(i) (a) BoD has approved the Equity participation (committed), not exceeding ? 10.00 crore in WOS, Ircon Vadodara Kim Expressway limited (IVKEL) Further, BoD has approved interest free loan not exceeding ? 195.74 crore for IVKEL which has been paid, Further includes fair value of the financial guarantee of ?0.24 Crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IVKEL.

(b) Board of Directors have approved Interest free loan, of ?114.11 crores (March,31st 2022: ?50 crores) in favour of Jharkhand Central Railway Limited (JCRL).

(c) Includes fair value of the financial guarantee of ?0.83 Crore (as on 31.03.2022 ? 0.83 Crore) issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by Ircon Davangere Haveri Highway Limited ( IDHHL),WOS.Further, BoD has approved interest free loan not exceeding ? 13.86 crore for IDHHL which has been paid.

(d) BoD has approved the Equity participation (committed), not exceeding ? 5 Lakh for WOS, Ircon Gurgaon Rewari Highway Limited(IGRHL).

Further, BoD has approved interest free loan not exceeding ? 103.18 crore for IGRHL out of which ?71.35 Crore (March 31st ,2022:18.35 crore) has been paid.

(e) BoD has approved interest free loan not exceeding ?15.60 crore for Chhattisgarh East Railway Limited (CERL) which has been paid accordingly.

"(f) BoD has approved the Equity participation (committed), not exceeding ?3.80 crore in Ircon Renewal Power Limited (IRPL)

Further, BoD has approved interest free loan not exceeding ?108.03 crore in IRPL out of which ?38.00 crore (March 31st, 2022: 1.40 crore) has been paid."

(g) Includes fair value of the financial guarantee of ?0.19 Crore (March 31,2022 ?0.19 Crore) issued by Ircon to State Bank on behalf of and in respect of term loan facility availed by Ircon Shivpuri Guna Tollway Limited (ISGTL).

(h) The Company vide board approval dated August 12,2021 has waived interest on its loan given to IRCON PB Tollway Limited for the period October 01,2019 till March 31, 2024 and deferment of balance interest till repayment of principal. The said waiver has been considered as Investment in subsidiary by the Company in accordance with provision of Ind AS. Accordingly ?65.62 (March 2022: ?65.79 Crore) crore has been included in above.

(i) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS, Ircon Akloli-Shirsad Expressway Limited (IASEL).

Further, BoD has approved interest free loan not exceeding ?171.54 crore for IASEL out of which ?51.44 Crore has been paid and Includes fair value of the financial guarantee of ?106/- (as on 31.03.2022 ?Nil) issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by Ircon Akloli-Shirsad Expressway Limited (IASEL)."

(j) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS,Ircon Ludhiana Rupnagar Highway Limited (ILRHL).Further, BoD has approved interest free loan not exceeding ?142.65 crore for ILRHL out of which ?0.89 Crore (March 31, 2022 ?Nil) has been paid.

(k) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS,Ircon Bhoj Morbe Expressway Limited (IBMEL).

Further, BoD has approved interest free loan not exceeding ?205.80 crore for IBMEL out of which ?6.73 Crore (March 31, 2022 ?Nil) has been paid."

(l) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS,Ircon Haridwar Byepass Limited (IHBL).

Further, BoD has approved interest free loan not exceeding ?111.85 crore for IHBL out of which ?82.17 Crore (March 31, 2022 ?Nil) has been paid."

(m) Board of Directors have approved Interest free loan, of ?52 crores (March 31, 2022 ?Nil) in favour of Mahanadi Coal Railway Limited (MCRL) which has been paid.

(n) The Interest free loan as per "(i) a to m" above will be repaid only on winding up of the SPVs/JV or end of conecession period which ever is later.

(ii) Includes fair value of the financial guarantee for ?0.28 crore issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31.03.2023 is ?Nil (as on 31.03.2022 ?Nil).

(iii) "Ministry of Railways" (MoR) vide its letter No. 2011/LMB/22/1/39 dated 18.10.2021 had communicated 'in-principle' decision for closure of Indian Railway Station Development Corporation Limited (IRSDC) and transfer/handover of its business to RLDA/MoR. Accordingly, as part of the closure activities, all assets and liabilities (except investments in SITCO and GARUD) are to be transferred to RLDA/MoR on slump sale basis for a consideration not less than the book value as on the cutoff date to be mutually agreed upon as approved in the 59th BoD meeting held on 07.11.2022 of IRSDC. Closure related activities initiated in FY 2021-22 are yet to be completed. The Liquidation process shall commence on completion of these activities and handing over of assets and liabilities to RLDA/ MoR.Financial statement of IRSDC has been prepared on liquidation basis. The Company does not foresee any impairment in the value of its investment as the Company's share in the reported Net Worth of IRSDC is ?58.50 Crore i.e.26% of ?225 Crore.

