1.13. PROVISION FOR WARRANTY FOR SALE AND
SERVICES RENDERED
Provision for warranties is recognized when products are sold
and services are rendered with warranty as per the contract.
These provisions are estimated by using historical information
on the nature, frequency and average cost of warranty
claims and management estimates regarding possible future
incidence based on corrective actions on product failures.
The timing of outflows will vary as and when warranty claim
will arise or incurred. The initial estimate of warranty-related
costs is revised annually.
As per the terms of the contracts, the Company provides post¬
contract services /warranty support to some of its customers.
The Company accounts for the post-contract support /
provision for warranty on the basis of the information available
with the Management duly taking into account the current
and past estimates.
1.14. LEASES:-COMPANY AS A LESSEE
The Company’s leased asset primarily consists of leases for
land and buildings.
At the date of commencement of the lease, the Company
recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short-term and low
value leases, the Company recognizes the lease payments as
an operating expense on a straight-line basis over lease term.
The right-of-use assets are initially recognized at cost. The
right-of-use assets is subsequently measured at cost less any
accumulated depreciation, accumulated impairment losses, if
any and adjusted for any remeasurement of the lease liability.
The right-of-use assets are depreciated using the straight-line
method from the commencement date over the shorter of
lease term or useful life of right-of-use asset. The estimated
useful lives of right-of- use assets are determined on the same
basis as those of property, plant and equipment.
The lease liability is initially measured at amortized cost at the
present value of the future lease payments. Lease liability and
ROU asset have been separately presented in the Balance
Sheet and lease payments have been classified as financing
cash flows.
1.15. LEASES:-COMPANY AS A LESSOR
Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease. All
other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight
line basis/systematic basis over the lease term. However,
reimbursable under the contract are accounted for on accrual
basis. Initial direct cost are added to the carrying amount of the
leased assets and recognized as an expense over the lease term.
1.16. FINANCIAL INSTRUMENTS
1.16.1 Initial Recognition
Company recognizes financial assets and financial liabilities
when it becomes a party to the contractual provisions of
the instrument. All financial assets and financial liabilities are
recognized at fair value on initial recognition except for trade
receivables/ trade payables which are initially measured at
transaction price. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial
liabilities that are not at fair value through profit and loss are
added or deducted to/from the fair value on initial recognition.
1.16.2 Subsequent Measurement
(a) Financial assets are subsequently measured at amortised
cost if these are held within a business model whose
objective is to hold the assets in order to collect
contractual cash flows and the contractual terms of the
financial assets give rise on specific dates to cash flows
that are solely payments of principal and interest on the
principal amount outstanding using the Effective Interest
Rate (EIR) method. The EIR amortisation is included in
finance income in the Statement of Profit and Loss. The
losses arising from impairment are recognised in the
Statement of Profit and Loss.
(b) Financial assets at fair value through profit or loss.
The financial assets are measured at fair value through
profit or loss unless it is classified at amortised cost.
(c) Financial liabilities
Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss.
All other financial liabilities are subsequently measured
at amortised cost using EIR method. Gains and losses
are recognised in Statement of Profit and Loss when the
liabilities are de-recognised as well as through the EIR
amortisation process.
1.16.3 De-recognition of Financial Instruments
A financial asset is de-recognised when:
• The rights to receive cash flows from the asset have
expired, or
• the Company has transferred substantially all the risks
and rewards of the asset, or the Company has neither
transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of
the asset.
A financial liability or a part of financial liability is de-recognised
from the Balance Sheet when the obligation specified in the
contract is discharged, cancelled or expired. 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 the de-recognition of the original
liability and the recognition of a new liability. The difference
in the respective carrying amounts is recognised in the
statement of profit or loss.
1.17. GOVERNMENT GRANT
The Company is getting Government Grant as export incentive
under Foreign Trade Policy (FTP) of the Government of India.
