1.17. 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.
1.18. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT
ASSETS
(a) Provisions involving substantial degree of estimation in
measurement are recognized when there is a present legal
or constructive obligation as a result of past events and it is
probable that there will be an outflow of resources.
(b) Contingent Liabilities are not recognized but are disclosed
in the notes in any 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.
(c) Contingent Liability is net of estimated provisions
considering possible outflow on settlement.
(d) Contingent Assets are not recognized but are disclosed
where an inflow of economic benefits is probable.
(e) Contingent Assets, Contingent Liabilities and Provisions
needed against Contingent Liabilities are reviewed at
each balance sheet date.
1.19. 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.
1.20. 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.
1.21. FINANCIAL INSTRUMENTS
1.21.1 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.
1.21.2 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.
1.21.3 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.
1.22. 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.
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 0.50%, while
holding all other assumptions constant.
If the discount rate increases/ decreases by 0.50%, the defined
obligations would decrease by H 4.81 crore / increase by H 5.18
crore as on 31st March, 2026 and if the expected salary growth
increases /decreases by 0.50%, the defined benefit obligations
would increase by H 1.83 crore/ decrease by H 1.88 crore as on
31st March, 2026.
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 H Nil crore to
defined benefit plan obligations towards Gratuity during
the year 2026-27.
Remeasurement (gain)/loss of defined employee benefit plans
in Other Comprehensive Income (OCI) for the year ended
31.03.2026 and 31.03.2025 are H (10.47) crore and H (2.72)
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 0.50%, while holding all other assumptions constant.
If the discount rate increases /decreases by 0.50%, the defined obligations would decrease by H 0.27 crore /increase by H 0.29 crore as
on 31st March, 2026 and if the expected salary growth increases /decreases by 0.50%, the defined benefit obligations would increase by
H 0.29 crore/ decrease by H 0.28 crore as on 31st March, 2026.
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 H 1.16 crore to defined benefit plan obligations towards gratuity during the year 2026-27.
Remeasurement (gain)/loss of defined employee benefit plans in Other Comprehensive Income (OCI) for the year ended 31.03.2026 and
31.03.2025 are H 0.11 crore and H 0.23 crore respectively.
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. Based on the Actuarial
valuation, the present value of obligation exceeds the fair value
of plan assets by H 1.60 crore as at 31.03.2026 (previous year
H 1.03 crore). Accordingly, Company has not recognized the
surplus as assets as it pertains to the provident fund trust and
not to the Company.
The Company contributed H 28.98 crore and H 27.65 crore to
the provident fund during the year ended 31st March, 2026 and
31st March, 2025 respectively.
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 21.18 crore (previous year H 21.26 crore) towards post
retirement pension fund, H 2.39 crore (previous year H2.31
crore) towards pension under EPFO and H 7.53 crore
(previous year H 9.42 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 9.30 crore (previous year H 4.79 crore)
as export incentive. The export incentive receivable at the end of the
year is H 3.94 crore (previous year H 0.31 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 H 14.53 crore
(previous year H 10.16 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.
However, during the financial year, the company has impaired its equity investment in one of the associates namely M/s Elicius Energy Private
Limited by H0.00* crore and the same has been provided for in books of accounts.
*(refer Note 58 (j)(iv))
47. Indian Accounting Standard (Ind AS) 37, Disclosures on Provisions, Contingent Liabilities and Contingent
Assets are as follows:
a) Provisions include mainly towards warranty which has been made for fulfilment of warranty obligation after export sale of rolling stocks/
locomotives & spares. Estimation of such provision is based on past experience, nature of rolling stock exported to various clients and
period specified in the agreements with them. Actual expenditure may vary during the warranty period as per the requirements.
1. Contractual Obligation: Contractual obligations
represent provision for estimated liabilities on account
of expenses to be incurred in respect of consultancy and
engineering services.
2. Ground Rent: It relates to the estimated liabilities on
account of ground rent expense for staff quarters. The
estimated provision is for one year.
3. Outsourced Manpower Expenses: These mainly
includes welfare expenses such as Gratuity and impact
of New Labour Code on the Manpower Hired through
outsourced Agencies.
Estimation of such provision is based on experience, nature of
expense and period specified in the agreements with them. The
provision for expenses is for one year and actual expenditure
may vary as per the requirements.
For movement of provision for unspent amount of Corporate
Social Responsibility-refer 58(c)(iii).
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 38.98 crore (previous
year H 40.10 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 be reconstructed. A
contract for dismantling of the building has been
awarded. 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, H39.11 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 H6.96 crore) which are being contested
by the Company. This excludes H 4.51 crore
(previous Year H 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 H 69.58 crore (previous
year H 44.20 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 H1.40 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 31.03.2026. However, as
an abundant precaution, the same is being disclosed
as Contingent Liability.
