2.17 Provisions

Provision is recognised when:

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

ii) A probable outflow of resources is expected to settle
the obligation and

iii) A reliable estimate of the amount of the obligation
can be made.

Reimbursement of the expenditure required to settle a
provision is recognised as per contract provisions or when
it is virtually certain that reimbursement will be received.

Provisions are reviewed at each Balance Sheet date.

a) Discounting of Provisions

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

Onerous Contract

Present obligations arising under onerous contracts are
recognized and measured as provisions. An onerous
contract is considered to exist where the company has a
contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic
benefits expected to be received under it.

2.18 Contingent Liabilities and Contingent Assets

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

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

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

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

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

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

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

2.19 Earnings Per Equity Share

In determining earnings per share the Company considers
the net profit attributable to equity shareholders. The
number of shares used in computing basic and diluted
earnings per share is the weighted average number of
shares outstanding during the year.

2.20 Liquidated Damages and Penalties

Credit items arising on account of Liquidated Damages
and Penalties during execution of contract or due to

termination of contract etc. are carried as "Retained
Amount for Damages A/c" under "Other Current Liabilities"
until the management has decided either to levy or waive
the same before financial closure of the project. Thereafter
if these are not levied or waived by the management before
financial closure of the project such leftover balances of
liquidated damages and penalties etc. are credited to the
total cost of the concerned project on financial closure of
the project".

2.21 Operating Segment

An operating segment is a component of the Company
that engages in business activities from which it may
earn revenues and incur expenses, whose operating
results are regularly reviewed by the Company's Chief
Operating Decision Maker ("CODM") to make decisions
for which discrete financial information is available.
Based on the management approach as defined in Ind
AS 108, the CODM evaluates the Company's performance
and allocates resources based on an analysis of various
performance indicators by business segments and
geographic segments.

2.22 Fair Value Measurement

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

• in the principal market for the asset or liability or

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

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

Financial Guarantee Contracts

Financial guarantee contracts issued by the Company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due

in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially as
a liability at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the
amount of loss allowance determined as per impairment
requirements of Ind AS 109 and the amount recognised
less cumulative amortisation.

2.23 Dividend to equity holders

Dividend paid/payable shall be recognised in the year in
which the related dividends are approved by shareholders
or board of directors as appropriate.

2.24 Financial instruments:-

(A) Initial recognition and measurement

Financial Instruments are recognized at its fair value
plus or minus transaction costs that are directly
attributable to the acquisition or issue of the financial
instruments.

(B) Subsequent measurement

(i) Financial Assets

Financial assets are classified in following
categories:

a) At Amortised Cost

b) Fair value through Other Comprehensive
Income.

c) Fair value through Profit and loss account.

a. Debt instrument at Amortised Cost

A financial asset shall be measured at amortised
cost if both of the following conditions are met:

(a) the financial asset is held within a business
model whose objective is to hold financial
assets in order to collect contractual cash
flows and

(b) The contractual terms of the financial
asset give rise on specified dates to cash
flows that are solely payments of principal
and interest on the principal amount
outstanding.

Financial assets measured at amortised cost
using effective interest rate method less
impairment if any. The EIR amortisation is
included in finance income in the statement of
profit and loss.

b. Debt instrument at FVTOCI

A debt instrument is classified at FVTOCI if both
of the following criteria are met:

• The objective of the business model is
achieved both by collecting contractual
cash flows and selling the financial
assets and

• The asset's contractual cash flows
represent SPPI.

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

c. Debt instrument at FVTPL

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

In addition the Company may elect to designate
financial asset which otherwise meets
amortized cost or FVTOCI criteria at FVTPL, if
doing so reduces or eliminates a measurement
or recognition inconsistency. The Company has
not designated any financial asset at FVTPL.

Financial assets included within the FVTPL
category are measured at fair value with all
changes recognized in the P&L.

Investment in Equity instruments are measured
through FVTOCI.

d. Equity Instrument at FVTOCI

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

The Company has made an irrevocable election to
present in other comprehensive income subsequent
changes in the fair value of equity investments not
held for trading.

(ii) Financial liabilities

a) Financial liabilities at Amortised Cost

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

b) Financial liabilities at FVTPL

The company has not designated any financial
liabilities at FVTPL.

(C) Derecognition
Financial Asset

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

Financial Liability

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

(D) Impairment of financial assets

Company applies expected credit loss (ECL) model
for measurement and recognition of impairment
loss. The Company follows simplified approach for
recognition of impairment loss allowance on trade
receivable. The application of simplified approach
does not require the Company to track changes
in credit risk. Rather it recognises impairment loss
allowance based on lifetime ECLs at each reporting
date right from its initial recognition

Company assesses on a forward looking basis
the expected credit losses associated with its

assets carried at amortised cost and FVTOCI debt
instruments. The impairment methodology applies
on whether there has been significant increase in
credit risk.