The same is recognized/presented following Income Approach
as other operating income when there is a reasonable
assurance that the incentive will be received, and all the
attached conditions have been complied with and the same
will be received.
20.7 FULLY PAID-UP AGGREGATE NUMBER OF EQUITY SHARES ALLOTTED BY WAY OF BONUS SHARES DURING THE YEAR OF FIVE
YEARS IMMEDIATELY PRECEEDING BALANCE SHEET DATE
Company issued 5 crore bonus shares of ' 10 each during 2019-20 amounting to ' 50 crore and 24.03 crore bonus shares of
'10 each during 2024-25 amounting to ' 240.30 crore
20.8 FULLY PAID-UP AGGREGATE NUMBER OF EQUITY SHARES BUY-BACK DURING THE YEAR OF FIVE YEARS IMMEDIATELY
PRECEEDING BALANCE SHEET DATE
The company has bought back 96,98,113 fully paid-up equity shares of ' 10 each from the shareholders on 18th November,
2020, on proportionate basis by way of tender offer at a price of ' 265 per equity share for an aggregate amount of ' 257
crore. Consequent to the said buy-back, the equity share capital of the company has been reduced by ' 9.70 crore and capital
redemption reserve of an equivalent amount has therefore been created as per the extant provision of the companies act, 2013.
VII) The significant actuarial assumptions for the determination of the defined obligations are discount rate and
expected salary increase. The sensitivity for actuarial assumptions has been computed by varying respective
actuarial assumption used for valuation of the defined benefit obligation by 1%, while holding all other
assumptions constant.
If the discount rate increases/decreases by 1%, the defined obligations would decrease by H10.29 crore / increase
by H 11.09 crore as on 31st March, 2025 and if the expected salary growth increases /decreases by 1%, the
defined benefit obligations would increase by H 3.92 crore/ decrease by H 4.14 crore as on 31st March, 2025.
However, the actual change in assumptions would not necessarily behave in isolation to each other. The defined
benefit obligations would change accordingly.
The company is expected to contribute H6.26 crore to defined benefit plan obligations towards Gratuity during
the year 2025-26.
Remeasurement (gain)/loss of defined employee benefit plans in Other Comprehensive Income (OCI) for the
year ended 31.03.2025 and 31.03.2024 are H (2.72) crore and H (9.00) crore respectively.
VII) The significant actuarial assumptions for the determination of the defined obligations are discount rate and
expected salary increase. The sensitivity for actuarial assumptions has been computed by varying respective
actuarial assumption used for valuation of the defined benefit obligation by 1%, while holding all other
assumptions constant.
If the discount rate increases /decreases by 1%, the defined obligations would decrease by H 0.83 crore /increase
by H 0.91 crore as on 31st March, 2025 and if the expected salary growth increases /decreases by 1%, the defined
benefit obligations would increase by H 0.93 crore/ decrease by H 0.85 crore as on 31st March, 2025.
iii) Provident Fund (Funded)
The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests
the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members
as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest
earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented.
Further, contribution to employees pension scheme is paid to the appropriate authorities.
As per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Company has
no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the
net surplus of H1.03 crore (previous year H 1.67 crore) determined through actuarial valuation. Accordingly, Company
has not recognized the surplus as assets as it pertains to the provident fund trust and not to the Company.
b) Defined Contribution Plans
i) Post Retirement Benefits (Pension & Medical):
All eligible employees are entitled to benefit under defined contribution plans towards pension under EPFO scheme,
post retirement pension fund and medical schemes as defined contribution plans. The Company has no obligations
other than the contribution payable to such funds/schemes. The Company recognizes such contributions as expenses
when an employee renders the related service.
