st March, 2024 only for two plants and in the previous year 2022-23, the impact of H 442.46 Lakhs (Financial Year 2021-22 H 309.28 Lakhs) was accounted for the two plants only. 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 refundabe 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

• State Teertha

• 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 categorized as unallocated expenses. The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income of the Corporation. The overall percentage of such unallocable expenses to total revenue is not material.

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

The company objective to manage its capital in a manner to ensure and safeguard their ability to continue as a going concern so that company can continue to provide maximum returns to share holders and benefit to other stake holders. Company does not have any borrowings as at 31st March 2024.

Further, company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants. No changes were made in the objectives, policies or processes of managing capital during the year ended 31st March 2024.

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

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 form foreign currency transactions. Company does not hedge any foreign currency risk.

b) Credit risk

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

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 2(i). 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. 2 (i) (h) to estimate the future lease term.

Note :- 60Train 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 31st March 2024, number of cases pending were 77731 (previous year 59582) with value of H 949.60 lakhs (Previous year H 726.40 Lakhs).

Note :- 62 Railneer Plants on PPP Model

In addition to 4 nos. of company owned Rail Neer plants, 15 nos. of Rail Neer Plants are operational at various locations on PPP model. One more Rail Neer Plantat Vijayawada is under construction and commercial production at this Rail Neer plant is Likely to start in 2024-25.

Note :- 63 Capital Exepnditure

The company has incurred Total Capital Expenditure of H 23,960.35 lakhs including CWIP and Capital Advances but excluding ROU assets ( previous year H 23,863.60 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 31st March, 2024 amounting to H 2283.76 Lakhs (previous year H 921.13 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 be discounted and deemed as current in nature.

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

The Company has entered into in agreement with private parties “the operator” wherein operator is responsible for Set Up (Building & Plant Machinery), Operation and Maintenance of water treatment Plant on the land owned by 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.

Note 71 Tejas and Mahakal Express trains:

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

”In the financial year 2020-21, both Tejas trains have been run from the month of October, 2020 and stopped due to the COVID -19 pandemic and suspension of passenger's trains services. The representations have been made to Railway Board for waiver of fixed commitments against both Tejas and Kashi Mahakal trains for the non operational period during the financial year 202021 due to present pandemic. Railway Board vide letter no TC-II/2910/20/Trains dated 11.5.2021 has only agreed to waive off the component of '"'loss of paths to Good trains”” in calculation and charging of fixed cost for IRCTC passenger trains for non -operational period up to 31.12.2020 and has decided that other charges applicable will remain the same. IRCTC has again requested Railway Board to reconsider waiving off the fixed charges (fixed haulage and Custody charges) amounting to H 2793 Lakhs for non-operational period of the three trains considering it as a force majeure situation, as the lockdown and restriction imposed by Government of India due to COVID-19 pandemic was beyond control of IRCTC. However, IRCTC has made full provision for the fixed charges for both the Tejas trains and Kashi Mahakal express trains train in the Financial Year 2020-21. Further, during the financial year 2022-23, Railway Board vide letter no TC-II/2910/2019/Trains by IRCTC (E-3344610), New Delhi dated 06.01.2023 has further allowed waiver off amounting H 174.91 lakhs relating to Tejas trains on account of Custody and Fixed Haulage charges out of H 2793 Lakhs. The said amount is included in Excess Provision Written Back under Exceptional Items (refer note no.33.2) during that year. ”

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 H 8000 Lakhs, H 8800 Lakhs and H 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 H 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 H 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 H 1385 Lakhs, H 7058 Lakhs, H 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 licence for payable to Indian Railways as per Finance Act at the time of its receipt. The proportionate amount paid by Indian

Railways to IRCTC is towards the remaining part of the tender period which was awarded prior to the implementation of GST. The assigning of licence by Indian Railways to its subsidiary i.e. IRCTC does not change the nomenclature of the transaction as the licence has been awarded prior to the implementation of GST. The incidence of tax is the event when the service is provided/supplied to the service recipient. Thus, the Service being “grant of licence” was provided by Indian Railways at the time when the licence was awarded.