2.25Investment Property

Properties that are held for long-term rental yields and
/ or for capital appreciation are classified as investment
properties. Investment properties are stated at cost of
acquisition or construction less accumulated depreciation
and impairment, if any. Depreciation is recognised using
the straight line method so as to amortise the cost of
investment properties over their useful lives as specified
in Schedule II of the Companies Act, 2013.

Transfers to, or from, investment properties are made
at the carrying amount when and only when there is a
change in use.

An item of investment property is derecognised upon
disposal or when no future economic benefits are
expected to arise from the continued use of asset. Any
gain or loss arising on the disposal or retirement of an item
of investment property is determined as the difference
between the sales proceeds and the carrying amount
of the property and is recognised in the Statement of
Profit and Loss.

Income received from investment property is recognised
in the Statement of Profit and Loss on a straight-line basis
over the term of the lease

2.26Cash and cash equivalents

Cash and cash equivalent comprise cash at bank and on
hand. It includes term deposits and short term money
market deposits with original maturities of three months
or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of
changes in value.

2.27 Non - current asset held for sale

Non-current assets (or disposal groups) are classified as
assets held for sale when their carrying amount is to be
recovered principally through a sale transaction and a sale
is considered highly probable. The sale is considered highly
probable only when the asset or disposal group is available
for immediate sale in its present condition, it is unlikely
that the sale will be withdrawn, and sale is expected within
one year from the date of the classification. Disposal
groups classified as held for sale are stated at the lower of
carrying amount and fair value less costs to sell. Property,
plant and equipment, investment property and intangible
assets are not depreciated or amortised once classified as
held for sale. Assets classified as held for sale/distribution
are presented separately in the balance sheet. ""If the
criteria stated by IND AS 105 "Non-current Assets Held for

Sale" are no longer met, the disposal group ceases to be
classified as held for sale. Non-current asset that ceases to
be classified as held for sale are measured at the lower of:

(i) its carrying amount before the asset was classified
as held for sale, adjusted for depreciation that would
have been recognised had that asset not been
classified as held for sale, and

(ii) its recoverable amount at the date when the disposal
group ceases to be classified as held for sale. The
depreciation reversal adjustment related property,
plant and equipment, investment property and
intangible assets is charged to statement of profit
and loss in the period when non-current assets held
for sale criteria are no longer met.

2.28 Prepaid Expenses

Prepaid expenses up to C5,00,000/- in each case are treated
as expenditure/income of the year and accounted for to
the natural head of accounts.

2.29 Prior period errors

Errors/omissions discovered in the current year relating
to prior periods are treated as immaterial and adjusted
during the current year, if all such errors and omissions in
aggregate does not exceed 1% of total operating revenue
as per last audited financial statement of the Company.

If the error occurred before the earliest period presented,
the opening balances of assets, liabilities and equity for
the earliest period presented, are restated.

2.30 Recent pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.

a) In May 2025, MCA notified amendments to Ind AS
21 - The Effects of Changes in Foreign Exchange
Rates, applicable w.e.f. April 1, 2025. The Company
has reviewed the amendment and based on its
evaluation has determined that it does not have any
significant impact in its financial statements.

b) In August 2025, MCA notified the following
amendments to:

1. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1,2025 - The amendment
relates to classification of liabilities as current
or non-current and non-current liabilities
with covenants. In the context of classifying a
liability as current, it removes the requirement
of existence of a right to defer settlement for

at least 12 months after the reporting date
and instead requires that the said right should
exist on the reporting date and have substance.
The amendment also introduces guidance on
classification of liabilities with covenants. The
Company has no impact of these amendments
in its classification criteria of current and non¬
current liabilities.

2. Ind AS 7, Statement of Cash Flows and Ind
AS 107, Financial Instruments: Disclosures,
applicable w.e.f. April 1,2025 - The amendment
in Ind AS 7 requires to inform users of financial
statements of the existence of supplier finance
arrangements and explain the nature of the
arrangements, the carrying amount of liabilities
and the range of payment due dates. Ind AS
107 has been amended to add supplier finance
arrangements as a factor that may cause
concentration of liquidity risk. The Company
has reviewed the amendment and based on
its evaluation has determined that it does

not have any significant impact in its financial
statements.

3. Ind AS 12, International Tax Reform - Pillar
Two Model Rules applicable immediately - The
amendments provide a temporary mandatory
relief from deferred tax accounting for top-
up tax and disclose that they have applied
the relief. This relief is immediate and applies
retrospectively. The Company has assessed the
amendments to Ind AS 12 issued in connection
with the OECD Pillar Two international
tax reform. Based on the current facts and
circumstances, these amendments do not
have any impact on the Company's financial
statements.