In FY 2017-18, Department of Investment and Public Asset Management (DIPAM) had instructed the Company to buy back shares to the extent of 5% of paid up capital. Total shares proposed to be bought back was 49,41,818 in numbers at book value of these shares. Board of Directors at its 236th meeting dated 21.09.2017 approved proposal to buy back by the company of its fully paid up equity shares of ?10 each not exceeding 49,41,818 shares from the existing shareholders. As on the closing date of submission of offer i.e. 04.12.2017 offer for 49,28,426 shares held by Govt. of India was received.

(d) Terms / Rights attached to Equity Shares :

(i) Voting

The Company has only one class of equity shares having a par value of ?2 per share. Each holder of equity share is entitled to one vote per share.

(ii) Liquidation

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) Dividend

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting

(f) The Board of Directors of IRCON in its 268th meeting held on 5th April, 2021 had approved the proposal for issuance of 47,02,57,870 fully paid-up Bonus Shares of ?2/- each in the ratio of 1:1, (i.e. issue of 1 (one) equity share for every existing 1 (one) equity share with 21st May, 2021 as the Record Date for the purpose of ascertaining the eligibility of Shareholders. The Final Listing and Trading Approvals from NSE and BSE have been received on 31st May, 2021. Post Bonus, the Paid-up Share Capital of the Company is ?188,10,31,480 divided into 94,05,15,740 equity shares of ?2/- each.

(a) Terms and Conditions of the unsecured Loan :

The Company has raised a loan from Indian Railway Finance Corporation ("IRFC") of ?3200 crore as on 28th March 2018 which in turn have been paid to Railway Land Development Authority ("RLDA") in terms of lease agreement. As per the Memorandum of understanding ("MOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company. The repayment of principal of the Loan Amount shall be made in 5 (five) equal instalments commencing from April 15, 2019. [Refer note 8.3 (Foot note (ii)].Companies Act has been complied with for such transactions and the transactions are not violative of any applicable Act.

(b) Rate of Interest :

(i) The Company will pay interest on the principal amount of the Loan advanced and outstanding from time to time, at the rate of 8.77% (Eight point seven seven percent) per annum ("Applicable Interest rate") (exclusive of applicable interest tax, service tax and / or any such other taxes / levies / duties). Such taxes / levies / duties, if any, applicable, shall be payable (in the same manner and time as the principal and interest) by the Borrower to the Lender over and above the rates specified above.

(ii) The Applicable Interest Rate shall be fixed for currency of loan term.

(c) Termination of the Memorandum of Understanding (MOU)

Upon the occurrence of certain identified events the MOU would stand terminated, whereupon Ircon would be substituted by such entity as agreed to between IRFC, IRCON, RLDA & Ministry of Railways (MoR). MoR would be entitled to pre pay the entire outstanding under the Loan Agreement on termination of this agreement.

(d) Offsetting the Loan from IRFC and Recoverable from RLDA

As per para 2.4 of the Memorandum of understanding ("MOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company.

Company has a legally enforceable right to set off the loan liability regarding IRFC and recoverable from RLDA as per MOU and have the financial arrangement to settle the loan from IRFC with the proceeds realised from RLDA simultaneously. Accordingly, as per provision of IND AS-32 amount recoverable from RLDA and loan from IRFC has been offset and the net amount presented in the balance sheet.

19.2 Other Provisions :

Disclosures as per Ind AS 37 regarding nature of provisions and movements in provisions are as follows :

a) Demobilisation Provisions

The Company has made provision for demobilisation to meet the expenditure towards Demobilisation of Manpower and Plant & Equipment in respect of foreign projects.

b) Maintenance Provisions

In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover company's liability during defect liability period keeping into consideration the contractual obligations, obligations of the sub-contractor, operating turnover and other relevant factors.

c) Legal Cases

Provision for legal cases represents liabilities that are expected to materialise in respect of matters in courts, arbitrations and appeal.

d) Provisions for Other Expenses

Provision for other expenses represents expected liabilities in respect of indirect taxes and others.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties.The following methods and assumptions were used to estimate the fair values:

i) The fair value of investments in mutual fund units is based on the Net Asset Value ('NAV') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.

ii) Investment in subsidiaries and joint ventures are classified as equity investments have been accounted at historical cost. since these are scope out of Ind AS 109 for the purposes of measurement, the same have not been disclosed in the tables above.