During the year, Company contributed/ provided H 21.26 crore (previous year H 20.92 crore) towards post retirement
pension fund, H 2.31 crore (previous year H2.32 crore) towards pension under EPFO and H 9.42 crore (previous year
H 1.98 crore) towards medical schemes.
ii) Performance Related Pay:
Eligible employees are entitled to benefit of performance related pay. The provision for performance related pay is
of short-term nature and has been recognized as per the procedure laid by management based on the guidelines of
the Department of Public Enterprises.
c) Foreign Service Contribution
Foreign Service Contribution is recognized on accrual basis in the Statement of Profit and Loss Account as per the deputation
terms with parent organizations in respect of officers taken on deputation from other organizations.
| 41 | INDIAN ACCOUNTING STANDARD (IND AS-20), DISCLOSURES ON ACCOUNTING FOR
GOVERNMENT GRANTS AND DISCLOSURE OF GOVERNMENT ASSISTANCE ARE AS FOLLOWS:
The Company is receiving government grant in the form of export incentive on export of Rolling Stock and Spare parts. There are
two types of export incentive i.e duty drawback and RoDTEP (Remission of Duties &Taxes on Exported Products). The Company
has recognized/presented H 4.79 crore (previous year 7 1.69 crore) as export incentive. The export incentive receivable at the
end of the year is 7 0.31 crore (previous year 7 0.32 crore).
| 42 | INDIAN ACCOUNTING STANDARD (IND AS) 21, DISCLOSURES ON THE EFFECTS OF
CHANGES IN FOREIGN EXCHANGE RATES ARE AS FOLLOWS:
The amount of exchange differences (net) credited to the statement of profit and loss account during the Financial Year is
7 10.16 crore (Previous Year 7 8.86 crore)
| 46 | INDIAN ACCOUNTING STANDARD (IND AS) 36, DISCLOSURES ON IMPAIRMENT OF ASSETS
ARE AS FOLLOWS:
The Company has carried out the assessment on impairment of assets in terms of Indian Accounting standard (Ind AS) 36,
Impairment of Assets and management does not perceive any impairment in the value of the carrying amount of assets.
The company has already impaired the value of investment in M/s MMG - Metro Management Group Ltd (MMG) and entire
equity investment of H 0.60 crore has been provided for in books of Accounts.
As per the agreements with the customers, warranty years are varying from two to five years, i.e., extending beyond one
year, require discounting to work out net present value of such provisions made towards warranty.
Effect of change in the discount rates
3 years SBI MCLR rate as on 31.03.2025 i.e. 9.10% is used as discount rate during the reporting period. The effect of
change in discount rate i.e. 9.10% for FY 2024-25 vice 8.85% for FY- 2023-24, is H 0.01 crore.
For movement of provision for unspent amount of Corporate Social Responsibility-refer 57(c)(iii).
b) Contingent liabilities and Commitments to the extent not provided for include:
i) Contingent Liabilities
I) Claims (excluding interest) against the Company not acknowledged as debts are H 40.10 crore (previous year
H 27.15 crore).
II) In one of the Building Projects, which the company did as a Project Management Consultant (PMC), The building
is declared unsafe based on third-party evaluation and is required to reconstructed. Cost of Reconstruction is
estimated at H 99.23 Crore (including GST & Contingencies). The contractor, who constructed the said building,
has undergone Insolvency Proceedings under the Insolvency and Bankruptcy Code (IBC).
The likely availability of the amount from insurance claim, Bank Guarantee encashment proceeds, and other
amounts available under the contract is estimated to be H 60.12 crore. Since the project is handled by the company
as PMC, the company does not foresee any outflow from its account. However, as an abundant precaution,
H 39.11 crore (including GST & Contingencies) is being disclosed as contingent liabilities on this account.
III) The Company is subject to legal/arbitration proceeding and claims, which have arisen in the ordinary course of
business. Management does not reasonably expect that when these cases ultimately conclude and determined,
will have any material and adverse effect on the Company’s results of operations or financial conditions.