Nature and Purpose of Other Reserves:

(a) Retained Earnings

Retained Earnings represent undistributed profits of the Company.

(b) General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully
paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buy-back
of shares.

(c) Items of Other Comprehensive Income

The Company has elected to recognize changes in fair value of investment in equity securities of Indian Port Rail and
Ropeway Corporation Limited in other comprehensive income. The changes are accumulated within the FVTOCI equity
investments reserves within equity. The company transfers amounts from this reserve to retained earnings when the
relevant equity securities are de-recognized.

Terms of Repayment:

(i) There is a moratorium period of 3 years for each year's loan. During the said moratorium period, no amount on account
of interest and principal shall be payable. The interest shall be charged on yearly basis and repayment of loan and
interest accumulated during moratorium period shall be once in a year (for a period of 12 years) after the completion of
moratorium period. Ministry of Railways would make available to RVNL the required funds thereafter, to enable them to
do the debt servicing. The debt servicing will pass through RVNL books.

(ii) The Company has not borrowed any funds during this F.Y 2025-26 (Previous year 2024-25: C Nil) from Indian Railway
Finance Corporation (IRFC). The outstanding borrowing is C3992.85 crores as on 31.03.2026 (as at 31.03.2025 :
C4492.36 crore) , which includes current liability i.e. repayable in next twelve months C491.17 crores (as at 31.03.2024 :
C499.51 crore).

(iii) The Interest Liability has been assessed on the amount disbursed in the F.Y. 2006-07 to 2025-26 by applying the Interest
rate as advised by the IRFC for each Financial year (2025-26-No disbursement, 2024-25- No disbursement, 2023-24- No
disbursement, 2022-23- No disbursement, 2021-22: 7.64%, 2020-21: 7.73%, 2019-20: 8.42%, 2018-19: 9.17% & 8.93%,
2017-18: 8.82%, 2016-17: 8.19%, 2015-16: 8.68%, 2014-15: 9.56%, 2013-14: 9.60%, 2012-13: 9.41%, 2011-12: 10.12%).

The interest accrued but not due on the IRFC loan amount has been shown in the Balance Sheet as recoverable from MoR
under Current Assets & Non-Current assets (for the interest non recoverable in next 12 Months) and the interest payable
but not due under the Current Liabilities and Non-Current Liabilities (for the interest not payable in next 12 Months)
payable to IRFC.

Sensitivity analysis:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice,
this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been
applied as when calculating the defined benefit obligation recognised within the statement of financial position.

Risk Analysis :

Company is exposed to a number of risks in the defined benefit plan which are as follows:

A) Salary Increases- Actual salary increases will increase the Plan's liability. Increase in salary increase rate assumption in
future valuations will also increase the liability.

B) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the
discount rate assumed at the last valuation date can impact the liability.

C) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan's liability.

D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact
the liabilities.

E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates
at subsequent valuations can impact Plan's liability.

NOTE: 32 DIVIDEND

The Board of Directors has recommended the final dividend of C0.71 per equity share having face value of C10 for the financial year
2025-26, subject to the approval of the shareholders at the ensuing Annual General Meeting.

NOTE: 33 CAPITAL MANAGEMENT

The Company manages its capital in a manner to ensure and safeguard their ability to continue as a going concern so that Company
can continue to provide maximum returns to shareholders and benefit to other stake holders. Company has paid dividend as per
the guidelines issued by Department of Public Enterprises (DPE) as follows:-

i) The carrying amounts of trade receivables, trade payables, unbilled revenue, cash and cash equivalents and other short
term trade receivables and payables which are due to be settled within 12 months are considered to the same as their
fair values, due to short term nature.

ii) Long term variable rate borrowings and lease receivables are evaluated by Company on parameters such as interest
rates, specific country risk factors and other risk factors. Based on this evaluation the fair value of such payables are not
materially different from their carrying amount.

iii) The fair values of office security deposits, other assets, and items like liquidated damages and penalties is determined by
discounting estimated future cash flows using current market interest rates. For FY 2025-26, a 6.25% SBI fixed deposit
rate is used for financial assets, and a 9.90% SBI lending rate is used for financial liabilities. These are reported under Level
3 in the fair value hierarchy, given the use of unobservable factors, including credit risk of counterparties.

iv) Investment in unquoted equity of subsidiaries, joint ventures and associates are stated at cost as per exemption provided
by Para 10 of IND-AS 27.

v) Staff loans and advances have been continued at carrying value as measurement implications are immaterial.

vi) RVNL determined fair value of investment those are carried through Other Comprehensive Income through independent
valuer. Valuation of Investment of Indian Port Rail & Ropeway Corporation Limited is based on the latest available audited
financial statements as on 31^st March 2025.

