Notes forming part of the Standalone Financial Statements as at 31st March, 2020
22.1
(a) The IDBI Trusteeship Services Limited has been appointed as Trustees to the Bond Holders for all
series of Bonds.
(b) All Bonds issued by the Corporation under various Series are secured by way of pari-passu charges /
mortgage created / to be created on movable / immovable assets of the Corporation.
(c) Corporation is authorised to reissue all bonds u/s 121 of the Companies Act, 1956 (Corresponding
section 73 notied under Companies Act, 2013) after complying all the formalities required for reissue
or fresh issue of bonds or both.
(d) These bonds carry a put and call option on 01/10/2024, giving a right, to redeem the bonds before
scheduled redemption date at par at the end of 5 years from the date of allotment .
(e) In terms of Section 71 of the Companies Act, 2013 the Corporation is required to create a Debenture
Redemption Reserve of an adequate amount in respect of bonds issued. However, due to accumulated
losses no Debenture Redemption Reserve has been created by the Corporation.
(f) Letter of Comfort has been given by the Ministry of Railways in respect of all the Bonds ( except 17-I
Series) issued for which No fees has been charged by MOR .
(g) KRCL has excercised call option in relation to 9.14%, 1200 taxable bonds of ` 10 lakh each 16-I series
and redeemed on 21.07.2019.
(h) The bond are listed on National Stock Exchange.
22.2
: 2019
: 110.29
342.57
:
239.36 78.79
TOTAL (B) 581.94 189.08
TOTAL A+B 2,331.94 1,939.08
(a) Konkan Railway Corporation Limited (KRCL) had entered into a Rupee Term Loan Agreement for `1200
crore for 20 years tenure on 9th April, 2017 with consortium of State Bank of India and Export-Import
Bank of India for its Route Electrication and Roha to Veer Doubling Project. The interest rate applicable
is one year MCLR of SBI with annual re-set clause.
(b) The facility is secured by way of a pari passu charge by way of hypothecation on all Fixed Assets
pertaining to the project, both present and future.
(c) The terms of loan is 20 years including moratorium period of 5 years from the rst drawdown date
inclusive of construction period. Interest during construction period is also nanced by bank. After
Construction period, interest will be paid as and when applied.
199
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
(d) Quarterly Repayment is scheduled after moratorium period as per below mentioned schedule:
(per Qtr) (per annum)
per annum %
23. Non-current Financial Liabilities: 3.56 2019
Others 3.56 -
-
Lease Liability (Refer Note 44)
2019
24.
(Refer Note 24.2) 173.55 156.33
(Refer Note 24.1) 227.22 83.43
17.32
(Refer Note 24.1) 36.90 2.00
4.03
259.08
441.69
24.1 Net of the amount of Investments held by KRCL Employees Super Annuation Trust and KRCL
Employee's Gratuity Trust.
200
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
24.2 Leave Encashment: It represents un-availed leave to the credit of the employee and carried forward in
accordance with leave rules of the Corporation. As per KRCL Circular no. CO-13011(11)/1/2019-PERS
dtd 29.06.2020, as an austerity measure due to COVID-19, leave balance of each employee as of 31st
March 2020 is reduced by 30 days except for the employees who are on deputation or who are having
KRCL service of 10 years or less or those who are having less than 60 days leave as on 31st March
2020. 30 days leave adjustment for employees having less than 60 days as on 31st March 2020 will be
adjusted during FY 2020-21.
25. Other non-current liabilities
Deferred government grant 28.07 2019
15.52
TOTAL 28.07 15.52
25.1 Government Grant includes grant received from Ministry of Tourism for Station development for
passanger amenities including interest earned on the same and Grant received from MP LAD Fund.
25.2 During the year, KRCL has received ` 17.64 Crore from Ministry of Railways under Nirbahaya Fund for
installing CCTV cameras at various stations in KR route out of which ` 6.49 Crore is appropriated during
the year. The remaining balance of ` 11.15 Crore is included above.
26.
As at As at
31st March 2020 31st March 2019
80.81 59.45
174.92 90.32
708.20 703.07
48.33
86.66
1,050.59 901.17
6
201
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
26.1 Purchase orders to MSME parties are seperately identied and processed for payment to avoid delay
in payment. There is no demand/complain from MSME parties for non receipt of payment or interest on
delayed payment.
26.2 There is no incidence of extended credit terms with reference to Trade Payables.
26.3 Trade payable includes ` 708.20 Crore in respect of amount due to railways, out of which Includes old
outstanding of ` 424.38 Crore which is payable for more than 1 year and Includes old outstanding of
` 278.59 Crore which is payable for more than 3 years.
27.
(Refer 27.1) As at As at
31st March 2020 31st March 2019
NPS Payable
For Capital Works 61.70 61.76
91.33 52.10
(Refer 27.2 and 27.3) 58.49 57.67
Lease Liability (Refer Note 44) 2.21 1.65
36.68 35.40
1.89 5.07
292.14 225.62
4.13 7.98
2.92 -
551.50 447.25
202
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
27.1 JDRL is a JV company in which KRCL and Maharashtra Maritime Board ( MMB) holds 26% and 11 %
equity respectively and balance held by JSWJPL .JDRL was formed for construction, operation and
maintenance of a Railway system for providing port connectivity. JDRL has entered into the requisite
Concession agreement with KRCL on behalf of Ministry of Railways, Government of India . Despite
requisite nancial tie up of the project, due to internal constraint imposed by RBI the bankers could not
lend the funds. Thereafter due to unavoidable change in basic assumptions of the project, the lenders
have asked to submit the revised project report and market study based on revised assumptions. For
the same the associate company has decided to review market study of the project through
independent consultant based on the revised assumption and till then project was kept on hold for
further development, taking all the safeguards for the project site and constructions already done.In the
meantime KRCL on behalf of Ministry of Railways, Government of India, has en-cashed the Bank
Guarantee of `23.26 Crore and kept it as liability, on the failure of JDRL to achieve the milestone of
Financial closure. However, the management of the associate company is optimistic about the
resumption of the work and based on that associate company have prepared nancial statement on the
going concern basis although there is a temporary suspension of the project.The Management of
Corporation too are optimistic of revival and completion of the project, due to which provision for
impairment of investment in associate company has not been considered.
27.2 Deposits from contractors & others for Project includes an amont of ` 25 Crore received from RDSO for
research and development of SKY Bus Technology which is refundable as per the letter received from
Railway Board vide no 2K/Proj/SBM/1/1Pt. dated 26/10/2015.
27.3 Deposits from contractors & others for Project includes an amont of ` 21.47 Crore forfeited from the
parties related to USBRL project. The same needs to be refunded to Northern Railway once the
arbitration proceddings related to this are completed in all respects.
28.
(Refer note 28.1) As at As at
31st March 2020 31st March 2019
0.86 0.98
478.97
448.68
31.88 13.60
0.46 1.28
Deferred government grant 7.37 4.43
2.11 1.10
2.19
-
523.83 470.07
28.1 Pending verication of the impact of GST in respect of contract awarded for USBRL Project in the pre
GST regime involving excise and Service Tax, certain percentage of deductions from the bill of sub
contractors are kept in Advance related to Projects to the tune of ` 57.74 Crore.
203
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
29. Current liabilities : Provisions
As at As at
31st March 2020 31st March 2019
Provision for employee benets 42.69 29.40
Employee Pension Scheme* 13.53 11.73
Gratuity*
Compensated Leave Absences 5.82 4.84
Post Retirement Medical Benets 0.02 0.02
62.06 45.99
*Net of the amount of Investments held by KRCL Employees Super Annuation Trust and KRCL
Employee's Gratuity Trust.
Leave Encashment: It represents un-availed leave to the credit of the employee and carried forward in
accordance with leave rules of the Corporation. As per KRCL Circular no. CO-13011(11)/1/2019-PERS
dtd 29.06.2020, as an austerity measure due to COVID-19, leave balance of each employee as of 31st
March 2020 is reduced by 30 days except for the employees who are on deputation or who are having
KRCL service of 10 years or less or those who are having less than 60 days leave as on 31st March 2020.
30 days leave adjustment for employees having less than 60 days as on 31st March 2020 will be
adjusted during FY 2020-21.
30.
Revenue 2019-20 2018-19
Revenue 670.77 677.02
10.01 9.86
438.07 560.96
7.87 8.23
1,126.72 1,256.07
204
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
31.
2019-20 2018-19
1,280.51 1,163.38
11.71 17.12
114.95 342.85
94.39 37.49
1,501.56 1,560.83
31.1
(a) The Contract agreement between the Corporation and Northern Railway for the execution of USBRL
Project was initially upto 15.08.2007 and validity of the contract has been extended upto 31.03.2021.
(b) In terms of the contract between the Corporation and Northern Railway for execution of USBRL Project,
monthly account statements are being submitted by the Corporation in the mutually agreed proforma
incorporating all the expenses and 10% prot. So far there is no disallowances of any item of
expenditure. Disallowance if any will be incorporated in the accounts on its occurance.
NTPC Kudgi Project and NTPC Gadarwara Project was awarded to KRCL on bidding basis. KRCL is
eligible for management fees of certain percentage of the estimated cost of the works and the expenses
other than project related, like Salary, Administrative expenses are to be born by the corporation.
32.
2019-20 2018-19
7.28 5.53
7.08 1.85
14.36 7.38
205
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
33.
2019-20 2018-19
(Refer Note 33.2) 68.73 64.52
Other income 1.42 1.43
Prot on Sale of Asset
6.54 0.06
4.33 1.41
0.00 1.14
11.10 6.13
TOTAL 92.12 74.69
* Interest is calculated using the effective interest method for nancial assets which are measured at amortized cost.
33.1 The Other Income of currrent year on account of "excess provision of earlier years written back"
includes reversal on account of Indian Railway Financial Adjustment (IRFA) charges, due to full and
nal settlement of Account of respective years.
33.2 The Revenue from Government grant includes amount received from Nirbhaya Fund worth ` 6.49
Crore utilised for installation of CCTV Survillance System.
34. Cost of Operation: Train Operation Expenses
2019-20 2018-19
269.73 308.14
173.59 184.19
7.60 6.84
- 0.59
4.72
7.20
81.19 122.61 71.12 122.22
9.67 580.74 12.12 626.70
17.52
15.81
5.55 5.52
15.93
10.40
206
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
35.