IV) Disputed taxes and duty:
A) Demand on account of income tax includes of H 6.96 crore (excluding interest) (previous year 96.66 crore)
which are being contested by the Company. This excludes 9 4.51 crore (previous Year 9 4.51 crore) relating
to cases where Company has already won at different appellate authorities during earlier years, against
which income tax department has gone for appeal at higher appellate authorities. In similar cases of past
years, the appeal of the income tax department has been dismissed.
B) Demand on account of Service Tax, VAT and GST etc. amounting to 9 44.20 crore (previous year
9 11.04 crore) is being contested by the Company at different forums.
V) The company has entered into a contract with the Ministry of Housing & Urban Affairs for purchase of commercial
built up in the complex at Nauroji Nagar New Delhi through NBCC. The company has paid GST under reverse
charge from third demand onward along with the GST on earlier demand excluding interest of 91.40 crore on
delay payment of GST under reverse charge prior to third demand. Company is of the view that liability to pay
GST is with NBCC under Sec 9(1) of CGST Act. AAR (Authority for Advance Ruling) under Sec 37 (1) and Delhi
Appellate Authority also held the same view. As such, the company does not foresee any liability of interest as
on 31.03.2025. However, as an abundant precaution, the same is being disclosed as Contingent Liability.
VI) A number of cases are lying for adjudication at various forums or under arbitration, which Company is contesting
on behalf of Clients. The Company is not subject to any liability that may result pursuant to adjudication /
arbitral award.
VII) The above contingent liabilities do not include contingent liabilities on account of pending cases in respect of
service matters & others where amount cannot be quantified.
ii) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for amounting to
9 24.28 crore (previous year 9 94.17 crore).
c) Contingent Assets
i) In a pre-closed contract in the year 2005-06, Company invokes arbitration for a claim of 9 233.93 crore (previous year
9 233.93 crore) against a client. Client also submits counter claims of 9 469.10 crore (previous year 9 469.10 crore)
before arbitrator. The sole arbitrator awarded 988.31 crore in favour of the Company against the claim of 9233.93
Crore, while rejecting the counter claims of the client. Since the awarded amount is less than the claimed amount,
Company appealed against the aforesaid award. Appellate authority awarded 9 231.68 crore with applicable interest
in favour of the Company. Client filed a petition in the Civil Court for setting aside the aforesaid award, which was
dismissed by the Court on 22.11.2017 and preliminary objections of Company are allowed. Thereafter the Company
filed writ petition before Hon’ble Jharkhand High Court on 05.07.2018 to issue the direction to client to pay the
awarded amount. The said petition was disposes on 16.02.2024 in favour of company by appointing sole arbitrator
ie Honb’le Justice (Retd.) from Supreme Court of India to adjudicate the dispute between the parties. Thereafter, the
client filed an appeal before Jharkhand High Court on 21.03.2024 to challenge the appointment of Sole Arbitrator,
the same is also dismissed on 07.05.2024. Client filed SLP (Civil) No. 15665 of 2024 before Supreme Court of India
on 19.07.2024 to challenge the appointment of Sole Arbitrator. The same was admitted on 26.07.2024. Next date of
hearing is fixed on 05.08.2025.
ii) In the above contract, executing agency also raised claims (excluding interest) of ?184.41crore (previous year
T 184.41 crore) against the Company before the arbitration tribunal. The Company also submitted a counter claim
of T 644.53 crore (previous year T 644.53 crore) against the executing agency. Both the parties had concluded their
arguments before the Tribunal and award was published on 18th October 2016 in favour of the Company. As per the
award, Company was to get T 63 crore from executing agency effective from the date of publication of award i.e.,
18th October 2016. The executing agency had filed two petitions i.e. arbitration appeal before hon’ble Jharkhand
High Court on 25.05.2017 and commercial revocation to set aside the award before the Commercial Court, Ranchi
on 06.01.2018. The arbitration appeal has already been dismissed by hon’ble Jharkhand High Court on 11.03.2019.