(iii) Financial risk management

The Company's principal financial liabilities comprise
Borrowings from IRFC, trade payable and other payables.
The Company's principal financial assets include trade
and lease receivables and cash & cash equivalents that
are derived directly from its operations.

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

a) Market Risk

Market risk is the risk that the fair value of future
cash flows of a financial instruments will fluctuate
because of changes in market prices. Market
risk comprises Interest rate risk and foreign
currency risk. Financial instruments affected
by market risk includes loans and borrowing,
deposits and other non derivative financial
instruments.

i) Interest Rate Risk

Interest rate risk is the risk that the fair value of
future cash flows of a financial instruments will
fluctuate because of change in market interest
rate. The Company has only loan from IRFC, the
payment of interest and repayment of principal
of that is ensured by the Ministry of Railways;
therefore the risk related to said loan is Nil, debt
servicing will pass through RVNL books only.

ii) Foreign Currency Risk

The Company takes services from countries
outside India for projects and is exposed to
foreign currency risk arising from such foreign
currency transactions. Due to immateriality of
foreign exchange amount, Company does not
hedge any risk.

b) Credit risk

Credit risk is the risk of financial loss to the Company if
a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises
principally from the Company's receivables from
customers. The Company is exposed to credit risk
from its financial activities in respect of financial
instruments and the risk is negligible since the
receivable are mainly from Ministry of Railways and
State Governments. Also Company does not have any
history of bad debts.

Financial instruments and cash deposits

Credit risk from balances with banks and financial
institutions is managed in accordance with the
Company's policy. Investment of surplus are made
with approved counterparty on the basis of the
financial quotes received from the counterparty
and as per the gudilines issued by DPE from time
to time.

c) Liquidity risk

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

The Company's principal sources of liquidity are
cash and cash equivalents and the cash flow that is
generated from operations. The Company believes
that the working capital is sufficient to meet its
current operational requirements. Any short term-
surplus cash generated, over and above the amount
required for working capital management and other
operational requirements, are retained as cash and
investment in short term deposits with banks. The
said investments are made in instruments with
appropriate maturities and sufficient liquidity.

Note 35 Key sources of estimation uncertainty

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

a) Fair valuation measurement and valuation
process

Impact of fair valuation of Staff loans and advances are
immaterial therefore it has been continuing at the carrying
value.

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

fair value of financial instruments. See Note 34 for further
disclosures.

b) Taxes

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

c) Borrowings from IRFC and Lease Receivables
from Railway

Company has borrowed funds from Indian Railway
Finance Corporation for the purpose of construction

of railway projects. There is a moratorium period of 3
years for each year's loan. During the said moratorium
period, no amount on account of interest and principal
shall be payable. The interest shall be charged on yearly
basis and repayment of loan and interest accumulated
during moratorium period shall be once in a year (for a
period of 12 years) after the completion of moratorium
period. Ministry of Railways would make available to
RVNL the required funds thereafter, to enable them to do
the debt servicing. The debt servicing will pass through
RVNL books. Accordingly, funds are received by RVNL on
each year from MoR and the same is transferred to IRFC.
Therefore, there is no impact on Statement of Profit & Loss
of the Company.

i) Trade receivables are non-interest bearing except receivable from related party (other than subsidiaries) amounting to
C498.40 crore (Previous year C694.22 crore) which are interest bearing at SBI base rate 1%. Customer profile include
Ministry of Railways, Public Sector Enterprises and State Owned Companies in India. The Company's average project
execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress
payments with a credit period ranging from 45 to 60 days.

ii) Contract Assets are recognised over the period in which services are performed to represent the Company's right to
consideration in exchange for goods or services transferred to the customer. It includes balances due from customers
under construction contracts that arise when the Company receives payments from customers as per terms of the
contracts, however the revenue is recognised over the period under input method. Any amount previously recognised
as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is
necessary to achieve the billing milestone.

iii) Contract liabilities relating to construction contracts are obligation to transfer goods or services to a customer for which
the entity has received consideration (or the amount is due) from the customer. These mainly arise when a particular
milestone payment exceeds the revenue recognised to date under the input method and advance received in long
term construction contracts, the amount of advance received gets adjusted over the construction period as and when
invoicing is made to the customer.

NOTE: 40 CONTINGENT LIABILITIES

40.1 Claims Against the Company not acknowledged as debts:

In respect of claims pending under adjudication in arbitration invoked by the Contractor not acknowledged as debts by
the Company are C4,979.26 crore as at 31 March 2026 (Previous year C4,527.61 crore ) and the cases pending in courts not
acknowledged as debts by the Company involve an amount of C467.35 crore as at 31^st March 2026 (Previous year C436.31 crore
). All the claims in case of MoR Projects, if become payable, will form part of the project cost and reimbursable by respective
clients.