2019-20 2018-19
Udhampur Srinagar Baramulla Rail Link Project 1112.30 1,012.73
Payment to contractors
Establishment charges 37.37 33.66
Other than Establishment charges
18.86 1,168.53 15.13 1,061.51
NTPC Kudgi
Payment to contractors 11.09 11.63 16.19 16.84
Establishment charges 0.35 0.43
Other than Establishment charges 0.19 0.22
NTPC Gadarwara 106.10 325.47 328.19
Payment to contractors 2.34 2.24
Establishment charges 0.20
Other than Establishment charges 108.64 0.47
Other Projects 121.79 125.53 32.20 37.89
Payment to contractors 2.65 1.56
Establishment charges 1.10 4.13
Other than Establishment charges
1,414.33 1,444.44
35a. Change in Inventory of Finished Goods
As at 31st As at 31st
March 2020 March 2019
Opening Inventory of Finished Goods - -
Less Closing Inventory of Finished Goods 42.25 -
(42.25) -
Total
The above inventory of Finished good is the DEMU rakes to be exported to Nepal. This has been valued
at FIFO Basis.
207
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
36. Employee benets expenses
2019-20 2018-19
Salaries and wages* 412.33 361.75 392.69
Salary and wages 20.84 433.17 30.94
Compensated Leave Absences
Contribution to Providend Fund and Other Fund 37.51 34.00
Employee Pension Scheme 13.24 11.41
Gratuity
Contribution to Provident Fund and NPS 14.80 9.92
(Refer Note No.36.6)
28.77 65.54 55.34
Staff Welfare Expenses 1.98 32.59
Staff Welfare Expenses 0.50 33.72 27.79
Post Retirement Medical Benets 1.49 1.99
Cash Awards 0.97 0.95
Training Expenses 0.79
Foreign Service Contribution 1.06
TOTAL 532.43 480.62
36.1 The High Court of Bombay in April 2008 exempted the Corporation from the purview of Employees
Provident Fund and Miscellaneous Provisions Act,1952 and permitted the Corporation to maintain its
own provident fund and pension scheme. Accordingly, Pension was restored as per Railway Service
(Pension) Rules, 1993 and it is managed by erstwhile ‘Konkan Railway Corporation Employees
Superannuation Trust” through Life Insurance Corporation of India.
However, the employees those who have joined on or after 1.1.2004 are continued to be governed by
the 'Contributory Pension Scheme' as announced by the Government of India.
36.2 An amount ` 1.19 crore (Previous year ` 1.13 crore) has been deducted from Salary,Wages and
Allowance etc. and charged to Capital/Deposit Work on account of Direction & General/Establishment
expenses.
36.3 Salary and wages includes arrears of Kilometer allowance ` 17.56 Crore For the period July 17 to
March 19. The approval of arrears was received after nalization of accounts for FY 2018-19.
36.4 Out of Actuarial Expenses charged, Pension Expense ` 0.86 Crore (` 0.69 Crore), Gratuity Expenses `
0.23 Crore (` 0.20 Crore), Compensated Leave Absences Expenses ` 0.67 Crore (` 0.55 Crore) and
PRMS expenses ` 0.03 Crore (` 0.03 Crore) have been charged to USBRL Project.
36.5 Disclosures for Employee benet expenses as per Ind-AS 19 are given below :
36.6 Employees Contribution for National Pension Scheme (NPS) is deducted at 10% Whereas as employer
contribution is made at the rate of 14%.
208
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
(A) Dened Contribution Plan :
(i) The employees joined on or after 1.1.2004 are governed by the Contributory Pension
Scheme introduced by Government of India.The Corporation is contributing an
amount equal to the contribution made by the employess to the fund and there is no
further liablility on this account.
(ii) expenses for the year is as under
2019-20 2018-19
0.08 0.09
14.29 9.04
(B) Dened Benet Plan :
(i) Gratuity: The employees’ gratuity fund scheme managed by a Trust, is a dened
benet plan. The present value of obligation is determined based on the actuarial
valuation using the Projected Unit Credit Method, which recognizes each period of
service as giving rise to additional unit of employee benet entitlement and measures
each unit separately to build up the nal obligation. Represents benets to employee
on the basis of number of years of service rendered. The employee is entitled to
receive the same on retirement or resignation. The Corporation has formed a trust for
gratuity, which is funded by the Corporation. However the funding to Gratuity fund as
required by actuary valuation is partly funded.
(ii) Leave Encashment: It represents un-availed leave to the credit of the employee and
carried forward in accordance with leave rules of the Corporation. As per KRCL
Circular no. CO-13011(11)/1/2019-PERS dtd 29.06.2020, as an austerity measure due
to COVID-19, leave balance of each employee as of 31st March 2020 is reduced by 30
days except for the employees who are on deputation or who are having KRCL service
of 10 years or less or those who are having less than 60 days leave as on 31st March
2020. 30 days leave adjustment for employees having less than 60 days as on 31st
March 2020 will be adjusted during FY 2020-21.
(iii)Pension : It represents benets to employees joined prior to 1.1.2004 on the basis of
rules framed in the Employees Pension Scheme Rules as under:
a Retirement pension on normal retirement at age of superannuation.
209
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
50% of the average emoulments received during the past 10 months or the pay last
drawn whichever is more benecial to the retiring employee subject to completion of
minimum pensionable service of 10 years.
b. No pension benets accrue on exits before Normal Retirement age (except in
case of approved Voluntary Retirement).
c. In-service death benet to spouse:
There is no qualifying period of minimum service prescribed – Family Pension (30% of
last drawn salary subject to Minimum of Monthly amount of ` 9,000/- and a maximum
of ` 1,25,000/- is payable to spouse. However for the rst 10 years from date of death,
Enhanced Family Pension (50% of last drawn salary, double the family Pension,
whichever is the lower will be payable).
d. Benet to Family on death of member while receiving pension:
Family pension as dened above shall be payable to the family. However until 7 years
from the date of retirement Enhanced Family Pension as dened above shall be
payable.
e. For all Pension payments DA is allowed for at an appropriate rate consistent with
the rates declared by the Corporation.
Voluntary Retirement Scheme:
The Corporation has implemented the Voluntary Retirement Scheme (VRS) as
applicable to Central Government employees and Railway employees
w.e.f.01.06.2016.
(iv)The Company has introduced in current year, Post Retirement Medical Benet Plan for
Employees including their spouse at superannuation with minimum 20 years of
service against one time contribution equivalant to the last month's basic pay at the
time of retirement.
210
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Reconcilation of opening and closing
balances of Dened Benet Obligation
Dened benet obligation at the
beginning of the year 648.60 511.41 203.23 174.05 2.03 - 161.17 134.49
Adj. to PVO at the beginning of the year - -- - - --
Current Service Cost 30.97 28.79 11.73 10.25 2.02 2.03 6.45 6.69
Interest Cost 48.82 38.61 15.09 12.96 - - 11.99 10.01
Components of acturial gain/losses on
obligations 6.51 - - 13.27 7.21
Due to change in nancial assumptions 107.40 48.92 15.72
Due to change in demographic
assumptions 1.18 - (0.88) - - - (0.13) -
Due to experience adjustments 60.34 34.49 3.84 2.14 - - (10.05) 7.58
Actuarial losses (gains) 168.91 83.41 18.68 8.65 - - 3.08 14.80
Past service cost -- - - - - - -
Benets paid (26.67) (13.62) (3.94) (2.67) - - (3.32) (4.82)
Dened benet obligation at the year end 870.63 648.60 244.78 203.23 4.04 2.03 179.36 161.17
Reconcilation of opening and closing 535.77 418.91 174.18 153.71 - - --
balances of Fair Value of Plan Assets 41.41 32.71 13.34 11.81 - - --
Fair value of plan assets at the beginning 52.18 93.50 12.00 12.00 - - --
of the year (3.94) (2.67) - - --
Interest Income (26.67) (13.62)
Contributions by employer (1.23) (0.65) - - --
Benet Paid (1.97) 4.26 194.35 174.18 - - --
Return on plan assets excluding 600.72 535.77 - - --
amounts included in interest income 12.11 11.15
Fair value of plan assets at the year end 39.44 36.98
The actual return on plan asset is Rs.
Reconciliation of present value of the
obligation and fair value of the plan
assets
Present Value of Funded obligation
at the year end 870.63 648.60 244.78 203.23 - - --
Present Value of Unfunded obligation - - - - 4.04 2.03 179.36 161.17
at the year end
Fair Value of Plan assets at the year end 600.72 535.77 194.35 174.18 - - - -
Amount Recognised in the Balance
Sheet 269.91 112.83 50.43 29.04 4.04 2.03 179.36 161.17
Composition of plan assets
211
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Policy of insurance 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
100.00% 100.00% 100.00%100.00%
Net Cost recognised in Statement of 30.97 28.79 11.73 10.25 2.02 2.03 6.45 6.69
Prot and Loss 48.82 38.61 15.09 12.96
(Under the head "Employee Benet - - 11.99 10.01
Expenses" - Refer note no.36) - - --
Current Service Cost (41.41) (32.71) (13.34) (11.81) -- - -
Interest Cost
Past service cost 38.38 34.69 13.48 11.40 -- - -
Interest Income
Total cost considered as Employee 2.02 2.03 18.43 16.70
Benet expenses
Other Comprehensive Income 145.55 66.41 33.01 23.71
Other Comprehensive Income at the
beginning of the year
Components of acturial gain/losses on 107.40 48.92 15.72 6.51
obligations
Due to change in nancial assumptions 1.18 - (0.88) -
Due to change in demographic 60.34 34.49 3.84 2.14
assumptions 168.91 83.41 8.65
Due to experience adjustments 18.68
Actuarial (Gains)/Losses on Obligation 1.97 (4.26) 0.65
Return on plan assets excluding amounts 1.23
included in interest income 316.44 145.55 33.01
Other Comprehensive Income at the end 52.92
of the year
Reconciliation of opening and closing
net liability recognized in Balance Sheet
Net Liability at the beginning of the year 112.83 92.50 29.04 20.34 2.03 - 161.17 134.49
34.69 13.48 11.40 2.02 2.03 21.52 31.50
Expenses as recognized in prot and 79.15 19.91
9.30
loss account 38.38 (93.50) (12.00)
112.83 50.43 (12.00)
Other Comprehensive Income for the 29.04
current period 170.88
Expenses deducted from the fund
Benets paid by the Company (3.32) (4.82)
Employers Contribution (52.18) -- - -
Net liability/(Asset) recognized in Balance
Sheet at the year end 269.91 4.04 2.03 179.36 161.17
Principal Actuarial Assumptions: - 6.80% 7.55% 6.80% 7.55% 6.80% 7.55% 6.80% 7.55%
Discount Rate
Salary Escalation
7.00% p.a 7.00% p.a 7.00% p.a 7.00% p.a 7.00% p.a 7.00% p.a 7.00% p.a 7.00% p.a
for rst 2 for rst 3 for next 2 for next 3 for next 2 for next 3 for rst 2 for next 3
years & years & years & years & years & years & years & years &
5.00% p.a 5.00% p.a 5.00% p.a 5.00% p.a 5.00% p.a 5.00% p.a 5.00% p.a 5.00% p.a
thereafter thereafter thereafter thereafter thereafter thereafter thereafter thereafter
212
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Pension growth rate 2.50% 2.50% NA NA NA NA NA NA
Withdrawl rates at all stages 0.80% 0.80% 0.80% 0.80% - - 0.80% 0.80%
Sensitivity to key assumptions
Discount rate + 0.5% 801.01 591.22 234.14 194.11 186.45 153.09
Discount rate - 0.5% 958.96 713.54 256.14 212.95 206.46 169.85
Salary growth rate + 0.5% - - - - - -
Salary growth rate - 0.5% 928.27 677.25 251.40 209.43 206.57 169.99
813.79 617.47 237.61 196.87 186.27 152.90
Expected Post employment term of the
obligation 24.87 23.90 10.18 10.69 16.61 16.73 - -
10.18 10.69
Expected future cashows from
the plan
We have not considered the future
accrual while computing the cashows.