The commercial revocation has also been dismissed on 29.06.2019. Now RITES limited filed the commercial execution
case no. 03 of 2020 on 16.01.2020 before Commercial Court Ranchi to execute the award amount. Same is pending
and next date of hearing is fixed on 09.05.2025. In view of above, the Company has not recognized the award amount
in the books of account.
Methods & assumptions for valuation:
The Valuation Report is based upon the market price method in which the market value is determined by its location,
amenities availabilities in the area and with more of Middle class commercial cum office use area coupled with enquiries
from the local real estate agents and the neighbourhood. Accordingly, the valuer has collected information through their
technical team during their personal inspection of the plot, upon the prior receipt of detailed particulars of property,
related documents, date and reply of queries. Valuation is carried out by an independent agency on the basis of present
construction / replacement cost of similar structures/constituents without considering the value of furniture, fixtures &
fittings, office equipments etc.
b) Fair value hierarchy & valuation techniques
To provide an indication about the reliability of method used in determining fair value, the Company has classified its
financial instruments into three levels prescribed under the Indian Accounting Standard (Ind AS-113) on fair value measure.
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value of financial instruments that are not traded in an active market is determined using valuation techniques
and observable inputs 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 (observable inputs).
c) Financial Risk Management
The Company’s activities are exposed to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s
focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial
performance. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer
and the concentration of risk from few customers.
i) Market Risk
The Company operates internationally and a considerable portion of the business is transacted in several currencies
and consequently the Company is exposed to foreign exchange risk for its sales and services in the Middle East, Africa
and South Asian countries. The exchange rates between the rupee and foreign currencies have changed substantially
in recent years which may also fluctuate substantially in the future. However, Company has currency risk management
policy and exchange fluctuations are regularly monitored by the risk management committee to mitigate this risk. Policy
covers various aspects of currency risk management, benchmarking, hedging and risk appetite, permissible instruments,
hedging policy, structure of the risk management committee and treasury group, reporting procedures etc.
For the year ended 31st March, 2025 and 31st March, 2024, every percentage increase/decrease in the exchange rate
between the INR & US Dollar has affected the Company’s incremental margins by approximately 0.30 % (previous
year 0.74%) each. For the year ended 31st March, 2025 and 31st March, 2024, every percentage increase/decrease
in the exchange rate between the INR & MUR has an insignificant affect on the Company’s incremental margins.
Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion
into functional currency, due to exchange rate fluctuations between the previous reporting year and the current
reporting year.
The above foreign currency exposure is unhedged as these are covered through foreign currency risk management policy.
ii) Credit Risk
Credit Risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. Primarily
exposure to the credit risk is from trade receivables amounting to k 841.96 crore (previous year k 1007.12 crore) and
unbilled revenue amounting to k 276.55 crore (previous year k 141.36 crore) which are typically unsecured. Credit risk
is being managed by continuously monitoring the outstanding dues from the customers. Trade Receivables towards
export sales are generally managed by establishing Letter of Credit with the clients. Further, most of the clients of
No significant credit risk on cash and bank balances including clients’ funds amounting to 7 3335.69 crore (previous
year 7 3071.05 crore) is expected as Company parks surplus funds with Scheduled Banks having good capital adequacy
ratio and least NPA as determined by RBI and guidelines of the Company. Company has parked its owned funds in
fixed deposits of 7 826.33 crore (previous year 7 690.11 crore) with Scheduled banks with negligible credit risks.
Non-Strategic Investments primarily include investments in tax-free bonds of 7 20 crore (previous year 7 20 crore)
and liquid mutual fund units of 7 NIL (previous year 7 NIL) issued by Public Sector Undertaking where risk is minimal.
The Company has given House building, multi-purpose loans etc. to the employees which are insured and house
properties/ other assets are mortgaged / hypothecated against these loans in line with the policies of the Company.