* During the financial year 2022-23 and 2021-22, there were no transfers between Level 1, Level 2 and Level 3 fair value measurements.

B. Financial Risk Management

The Company's principal financial liabilities comprise borrowings, trade, lease liability and other payables. The Company's principal financial assets include loans to related parties, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also holds investment in mutual funds and tax free bonds. The Company's activities expose it to some of the financial risks: market risk, credit risk and liquidity risk.

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 Foreign currency risk and Interest rate risk. Financial instruments affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial instruments.

(i) Foreign Currency Risk

The Company operates internationally and is exposed to insignificant foreign currency risk (since receipts & payments in foreign currency are generally matched) arising from foreign currency transactions, primarily with respect to the USD, EURO, BDT, DZD, LKR, JPY,MMK and ZAR. Significant foreign currency risk of group are naturally hedged.

As of March 31, 2023 and March 31, 2022, every 5% increase or decrease of the respective foreign currency would impact our profit before tax by approximately ?5.67 crore and ?16.98 crore respectively.

No significant changes in estimation techniques or assumptions were made during the reporting period.

During the year, the Company has recognised loss allowance of ?20.00 (31 March, 2022 : ?2.26 ). c) Liquidity risk

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. The treasury department regularly monitors the position of Cash and Cash Equivalents vis-a-vis projections. Assessment of maturity profiles of financial assets and financial liabilities and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position.

The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The senior Management of the Company oversees its investment strategy and achieve its investment objectives. The Company typically invests in government of India debt bonds and mutual

Further, the Company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants.

32. Employee Benefits

Disclosures in compliance with Ind AS 19 "Employee Benefits" are as under:

(a) Defined Contribution Plans - General Description

Pension

The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. April 01, 2009, for all regular employees drawing pay in IDA scale irrespective of their length of service except for those employees who joined before January 01, 2017 but would superannuate/resign after January 01, 2017, before completing 15 years of service, in such case Employer contribution towards pension would be effective from January 01, 2017 only. The scheme is managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Company's share of contribution amounting to ?9.17 crore (? 8.93 crore) for the period from April 01, 2022 to March 31, 2023 has been paid and accounted for during the period 2022-23.

Subsequent to closure of FY 2022-23, the Board of Directors in its 286th meeting held on 11th May, 2023 has approved for shifting of IRCON Defined Contribution Superannuation Pension Scheme, 2009 maintained with Life Insurance Corporation (LIC) to National Pension Scheme (NPS).

(b) Defined Benefit Plans - General Description

Provident fund

The Company pays fixed contribution of Provident Fund at a pre-determined rate to a separate trust ( IRCON Contributory Provident Fund Trust), which invests the funds in permitted securities. The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The trust is approved by the Income Tax Authorities. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and the interest payment based on the notified interest rate.

During the period, the Company has contributed ?13.64 crore (? 13.43 crore) to the trust towards employer's contribution for providend fund.

Gratuity

The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the employees of the Company as a social security measure on the termination of their employment due to superannuation, retirement, resignation, physical incapacitation or death. The scheme is managed by a separate trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of India. As at March 31, 2023 a liability of ?7.17 crore (? 4.68 crore) has been booked in the books of accounts based on the actuarial valuation.

Post retirement medical facility (PRMF)

The Company had established an irrevocable trust by initial one-time contribution of ?12.00 crore during the year 2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as a voluntary welfare measure for which the Company is not liable for providing such benefit to its employees. Further, the Company provides medical benefits to its emolpyees (and spouse) who superannuate from the Company. The Company has contributed ?5.26 crore (? 4.64 crore) based on DPE guidelines on Superannuation Benefits.

Other Retirement benefits - General Description

Other retirement benefits include settlement at home-town or to the place where he/she or his/her family intends to settle in India including Baggage Allowance. The liability on this account is recognized on the basis of actuarial valuation.

The summarised position of various employee benefits recognised in the statement of profit and loss and balance sheet as on March 31, 2023 is as under:

reporting period.

Sensitivities due to mortality and withdrawals are insignificant and hence ignored.

Sensitivities as to rate of inflation, rate of increase of pensions in payments, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

ix) Expected contribution for next annual reporting period

The expected contribution to the defined benefit plan for next annual reporting period is ?23.07 Crore.