VI) The Company has received property tax demands
of H 10.55 Crores based on rectification order from
NDMC in respect of its office premises at Nauroji
Nagar Delhi constructed by NBCC (India) Limited on
behalf of the Ministry of Housing and Urban Affairs.
NDMC has raised demands at higher ratable value,
which are under dispute. Based on legal opinion,
property tax of H8.08 crore has been recognised
and paid. Based on management's assessment
supported by legal opinion, no additional liability
is considered probable and hence no provision
has been recognized. The differential amount is
disclosed as a contingent liability of H 2.47 crore
(Previous year: H Nil crore), the outcome of which is
presently not ascertainable.
VII) 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.
VIII) 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 H
43.11 crore (previous year H 24.28 crore).
d) Contingent Assets
i) In a pre-closed contract in the year 2005-06, Company
invokes arbitration for a claim of H 233.93 crore (previous
year H 233.93 crore) against a client. Client also submitted
counter claims of H 469.10 crore (previous year H 469.10
crore) before arbitrator. The sole arbitrator awarded
H88.31 crore in favour of the Company against the claim
of H233.93 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 H 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 disposed on 16.02.2024 in favour of
company by appointing sole arbitrator i.e. 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.
Last hearing was held on 05.08.2025. On the date of
hearing, the case was not taken up, and no date was
fixed thereafter.
ii) In the above contract, executing agency also raised
claims (excluding interest) of H184.41 crore (previous year
H184.41 crore) against the Company before the arbitration
tribunal. The Company also submitted a counter claim of
H 644.53 crore (previous year H 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 H 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 the Company 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
as 09.06.2026. In view of above, the Company has not
recognized the award amount in the books of account.
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 neighborhood. 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, fixture & fitting, office equipments etc.
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, 2026 and 31st March, 2025, every percentage increase/decrease in the exchange rate between the INR
& US Dollar has affected the Company's incremental margins by approximately 0.35 % (previous year 0.30%) each. For the year ended
31st March, 2026 and 31st March, 2025, every percentage increase/decrease in the exchange rate between the INR & MUR and INR &
GYD 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 H1035.85 crore (previous year H 841.96 crore) and unbilled revenue amounting to
H 152.73 crore (previous year H 276.55 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 the Company are Government or Government Undertakings; hence credit risk
is bare minimum and Company also does not foresee any impact on credit risk of the Company. Company has impaired, as a prudent
measure, the trade receivables and unbilled revenue towards expected credit loss as per Company accounting policy to the extent
of H 113.12 crore (previous year H 112.44 crore). Keeping in view the nature of business expected credit loss is provided for on case-
to-case basis as per the policy on impairment of financial assets.
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 H 1679.77 crore (previous year
H 1598.54 crore) including cash and bank balance (owned funds) of H 805.61 crore (previous year H 860.76 crore) and current
investment H Nil Cr (previous year H 20 Cr). 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 analyze 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.
(H in crore)
51. 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 within 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.
52. Indian Accounting Standard (Ind AS) 115, Disclosures on Revenue from Contracts with Customers are as
follows:
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 2026 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 H 8.48 crore (previous year H 5.67 crore), which includes impairment for lease services amounting to H 0.19
crore (previous year H 0.04 crore).
j) During the year ended March 31st, 2026, H 244.50 crore
and March 31st,2025, H 137.68 crore of unbilled revenue as
of April 1st, 2025 and April 1st, 2024 respectively has been
reclassified to Trade receivables upon billing to customers
on completion of milestones.
k) During the year ended March 31st, 2026 H 60.18 crore and
March 31st, 2025 H 101.14 crore of contract liabilities as of
April 1st, 2025 and April 1st, 2024 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, 2026
is H 9,296 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, 2025 was H 8,577
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
H Nil (previous year H Nil) on account of costs incurred in
fulfilling the contract.
53. 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 9.10% and 8.85% has been considered as
weighted average incremental borrowing rate for calculation of
present value of lease liability for the FY 2025-26 and FY 2024¬
25 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.
i) The following is the summary of practical expedients
applied:
I) The Company has used a single discount rate to a
portfolio of leases with similar characteristics.
II) Applied the exemption not to recognize right-of-
use assets and liabilities for leases with less than 12
months of lease term on the date of initial application
III) Excluded the initial direct costs from the
measurement of the right-of-use asset at the date
of initial application.
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 2026, the Company incurred
expenses amounting to H 24.07 crore (Previous year H 15.02 crore)
on account of short-term leases and leases of low-value assets. For
the year ended 31 March 2026, the total cash outflows for leases,
including short-term leases and low-value assets amounted to
H 27.13 crore (Previous year H 18.01 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 had already requested to Indian Railways
for surrender of these staff quarters. ROU Assets also include office
building at Central Metro Railway Building 2nd and 3rd Floor Kolkata
for which the company has requested the Indian Railways to take
over the possession.