1st Year 5.19 3.96 8.41 6.57 5.82 4.83
2nd Year 7.56 4.25 10.14 7.31 5.79 4.52
3rd Year 10.39 6.86 11.62 9.74 7.13 5.82
4th Year 12.21 7.05 15.44 11.14 9.92 7.17
5th Year 15.85 9.11 17.95 14.83 11.72 10.23
6th to 10th Year 147.11 86.67 160.43 133.47 108.73 94.84
37. Finance costs
Interest on Bonds (Refer note 37.1) 2019-20 2018-19
130.72 130.38
Management Fees on Bonds Issued including service 0.36 0.20
charges
Other Interest 0.18 4.00
Finance Charges on Lease Assets (Refer Note 37.3) 0.63 -
TOTAL 131.89 134.59
* Interest is calculated using the effective interest method for nancial assets which are measured at
amortized cost
213
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
37.1 8.50% 2500 taxable bonds of 17-I series amounting to `250 Crore have been issued
for capital projects which includes additional Stations and Looplines. Hence interest
amounting to `11.17 crore (interest payable `21.25 crore net-off interest earned `7.18
crore) on these bonds have been charged to Project of additional stations and
looplines in accordance with Ind AS 23 Borrowing Costs. Interest amounting to ` 2.9
Crore on these bonds charged to Prot and Loss.
37.2 Other Interest includes ` 0.065 Crore (` 3.80 Crore) on account of interest paid on
arbitration awards during the current nancial year.
37.3 Interest on Rupee Term Loan from State Bank of India and Export-Import Bank of India
for its Route Electrication and Roha to Veer Doubling Project. Interest amounting to
`24.79 Crore (` 1.60 Crore) have been charged to the project in accordance with Ind
AS 23 Borrowing Costs.
38. Others Expenses
Rent for Residential buildings 2019-20 2018-19
Rent for Ofce buildings
Telephone and Communications 0.42 0.25
Vehicle Expenses 0.93 0.94
Vehicle Hiring Expense 0.51 0.68
Corporate Social Responsibility Expenses 0.86 0.97
Legal Expenses 3.03 2.67
Advertisement & publicity 1.64 2.39
Payment to Auditors 0.40 0.72
Travelling expenses 1.32 0.68
Commission 0.16 0.14
Insurance 20.59 21.53
Indirect Tax 0.62 0.51
Repairs and Maintenance-Staff Qtrs,Ofce Building 0.28 0.20
Electricity and Water Charges. 0.46 2.92
Other Sundry Expenses 4.12 3.99
Doubtful Debts 2.17 1.88
Loss on Sale of Asset 12.04 15.53
0.17
TOTAL 0.01 -
49.73 -
# The detail of CSR expenses has been disclosed in Note No.52 55.99
214
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
39. Provision for Contingencies
i. As per the terms and conditions of project, the corporation is required to make good,
the defects in the project work undertaken for dened period of time depending on the
terms specied in the MOU/Agreement.
ii. However, the Corporation stipulates similar condition to the sub-contractor and
retains the Security Deposit/ obtains the nancial guarantees. As such, management
is of the view that there would not be any major nancial impact on Account of the
same and no provision is required to be made in accordance with IND-AS 37 on
“Provision, Contingent Liabilities and Contingent Assets.”
40. Contingent liabilities and Contingent Asset:
a. Claims/Disputed liabilities not acknowledged as debt:
i. Against the court cases/arbitration proceeding relating to USBRL project, if any
liability arises, then as per the MOU between Northern Railway (NR) and KRCL the
same will be absorbed by NR. In case of any dispute between KRCL & NR on said
claim, the same will be decided under Arbitration between NR & KRCL. Even if it is to
be shared by KRCL as per the outcome of Arbitration, the liability of KRCL should be
limited to 80% of the total prot of the project of that year.
ii. As such no contingent liability has been considered against the Arbitration claims
settled by KRCL up to 31st March 2020 amounting to ` 30.12 Crore (` 10.08 Crore)
charged to the project and accepted by Northern Railway. Similarly claims of ` 783.30
Crore. (` 1978.84 Crore) under Arbitration and Court case related to USBRL Project, in
case of an adverse outcome of cases, these claims also will be chargeable to the
project. No contingent liability arises until the claims settled by KRCL are disputed by
Northern Railway (NR).
iii. Out of the above ` 783.30 Crore one arbitration case with ILFS is settled in the month
of April 2020 and the award of ` 11.74 Crore. has been declared against the
corporation. However, the corporation has decided to contest the same as per the
legal advice. Accordingly, no liability is provided as on 31.03.2020.
iv. Apart from the above the Claims by contractors against the Corporation pending
under Arbitration are ` 30.78 Crore (` 40.11 Crore). Besides this, against the
arbitration award to the tune of ` 11.40 Crores (` 12.07 Crore) the corporation has
preferred an appeal in the Court.
215
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
v. Assessment of Income Tax for the Financial Year 2007-08 to 2014-15 are pending at
various level of Appellate Authority. However, considering the past Assessment and
existing substantial carry forward un-absorbed Depreciation loss of ` 1146.63 crore (`
1372.65 Crore.), there will not be any impact on nancials of the company.
vi. Against the demand of the Service Tax Department of ` 704.40 Crore and applicable
interest thereon for the period from 2009-10 to 2013-14, the corporation has led a writ
petition with CESTAT, Mumbai on 28th August 2019 as per the directive of High Court,
Mumbai challenging the same as unconstitutional and against the service tax law
being double taxation on business transaction between KRCL and Indian Railways.
Against the same the Corporation has deposited ` 10 Crore with the court.
vii. The TRACES Portal of Income tax department shows demand of ` 0.60 Crore (` 1.12
Crore) including interest. The same is on account of mismatch in credit of TDS paid
due to certain punching error. The management afrms the rectication of above-
mentioned amount.
viii. There is demand of ` 19 crore (` 19 crore) towards Value Added tax by the department
of Commercial tax for work of Road Over Bridge (ROB) executed in Jharkhand state
which has been challenged by the Corporation.
ix. 103 (435) cases relating to land have been led by the landowners in several Courts
for revision of amount of the award passed by the concerned SLAOs of the respective
State Governments involving amount of ` 12.79 Crore (` 46.98 Crores) (approx.). The
Corporation has deposited ` 6.75 Crore (` 22.16 Crore) with the Court including
Interest.
x. 458 (400) cases has been led for enhance Land Compensation payable to claimants
under section 28A of Land Acquisition Act, 1894 having nancial implication of ` 86
Crore (` 51 Crore)
xi. Total 69(66) personal claims pertaining to railway accidents are pending with Tribunal
amounting to ` 5.52 Crore (` 5.28 Crore).
b. Contingent Asset: NIL
41. Capital and Revenue Commitments
Estimated amount of contracts remaining to be executed on account of capital not
provided for, are ` 618.27 Crore (` 832.06 Crore) .
216
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Revenue commitment
Estimated amount of contracts remaining to be executed on account of revenue not
provided for, are ` 3467.44 Crore (` 3258.13 Crore).
42. Operating Segment Reporting
i. As per Ind-AS 108 an operating segment is a component of an entity:
a) that engages in business activities from which it may earn revenues and incurred
expenses.
b) whose operating results are regularly reviewed by the Competent Authority to make
decisions about resources to be allocated to the segment and assess its
performance, and
c) For which discrete nancial information is available.
ii. Based on above, the Corporation has two operating segments, i.e. (i) Trafc & (ii)
Project; required disclosures are made for the same in the nancial statements.
iii. Segment revenue and expenses directly identiable / allocable to the segment are
classied accordingly. The expenses relating to the specic projects are chargeable
to the related project cost as per the terms of contract. Due to which the major portion
of the common expenses are considered as attributable to the Open line, and
allocated to Trafc Earnings. Segment assets and liabilities include those directly
identiable with the respective segments.
Information in accordance with Ind-AS 108 on Operating Segments for the Year ending 31.03.2020
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
1,139.78 1,263.45 1,502.86 1,560.83 2,642.64 2,824.28
1,139.78 - - - - -
1,263.45 1,502.86 1,560.83 2,642.64 2,824.28
(23.11) 100.14 88.54 116.39 65.42 216.53
- - - - - -
(23.11) 100.14 88.54 116.39 65.42 216.53
76.46 65.14 0.23 2.27 76.69 67.41
15.43 7.27 - - 15.43 7.27
217
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
131.89 - 131.89 134.59
134.59 -
Change in inventory of - - (42.25) - (42.25) -
Finished Goods 61.62 56.67 0.31 0.24 61.94 56.91
- -
Income - - - 5.96 -
(124.74) (18.70) 130.70 118.43 - 99.73
-
- - - 5.96 -
130.70
(124.74) (18.70) 118.43 99.73
4,890.72 4,858.37 2,013.83 1,285.19 6,904.56 6,143.55
- - -
- --
4,858.37 2,013.83 1,285.19
4,890.72 2,601.56 2,261.42 1,476.61 6,904.56 6,143.55
Segment Liabilities 2,731.82 - - - 4,993.24 4,078.17
2,601.56 2,261.42 1,476.61
Unallocated Corporate Liabilities - --
56.67 0.31 0.24
Total Liabilities 2,731.82 4,993.24 4,078.17
Depreciation and Amortisation 61.62 61.94 56.91
43. Related Party Disclosures: -
The Corporation being a Government related entity is exempt from the general
disclosure requirements in relation to related party transactions and outstanding
balances with the controlling Government and another entity under same
Government. The related disclosure in accordance with para 26 of IND AS 24 are
given hereunder.