40.2 Direct taxes:

Income- tax demands raised by the Income-tax department as at 31^st March 2026 is aggregating to C33.57 crore (Previous
Year C28.00 crore ) and Company has not accepted the claim and submitted its appeal to department as follows:-

40.3. Indirect taxes:

a). Service Tax

In respect of Service-tax, the company has received show cause notice from Director General of Goods & Service Tax
Intelligence, Delhi Zonal Unit for service tax for the period from July 2012 to June 2017 which was contested by the
company. Accordingly, The Company has received order from Additional Director General(Adjudication) dated 24.08.2021
raise the demand of C148.68 crore plus applicable interest as per section 75 of Finance Act( which amounts to C130.16
crore) and imposed penalty of C130.78 crore .The Company has filed an appeal before CESTAT, New Delhi against the said
demand. Further, If the liability is decided against the Company in future ,the same will be borne by Ministry of Railways.

As per management's assessment, the likelihood of any adverse outcome in these cases is considered remote. Accordingly,
no further interest has been recognized in respect of contingent liabilities.

40.4 National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) have levied a fine of C2.37 Crore (Upto
Previous year C1.74 crore ) for non-compliance with the requirements pertaining to the composition of the Board and its
committees upto March 31,2026. Directors of the Company are appointed by the Government of India and the Company has
no role to play in this regard and accordingly has requested Stock exchanges for waiver of fine.

40.5 Amount of Letter of Credit/Bank Guarantee as on 31 March 2026 is C5,263.18 crore (Previous year C4,822.14 crore).

NOTE: 41 CAPITAL COMMITMENT:

-Office Premise at World Trade Center, Nauroji Nagar New Delhi being constructed by NBCC Nil (Previous Year: C50.54 crore)

41.1 Other Commitment

Commitment towards Contractual Payments of Project expenditure is C87,228.47 crores (Previous Year: C42,871.50 crores).
Contribution towards share capital in Subsidiaries, Joint Venture & Associates is C312.48 crores (Previous Year: C331.49 crores).

Contingent Liabilities: (RVNL share- 50% )

i) One of the former employees Mr. Devendra Singh on deputation from Indian Railways has filed a writ petition on
22.07.2010 against the Company in respect of dues on account of difference in pay scales. The impact of the same has
not been quantified in the writ.

ii) During the financial year 2014-15, Company received a show cause notice from the Director General of Central Excise
Intelligence, regarding the liability of Service Tax of C213.59 crores and interest and penalty thereon. The Company has
not accepted the liability and has submitted its reply to the Show Cause Notice on 06.01.2015. A personal hearing has
also been held in this regard on 21.09.2015 before the Principal Commissioner of Service Tax, Delhi-I. A similar statement
of demand cum show cause notice has also been received for F.Y. 2014-15 on 05.04.2016 in which a demand of 82.07
crores has been raised. It has also been replied on 24.05.2016. For F.Y. 2015-16, 2016-17, 2017-18 (upto 30.06.2017), the
statement of demand cum show cause notice in which a total demand of 211.66 crores cum show cause notice was
served on 22.03.2018 the matter is pending before The Principal Commissioner of Service Tax-I Delhi, which was replied
on 18.05.2018. In this matter department has communicated that it is kept in abeyance in view of the appeal on the
identical issue filed by the department in the case of M/s Mundra port and special economic zone limited before the
Hon'ble supreme court.

iii) As per the Construction Agreement between RVNL and Kutch Railway Company Limited, If expenditure is incurred by
RVNL out of its own funds on the project executed on behalf of KRC, on account of the failure of KRC to make payment
to RVNL within 15 days of dispatch of intimation of requirement of additional funds, then RVNL shall charge interest at
the prevailing Base Rate of SBI 1% on the total amount so expended. The interest to be charged shall be fixed from the
16^th day after dispatch of demand for required funds and charged up to the date of actual payment is received from KRC.

During the current financial year, Company has written the letter to the RVNL and challenged the interest calculation
method adopted by the RVNL.

Further board of directors in the 106^th meeting held on 23^rd August 2024 is of the view that the levy of interest by RVNL
for delayed payment beyond the original estimate cost of C1548.66 crores should not be made on the basis of RVNL
demand for funds. Interest should not be charged till the Revised estimate (1^st or 2^nd) is sanctioned by KRCL Board and a
period of 2 years has passed which is required by KRCL to mobilise the funds for the cost overrun.

Contingent liabilities: (RVNL Share : 30%)

(Claims against the company not acknowledged as debts by the company)

(i) Landowners (from whom land was purchased) have filed various cases from time to time for enhanced compensation.
The amount of claims pending as at year-end is not quantifiable.

(ii) Income-tax amounting C 1.88 crore (Previous year C2.98 crore) pertains to the AY-2013-14. 2014-15, & 2017-18.