The risk of default in respect of these loans is considered negligible.
iii) Liquidity Risk
Company’s principal sources of liquidity are “cash and bank balances” and the cash flow that is generated from
operations. The Company has no outstanding borrowings. The Company has a working capital of 7 1598.54 crore
(previous year 7 1672.05 crore) including cash and bank balance (owned funds) of 7 860.76 crore (previous year
7 698.49 crore) and current investment 7 20.00 crore (previous year 7 Nil). Company believes that the working capital
is sufficient to meet its requirements, accordingly no liquidity risk is perceived by the Company.
Maturities of financial liabilities
The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.
| 50 | INDIAN ACCOUNTING STANDARD (IND AS) 108, DISCLOSURES ON OPERATING SEGMENTS
ARE AS FOLLOWS:
Operating segments are defined as components of an enterprise for which discrete financial information is available which
is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and
assessing performance. The Company’s chief operating decision maker is the Chairman & Managing Director who is also
Chief Executive Officer.
a) Company has identified four operational reportable segments based on operations being carried out which
are as under:-
• Consultancy Services
• Leasing of railway rolling stock & equipments
• Export of rolling stock, equipments and spares
• Turnkey Construction Projects
b) Geographical wise revenue segment is disclosed as under:-
i) Revenue within India from consultancy includes quality assurance & project management services, turnkey construction
projects and domestic lease rental services to clients located inside India.
ii) Revenue from outside India includes services rendered and export sales of rolling stock & spare parts to the clients
located outside India.
c) The accounting principles used in the preparation of the financial statements are consistently applied to record revenue
& expenditure in individual segment, as set out in the note of material accounting policies.
d) Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which
are not directly identifiable to each reporting segment have been allocated on the basis of attributed direct cost. All other
expenses which are not attributable or allocable to the segments have been disclosed as un-allocable expenses.
e) Assets and liabilities used in the Company’s business are not identified to the reportable segments as these are used
interchangeably between segments. Depreciation, amortization & impairment on Property, Plant & Equipment and Intangible
Assets cannot be allocated to a specific segment. Company believes that it is currently not practicable to provide segmental
disclosure relating to total assets, total liabilities and depreciation, amortization & impairment since a meaningful segregation
of the available data could be onerous.
a) Significant management judgments on Revenue Recognition:
Recognised amounts of contract revenues and related receivables reflect management’s best estimate of each contract’s
outcome and stage of completion which is determined based on physical progress, efforts, cost incurred to date bear to the
total estimated cost of the transaction, time spent, service performed or any other method that management considered
appropriate. For more complex contracts in particular, costs to complete and contract profitability are subject to significant
estimation and uncertainty.
b) Company has contracts with customers for different services which are given below:-
• Consultancy Services
• Export of rolling stock, equipments and spares
• Turnkey Construction Projects
Beside above, Company has contracts with customers for wet leasing which are covered under Indian Accounting Standard
(Ind AS) 116, Leases.
c) Company has recognized revenue either on the basis of over time or point in time depending upon satisfaction of
performance obligation on transferring control of goods or services to customers. Revenue has been recognized by the
Company over time basis if any one of the following condition is met:
• Customer simultaneously receives and consumes the benefits
• Company’s performance creates or enhances an assets that the customer controls as the assets is created or enhanced
• Company’s performance does not create with alternative use and Company has enforceable right to payment for
performance completed to date.
In case, none of the above condition is met, revenue recognized by the Company on the basis of point in time.
d) Disaggregation Revenue information:
The below presents Disaggregated Revenues from contract with customer for the year ended 31st March 2025 from
various streams of revenue. The Company believe that this Disaggregation best depicts how the nature, amount, timing
and uncertainty of our revenues and cash flows are affected by industry, market and other economic factor.
e) Company is rendering many project management consultancy services for and on behalf of clients where fee is due to
Company for professional services.
f) In most of the cases, payments from customers are linked with performance obligations. Wherever on the reporting date
work has been performed and payment is not due as per the contract, in such cases contract assets have been created.