43.1 Government of India (acting through Ministry of Railways -MOR) is holding 52.2% of
equity shares and State Govt. of Maharashtra, Goa, Karnataka and Kerala holding
22.5%, 6.1%, 13.1% and 6.1% respectively in the Corporation. Accordingly,
Corporation is controlled by the Government of India (Ministry of Railways). The
Corporation along with other Zonal Railways and entities like RDSO, CRIS, IRCTC,
NIC, ICF, Railtel are under the control of the Ministry of Railways.
218
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
A substantial portion of Trafc Earnings of the Corporation accrues from various Zonal
Railways. The corporation also makes payment of signicant amounts of Trafc
Earnings to said Zonal Railways as per the agreement with the Ministry of Railways.
Such “apportioned earnings” form a major part of trafc revenue of the Corporation.
The revenue expenditure incurred under the head 'Train Operations Expenses'
include large amount of expenditure towards Hire charges of Coaches, Locos and
Wagons and fuel charges from the various Zonal Railways.
A large portion of Project Revenue is contributed by the various Zonal Railways and
from other PSU companies owned by Central Government/state Governments.
The details of transactions along with name of the projects and such awarding entities
are mentioned below:
Related Party Name Nature of Transaction 2019-20 (` In Crore)
Zonal Railways 173.59 2018-19
Zonal Railways Hire Charges of Rolling Stock 269.73 184.19
Indian Oil Corporation Ltd. 280.56 308.14
Fuel Expenses 265.39
National Projects Construction Corporation Ltd.
Purchase of Diesel and Lubricant Oil 0.00 0.30
Certication Engineers International Ltd (CEIL) Construction of Rest House, duty
RITES Ltd. room and service blocs 3.66 4.55
RITES LTD Quality Assurance and Inspection 3.18 4.34
STEEL AUTHORITY OF INDIA Services 0.18 0.17
7.14 13.61
NICS Technical Consultancy
NICS 0.00 0.05
RAILTEL CORP OF INDIA Inspection Fees 0.08 0.01
RAILTEL CORP OF INDIA 0.05 0.05
RAILTEL CORP OF INDIA Purchase of Rails 0.96 0.79
CONSULTANCY OF ERP REVAMP 0.09 0.05
RAILTEL CORP OF INDIA PROJECT
CRIS 0.05 0.06
ADV PAYMENT 1.46 4.05
CRIS
INTERNET LEASE LINE SERVICES 0.07 0.00
CRIS
Northern Railway BANDWIDTH LEASE CHARGES 1.02 0.00
NTPC-Kudgi 1280.73 1163.64
NTPC-Gadarwara LEASING OF NGN CONNECTIVITY
LEASE CHARGES FOR VIDEO 11.71 17.12
CONFERENCE FACILITY 114.95 342.85
EXP.FOR UTS OVER KR
MAINTENANCE & AMC SUPPORT
FOR WEBSITE
RENEWAL OF POST
IMPLEMENTATION SUPPORT OF
COA APPLICATION
USBRL Project
Construction of Railway Siding
Construction of Railway Siding
219
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Central Railway Construction of Rolling Stock 53.23 6.25
Component Factory
East Central Railway Raxaul Kathmandu Railway Line 0.04 0.9
Vizhinjam International Seaport Limited Project 0.74 2.89
Kerala Rail Development Corporation Limited 1.30 1.57
RVNL Seaport Rail Connectivity 20.01 1.58
MSEZL 3.32 2.31
MRPL Mysore-Thalassery PET Survey 13.39 20.98
Madgaon-Majorda Doubling Work
Construction of Flyover and ROB
Construction of Railway Siding
KRCL has issued bonds for long term borrowings to the tune of ` 1500 Crore (` 1500
Crore) wherein letter of comfort has been issued by Ministry of Railways in favor of
lending agencies.
43.2 Investment in associate company Jaigarh Digni Rail Limited- 26% holding
Purchase of 2,60,00,000 (2,60,00,000 ) of Equity Shares at par value of ` 10/- each at
total cost of ` 26 Crore (` 26 Crore).
Note : Bank Guarantee for ` 23.26 Crore issued by JDRL for performance of
construction agreement was encashed during the year by KRCL as per direction of
Ministry of Railways and the amount is kept under current liability payable to Ministry
of Railways.
43.3 Loan to Konkan Railway Welfare Organization (KRWO)
Loan has been given to Konkan Railway Welfare Organization (KRWO) formed for the
welfare for the employees of Corporation. As on 31st March 2020, total amount
receivable from KRWO is ` 26.67 Crore (` 24.04 Crore) including interest amounting to
` 1.42 Crore for current year. The loan has been classied as unsecured pending
execution of mortgage deed in favour of the corporation. The KRWO has executed
simple mortgage instead of registered mortgage deed in favour of the Corporation as
per the terms and conditions of the sanction. The loan has been classied as
unsecured.
43.4 Ramakrishna Hegde Skill Development Centre (RHSDC)
RHSDC is a society registered under Karnataka Societies Registration Act 1969 at
Udupi , Karnataka with an object to setting up of training centre for imparting training in
Mechatronics to engineering students and industry professionals.
220
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Further Corporation had spent Rs. 38.38 Lakhs from CSR budget for the said society.
43.5 The Key Managerial Personnel of the Corporation and their remuneration (including
Superannuation benets) are as below:
a) Shri Sanjay Gupta, Chairman and Managing Director Salary & Allowances: ` 0.69
Crore ( ` 1.12 Crore) including Employer Contribution to PF: ` 0.09 Crore ( ` 0.24
Crore); Perks: Nil
b) Shri Amitabh Banerjee, Director (Finance) (Period 01/04/19 to 12/10/2019) Salary
& Allowances: ` 0.39 Crore (` 1.04 Crore) including Employer Contribution to PF:
` 0.04 Crores (` 0.24 Crore); Perks: Nil
c) Shri Hari Das Gujrati, Director (Operations & Commercial) Salary &
Allowances:`0.59 Crore (` 0.52 Crore) including Employer Contribution to PF: ` 0.08
Crore (` 0.08 Crore); Perks: Nil
d) Shri Subhas Chand Gupta, Director (Way & Works) (Salary & Allowances:` 0.48
Crore (` 0.12 Crore) including Employer Contribution to PF: ` 0.07 Crore (` 0.015
Crore); Perks: Nil
e) Shri Rajendra Parab, (Company Secretary) Salary & Allowances: ` 0.24 Crore (`
0.22 Crore) including Employer Contribution to PF: ` 0.012 Crore ( `0.012 Crore);
Perks: Nil
44. Lease payments:
With effect from 1st April, 2019, Ind AS 116 – “Leases” (Ind AS 116) supersedes Ind AS
17 – “Leases”. The Company has adopted Ind AS 116, retrospectively with the
cumulative effect of initially applying the standard, recognized on the date of initial
application (April 1, 2019). The application of Ind AS 116 has resulted into recognition
of 'Right-of-Use' asset with a corresponding Lease Liability in the Balance Sheet.
However the company has applied the option given in transitional provisions of the Ind
AS 116, and recognized the right-of-use asset at an amount equal to the lease liability
at the date of initial application, relating to those operating lease arrangement
recognized in the balance sheet immediately before the date of initial application. Due
to which there is no impact on the date of initial application i.e. 01/04/2019 on the
opening balance of retained earnings.
221
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
On transition, the adoption of the new standard resulted in recognition of 'Right of Use'
asset of ` 8.75 crore, and a lease liability of ` 8.75 crore. The following is the summary
of practical expedients elected on initial application:
i. Applied the exemption not to recognize ROU assets and liabilities for leases with less
than 12 months of lease term on the date of initial application and inclusion for
operating lease amount Excluded the initial direct costs from the measurement of the
ROU asset at the date of initial application.
ii. The weighted average incremental borrowing rate applied to lease liabilities as at April
1, 2019 is 8.64% on the basis of Bonds and Loans.
The changes in the carrying value of ROU assets for the year ended March 31, 2020
are as follows (` in crore)
Particulars Category of ROU Assets Total
-------
Balance as at S & T Equipment Vehicles
1st April 2019
----------- --------
Addition 8.67 0.07 8.74
----- ------ ------
Deletion 2.68 0.01 2.69
------ ------- -------
Depreciation 5.99 0.06 6.05
Impairment
Balance as on
31st March
2020.
The aggregate depreciation expense on ROU assets is included under depreciation
and amortization expense in the Statement of Prot and Loss. Methods For lease term
as no buy options.
The break-up of current and non-current lease liabilities as at March 31, 2020 is as
follows
Particulars Amount
Current lease liabilities 2.49
Non-Current Lease Liabilities 3.99
222
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
The details of the contractual maturities of lease liabilities as at March 31, 2020 on an
undiscounted basis are as follows:
Particulars As at 31st March 2020
Less than one year 2.92
One to ve years 4.45
More than ve years -------
7.37
Total
The Company does not face a signicant liquidity risk with regard to its lease liabilities as
the current assets are sufcient to meet the obligations related to lease liabilities as and
when they fall due.
Leases not yet commenced to which Company is committed relating to CCTV surveillance
system at 39 station and leasing of KR-Net amounting to ` 58.10 crore for a lease term for a
period of 5 years.
As Lessor
The corporation is engaged in leasing of Dark optic ber between Belapur and Loliem.
Further the corporation also collects way leave charges from various telecom companies
for installation of mobile towers on land pertaining to KRCL. Also the corporation collects
license fees from various vendors for stalls at various station on KR route.
Way leave Charges on assets given on lease to others was ` 1.61 crore for the year ended
March 31, 2020.
License Fees on assets given on lease to others was ` 6.36 Crore for the year ended March
31, 2020.