(iii) A sum of C29.87 crore (C29.87 crore up to 31 March 2025) towards interest and other changes demanded by M/s RVNL
is not acknowledged as debt by the Company.

Capital Commitments: (RVNL Share : 30%)

(i) Estimated amount of works remaining to be executed on capital account (based on EPC cost) on capital account and not

provided for:

Haridaspur Pradip BG Rail Link- Nil (Previous Year Nil)

Dhanmandal Chandikhal Rail Link C46.03 crore (Previous year C124.97 crore)

M/s RVNL, the agency responsible for executing the Dhanmandal-Chandikhol Chord rail link project, has not yet submitted
a revised estimate. However, it is understood that the project is experiencing both time delays and cost overruns. Once
the revised estimate is received from M/s RVNL, the details will be updated and the Company will take appropriate action.

Contingent liabilities: (Share of RVNL:49.76%)

a) Department has raised demand in respect of alleged offence of evasion of Service Tax amounting to C7.58 crores (as at
31^st March 2025 C7.58 crores) and C 2.86 crores (as at 31^st March 2025 C2.86 cores) for financial year 2014-15 and 2015¬
16 respectively. Also department has raised demand of C2.95 crores for the F.Y. 2016-17 and 2017-18 (upto June'17),
However Company has not accepted the liability and has submitted its reply to department. Since the Company had
earlier received favourable ruling from CESTAT, it is confident that no additional liability will devolve on it. Further for
the period F.Y. 2011-12 to F.Y. 2013-14, KRCL has received favourable order from CESTAT for demand of C13.42 crores
(as at 31^st March 2025 C13.42 crores). In case of similar companies on same matter department has moved to Hon'ble
Supreme court in this case.

b) Income Tax department has raised demand of C2.72 crores (as at 31^st March 2025 C2.72 crores) for AY 2011-12, the matter
is pending before commissioner of income tax appeal. Therefore liability for the case has not been recorded in the books
of accounts.

c) The Arbitral Tribunal delivered Award on July 16, 2024 in partly favour of KRCL, in respect of its Terminal Cost claim
including interest thereon. Other claims of KRCL as well as all the counter claims of MoR were rejected by the Tribunal.
Being dissatisfied with different portion of the Award, both the parties have filed appeals towards the rejected items under
Section 34 of the Arbitration & Conciliation Act, 1996. The amount of KRCL's total Claim was C3,184.76 crores including
interest, and total Counter claim of MoR was C5,556.54 crores including interest. Consequently, post Arbitration appeal
proceedings between KRCL and MoR are underway in the Hon'ble District Civil Court (for Commercial dispute) at Hyderabad.

d) Contingent liability in respect of departmental charges not claimed by RVNL @ 5% of project cost is estimated at
C114.61 crores (as at 31^st March 2025 C114.53 crores).

Contingent liabilities: (Share of RVNL:35.46%)

(i) The Company had received a Show Cause Notice (SCN)

during financial year 2014-15 from tax authorities
in the matter of applicability of service tax on the
Company in respect of apportioned freight received
by the Company from Railways. The SCN covered a
period of three years from financial year 2011-12 to
financial year 2013-14 and involved service tax of
C 16.33 crore plus interest and penalties. The
Company contested the SCN and submitted
its position through a rejoinder thereon to the
adjudicating authorities, pleading that no service is
rendered by BDRCL to Western Railway that might
warrant liability to pay Service Tax. The Company
managed to obtain relief from the Commissioner
of Service Tax vide her order dated 25.01.2016 and
has, therefore, not provided for the amount in the
aforesaid claim in its books for the above period.
However, the department has filed appeal with
CESTAT against the order of Commissioner for the
same period, which was contested on similar lines by
the Company. CESTAT has passed the order in favour
of the Company vide Order No ST/A/50434-50435-
50435/2019-CU(DB) dated 25/03/2019 rejected the
appeals filed by the department. The department
has filed a appeal in Hon'ble Supreme Court against
the order of CESTAT in response to the same the
Company has submitted a statement in Hon'ble
Supreme Court.

claim in the aforesaid SCN on the same grounds as
pleaded in the earlier rejoinder.

(ii) The O&M expenditure pertaining to Bharuch-Chavaj
section has been provided in the financial statements
to the extent information provided by Western
Railway and information available with the company,
remaining O& M will be provided in the year in which
information will be received from Railways.

(iii) Company has terminated some contractual
employees, due to misconduct at work place and
unauthorised absence from office, Aggrieved by
the decision of the company employees have filed
application with Labour court for compensation
towards their termination. However, based on
the facts of the case company expects favourable
decision. Further, certain exiting Contractual
personnel of Maintenance work have approached
Regional Labour Commissioner (RLC) with certain
demands. Matter was heard and hon'ble high court
ordered vide dated 10.03.2026 quashed and set aside
the order of RLC Vadodara dated 08-07-2024 (Special
Civil Application No. 3580/2025) and remanded back
to RLC with the direction for fresh hearing on merits,
the next hearing is fixed for 07-05-2026 before RLC
Vadodara.