Risk analysis

Company is exposed to a number of risks in the defined benefit plan. Most significant risks pertaining to defined benefits plan, and management's estimation of the impact of these risks are as follows:

a) Interest risk

A decrease in the interest rate on plan assets will increase the plan liability.

b) Longevity risk/ Life expectancy

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

c) Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

(vi) Government Related Entities:

The Company is a Central Public Sector Enterprise (CPSE) under the Ministry of Railways. The Company is controlled by Government of India (GOI), by holding 73.18 % of equity shares in the name of President of India as at 31st March, 2023. Pursuant to Para 25 and 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms at arm length basis. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements.

36. Impairment of Assets

During the year, Company has carried out assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, "Impairment of Assets" notified under section 133 of the companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Nil (Nil) has been provided for."

37. Provisions, Contingencies and Commitments

(i) Provisions

The nature of provisions provided and movement in provisions during the year as per Ind AS 37 'Provisions, Contingent Liabilities and Contingent Assets' are disclosed in Note 19.

(ii) Contingent Liabilities

Disclosure of Contingent Liabilities as per Ind AS 37 'Provisions, Contingent Liabilities and Contingent Assets' are as under:

Foot Note:

1. The Income Tax Authority have raised demands on account of various disallowances pertaining to different assessment years. Many of these matters were adjudicated in favour of Company but are disputed before higher authorities by the concerned departments. The Company is contesting these demands, which are pending at various appellate levels. Based on the advice from the independent tax experts and the developments on the appeals, the management is confident that additional tax so demanded will not be sustained on completion of the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has been made in these financial statements.

2. There are various disputes pending with authorities of excise, customs, service tax, sales tax, VAT etc. The Company is contesting these demands raised by concerned authorities and are pending at various appellate authorities. Based on the grounds of appeal and advice of the independent legel experts, the management believes that there is reasonable strong likelihood of succeeding before the various authorities. Pending the final decisions on the above, no adjustment has been made in these financial statements. The above disputed indirect tax demands includes ?195.82 crore which is reimbursable from clients.

3. In case of International Metro Civil Contractor, a Joint Operation of the Company, there is disputed demand pending with the sales tax authorities amounting to ?3.33 crore (? 3.33 crore) on account of disallowance of labour expenses. The joint operation had filed appeals before the appropriate appellate authorities against the demand. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

4. The Company is a party to several legal suits on construction contract terms related disputes, pending before various courts and arbitration proceedings in India and aboard. Some of the contractors have lodged claims on the company seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the company as being not admissible in terms of provisions of the respected contracts. Against a total claim of ?701.86 crore (? 638.79 crore), provision of ?77.35 crore (? 101.48 crore) has been made and balance t624.51 crore (? 537.31 crore) is shown as contingent liability. The Company has also made counter claims on the contractors admissible as per the terms of the contract of ?333.31 crore (? 238.82 crore). Interest on claims is not considered, being unascertainable.

5. One of the contractor, M/s Sai Engineers has filed suit against International Metro Civil Contractor for an amount of ?0.02 crore (? 0.02 crore) for dispute on contract terms. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

6. There are some cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

7 (i) The Company has given letter of comfort on behalf of its subsidiary company, Ircon Infrastructure and Services Limited for an amount of ?11.39 crore (? 11.39 crore) for performance guarantee submitted to client.

(ii) The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for its subsidiary companies for an amount of ?4,565.99 crore (? 1,534.80 crore). The term loan availed (net of repayment) by the subsidiary companies as on 31.03.2023 is t1,464.21 crore (? 1,056.02 crore).

(iii) Contingent Assets

Disclosure of Contingent Assets as per Ind AS 37 'Provisions, Contingent Liabilities and Contingent Assets' is as under:

a) Claims raised by company on some of its clients and awarded by arbitrators in favour of company against which clients have gone to court not accounted for as receivables are ?461.17 crore (? 425.76 crore) including interest calculated up to 31.03.2023 as per arbitration award.

b) Counter Claims raised by company on sub-contractors and awarded by arbitrators in favour of company against which subcontractors have gone to court, not accounted for as receivables are ^22.48 crore (? 25.42 crore).

c) Insurance Claim of USD 0.93 Mn (USD 0.91 Mn) and Ethiopian Birr 1.28 Mn (Birr 1.22 Mn) equivalent to ?7.79 crore (? 7.05 crore) including interest calculated upto 31.03.2023 awarded by Honourable Supreme Court of Ethiopia in favour of company has not been accounted for, pending execution order by High Court of Ethiopia.