The details of the contractual maturities of lease payments to be received as at March 31,
2020 on an undiscounted basis are as follows:
Particulars As at 31st March 2020
Less than one year 1.27
One to ve years 2.41
More than ve years 0.10
3.78
Total
223
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
45. Earnings per Share (EPS) is calculated as under:
Particulars 2019-20 2018-19
Net Prot / (Loss) for the year (` in Crore) 5.96 99.73
Weighted average no. of Equity shares of
`1,000 each 1,27,77,177 1,12,24,252
Weighted average no. of Ordinary Shares
for Diluted EPS 5,35,72,277 5,20,19,352
Earnings Per Share (in `) 4.67 88.85
Earnings Per Share Diluted (in `) 1.11 19.17
46. Receivable and payable balances of Railways, Government Authorities, Suppliers,
Contractors, etc. are subject to conrmation / adjustment / reconciliation. The
Corporation is in the process of review of such balances for carrying out necessary
adjustments in the subsequent years.
47. Taxes on Income
I. KRCL has an unabsorbed depreciation of ` 1146.63 crore (` 1372.65 crore) as
computed under Income Tax Act 1961. In view of, no income tax provision is made
during the current year.
ii. Considering the past trend of income and payment towards servicing of interest,
management is of the view that the future taxable prot shall not be sufcient to
recoup/recover the deferred tax asset in near future. In view of this, as per Ind AS-12
deferred tax asset has not been created.
iii. The amount of ineligible Input Tax Credit due to mismatch of ITC claimed with Credit
reected in Form 2A of GST portal for the Financial Year 2018-19, has not been
nalized. Hence liability against such ineligible Input Tax Credit cannot be worked out.
The Company will nd out the ineligible Input Tax Credit if any before completion of
GST Audit for the Financial Year 2018-19 and will discharge the same as per the
provision of GST Act.
iv. An amount of mismatched ITC of ` 24,96,784/- has been paid in the course of GST
Audit apart from interest of ` 2,28,293/- thereon for the FY 2017-18.
v. The Refund of the Income tax of ` 34.73 crore is pending for various reasons such as
disputed demand raised against certain dis-allowances, pending completion of
Assessment of immediately preceding years, pending processing of refund order,
etc. The Management is pursuing the claim for recovery of the same and is of the
opinion that no provision is required for the same.
224
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
48. Capital Management
i. For the purpose of the company's capital management, capital includes issued equity
capital, attributable to the equity holders of the holding company. The primary
objective of the company capital management is to maximize the shareholder value.
ii. The company manages its capital structure and makes adjustments in light of
changes in economic conditions and the requirements of the nancial covenants.
iii. The Company monitors capital using a gearing ratio, which is net debt divided by total
capital plus net debt. The Company includes within net debt, Loan obligation, trade
and other payables and less cash and cash equivalents.
Particulars As at 31st March As at 31st March
Non-current Borrowings 2020 2019
Current Borrowing
Current Maturities of Non-current Borrowing 2331.94 1939.08
Total Debt
Less : Cash & Cash Equivalent 0.00 0.00
Net debt
0.00 0.00
(a) Equity Share capital
(b) Instruments entirely equity in nature 2331.94 1939.08
(c) Other Equity
Total capital 658.53 282.50
Capital and net debt 1673.41 1656.57
Gearing Ratio
1283.06 1259.54
4079.51 4079.51
(3451.25) (3273.66)
1911.32 2065.39
3584.73 3721.96
46.68% 44.51%
49. Financial Risk Management Objectives and Policies:
The Corporation's principal nancial liabilities, other than derivatives, comprise loans
and borrowings, trade and other payables, and nancial guarantee contracts. The
main purpose of these nancial liabilities is to nance the Corporation's operations
and to provide guarantees to support its operations. The Corporation's principal
nancial assets include loans, trade and other receivables, and cash and cash
equivalents that derive directly from its operations.
225
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Credit risk:
Credit risk is the risk that counterparty will not meet its obligations under a nancial
instrument or customer contract, leading to a nancial loss. The Corporation is exposed to
credit risk from its operating activities [primarily trade receivables] and from its nancing
activities, including deposits with banks and nancial institutions, foreign exchange
transactions and other nancial instruments. (` in crore)
Particulars As at 31st March 2020 As at 31st March 2019
Trade Receivables 138.03 242.26
Total 138.03 242.26
The Company evaluates the concentration of risk with respect to trade receivables as low
as they most of them are government entities.
Exposure to the Credit risk on the nancial guarantee:
I. Performance Guarantee is given to Gujarat Water Infrastructure Ltd. amounting to
` 0.10 Crore (` 0.10 Crore), NTPC Projects amounting to ` 0.26 Crores (` 2.25 Crores)
and NSCPCL Project amounting to ` 0.09 Crore (` 0.09 Crore) .Margin money has
been kept for these bank guarantees in the form of term deposits.
ii. Advance Bank Guarantee amounting to ` 10.49 Crore. towards advance received,
related to supply of 2 DEMU rakes to Nepal Government, has been issued by Nabil
Bank – Nepal on the basis of counter guarantee issued by the ICICI Bank Ltd during
the Financial year.
Financial instruments and cash deposits:
Credit risk from balances with banks and nancial institutions is managed by the
Corporation's Finance department in accordance with the Corporation's policy.
Investments of surplus funds are made only with approved counterparties and within credit
limits assigned to each counterparty. Counterparty credit limits are reviewed by the
Corporation's Board of Directors on an annual basis and may be updated throughout the
year subject to approval of the Corporation's Finance Committee. The limits are set to
minimize the concentration of risks and therefore mitigate nancial loss through
counterparty's potential failure to make payments.
The Corporation's maximum exposure to credit risk is 'Other deposits' illustrated in Note 14
of the balance sheet at March 31, 2020 and March 31, 2019.
226
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Liquidity risk:
The Corporation monitors its risk of a shortage of funds using a liquidity planning tool. The
Corporation's objective is to maintain a balance between continuity of funding and
exibility through the use of bonds. The Corporation assessed the concentration of risk
with respect to renancing its debt and concluded it to be low. The Corporation has access
to a enough variety of sources of funding and debt maturing within 12 months can be rolled
over with existing lenders.
2020 188.71 366.35 780 970 1750.00
2019 1050.59 366.35 90 491.94
581.94
1,239.30 870 1,461.94 555.06
1050.59
3937.59
146.83 120.00 1630.00 1750.00
901.17 300.43 30.00 159.08 189.08
1047.99 420.43 447.26
30.00 1789.08
901.17
3287.50
30.00 813.00 26.00 869.00
658.54 120.32 138.03
17.71 658.54
688.54 76.87
1,010.19 2.30 19.03 2.30
356.22 4.26 1.30 20.33
376.23
23.29 437.36
27.30 2,125.55
227
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
2019
30.00 824.12 26.00 880.12
282.50 210.57 230.37
19.80 282.50
13.15 398.31 19.03 1.30 13.15
80.48 6.55 - 20.33
485.34
312.50 1,128.32 418.11 25.58 27.30 1,911.81
Market Risk:
Interest rate risk is the risk that the fair value of future cash ows of a nancial instrument will
uctuate due to changes in market interest rates. The Company's exposure to the risk of
changes in interest rates relates primarily to the Company's debt obligations with oating
interest rates.
50. Fair Values:
The management assesses that cash and cash equivalents, trade receivables, trade
payables, and other current liabilities approximate their carrying amounts largely due to the
short-term maturities of these instruments. The fair value of the nancial assets and
liabilities are included at the amount at which the instruments could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.
Long-term xed-rate receivables/borrowings are evaluated by the Corporation based on
parameters such as interest rates, and individual creditworthiness of the customer and the
risk characteristics of the nanced project. Based on this evaluation, allowances are
considered for the expected credit losses of these receivables.
228
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
A) Financial instruments by category
The carrying value and fair value of nancial instruments by categories as at 31 March
2020 were as follows:
Particulars Amortised Financial Financial Total carrying Total fair
cost assets/ assets/ value value
Assets: liabilities at fair liabilities at
Investments value through fair value
Trade receivables prot or loss through OCI
Loans
Others nancial assets 869.00 ----- ----- 869.00 869.00
Cash and cash equivalents 138.03
Other bank balances 20.33 ----- ----- 138.03 138.03
Liabilities: 437.36
Borrowings 658.53 ----- ----- 20.33 20.33
Trade payables 2.30
Other nancial liabilities ----- ----- 437.36 437.36
2331.94
1050.59 ----- ----- 658.53 658.53
555.06
----- ----- 2.30 2.30
----- -----
----- ----- 2331.94 2331.94
----- ----- 1050.59 1050.59
----- ----- 555.06 555.06
The carrying value and fair value of nancial instruments by categories as at 31 March
2019 were as follows:
Particulars Amortised Financial Financial Total carrying Total fair
cost assets/ assets/ value value
Assets: liabilities at fair liabilities at
Investments value through fair value
Trade receivables prot or loss through OCI
Loans
Others nancial assets 880.12 ----- ----- 880.12 880.12
Cash and cash equivalents 242.26
Other bank balances 20.33 ----- ----- 242.26 242.26
Liabilities: 485.34
Borrowings 282.50 ----- ----- 20.33 20.33
Trade payables 13.15
Other nancial liabilities ----- ----- 485.34 485.34
1939.08
901.17 ----- ----- 282.50 282.50
447.25
----- ----- 13.15 13.15
----- -----
----- ----- 1939.08 1939.08
----- ----- 901.17 901.17
----- ----- 447.25 447.25
229
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
51. Auditors remuneration (excluding GST)
Particulars Total 2019-20 2018-19
Statutory audit fees/Limited review 0.12 0.12
Tax audit fees 0.02 0.02
Certication 0.01 0.01
52. Corporate Social Responsibility Expenses (CSR) 0.15 0.15
As per Section 135 of the Companies Act, 2013 read with guidelines issued by
Department of Public Enterprises, GOI, the Company is required to spend, in every
nancial year, at least two per cent of the average net prots of the Company made
during the three immediately preceding nancial years in accordance with its CSR
Policy. The details of CSR expenses for the year are as under:
9
1.93 2.12
(a) 0.38 2.09
(b) 1.25 0.30
1.63 2.39
52.A The prior period expenses and income accounted for during the year have been
treatedin accordance with Ind AS-8. The relevant adjustments have been made and
the corresponding previous year gures and / or gures of retained earnings have
been restated.
52.