(iv) The Company has received a claim of C6.97 crore
from Rail Vikas Nigam Limited (RVNL) pertaining
to arbitral award for construction of BDRCL Project
under construction agreement for gauge conversion
of Bharuch Samni-Dahej Section. The claim of C5.51
crore has been accepted and paid by the company.
The remaining amount of C 1.45 crore has not been
accepted by the Company and the necessary facts in
this regard have been intimated to RVNL.

(v) The Company has received a claim for the legal
proceedings involving enhanced land acquisition
compensation claims filed by landowners under the
Land Acquisition Act. These matters are currently
pending before the Civil Courts at Jambusar and
Vagra and also involve related appeals before the
Hon'ble High Court.

Civil Court, Vagra:

In the case of Kalyansinh Madhavsinh (LAR 69/2019),
the court has awarded enhanced compensation at
C 138.10 per sq. meter against the original C39 per
sq. meter for 2,890.52 sq. meters of land. A Review
Application (Misc. App. No. 11/2023) has been filed
and is pending for hearing on 24.06.2025. This case
may result in additional liability to the Company
depending on the final adjudication by the courts.

However, no provision has been recognized in the
financial statements as the obligation is contingent
in nature and accordingly Contingent Liability will be
C0.04 crore (2890 sq.mt. @ C138.10) subject to final
order of proceedings.

Civil Court, Jambusar:

Execution Applications No. 41/2022 to 43/2022,
arising from LAR Case Nos. 81/2017 to 83/2017, are
currently pending before the Civil Court, Jambusar
for enforcement of the order dated 21.01.2022,
which awarded enhanced compensation at C857/-
per square meter. Subsequently. First Appeals (Nos.
9412/2025, 10931/2025, and 10955/2025) have been
filed by the affected parties before the Hon'ble High
Court, Ahmedabad. The matter is scheduled for next
hearing on 21.06.2025. Accordingly, a contingent
liability exists towards payment of enhanced
compensation at C857/- per square meter for the
total land area involved, subject to the final outcome
of the proceedings. Hon'ble High Court has granted
stay in these cases with instructions to deposit C0.67
crore, C0.33 crore & C0.17 crore and accordingly
company deposited the same on 26.09.2025.

(vi) The Company has received a claim in connection
with land acquired for the Company's project,
15 landowners had disputed the compensation
awarded and filed a case before the Civil Court. Vide
order dated 03.02.2018, the Civil Court awarded
enhanced compensation of C315 per sq. meter
along with interest, solatium, and other statutory
benefits. The total enhanced compensation awarded
was C0.61 crores, which has been fully deposited by
the Company in compliance with directions of the
Hon'ble High Court of Gujarat- C0.30 crore in FY
2019-20 and C0.30 crore in FY 2024-25.

The appeal filed by the Company is currently pending
before the Hon'ble High Court. As the matter remains
sub judice, and the additional liability on account
of interest and statutory components is presently
unascertainable, no provision has been made in the
financial statements.

Accordingly, a contingent liability of an
unascertainable amount exists as on 31.03.2026,
pending final adjudication.

Capital commitment: (Share of RVNL:35.46%)

(i) Capital commitment in respect of S&T Work-project
C8.34 crore (Previous year C1.87 crore)

Other commitment: Nil (Previous Year Nil).

Lease Modification

During the year, certain lease arrangements of the Company were modified resulting in a decrease in the scope of the lease, such as
reduction in the leased area and/or shortening of the lease term. As required by Ind AS 116 - Leases, the Company has accounted
for this modification as follows:

The lease liability has been remeasured based on the revised lease payments over the revised lease term using a revised discount
rate at the effective date of modification.

The carrying amount of the related ROU asset has been decreased to reflect the partial or full termination of the right of use arising
from the reduction in scope.

Any difference between the reduction in the lease liability and the corresponding adjustment to the ROU asset has been recognised
in the Statement of Profit and Loss as per Ind AS 116 requirements.

Note 48.

The Company usually receives advance payment from Joint Venture Companies for incurring expenditure on their projects.
However, in the case of one joint venture company i.e. Krishnapatnam Railway Company Limited (KRCL), the Company is incurring
project expenditures on a regular basis and the total amount receivable from KRCL as on 31^st March, 2026 is C 1,116.26. crore which
includes C889.95 crore on account of Interest (Previous year C1,355.72 crore which includes C889.95 crore on account of Interest).
The application of interest has been changed from compound to simple w.e.f 1^st October 2024, whereas KRCL requested for
application of simple interest w.e.f. 01.04.2020. The matter is pending with the Board of Directors of the Company and adjustment
if any will be recognized as and when the matter is finalized.