* The Company's Board of Directors (BoD) has approved a resolution on 11th May, 2023 to increase the loan commitment in three Joint Venture Companies. Accordingly, the changes in the commitment has been disclosed.

4. Company's Non Fund based limits earmarked for issuance of bank guarantee to subsidiary companies amounts to ?738.61 crore (? 488.61 crore). Out of the said limit, bank guarantees to the extent of ?447.03 crore (? 230.33 crore) has been utilised as on 31.03.2023. Therefore, the balance limit for issuance of bank guarantee is ?291.58 crore (? 258.28 crore).

5. The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for its subsidiary companies for an amount of ?4,565.99 crore (? 1534.80 crore). The subsidiary companies have availed term loan of ?1758.82 crore (? 1090.50 crore) till 31.03.2023. During the year, the subsidiary companies have repaid an amount of ?294.61 crore (? 34.48 crore) against these term loans and the term loan balance as on 31.03.2023 is ^1,464.21 crore (? 1056.02 crore).

6. (i) The Company along with SECL (Sponsors) have executed Sponsor's Support Agreement on behalf of its Joint Venture, Chhattisgarh East West Railway Ltd.(CEWRL), wherein it has been stated that in case of termination of the Concession Agreement due to an event of default by the Borrower prior to the achievement of the Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service obligations of the Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the Project. IRCON's share as per the given amount of Rupee Term Loan is ?1,033.76 (26% of total loan of ?3976 Crore) as on 31st March 2023 (31st March, 2022: ?1033.76 Crore).

(ii) The Company along with CCL (Sponsors) have executed Sponsor's Support Agreement on behalf of its Joint Venture, Jharkhand Central Railway Ltd. (JCRL), wherein it has been stated that in case of termination of the Concession Agreement due to an event of default by the Borrower prior to the achievement of the Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service obligations of the Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the Project. IRCON's share as per the given amount of Rupee Term Loan is ?327.60 (26% of total loan of ?1259.75 crore) as on 31st March 2023.

7. The Company has committed to grant loan (Unsecured interest free/ Unsecured interest-bearing) upto an aggregate amount of ?500 crore at any time to Special Purpose Vehicles (SPVs) formed as wholly owned subsidiary (WOS) companies in India for executing road/ highway project of NHAI, in addition to limits already approved BoD.

38. Segment Reporting

Disclosure as per Ind AS 108 " Operating Segment” is given as under:

A. 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. The Board of Directors of the Company is the Chief Operating Decision Maker (CODM). The operating segments have been reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) for review of performance and allocating resources.

The Company has determined reportable operating segments from geographical perspective.

(i) Trade receivables are non-interest bearing and the customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. 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.

For the year 2022 - 23 and 2021-22 - There has been a net increase of ?332.45 crore and ?134.78 crore respectively as compared to previous year mainly due to recognition of Revenue based on input method whereas bills for work done are certified based on contract condition.

During the year ended March 31st, 2023, ?807.48 crore and March 31st 2022, ?272.11 crore of contract assets as of April 1st, 2022 and April 1st 2021 respectively has been reclassified to trade receivables upon billing to customers on completion of milestones.

iii. Contract liabilities relating to construction contracts are balances due to customers, these 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.

D. Cost to obtain the contract

Amount recognised as asset as at 31st March, 2023 is Nil (As at 31st March, 2022: Nil)

Amount of amortisation recognised in the statement of profit and loss during the year is Nil (FY 2021-22: Nil)

E. Performance obligation

Information about the Company's performance obligations are summarised below:

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31st March are, as follows:

40. Leases

a) Company as a Lessee

The Company as a lessee has entered into various lease contracts, which includes lease of land, office space, guest house and vehicles.

The Company also has certain leases of offices and guest house with lease terms of 12 months or less. The Company applies the 'short-term lease' recognition exemptions for these leases.

Right of Use Assets

The carrying amounts of right-of-use assets recognised and the movements during the year are disclosed in Note 7.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management and align with the Company's business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

Following are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term:

45. Covid -19 Disclosure

The Company has considered the possible effects that may result from Covid-19 in the preparation of its financial results including the recoverability of carrying amounts of financial and non-financial assets. ln developing the assumptions relating to the possible future uncertainties in the global economic conditions because of Covid-19, the Company has used internal and external sources of information and expects that the carrying amount of the assets will be recovered. The actual impact of this global health pandemic may be different from that which has been estimated, as the Covid- 19 situation evolves in India and globally. However, the Company will continue to closely monitor any material changes to future economic conditions.