Balance at the 1st April'2018 (3,277.54)
Prior Period errors
Add: 1.20
GST ITC Receivables 0.16
Income received for prior period
Less 0.32
Prior Period Depreciation 1.61
Prior Period Expenses (3,278.09)
Restated balance at the 1st April'2018
230
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
52. 2018-19
13.42
–
0.10
–
Prior Period Expense 0.27
1.97
Prior period expense 2018-19 11.28
53. Additional Disclosure as per Ind- AS 115.
REVENUE FROM OPERATIONS
Accounting Policy
The Company derives revenues primarily from passenger and Freight operations
business comprising Mail/Express/Passenger and freight Trains including Roll-On-
Roll-Off Services.
Under Cost Plus Contract, Revenue is determined by adding the aggregate cost-plus
proportionate margin as agreed with Principal Customer.
Under Fixed Price Contract Revenue is recognized by adding the aggregate cost and
proportionate margin using the percentage completion method. Percentage of
completion is determined as a proportion of cost incurred to date to the total
estimated contract cost.
Revenue is recognized upon transfer of control of services to customers in an amount
that reects the consideration we expect to receive in exchange for those services.
Disclosures:
Contract Balances (mentioned Table A)
Contract balances represent the balance of contract to an amount for which the
Company's right could not have been established. No such balances have been
accounted for in the books of the Corporation for the current Financial year.
231
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
Trade receivables (mentioned Table B)
A receivable represents the Company's right to an amount of consideration that is
unconditional, and the corporation has accounted the same in line with the provisions
of Ind AS 115.
Contract Assets &Liabilities (mentioned in Table below)
A Contract Assets is the performance by transferring goods and services to a
customer, before the customer pays consideration or before payment is due, the
entity shall present the contract as a contract asset, excluding any amount presented
as a receivables.
A Contract liability is the obligation to transfer goods or services to a customer for
which the Company has received consideration (or an amount of consideration is
due) from the customer. If a customer pays consideration before the Company
transfers goods or services to the customer, a contract liability is recognised when the
payment is made, or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs under the contract.
There is no signicant changes in contract asset and contract liability.
Performance Obligation:
The company considers timeline indicators mentioned in the contract for
performance obligation. Transfer of signicant risks and rewards to the customer,
acceptance of delivery by the customer, etc are indicators of discharge of service
obligations. The Company exercises judgement in determining whether the
performance obligation is satised at a point in time or over a period. Depending on
the terms of contract, controls on the asset or existence of enforceable right to
payment is established against performance in full or part discharge of obligation.
KRCL is engaged in execution of projects either as deposit work or as a project
management consultant or on cost plus contract basis.
Typically, KRCL receives advance consideration on some of the contracts and some
are executed based on the dened payment term in the contract. The consideration
on contracts can be Cost Plus or Fixed, however, unconstrained by any uncertainty.
KRCL is also involved in execution of contract where- in it acts as an intermediary.
Transaction price allocated to the remaining performance obligations.
The revenue recognized corresponds to the value transferred to customer.
232
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
The aggregate value of transaction price allocated to unsatised (or partially satised)
performance obligations as on 31st Mar 2020 was ` 3225.00 Crores (` 4962.00 Crore)
out of which around 30% is expected to be recognized as revenue in the next year and
the balance in subsequent years.
In accordance with Para 121 of Ind AS 115, the company has not specically
disclosed contracts with expected duration of one year or less.
Signicant judgements in the application of this Standard:
Revenue is recognized upon transfer of control of promised deliverables to customers
in an amount that reects the consideration which the Company expects to receive in
exchange for those deliverables. Revenue is recognized based on output measured
by Aggregate Cost-plus margin.
In respect of other xed-price contracts, revenue is recognized using percentage-of
completion method ('POC method') of accounting with contract costs incurred
determining the degree of completion of the performance obligation.
Determining the transaction price and the amounts allocated to performance
obligations Contract assets are recognized when there is excess of revenue earned
over billings on contracts. Contract assets are classied as unbilled receivables (only
act of invoicing is pending) when there is unconditional right to receive cash, and only
passage of time is required, as per contractual terms.
Unearned and deferred revenue ("contract liability") is recognized when there is billing
in excess of revenues.
3,714.37 - 1573.81 2,140.56
95.67 - 24.08 71.59
93.28 185.11 74.88
5.88 203.51
1,059.58 190.99 127.11 938.35
4,962.90 1928.51 3,225.38
233
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
1.775 1.600 2.830 0.545
10.441 19.336 24.218 5.559
18.864 143.780 154.950 7.694
4.067
3.235 0.833 0.001 1.688
1.688
0.057 0.057 (0.000)
0.036 0.036 0.000
0.093 - 0.093 0.000
240.661 1,515.220 1,422.950 332.931
0.043 - 0.041 0.002
0.026 - 0.026 0.000
99.27
166.16 30.86 97.748
406.888 1,546.080 1,522.287 430.681
Note on the effect of Covid- 19 on KRCL
The outbreak of Corona virus (COVID-19) pandemic in India has resulted in a
nationwide lock down and travel restriction by the Government of India which has
signicantly impacted business operation of the Corporation. Passenger trains were
cancelled since 22nd March 2020 across entire Indian Railway System. KRCL lost
Trafc revenue to the tune of Approximately ` 70 crore in March'2020.KRCL has
incurred expenditure of ` 22.43 lakhs towards Covid-19 preventive health measures.
However, in May/June '20 KRCL operated Shramik special trains from Karnataka, Goa
and Maharashtra to various parts of the country following COVID-19 protocol. A total
of 80 such special trains were run from Konkan Railway.
From 12th May' 20 and 1st June' 20, Rajdhani Class Trains and few special trains
started operations. The Passenger trafc has not been fully restored till now. As a
result, there is reduction in passenger revenue in the F. Y. 2020-2021. Moreover,
` 56.79 lakhs were further spent towards Covid-19 preventive health measures.
234
Notes forming part of the Standalone Financial Statements as at 31st March, 2020
In normal course of operation, on an average every day around 50 (fty) passenger
trains and 12 (twelve) to 13 (thirteen) Goods trains are operated on the Konkan
Railway route which includes originating, terminating and crossing. During lock down
due to Covid -19 Goods train movement on Konkan Railway zone has also came
down since other zonal railways has used their unutilized capacities for transportation
of Goods train rather than diversion over KRCL route.
Following are the details of Passenger and Goods train operated by the Corporation
during March'20 to July'20 (upto 25th July 2020). (Nos of trains)
Description Mar 20 Apr 20 May 20 Jun 20 Jul 20
(Up to 25.07)
Nos of Passenger trains run
Originating trafc 371 0 03 0 0
Terminating trafc 375 0 03 0 0
391 0 14 142 130
Cross trafc 0 75 19 0
Shramik Specials 0 0 95 161 130
1137 07 09 08 05
Total
Parcel Trafc 0 19 42 61 56
Nos of Goods trains run (Loaded) 44 37 31 35
a) Ro-Ro service 51 77 79 64 15
b) Other 52 60 95 68 58
Terminating trafc 104 200 253 224 164
Cross trafc 57
264
Total
Overall, with corresponding partial reduction in operational cost and other
expenditure control measures initiated, the Corporation expects to sustain and
overcome the impact and recover from the present slowdown shortly. In view of this,
the nancial statement has been prepared on Going Concern Basis.
54. Figures in bracket indicates gures of previous year.
55. Previous year gures have been regrouped/ rearranged wherever necessary.
For V. K. Surana & Co. For and on behalf of the Board
Chartered Accountants,
Firms Registration No. 110634W
Sd/- Sd/- Sd/-
CA Sudhir Surana Subhash Chand Gupta SANJAY GUPTA
Partner Director (Way and Works) Chairman and Managing Director
Membership No. 043414 DIN: 08339258 DIN:06710604
UDIN :20043414AAAACF6409
Place: Nagpur Place: Navi Mumbai Sd/-
Date: July 30, 2020 Date: July 30, 2020 RAJENDRA PARAB
235 Company Secretary
V.K.SURANA & CO.
CHARTERED ACCOUNTANTS
Unit No. 202, Tower – A, Peninsula Business Park, Senapati Bapat Marg,
Lower Parel, Mumbai-400013
Ph. No.: 91-22-41731000, Fax: 91-22-41731010
To the Members of Konkan Railway Corporation Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated nancial statements of Konkan Railway Corporation
Limited (“the Holding Company”) and its associate company, which comprise the
consolidated balance sheet as at 31st March 2020, and the consolidated statement of prot
and loss (including other comprehensive income), consolidated statement of changes in
equity and consolidated statement of cash ows for the year then ended and notes to the
consolidated nancial statements, including a summary of signicant accounting policies
and other explanatory information. (hereinafter referred to as “the consolidated nancial
statements”).
In our opinion and to the best of our information and according to the explanations given to
us, the aforesaid consolidated nancial statements give the information required by the
Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under section 133 of the Act
read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind
AS”) and other accounting principles generally accepted in India, of the consolidated state
of affairs of the Holding Company as at March 31, 2020, and consolidated loss (including
other comprehensive income), consolidated changes in equity and its consolidated cash
ows for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated nancial statements in accordance with the
Standards on Auditing (SAs) specied under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor's
Responsibilities for the Audit of the Consolidated Financial Statements section of our
report. We are independent of the Holding Company and its associate company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India (ICAI) together with the ethical requirements that are relevant to our audit of the
consolidated nancial statements under the provisions of the Act and the Rules thereunder,
236
and we have fullled our other ethical responsibilities in accordance with these
requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have
obtained is sufcient and appropriate to provide a basis for our audit opinion on the
consolidated nancial statement.
Material uncertainty related to going concern
We draw attention to note 27.1 to the consolidated nancial statements which indicates
that during year, pending nancial closure, the project was on temporary hold and
Konkan Railway Corporation Limited (KRCL) unilaterally invoked the Performance Bank
Guarantee (PBG) on 16.08.2019 without any prior intimation/notice of the intent to invoke
the PBG. The matter is in discussion with various stakeholders for resolving the issues that
concern the project and getting back the PBG amount from KRCL.
Considering the temporary suspension of the project and alternative linkage project
possibilities the present nancial statements of the Associate Company is prepared on
going concern basis till nal decision about the project by the Shareholders as well as the
Railway authorities.