However, where payment has been received including advance but performance has not been completed, in such cases
contract liabilities have been created. Advances received by the Company for execution of work are in the nature of security
i.e. a source of protection and are not for financing the project.
g) Company provides warranty in the nature of assurance for which provisions are made as per the Indian Accounting Standard
(Ind AS) 37, Provisions, Contingent Liabilities and Contingent Assets.
h) During the year, impairment of amount receivable from client for services rendered/goods supplied charged to Statement
of Profit and Loss amounting to 7 5.67 crore (previous year 7 8.63 crore), which includes impairment for lease services
amounting to 7 0.04 crore (previous year 7 1.14 crore).
j) During the year ended March 31st 2025, 7 137.68 crore and March 31st 2024, 7 94.28 crore of unbilled revenue as of
April 1st 2024 and April 1st 2023 respectively has been reclassified to Trade receivables upon billing to customers on
completion of milestones.
k) During the year ended March 31st 2025 7 101.14 crore and March 31st 2024 7 12.45 crore of contract liabilities as of
April 1st 2024 and April 1st 2023 has been recognized as revenue after completion of milestones.
l) The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31st 2025 is
7 8577 crore which pertains to various segment of the Company. Company is likely to recognize this revenue over a period
ranging from one year to three years. The aggregate value of performance obligations that was completely or partially
unsatisfied as at March 31st 2024 was 75399 crore which pertains to various segment of the Company.
m) Company has not incurred any cost for obtaining contracts except administrative cost required for preparation of offers
and the same is charged to statement of Profit and Loss.
n) Company has recognized unamortized contract assets of 7 Nil (previous year 7 Nil) on account of costs incurred in fulfilling
the contract.
| 52 | INDIAN ACCOUNTING STANDARD (IND AS-116): DISCLOSURES ON LEASES ARE AS
FOLLOWS:
a) Company as Lessee:-
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the
lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the
initial measurement of the lease liability. The right-of-use assets are depreciated using the straight-line method from the
commencement date over the term of useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement
date of the lease. Company has no borrowing, as such 3 year SBI MCLR rate 8.85% and 8.70% has been considered as
weighted average incremental borrowing rate for calculation of present value of lease liability for the FY 2024-25 and
FY 2023-24 respectively.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have
a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated
with these leases are recognised as an expense on a straight-line basis over the lease term.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are
sufficient to meet the obligations related to lease liabilities as and when they fall due.
vi) During the year ended 31 March 2025, the Company incurred expenses amounting to T 15.02 crore (Previous year
T 13.57 crore) on account of short-term leases and leases of low-value assets. For the year ended 31 March 2025,
the total cash outflows for leases, including short-term leases and low-value assets amounted to T 18.01 crore
(Previous year T 15.70 crore).
vii) ROU Assets includes staff quarters at Liluah Howrah, Kolkata from Indian Railways, for which lease has been expired
in the month of March, 2009. The Company has requested to Indian Railways for surrender of these staff quarters.
viii) The Company does not have any lease restrictions and commitment towards variable lease rent as per the contract.
ix) The Company has no commitments towards Leases yet to be commenced as on 31.03.2025.
x) The Company has not sub-leased any of the assets taken on lease.
Deferred tax assets and liabilities have been offset wherever the Company has a legally enforceable right to set off current
tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority.
The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during
the periods in which the temporary differences become deductible. Management considers the scheduled reversals of
deferred income tax liabilities, projected future taxable income and tax planning strategies in making the assessment.