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 31.03.2026.
x) The Company has not sub-leased any of the assets taken on lease.
b) Company as a Lessor:-
(i) Operating Lease: As Lessor
The Company has leasing arrangement of locomotives in domestic
market mainly on cancelable basis which includes providing services
of its experts for maintenance of these locomotives for which lease
rent is received from the clients as per terms of the contracts. [New &
In-Service Locomotives (refer note no.2)]
c) The Company does not envisage any contraction in demand
which could result in significant down-sizing of its business
operations.
54. Indian Accounting Standard (Ind AS) 12,
Disclosures on Income Taxes are as follows:
The Company opted to exercise the option permitted under section
115BAA of the Income Tax Act, 1961 as promulgated by the GOI vide
the Taxation Laws (Amendment) Ordinance, 2019 and accordingly
Corporate tax rate of 25.168% (Income Tax 22% Surcharge10%
Higher Education Cess 4%) has been considered for the purpose of
provision for taxes and measuring the deferred tax assets / liabilities
in the books of accounts.
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.
55. Indian Accounting Standard (Ind AS)1, Disclosures on Presentation of Financial Statements are as follows:
a) Subsequent Event - Dividend
Company has proposed a sum of H132.17 crore (H 2.75 per share to 48.06 crore equity shares) as final dividend for FY 2025-26 subject to
approval of shareholders in Annual General Meeting. If approved, the dividend would result in a cash outflow of H 132.17 crore.
b) Reclassification and Comparative figures
Certain reclassifications have been made to the comparative period's financial statements to enhance comparability with current year
financial statement. As a result, certain line items have been reclassified in the Balance sheet, Statement of profit & loss and Statement of
cash flow, the details of which are as under:
57. 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.
58. 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 H48 Crore. Pursuant to requisite approval of the Board and
Shareholders of IRSDC, the voluntary liquidation of IRSDC is under process. The Board of M/s IRSDC had 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. Consequent to the approval of its Board, Shareholders and Creditors, IRSDC has appointed the
liquidator. Hence the Voluntary Liquidation process of the Company commenced on 05.05.2026, the date of passing of resolution
in the Extra-Ordinary General Meeting.
Financial Statement of IRSDC has been prepared on liquidation basis. As at 31.03.2026, IRSDC has reported a net worth of H248.67
Crore, out of which 24% share i.e. H59.68 crore belongs to RITES, therefore management does not perceive any impairment in the value
of investment in IRSDC.
b) Assets and liabilities are classified between current and non-current considering 12 months period as operating cycle.
c) Information on CSR expenditure:
i) Gross amount required to be spent including advances given during the year 2025-26 H 11.80 crore (previous year 2024-25
H 13.30 crore).
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 Company has assessed the financial impact arising from the implementation of the New Labour Codes and related rules. The
financial impact, though not material, has been recognized in the financial results for the financial year ended 31 March 2026. The
Company continues to monitor further development/clarifications from the Government on other aspects of the Labour Code and
would provide appropriate accounting effect on the basis of such developments as needed.
p) The Company has an investment of H 0.60 Crore in MMG- Metro Management Group Ltd, incorporated in Israel, which was under
dissolution and the investment is fully provided for as of 31 March 2026. Subsequent to the reporting date, the said entity has
been struck off on 11 April 2026. This event does not have any financial impact on the financial statements for the year ended 31
March 2026.
q) In line with the Government of India's policy to facilitate timely payments to Micro, Small and Medium Enterprises (MSMEs),
the Company enables MSME vendors to avail invoice discounting through the Trade Receivables Discounting System (TReDS)
platforms. The facility is intended only to facilitate early payment to MSME vendors and does not provide additional financing to
the Company. Moreover, the amount involved in such arrangements are insignificant in relation to total trade payables.
r) Recent pronouncements
The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing Indian Accounting Standards (Ind AS) from
time to time under the Companies (Indian Accounting Standards) Rules.
1. In May 2025, MCA notified amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, effective April 1, 2025.
The Company has evaluated the amendment and does not expect any significant impact on its financial statements.
2. In August 2025, MCA notified amendments to the following standards, effective April 1, 2025:
(i) Ind AS 1 - Presentation of Financial Statements: The amendments relate to classification of liabilities as current or non¬
current, including those with covenants. The Company has assessed the impact and concluded that there is no change in its
classification of liabilities.
(ii) Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures: The amendments introduce disclosure
requirements for supplier finance arrangements. The Company has evaluated these amendments and does not expect any
significant impact on its financial statements.
(iii) Ind AS 12 - Income Taxes (International Tax Reform - Pillar Two Model Rules): The amendments provide a temporary mandatory
relief from deferred tax accounting for top-up tax, with related disclosure requirements. The Company has evaluated the
amendment and does not expect any impact in its financial statements.
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