Emphasis of Matter
A) We draw attention to Note No. 13.2 of the consolidated nancial statements related to
amount due from Udupi Power Corporation Ltd (UPCL) of Rs. 12.08 Crores for Railway
siding work wherein the amount is outstanding since long with no development. After
entering in to contract with Corporation, the UPCL had appointed LANCO Infratech
Ltd. as their EPC Contractor / agent to deal with the holding company in relation with
this work whereby all the bills / claim are raised on and settled by them. However the
LANCO Infratech Ltd. has gone into Corporate Insolvency Resolution Proceedings
under National Company Law Tribunal, due to which recovery of amount due from
LANCO Infratech Ltd. is extremely remote. The company has led the Civil Recovery
Suit against UPCL (Principal Employer) and LANCO (its agent).
The Management of the Company are optimistic for recovery of amount due from
UPCL.
B) We draw attention to Note No. 53 of the consolidated nancial statements related to
effect of Covid- 19 on the Company's consolidated nancial statement due to
outbreak of Corona virus (COVID-19) pandemic in India which has signicantly
impacted operation of the Corporation. Passenger trains were cancelled since 22nd
March 2020 across entire Indian Railway System.
As per the Board note, the company has lost Trafc revenue to the tune of
Approximately Rs 70 crore in March'2020. Further during April'20 to July'20, the travel
restrictions continued with partial relief which also severely impacted the nancial
237
position during that period and consequently may have nancial impact during
Financial Year 2020-21. However considering the partial relief in travel restrictions,
running of special trains and earnings through other segment; projects, the Company
expects to sustain and overcome the impact and recover from the present slowdown.
In view of this, the consolidated nancial statement has been prepared on Going
Concern Basis.
C) We draw attention to Note No. 46 of the consolidated nancial statements, that the
Balances of the Receivable and Payable accounts of Major Railways, Suppliers,
Contractors etc. are subject to conrmation / adjustments / reconciliations. The
Company will review of such balances for carrying out necessary adjustments in the
subsequent years.
D) We also draw attention to Note No. 8, 16, 17 & 43.3 of the consolidated nancial
statements related to loan given to Konkan Railway Welfare Organisation (KRWO)
wherein the principal and interest is overdue to the tune of Rs. 26.15 Crores.
Furthermore there is disparity in appropriation / adjustment of part amount received of
Rs. 2.61 Crores whereby the company has appropriated the amount received towards
interest whereas KRWO has adjsusted the same towards principal.
E) We draw attention to Note No. 26 of the consolidated nancial statements related to
Trade Payable which includes Rs. 708.20 Crores in respect of amount due to Zonal
Railways, out of which Rs. 424.38 Crores is outstanding for more than 1 year, including
outstanding of Rs. 278.59 Crores for more than 3 years, as old as 2004-05 and
onwards including old unclaimed amounts.
F) We draw attention to Note No. 17 of the consolidated nancial statements related to
Other Inter Railway Financial Adjustment (IRFA) Receivables from Zonal Railways
amounting to Rs. 356.22 Crores, out of which the outstanding for more than 3 years
are Rs.147.59 crores lying since long, as old as 2004-2005 and onwards.
G) We draw attention to Note No. 20a.7 of the consolidated nancial statements, which
shows that there is a difference of Rs. 214.02 Crores in authorized share capital as per
records of Ministry of Corporate Affairs – MCA (Rs. 8293.53 Crores) and as per
company's records (Rs. 8079.51 Crores). The application given to MCA for correction
/ reduction in authorised share capital in line with approval of President of India, is not
yet acted upon.
H) We draw attention to Note No. 12 of the consolidated nancial statements related to
Investments wherein presently the Investment of free fund is also kept deposited with
Life Insurance Corporation (LIC) in the Group Leave Encashment Scheme, including
238
life assurance benet. The same need to be evaluated as per Norms and Guidelines
including disclosure and considering it as unfunded, Refer Note No. 36.6 (C) of the
consolidated nancial statements for disclosure of Employee benets as per Ind AS
19.
I) We draw attention to Note No. 47 of the consolidated nancial statements related to
Taxes on Income whereby, considering the huge accumulated losses and current
trend of income, the management is of the view that the future taxable prot shall not
be sufcient to recoup/recover the carried forward unabsorbed losses & unabsorbed
depreciation in future. In view of this, Provision for Income Tax on taxable income
earned during current nancial year and deferred tax asset related to carried forward
unabsorbed losses & unabsorbed depreciation have not been created by the
company.
J) We draw attention to Note No. 47 of the consolidated nancial statements that the
amount of ineligible Input Tax Credit (ITC) of Goods and Services Tax (GST) has not
been nalized for the Financial Year 2018-19 due to pending reconciliation with the ITC
reected in GST portal.
K) We draw attention to the face of Balance Sheet related to Trade payables and Note
No. 26 of the consolidated nancial statements, wherein amount are not disclosed
related to Micro and Small Enterprises as per the disclosure requirement of Schedule
III of the Companies Act 2013.
L) We draw attention to Non-compliances of the Company Law Matters related to:
i) Non Compliance of Section 149 (4) of Companies Act, 2013, Regulation 17 (b) of
the SEBI Listing Obligation and Disclosure Requirement and Clause 3.1.4 of the
Guidelines on Corporate Governance for Central Public Sector Enterprises w.r.t.
composition of the Board of Directors of the Company.
ii) Non Compliance of Section 177 (2) and Section 178 (1) of Companies Act, 2013
and Rule 6 of Companies (Meetings of Board and its Powers) Rules 2014 and
Clause 18 (1) and 19 (1) of SEBI Listing Obligation and Disclosure Requirement
regarding composition of Audit Committee and Nomination and Remuneration
Committee.
iii) Non Compliance of Section 62 (1) (a) (i) of Companies Act 2013, regarding the
closure of Right Issue within 30 days. In the F.Y. 2018-19 the company has come
239
out with the 2nd Rights Issue for INR 196 Crore to the shareholders in their existing
shareholding proportion which was kept open from 1.12.2018 to 29.12.2018
(both days inclusive).
During F.Y. 19-20 the company has allotted shares against 2nd rights issue to the
tune of Rs. 23.52 Crores whereas in June'2020 the remaining shares of 2nd Right
issue were allotted to the shareholder amounting to Rs. 29.40 Crores.
The Board of Directors in their meeting have allowed for receiving the subscription
from the shareholders even after the closure of Rights Issue.
Likewise in the F.Y. 2019-20 the Company has announced 3rd Right issue of Rs. 490
Crores to the shareholders in their existing shareholding proportion which was kept
open for the period 16/12/2019 to 14/01/2020. However till the year end no amount
was received against the same. Consequently, the Board of Directors in their meeting
have allowed for receiving the subscription from the shareholders even after the
closure of Rights Issue.
iv) Non Compliance of Section 42 of the Companies Act 2013
The share application money received for 2nd right issue is not kept in a separate
bank account in a scheduled bank and the company has not allotted shares within 60
days from the date of receipt of amount to one of the shareholder - Government of
Karnataka of Rs. 19 Crores.
Our opinion is not modied in respect of these matters.
240
V.K.SURANA & CO.
CHARTERED ACCOUNTANTS
Unit No. 202, Tower – A, Peninsula Business Park, Senapati Bapat Marg,
Lower Parel, Mumbai-400013
Ph. No.: 91-22-41731000, Fax: 91-22-41731010
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
signicance in our audit of the consolidated nancial statements of the current period.
These matters were addressed in the context of our audit of the consolidated nancial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the matters described below to be
the key audit matters to be communicated in our report.
Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response
1. A c c u r a c y o f r e c o g n i t i o n , Our key audit procedures included and were not
measurement, presentation and limited to the following:
disclosures of Leases and other
related balances in view of adoption • Assessed and tested new processes and
of Ind AS 116 “Leases” (new Indian controls in respect of the lease accounting
accounting standard) standard (Ind AS 116);
With effect from 1st April, 2019, Ind AS • Assessed the identication of leases based on
116 – “Leases” (Ind AS 116) the contractual agreements and our knowledge
supersedes Ind AS 17 – “Leases”. The of the business.
Company has adopted Ind AS 116,
retrospectively with the cumulative • Evaluate the reasonableness of the discount
effect of initially applying the standard, rates applied in determining the lease liabilities;
recognized on the date of initial
application (April 1, 2019). • Upon transition at 1st April'2019:
a) Evaluated the method of transition and related
The application and transition to this
accounting standard is complex and is adjustments;
an area of focus in our audit since the b) Tested completeness of the lease data by
Company has lease arrangement with
different contractual term. reconciling the Company's operating lease
commitments to data used in computing ROU
Ind AS 116 introduces a new lease asset and the lease liabilities.
accounting model, wherein lessees
are required to recognise a right-of-use • On a stastical sample, we performed the
following procedures:
a) Assessed the key terms and conditions of each
lease with the underlying lease contracts; and
241
Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response
(ROU) asset and a lease liability arising b) Evaluated computation of lease liabilities and
from a lease on the balance sheet. challenged the key estimates such as discount
rates and lease terms.
The lease liabilities are initially
measured by discounting future lease • Assessed and tested the presentation and
payments during the lease term as per disclosure relating to Ind AS 116 including
the contract/ arrangement. disclosures relating to the transitions.
Adoption of the standard involves
signicant judgements and estimates
including, determination of the
discount rates and the lease term.
Additionally, the standard mandates
detailed disclosures in respect of
transition.
Refer Note 2(G) and Note 44 to the
consolidated nancial statements.
2 Recoverability and assessment of Our key audit procedures included and were not
Trade Receivables, Other Inter limited to the following:
Railway Financial Adjustment (IRFA)
Receivables We have performed the following procedures in
relation to the recoverability of trade receivables and
Trade Receivables of the company Inter Railway Financial Adjustment (IRFA)
comprise mainly receivables in relation Receivables:
to the Trafc Earning Receivable.
Ÿ Tested the calculations of claims on account of
Other Inter Railway Financial apportioned Trafc Earnings on sample basis.
Adjustment (IRFA) Receivables
comprise of Fuel Charges recoverable Ÿ Tested the accuracy of aging of trade receivables
from Railways. and Inter Railway Financial Adjustment (IRFA) at
year end on a sample basis.
These balances are recognised at their
anticipated realisable value, based on Ÿ Obtained the details of outstanding receivables
allocation of trafc done by Centre For and identied the claim wherever there is
Railway Information System (CRIS), a substantial delay in payment.
Central Government entity. The same
is worked on the basis of trains of one Ÿ Assessed the recoverability of the unsettled
railway plying through own as well as receivables on a sample basis through our
other railways track.