Comments:-

(i) The ratio is not applicable due to offsetting of loan from Indian Railway Finance Corporation with amount recoverable from Rail Land Development Authority. Only minor impact of lease liability considered.

(ii) The movement is primarily on account of incremental income generated via Contract Revenue and dividend from JVs. etc.

(iii) The improvement in the ratio is due to timely payments to its creditors.

(iv) The movement is on account of increase in dividend income from JVs.

(v) Investment in Bonds, Mutual funds and Joints Ventures has been considered for Ratio calculation.

(b) The Company do not have any transactions with companies struck off in current year and previous year.

(c) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period in current year and previous year.

(d) The Company have not traded or invested in crypto currency or virtual currency during the current year and previous year.

(e) The Company have not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall in current year and previous year:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(f) The Company have not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall in current year and previous year:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(g) The Company does not have any transaction which is not recorded in the books of accounts that has been subsequently surrendered or disclosed as income during the year as part of the on going tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961) in current year and previous year.

(h) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property in current year and previous year.

(i) The Company has not been declared as willful defaulter by any bank or financial institution or government or any government authority in current year and previous year.

(j) The Company has complied with the number of layers prescribed under the Companies Act, 2013 in current year and previous year.

47. Disclosure as required by Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors"

During the year, the Company has revised its accounting policy of "Property, Plant, and Equipment" for better disclosure. The changes made to the policy are highlighted in bold and do not have any impact on the Company's profitability.

Property, Plant and Equipment

Depreciation on Property, Plant and Equipment, excluding freehold land and leasehold land acquired on perpetual lease is provided on straight line basis over the estimated useful lives of the assets as specified in schedule II of the Companies act, 2013. However, in case of certain class of assets, the Company uses different useful life than those prescribed in Schedule II of the Companies Act, 2013. The useful life has been assessed based on technical evaluation, taking into account the nature of those classes of assets, the estimated usage of the asset on the basis of the management's best estimation of getting economic benefits from the asset. The estimated useful life as per the technical evaluation viz-a-viz Schedule II of the Companies Act, 2013 has been disclosed in the notes to accounts.

48. Recent pronouncement

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 on March 31,2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules,2023 as below:

Ind AS1- Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.

Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Error - This amendment has introduced a definition of 'accounting estimates' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.

Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that, it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for

adoption of this amendment is annual periods beginning on or after Aprill, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.

49. Other disclosures

a) (i) The company has been claiming deduction under section 80 IA from AY 2000-01 to AY 2019-20. The deduction under section 80 IA has been allowed by Income Tax appellate Tribunal (ITAT) upto AY 2016-17. However, Income Tax Department has filled appeal before High Court against order of ITAT for the AY 2000-01. Upto AY 201920 company was offering global income for tax in India after excluding the income in accordance with DTAA agreements where income earned from foreign countries are excluded from global income offered for taxation. The company was allowed exclusion method upto AY 2005-06, thereafter credit against taxes paid in foreign countries have been allowed from taxes computed on global income by department. After paying the due tax the issue has been contested by filing appeals. This issue has been allowed in favour of Ircon by ITAT upto AY 2016-17.

(ii) The provision for income tax w.r.t earlier years has been written back / income tax expenses has been reversed amounting to. ?78.53 crores (? 92.53 crores) account of favourable orders received from Income tax authorities.

b) There are certain other matters pending in litigations against the Company before various courts and appellate authorities on account of claims by some contractors in cost plus projects. In such cases, the Company envisages reimbursement from the Clients in full as per the terms of contract and expects no economic outflow of resources. In this respect, a total claim of ?1,984.19 crore (? 1,432.67 crore) is under litigation, for which provision of ?6.59 crore (? 3.93 crore) has been made and reimbursed by the client. The Company has also made counter claims on the contractors of ?340.09 crore (? 615.65 crore). Interest on claims is not considered, being unascertainable.

c) Hon'ble High Court has permitted to release an arbitration award, amounting to ?97.96 Crore against NHAI for UP-05 ,Orai Highway Project against submission of bank guarantee of equivalent amount. The company has provided liability of equivalent amount till final decision of the Court.

d) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters were sent to the parties. Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis. However, management does not expect to have any material financial impact of such pending confirmations / reconciliations.

e) Certain reclassifications and recasting have been made to the comparative period's financial statements to enhance comparability with the current year's financial statements. These reclassifications have no effect on the reported results of operations.

f) Previous year figures are shown under bracket () to differentiate from current year figures.

g) In the opinion of the management, the value of assets, other than property, plant and equipment and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.