Note 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 18th November,2019 to 22nd March, 2020 (for post paid trains) and 27th November,2021 to 31st 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 27th 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 31st March, 2024 and for previous years up to 31st March, 2023.

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. However, following the conservative approach, the negative (refund) impact on License fees of H 94.54 Lakhs (Net of Railway share) was recognized in the books of account for the year 2022-23. Further, an amount of H 45.87 Lakhs have been reversed during current financial year out of H 94.54 Lakhs due to error in caclulation during the year 2022-23.

Note 76 Exceptional Items

For the current Financial Year 2023-24, net expense on account of Exceptional items amounting to H 5853.03 Lakhs includes: (i) H 5126.20 Lakhs being provision made towards revised fixed, variable and Custody charges for the two Tejas express trains w.e.f. 13th August, 2021 to 31st March, 2023 in line with the letter receeved 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 31st March, 2023 on profits of Railneer plants operated on PPP model and (iii) H 724.41 Lakhs being excess provisions written back for previous years relating to various expenses.

For the Financial Year 2022-23, net income on account of Exceptional items amounting to H 2720.00 Lakhs includes: (i) H 1198.59 Lakhs being excess provisions written back for previous years relating to Performance Related Pay (PRP), (ii) H 1085.74 lakhs being excess provisions written back for previous years relating to Maintenance & Development charges for Internet Ticketing and (iii) H 435.67 Lakhs being excess provisions written back for previous years relating to various other expenses.

Note :- 77

The Company got incorporated a new company as its wholly owned subsidiary company namely “IRCTC Payments Ltd." on 10th 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 will be from 10th February, 2024 to 31st March, 2025 as approved by the Board of Directors of IRCTC Payments Ltd. in their meeting held on 4th March, 2024. Accordingly, the Standalone Financial Statements of the subsidiary for the period 10th February, 2024 to 31st March, 2024 has been prapered only for the purpose of prepartion of consolidated financial statements of IRCTC Ltd.

Note 78 Legacy Transactions

(A) Identification/Reconciliation/Adjustment of legacy items representing old debit and credit balances and certain differences between control and subsidiary balances is in progress. Further, the system of classification/identification of liabilties as trade payables and the aging of payables/recievables including linking of payments made/received against invoices received/ raised will be revisited and improved in FY 2024-25.

(B) Identification and classification of MSME into Micro, Small and Medium is a continuous process and the same will be reviewed and improved during the financial year 2024-25.

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

Ministry of Railways vide letter number 2023-BC-PP-05/2021-22 dated 09.01.2023 has sent provisional Para no 05 issued by C&AG to the company on payments of ex-gratia/Performance related pay to the deputationists and requested to send comments on the provisional Para. this Para C&AG has 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 H 230.13 Lakhs made to deputationists. The Company has sent detailed reply to Ministry of Railways on dated 24.01.2023 in which company has requested 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. In the meantime , no such provision has been made for the financial year 2022-23 & 2023-24 and the provisions oustanding (net of interim payments made) for financial year 2021-22 of H 30.65 lakhs was written back as on March 31,2023. The response from Ministry of Railways 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 appropiates 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 have transactions 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 31st March, 2024:-

(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 10th 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 2023-24.

(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 2023-24.

Reason for Change : Term deposits have been reclassified as on 31st March 2023 in accordance with requirment of schedule III. Corresponding impact of same is in statement of cash flow.

Company has defined its policy for restatement of prior period items in Standalone financial statements in accordance with IndAS notified. The impact of the policy is not material on current year financial statements. Net increase in profit for the year is H 553.94 lakhs due to items of prior period nature recognised in current year statement of profit and loss.

Note :- 84 Approval of Standalone Financial Statements

The Standalone financial statements were approved for issue by the Board of Directors on 28th May, 2024.

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

Sd/- Sd/- Sd/-

CA N.K. Bhargava Sanjay Kumar Jain Ajit Kumar

Partner Chairman & Managing Director Director (Finance) & CFO

M.NO:-080624 DIN:- 09629741 DIN:- 07247362

Sd/-

Suman Kalra

Place : New Delhi Company Secretary

Date : 28th May, 2024 M.No.FCS9199