242
Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response
Refer Note No. 13 of consolidated evaluation of management's assessment with
nancial statement related to Trade reference to the credit prole of the Other
receivables. Railways, their historical payment pattern and
latest correspondence with customers and to
Refer Note No. 17 of consolidated consider if any additional provision should be
nancial statement related to Inter made; and
Railway Financial Adjustment (IRFA)
Receivables. • Tested subsequent settlement of trade
receivables after the balance sheet date on a
Refer Note No. 46 of consolidated sample basis, if any.
nancial statement related to Balance
Conrmation and reconciliations. We found the key judgements and assumptions
used by management in the recoverability
assessment of trade receivables to be supportable
based on the available evidence.
We have drawn attention in Emphasis of Matters on
trade receivables and Other Receivable accounts in
respect of Balance Conrmations and
reconciliations, which in our judgement, are
fundamental to the users' understanding of the
consolidated nancial statements.
3. Evaluation of Direct Tax Positions Our key audit procedures included and were not
The Company has huge carry forward limited to the following:
accumulated business loss and Obtained details of completed tax assessments and
unabsorbed depreciation under the demands for the year ended March 31, 2020 from
Income Tax Law. management.
Considering the past trend of income, We involved our internal experts to assess whether
management is of the view that the the carried forward accumulated losses and
future taxable prot shall not be unabsorbed depreciation are sufcient to discharge
sufcient to recoup/recover the carried the Income Tax Liability arising out of the current year
forward unabsorbed losses & prots.
unabsorbed depreciation.
We have analysed the management's underlying
In view of this, deferred tax asset assumptions in estimating the future taxable prot
related to carried forward unabsorbed considering the past trend of income.
losses & unabsorbed depreciation
have not been created by the We have analysed the management's view in
company. Further Provision for Income estimating that huge carry forward business losses
Tax is not created on taxable income and unabsorbed depreciation shall not be recovered
earned during current nancial year considering the past trend and consequently non-
243
Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response
due to availability of setoff of losses / creation of deferred tax asset on accumulated losses
unabsorbed depreciated. and unabsorbed depreciation.
Assessment of Income Tax for the We have evaluated the uncertainty of tax liability
Financial Year 2007-08 to 2014-15 are which may arise due to Income Tax assessment in
pending at various level of Appellate respect of the Financial Year 2007-08 to 2014-15 and
Authority. However, the Management compared the same with carried forward
is of the opinion that, considering the accumulated losses and unabsorbed depreciation in
outcome of past Assessment and order to ensure whether there will be additional
existing carry forward Un-absorbed impact on the nancials of the company on account
Depreciation Loss, there will not be any of Income Tax Assessments.
impact on nancials of the company.
We have drawn attention in Emphasis of Matters on
Refer Note No. 47 to the Consolidated Non-creation of Income Tax Provision and Deferred
Financial Statements for Taxes on Tax Asset considering the huge accumulated losses
Income. and which in our judgement, are fundamental to the
users' understanding of the consolidated nancial
Refer Note No. 40 to the Consolidated statements.
Financial Statements for Contingent
Liability on account of pending
assessments.
4. Inter Railway Bill Passing System Our key audit procedures included and were not
and Reconciliations limited to the following:
We have performed the following procedures in
Trade payable of the Company relation to the payment / settlement of trade
comprise mainly comprises of the payables:
claim of various Railways on account
of Loco Hire Charges, Wagon Hire Ÿ Tested the calculations of claims on account of
Charges, Fuel charges. Loco Hire charges with number of hours operated
in the month in the territory of Company.
The claims are recognised on the
following basis: Ÿ Tested the calculations of claims on account of
1) Loco Hire Charges: Per Hour basis, Wagon Hire charges with number of days
2) Wagon Hire Charges: Per Day basis, operated in the month in the territory of Company.
3) Fuel charges: On GTKm (Gross Ton
K i l o m e t e r ) b a s i s a s p e r t h e Ÿ Tested the calculations of claims on account of
calculation of run mileage. fuel with GTKM basis i.e. the gross ton kilometre
run of the train belonging to Company which run
Note No. 26 of the consolidated on the track of other Railways during the month.
nancial statements for Trade
Payables
244
Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response
Ÿ Tested the accuracy of aging of trade payable at
year end on a sample basis.
Ÿ Obtained the details of outstanding payable and
identied the claim wherever there is substantial
delay in payment.
Ÿ Assessed the liability of the old overdue unpaid
claims on a sample basis through our evaluation
of management's assessment with reference to
the credit policy of other railways, historical
payment pattern to customers and latest
correspondence / reconciliation with the
customers and to consider if any extra provision
need to be reversed; and
Ÿ Tested subsequent settlement of trade payables
after the balance sheet date on a sample basis, if
any.
5. Disputed Statutory Dues
The Corporation has received a Our audit procedures included and were not
Demand of Rs.704.40 crore and limited to the following:
applicable interest thereon, from the Our audit procedures include the following
Service Tax department for the period substantive procedures:
2009-10 to 2013-14.
Ÿ Obtained understanding of Service Tax Demand
on providing Business Support Services and
The corporation is engaged in updated status of the dispute;
providing services of Transportation of
passenger and goods by Rail but the Ÿ We along with our internal tax experts –
service tax department has identied it a) Read and analysed select key correspondences,
as another business transaction external legal opinions / consultations by
between KRCL and Indian Railways management in this regards;
stating that KRCL is providing
business support services to Indian b) Discussed with appropriate senior management
railways by making available its rail and evaluated management's underlying key
infrastructure and manpower to Indian assumptions of not creating provisions in this
Railways. regards;
KRCL has challenged the order as c) Assessed management's estimate of the possible
unconstitutional and against service outcome of the disputed cases.
tax law and a matter of double taxation.
245
Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response
Refer Note No 40 to the Consolidated
Financial Statement regarding
contingent liabilities.
6. I m p a c t o f C O V I D - 1 9 o n t h e
C o m p a n y ' s o p e r a t i o n s a n d Our audit procedures included and were not
consolidated nancial statement. limited to the following:
On 11 March 2020, the World Health - Obtained and reviewed the management impact
Organisation declared the Novel assessment on account of reduction in revenue
Coronavirus (COVID-19) outbreak to during current nancial year, including
be a pandemic. judgement and estimates applied in determining
the areas of impact.
The outbreak of Corona virus (COVID- - Assessed the determination of impact on trafc
earnings on account of travel restrictions due to
19) pandemic in India has resulted in a
nationwide lockdown consequent to COVID-19.
nationwide lock down and travel
restriction by the Government of India - Assessed the determination of reduction in direct
which has signicantly impacted
operating expenses during lockdown period
business operation of the Corporation.
consequent to COVID-19.
We have identied the impact of, and - Assessment of how the management has
factored the deterioration in the overall economic
uncertainty related to the COVID-19
environment arising from COVID-19.
pandemic as a key event and
consideration for Company's - Assessed management's cost reduction
Operations on account of: measures taken by the company in order to
reduce the impact COVID-19.
- Short and long term effect on - Assessed and evaluated the possible recovery in
company's business operations and other operating segment apart from open line
its consequential rst order and operations i.e. Project revenue.
cascading negative impact on
- Assessed and evaluated expenditure incurred
revenue;
towards preventive health measures as an
- impact of the pandemic on the additional cost for prevention of COVID-19.
Revenue and Expenses; and - Performed subsequent event procedures upto
the date of the audit report.
- Assessed and tested the disclosure relating to
COVID-19 Impact on nancial position for FY 19-
20 and for the period April'20 to 25th July'20.
246
Other Matters
1. In respect of Holding Company, the COVID 19 induced restrictions on physical
movement and strict timelines, the entire audit team could not visit the audit place for
undertaking the required audit procedures as prescribed under ICAI issued
Standards on Auditing, including but not limited to:
• Inspection, observation, examination and verication of the original documents
/ les.
• Physical verication of cash, Inventories, Original xed deposit receipts, original
copies of investments, including adequate internal controls thereof.
• Verication of original sanction letters of loans obtained by the bank, bank
records, etc.
• Observation with regard to access controls and data security.
The above audit procedures was conducted during the limited review of the Company
for the half year ended 30th Septermber'2019 and we do not found any material
misstatement during such verication. Further the management has provided us with
the scanned copies of the relevant documents and records required for the purpose
of our statutory audit and we have obtained sufcient appropriate audit evidence
which is required in forming our opinion.
Our opinion is not modied in respect of the above matter.
2. The consolidated nancial statements also include the Holding Company's share of
Total prot after comprehensive income of Rs. 0.01 Crores for the year ended 31st
March, 2020, as considered in the consolidated nancial statements, in respect of
one associate – Jaigarh Digni Rail Limited, whose nancial statements have not been
audited by us.
These nancial statements have been audited by other auditor whose report has been
furnished to us by the Management and our opinion on the consolidated nancial
statements, in so far as it relates to the amounts and disclosures included in respect of
this associate, and our report in terms of sub-section (3) of Section 143 of the Act, in
so far as it relates to the aforesaid associate, is based solely on the report of the other
auditor.
247
Our opinion on the consolidated nancial statements, and our report on Other Legal and
Regulatory Requirements below, is not modied in respect of the above matters with
respect to our reliance on the work done and the report of the other auditor.
Information Other than the Consolidated Financial Statements and Auditor's Report
Thereon
The Holding Company's Board of Directors are responsible for Preparation of other
information. The other information comprises the information included in the Company's
annual report, but does not include the consolidated nancial statements and our auditor's
report thereon.
Our opinion on the consolidated nancial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated nancial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is
materially inconsistent with the consolidated nancial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Management's Responsibilities for the Consolidated Financial Statements
The Holding Company's Board of Directors is responsible for the matters stated in section
134(5) of the Act, with respect to the preparation and presentation of these consolidated
nancial statements that give a true and fair view of the consolidated state of affairs,
consolidated prot / loss (including other comprehensive income), consolidated changes
in equity and consolidated cash ows of the Holding Company and its associate company
in accordance with the Indian Accounting Standards prescribed under section 133 of the
Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended
(“Ind AS”) and other accounting principles generally accepted in India. The respective
Board of Directors of the Holding company and of its associate company are responsible
for maintenance of adequate accounting records in accordance with the provisions of the
Act, for safeguarding of the assets of the Holding Company and its associate company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal nancial
controls, that were operating effectively for ensuring the accuracy and completeness of the
248
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KRCL Annual Report 2019-20 - English
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