Based on the level of historical taxable income and projections for future taxable income over the periods in which the
deferred income tax assets are deductible, management believes that the group will realize the benefits of those deductible
differences. The amount of deferred income tax assets considered realizable could be reduced in the near term if estimates
of future taxable income during the carry forward period are reduced.
| 56 | CAPITAL MANAGEMENT:
The Company’s objective for capital management is to maximize shareholders value, safeguard business continuity and support
the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term
and other strategic investment plans. The funding requirements are primarily being met through operating cash flows generated.
| 57 | OTHER DISCLOSURES:
a) Ministry of Railway (MoR) vide letter dated 18.10.2021 has decided in principle for closure of Indian Railway Station
Development Corporation Limited (IRSDC), in which Company has an investment of 248 Crore. Pursuant to requisite
approval of the Board and Shareholders of IRSDC, the process of voluntary liquidation of IRSDC has been initiated. The
Board of M/s IRSDC has resolved to transfer the assets and liabilities to the M/s Rail Land Development Authority (RLDA)
/ MoR for consideration not less than the book value on slump sale basis. IRSDC entered into business transfer agreement
with RLDA on 09.04.2025 and consideration has been released by RLDA to IRSDC on 11.04.2025.
Financial Statement of IRSDC has been prepared on liquidation basis. As at 31.03.2025, IRSDC has reported a net worth
of 2237.52 Crore, out of which 24% share i.e. 257.00 crore belongs to RITES, therefore management does not perceive
any impairment in the value of investment in IRSDC.
* During the year there is no investment Liquid Fund.
# Decrease in Current Ratio is due to increase in current liabilities on account of increase in advance from client for export of rolling stock.
## The Company is Debt Free. Lease Liability recognized as per IND AS 116 has not been considered as debt.
### Decrease in inventory turnover ratio is due to increased inventory for future supply of rolling stock.
####Return on investment is not calculated on strategic investments in subsidiaries, joint ventures and other long term equity instruments.
i) Land for office building at Gomati Nagar Extension, Lucknow allotted by Lucknow Development Authority (LDA) having
a total cost of k 4.22 crore is yet to be registered in the name of the Company due to dispute of stamp duty. However,
physical possession of the land has been with the Company w.e.f. 27th June 2019.
j) The financial statements are presented in k crore. Those items which are required to be disclosed but can’t be presented
in the financial statement due to rounding off to the nearest k crore are given as follows: -
k) Balances shown under trade receivable, advances and trade payables including Indian Railway are subject to confirmation /
reconciliation/adjustment, if any. The Company has been sending letters for confirmation to parties. However, the Company
does not expect any material dispute w.r.t. the recoverability/payment of the same.
In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of
business, will not be less than the value at which these are stated in the balance sheet.
l) Information as regard to loans, investments made as required under section 186(4) of the Companies Act, 2013 have been
given vide note no. 7, 8 & 16.
m) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
n) No funds have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”),
with the understanding, whether recorded in writing or otherwise, that the company shall, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
o) The Code on Social Security, 2020 (“the Code”) relating to employee benefits during employment and post- employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However,
the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code
when it comes into effect and will record any related impact in the period the code becomes effective.
p) The Company has an investment of ^0.60 Crore in MMG- Metro Management Group Limited. Pursuant to requisite
approval of Board & Shareholders of MMG-Metro Management Group Limited, the process of voluntary dissolution has
been initiated. The company has already impaired the value of investment in MMG-Metro Management Group Limited.
q) Recent pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has notified
Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions
w.e.f. April 1, 2024. The Company has reviewed the new pronouncements and based on its evaluation has determined
that it does not have any significant impact in the financial statements.
For and on behalf of the Board of Directors
Rahul Mithal Krishna Gopal Agarwal Ashok Mishra
Chairman & Managing Director and Director Finance Company Secretary
Chief Executive Officer & Chief Financial Officer M. No. FCS 6411
DIN:07610499 DIN:10239667
As per our report of even date attached
For Pawan Puri & Associates
Chartered Accountants
Firm Registration No.005950N
Ashish Anand
Partner
Place : Gurugram Membership No.532897
Dated : 14.05.2025 UDIN: 25532897BMJFGH5408
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