Note 49. Segment Reporting as per IND AS 108
General Information

Operating segments are defined as components of an enterprise for which discrete financial information is available which is
being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assessing
performance. Chairman and Managing Director of the company has been identified as CODM.

The company has identified one reportable operating segments as "Development of Rail Infrastructure".

Information about reportable segments and reconciliation to amounts reflected in the financial statement:

Income and expenses directly attributable to segments are reported under the respective operating segment. Income and
Expenses which are not directly identifiable have been disclosed as un-allocable expenses or income.

Note 52. Regrouping & Reclassification

a) During the current financial year 2025-26, the Company has reclassified the 'Loss on onerous contracts' amounting to C63.76
crore (previous year: C13.86 crore) from 'Other Expenses' (Note 27) to 'Expenditure on Operations' (Note 24) in the Statement
of Profit and Loss. The said amount represents expenditure recognised at the year-end in respect of onerous contracts and
pertains to direct project-related costs. Accordingly, the same has been classified under 'Expenditure on Operations' to
appropriately reflect the nature of the expenditure in the financial statements. The comparative figures for the previous year
have also been regrouped/reclassified to conform to the current year presentation.

b) During the current financial year 2025-26, the Company has reclassified interest on mobilization advance under 'Finance Costs'
(Note 27) amounting to C4.56 crore (previous year C2.71 crore), which was previously presented under 'Other Expenses'(Note
27) as 'Miscellaneous Expenses' in the Statement of Profit and Loss for the year 2024-25. The said amount pertains to finance
charges in the nature of interest on mobilization advances and, accordingly, has been presented under 'Finance Costs' to reflect
a more appropriate classification of the expenditure. The comparative figures have been regrouped/reclassified accordingly.

c) During the year, the Company undertook a comprehensive review of its accounting treatment relating to low-value electronic
devices, specifically mobile phones and tablets provided to employees for business operations, considering their nature, usage
pattern, rapid technological obsolescence, relatively low individual value and the manner in which the associated economic
benefits are consumed.Pursuant to the aforesaid review, the competent authority approved a revision in the accounting
treatment whereby such items are to be recognised as revenue expenditure in the Statement of Profit and Loss at the time of
purchase instead of being capitalised as Property, Plant and Equipment and depreciated over their estimated useful lives as
followed under the earlier practice.

The aforesaid revision, in substance, involves a change in the accounting policy followed by the Company in respect of
capitalization of such assets. However, the revision principally emanates from a reassessment of management estimates and
judgements relating to the expected period of use, materiality, technological obsolescence and pattern of consumption of
economic benefits associated with such assets.

The financial impact of the aforesaid change is nominal & the impact for the current year is as follows:

Increase in Other Expenses: C 2.31 crore (including write-off of opening WDV amounting to C 1.09 crore)

Impact on Profit Before Tax: C 2.31 crore

Management believes that the revised treatment results in a more appropriate presentation of the consumption pattern of
economic benefits associated with such assets and reflects the operational and economic substance of these items in a more
relevant manner.

Note 53. Non-Current Assets Held for Sale

Non-current assets or disposal groups comprising of assets and liabilities are classified as 'held for sale' when all the following
criteria are met: (i) decision has been made to sell, (ii) the assets are available for immediate sale in its present condition, (iii) the
assets are being actively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance
Sheet date.

Subsequently, such non-current assets and disposal groups classified as 'held for sale' are measured at the lower of its carrying
value and fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.

Accordingly during the year, the Company identified certain non-current assets that met the criteria for classification as 'Assets
Held for Sale' in accordance with Ind AS 105 - Non-current Assets Held for Sale and Discontinued Operations. These assets have
been measured at the lower of their carrying amount and fair value less costs to sell as at 31 March 2026. No impairment loss has
arisen on such measurement. The assets classified as held for sale amount to C0.01 crore and are expected to be disposed of within
twelve months from the reporting date.

Note 54. The Government of India has notified four Labour Codes namely, the Code on Wages, 2019, the Industrial Relations
Code, 2020, Code on Social Security, 2020 and Occupational Safety, Health and Working Conditions Code, 2020 with effect from
21 November 2025, which consolidates 29 existing labour laws. The rules have been recently notified and no material liability is
envised in this regard.

Note 55. Operating Cycle

Based on the time involved between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Company has determined twelve months as its operating cycle for the purpose of classification of its assets and liabilities as current
and non-current in the balance sheet.

Note 56. Balances of some of the Trade receivables, Other assets, Trade and Other payables accounts are subject to confirmations/
reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis.