| Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory THE NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS NOTE NO.-1 GENERAL INFORMATION Indian Railway Catering and Tourism Corporation Ltd. (IRCTC) has been set up by the Ministry of Railways with the basic purpose of hiving off entire catering and tourism activity of the railways to the new Corporation so as to professionalize and upgrade these services with public-private participation. Rail based Tourism in India will be the specific vehicle for achieving high growth in coordination with state agencies, tour operators, travel agents and the hospitality industry. The Company is registered under the Indian Companies Act, 1956. NOTE NO.-2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 BASIS FOR brPARATION OF FINANCIAL STATEMENTS The financial statements are brpared in accordance with the generally accepted accounting principles in India and comply with Accounting Standards issued by the Institute of Chartered Accountants of India under Section 211(3C) of the Companies Act, 1956/Section 133 of the Companies Act, 2013.2.2 METHOD OF ACCOUNTING: - The Corporation is following accrual basis of accounting except License Fee on GDP basis with effect from 1st November, 2006 from the Licensees of static catering stalls, to whom the contract was awarded by Railways, on the basis of receipt, under historical cost convention. 2.3 USE OF ESTIMATES In brparing the financial statements in conformity with accounting principals generally accepted in India, management is required to make estimates and assumptions that affects the reported amount of assets and liabilities and the disclosures of contingent liabilities as at the date of the financial statements and the amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognized in the period of their determination. 2.4 REVENUE RECOGNITION:- The Corporation is in the business of managing catering services (both mobile and static units), Bedroll services in mobile units, operating Departmental Catering Units, Managing Rail Yatri Niwas and Railway Hotels on Public Private Partnership basis, awarding licenses for operating Food Plazas, Static Catering stalls, Automatic Vending Machines, booking of Rail Tickets through Internet, Managing Rail Sampark-139 Call Centre on Public Private Partnership basis, arranging package tours through reputed tour operators, managing complete tour packages, manufacturing and distribution of Railneer-Packaged Drinking Water, etc. (a) Sales:- Sales of Railneer-packaged drinking water, food and beverage items are recognized when the goods are sold and services rendered and are recorded net of excise duties wherever applicable, VAT etc. in terms of Accounting standard-9. It does not include inter-depot and inter-unit transfers. (b) Income from Internet Ticketing: - Income from Internet ticketing is recognized on the basis of value of the service charges earned on the sale of tickets sold through Corporations Web-site (www.irctc.co.in). Service charges earned on the sales of such tickets on accrual basis have been booked as income of the Corporation. (c) Income from Catering Services: - The Corporation has been given a mandate by Railway Board, Ministry of Railways to upgrade and professionalize catering services on trains & other locations. The Corporation recognizes its income from catering services as per the following policies. (i) Income from Onboard Catering Services: The corporation is providing catering services on Rajdhani and Shatabdi Exbrss Trains on Indian Railways network. The income is accounted on the basis of bills raised for catering services provided to the passengers of Indian Railways on accrual basis. (ii) Income from Concession Fees, User Charges and License Fee: - The Corporation is receiving the income from the following: - Sr. No. | Nature of business activity | Nature of Fee received from licensees | 1. | Awarding license for providing Catering Services on Rajdhani and Shatabdi Exbrss Trains. | One time Concession Fee for the contract period (including renewal period, if any), and Variable License Fee. | 2. | Award of license for arranging catering services on Mail/ Jan Shatabadi /Exbrss Trains. | (i) One Time Concession Fee for the contract period (including renewal period, if any), and Fixed Annual Licence Fee for trains awarded prior to Catering policy, 2005. (ii) Fixed Annual License fee as per Catering Policy, 2005 and revised Catering Policy, 2005 of Ministry of Railways. | 3. | Award of license for setting up of Food Plaza and operation thereof at the Indian Railway brmises | (i) Fixed Monthly User Charges and Variable License Fee in case of contracts awarded under earlier IRCTC Policy. (ii) Fixed Annual License fee in case of contracts awarded as per Catering Policy, 2005 and revised catering policy, 2005 of Ministry of Railways. | 4 | Award of License for Automatic Vending Machines at Railway Stations. | (i) One time Concession fee for the contract period (including renewal period, if any), and Variable brscribed License Fee in case of contracts awarded under earlier IRCTC Policy. (ii) Fixed Annual License fee in case of contracts awarded as per Ministry of Railways Policy for AVMs. | 5 | Award of License for static units at Railway Stations | (i) One time concession fee for the contract period (including renewal period, if any), and fixed license fee in case of contracts awarded under IRCTC Policy. (ii) Fixed Annual License fee in case of contracts awarded as per Catering Policy, 2005 and Revised catering policy, 2005 of Ministry of Railways | 6. | Award of license for Re-developing, Operation, Management and Transfer of Rail Yatri Nivas and Railway Hotels on Indian Railway brmises | Fixed Annual User Charges and License Fee as per the agreement signed with the awardees. |
The Income under these heads have been recognized / accounted as under: - Concession fee: Income is recognized on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) over the contract period as per proportionate completion method contained in Accounting Standard (AS-9) relating to revenue recognition. One time concession fee (Unexpired Concession Fee) received by the Corporation has been treated as income received in advance. In case the contracts for the trains are terminated on account of cancellation / withdrawal of the train by Railway Administration, income is recognized over the period, the contract was in force. User charges: User Charges payable by the Food Plazas and Budget Hotels Licensees are accounted on accrual basis till the period project were in operation. License Fee: - (a) Fixed yearly license fees received by the Corporation are accounted on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) till the period project were in operation. (b) Variable License fee is accounted on accrual basis as a fixed percentage of the catering services provided by the contractor. (c) License fee is accounted on accrual basis as a fixed percentage of the projected turnover of the Rail Yatri Niwas and Railway Hotels operated by the licensees under re-develop, operate, manage and transfer basis. Income Accrued on Forfeiture of Contracts: - Recognition of income from Catering contracts terminated on account of breach of terms and conditions was made as under: - (a) Up to the date of termination, the income is recognized in respect of concession fee over the contract period on monthly pro-rata basis and in case of License fee over the period the train has been in operation on monthly pro-rata basis. (b) Other income: Remaining balance of concession fee, License fee and Security Deposits on forfeiture of contracts are recognized as other income accrued during the year. (d) Income from Package Tours: - The Corporation is engaged in booking of Special Trains, Special Coach Charter and berths under value added tours for promoting the rail-based tourism and booking of Air Tickets. The Corporation is also engaged in booking of foreign tours on group basis. The income from special trains/ Coach Charters includes basic fare, other charges levied by the railway administration and Corporations service charge as a fixed percentage of the basic fare. In case of value added tours, the income includes fare, block booking charges, other charges levied by the railway administration and Corporations service charges as fixed percentage of the fare. In case of Complete Tour Packages, Buddhist Circuit Special Train and Bharat Darshan Trains, the income includes the total amount net of service tax collected from the customer. (e) Interest Income from Fixed Deposits including TDRs: - Income received as Interest from fixed deposit & TDRs is recognized on accrual basis. (f) Duty Credit License: At brsent A non-transferable duty credit license under the served from India Scheme (SFIS) has been received as per foreign trade policy 2009-2014. The said License can be used against payment of excise & import duty for brscribed items. Now, Served from India Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS) as per Foreign trade Policy 2015-2020. The Duty Scrips issued under SEIS (2015-2020) would be freely transferable and also the Scrips issued under Exports from India Scheme can be used for payment of custom duty, excise duty and service tax. 2.5 EXPENDITURE: - Items of expenditure are recognised on accrual basis however certain expense/claims, which are not ascertainable are accounted for on their being ascertained. (i) Expenditure on Railneer -Packaged Drinking Water and Departmental Catering Activity: - Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities (ii) Expenditure on Internet ticketing: - Expenses are accounted on accrual basis and provision is made for all known losses and Liabilities (iii) Catering Charges Paid: (a) Onboard Catering Charges: Catering Charges paid to the Contractor are accounted for on the basis of bills raised on Corporation for catering services provided to the passengers of Indian Railways. (b) Concession Fees, User Charges, License Fee and Haulage Charges : - The Expenditure under this head has been recognized/ accounted for as per the following: Concession Fee Paid: Concession Fee payable to Indian Railways in respect of on board catering contract, Automatic Vending Machines, Static Units etc. is recognized on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) over the contract period. Payment of Unexpired Concession Fee to the Indian Railways has been treated as an advance. In case the contracts for the trains are terminated on account of breach of terms and conditions of the contract or cancellation / withdrawal of the train by Railway Administration, expenditure is recognized over the period, the contract was in force. User charges Paid: User Charges payable to Indian Railways in respect of Food Plazas and Budget Hotels are accounted for on accrual basis till the period projects were in operation. License Fee Paid: - (a) Fixed yearly license fees payable to Indian Railways by the Corporation is accounted for on accrual basis on monthly pro-rata basis (fraction of the month, if any, has been treated as full month) till the period project were in operation. (b) Variable License fee payable to Indian Railways is accounted on accrual basis as a fixed percentage of the catering services provided /sales made. Tourism Expenses: - The Cost of Ticket, other charges, if any, levied by the Indian Railways and Service charges on booking of the special train / coach charter / berths are accounted on accrual basis. In case of complete tour packages and Buddhist Circuit Special Train, cost of train ticket, Service Charges and other charges, if any levied by Indian Railways, Road Travel expenses and accommodation and meal charges etc are accounted on accrual basis. (iv) Prior Period Expenses : Income / expenditure relating to prior period, which do not exceed Rs.1, 00,000/- in each case, are treated as income / expenditure of current year. (v) Exceptional Items : Exceptional items are generally non-recurring items of Income & Expense within Profit & loss from ordinary activities which are of such size, nature or incidence that their disclosure is relevant to explain the performance of the Company for the year.2.6 FIXED ASSETS AND INTANGIBLE ASSETS: - (i) Fixed assets are stated at cost of acquisition including installation charges and other related expenses. (ii) In case of Computers the cost of Operating System software procured along with Computer has been capitalized with Computers, while regular upgrades and Annual Maintenance Charges; have been treated as revenue expenditure. (iii) Expenditure on the leased buildings for Office brmises has been capitalized as Leasehold Office Development. (iv) Intangible assets like software, licenses, web portal, tourism portal etc. are recorded at the consideration paid for acquisition and useful life of Intangible Assets has been assumed as 4 Years. (v) The tools and plants placed at such catering units are taken on, as is where basis is. Due to non-availability of value of such assets, such assets are accounted at Nominal Value of Rs.1/- per item in the Books of Zonal Offices of the Corporation for the purpose of ensuring physical verification. (vi) The Luxury Tourist Train has been capitalized and shown as Luxury Tourist Train in Fixed Assets Schedule . 2.7 CAPITAL WORK IN PROGRESS/CAPITAL ADVANCES: - Capital work in progress includes the cost of fixed assets that are not yet ready for their intended use and the cost of assets not put to use before the Balance Sheet date. Advances paid to acquire fixed assets are shown as part of 'Long Term Loans &Advances"2.8 DEbrCIATION: - (i) Debrciation is provided in accordance with the life specified under schedule II of the Companies Act, 2013. Debrciation is calculated on a pro-rata basis from the date of put to use. Debrciation is provided up to the date of sale, discard and loss of the assets during the year. (ii) Leasehold-Office developments in respect of office brmises and Leasehold land (for which lease agreement exists) have been debrciated over the lease period. Expenditure incurred on civil work on brmises located on Railway Land (for which no lease agreement exists) has been accounted as lease hold improvement and has been debrciated over a period of ten years. (iii) Useful life of the Intangible Assets has been assumed at four years and such assets have been debrciated @ 25 % per annum on straight line method. (iv) In respect of Residential Flats constructed on leasehold land, debrciation is charged over the period of the lease of the land. 2.9 INVENTORIES: - (i) Inventories are valued at lower of cost and net realizable value. (ii) In case of raw materials, packing materials, stores, spares and consumables, the cost includes duties and taxes (net of CENVAT, wherever applicable) and is arrived at on FIFO basis. (iii) Cost of finished goods and work in process includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their brsent location and condition. (iv) PD items (traded goods) are valued at cost on FIFO basis.2.10 INVESTMENTS: - Long term investments are carried at cost less provisions, if any, for permanent diminution in the value of such investment. 2.11 EMPLOYEES BENEFITS: - (i) The provisions/liabilities towards, Gratuity, Leave encashment, Half Pay Leave and LTC are made on the basis of actuarial valuation at the end of the year and charged to Profit and Loss Account. (ii) Provision/liabilities towards Foreign Service Contribution- Pension and Leave Salary are made in terms of Government Rules & Regulations for employees on deputation/Deemed Deputation and charged to Profit and Loss Account on accrual basis. 2.12 GRANTS: Grants relating to the acquisition of a specific asset are adjusted against the cost of the concerned asset. Grants relating to the revenue expenditure are adjusted against the related expenses. The unutilized portion of revenue and capital grant is shown as liability. 2.13 TAXATION: - The corporation has accounted for deferred taxation in line with Accounting Standard-22 on accounting for taxes on income issued by the Institute of Chartered Accountant of India. The deferred tax on timing differences between book profit and taxable profit for the year is accounted for applying the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is a reasonable certainty that the assets can be realized in future. 2.14 TRADE RECEIVABLES/ADVANCES: - Trade receivables/advances are stated after writing off debts considered as bad. Adequate provisions are made for debts/advances considered doubtful. The provisions are made on the basis of agewise analysis of trade receivables and on case to case basis. 2.15 IMPAIRMENT OF ASSETS: Cash generating units as defined in Accounting Standard-28 on Impairment of Assets are identified at the balance sheet date with respect to carrying amount vis-?is. recoverable amount thereof and impairment loss, if any, is recognized in the profit and loss account. Impairment loss, if need to be reversed subsequently, is accounted for in the year of reversal. 2.16 FOREIGN CURRENCY TRANSACTIONS: Transactions in foreign currencies are recorded at the exchange rate brvailing on the date of transaction. Foreign currency assets and liabilities are translated or converted with reference to the rates of exchange ruling on the date of the Balance Sheet. 2.17 LEASES Where the Company is the lessee: Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of Profit & Loss on a straight line basis over the lease term. Where the Company is the lessor: Assets subject to operating leases are included in fixed assets. Lease income is recognized in the statement of P & L as per the terms specified in the agreement. Costs, including debrciation are recognized as an expense in the statement of Profit & Loss. 2.18 CASH FLOW STATEMENT Cash flow statement is made by using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the company are segregated. NOTE NO. 31: PROVISIONS, CONTINGENT LIABILITES AND CONTINGENT ASSETS 31.1: PROVISIONS Pursuant to the Accounting Standard (AS 29) relating to Provisions, Contingent Liabilities and Contingent Assets, the disclosure relating to provisions made in the accounts for the year ended 31st March 2016 is as follows:- (` In Lakh) Particulars | Provision for Bad and Doubtful Debts | | Provision for Doubtful advances | | Provision for Leave Encashment (Retirement Benefits) | | Provision for Gratuity (Retirement Benefits) | | Provision for Pension (Retirement Benefits) | | | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | Opening Balance | 3422.75 | 2361.45 | 62.48 | 62.48 | 1604.68 | 1392.99 | 390.26 | 59.46 | 2028.39 | 1332.98 | Addition | 426.09 | 1061.30 | -- | -- | 626.87 | 349.72 | 490.12 | 518.79 | 263.57 | 695.41 | Utilization/ Contribution | -- | -- | -- | -- | (108.16) | (138.03) | (224.25) | (187.99) | -- | -- | Reversal | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | Closing Balance | 3848.84 | 3422.75 | 62.48 | 62.48 | 2123.39 | 1604.68 | 656.13 | 390.26 | 2291.96 | 2028.39 |
Particulars | Provision for Pension for Optees (Retirement Benefits) | | Provision for Half Pay leave | | Provision for LTC | | Provision for Post retirement medical Scheme | | | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | Opening Balance | 497.95 | 444.24 | 775.41 | 431.94 | 27.73 | 24.50 | 565.20 | -- | Addition | -- | 153.35 | 481.81 | 343.47 | 47.70 | 12.30 | 65.10 | 565.20 | Utilization/ Contribution | (99.52) | (99.64) | -- | -- | (11.69) | (9.07) | -- | -- | Reversal | -- | -- | -- | -- | -- | -- | -- | -- | Closing Balance | 398.43 | 497.95 | 1257.22 | 775.41 | 63.74 | 27.73 | 630.30 | 565.20 |
Note: (i) Provision for doubtful debts/advances is made on the basis of management’s estimates. (ii) Provision for retirement benefits is made on the basis of independent actuary’s valuation. (iii) As per the DPE guidelines, Company has formulated employees’ Post-Retirement Pension Scheme to be effective from 1st January, 2007. The scheme is pending with Administrative Ministry for approval. However, the Company has provided the liability in the accounts as per the details given in above statement. (iv) As per the DPE guidelines, Company has formulated employees’ Post-Retirement Medical Scheme to be effective from 1st January, 2007. The scheme is pending with Administrative Ministry for approval. However, the Company has provided the liability in the accounts as per the details given in above statement. (v) Provision of Pension in respect of deemed deputationist Optees has been made to make 100% commutation of difference of pension (IRCTC- Railways) as full and final one time settlement of pensionery liabilities of IRCTC so as to avoid monthly recurring liability of pension. 31.2: CONTINGENT LIABILITIES Claims against the Corporation pending appellate/judicial decisions: (` In Lakh) S.No. | Particulars | As at 31st March, 2016 | As at 31st March, 2015 | a. | Employee Court Case – SCZ | 9.20 | 9.20 | b. | Service Tax | 2,542.00 | 1,407.30 | c. | Others | 9,880.50 | 9,362.95 | | Total | 12,431.70 | 10,779.45 |
Claim against the corporation not acknowledge as debt. S.No. | Particulars | As at 31st March, 2016 | As at 31st March, 2015 | a. | Service Tax | 8,388.36 | 9,373.54 | b. | VAT | 2,484.27 | 2,337.79 | c. | Other Taxes | 7.74 | 7.74 | | Total | 10,880.37 | 11,719.07 |
The Corporation has made provision for service tax where demand has been raised and shown as contingent liability where show cause notice have been issued by the service tax department. 31.3: By virtue of Joint venture agreement Dated 10.12.2008, Royale Indian Rail Tours Limited (RIRTL) was formed as a joint venture company with Cox and Kings Limited with IRCTC & Cox & King as Shareholders. A Luxury train of 23 coaches was constructed, funded and created by IRCTC and was given to Royale Indian Rail Tours Limited (RIRTL) for operations on adhoc basis and it was christened as Maharaja’s Exbrss. The Train was operated from March 2010 to April 2011. In that intergenem, it was noticed that various agreements between the parties regarding the train operation were not being allowed to be finalized, including the lease agreement for train and MOU with Indian Railways. Further, haulage charges, etc. due were also not being paid. Ultimately IRCTC terminated the agreement with Cox and Kings Ltd on 12/08/2011, as well as also had withdrawn the train from RIRTL. Cox and Kings Limited filed a petition in Honorable Delhi High Court and after the judgment of Division Bench of High Court in favour of IRCTC, Cox and Kings Ltd approached the Subrme Court. The matter has been decided in favour of IRCTC by Honorable Subrme Court of India with an observation that parties are at liberty to appoint an arbitral Tribunal to settle their disputes. The prayer of Cox & Kings Ltd. before the arbitral Tribunal is for specific performance of the joint venture agreement. Based on legal opinion available with the Company and in view of the termination of the joint venture agreement, the IRCTC is of the view that Cox and Kings Ltd. cannot invoke the arbitration clause in relation to the reliefs sought. The order on IRCTC’s plea has been reserved. IRCTC does not feel the necessity to recognize the claim of the Cox and Kings Ltd which is for restoration of the Joint Venture Agreement and therefore consequential financial impact is not ascertainable at brsent. On the other hand, IRCTC has initiated proceedings under section 397 and 398 of the Companies Act, 1956 against Cox and Kings Ltd. and its officers which is sub judice. 31.4:VAT Case filled Before Hon’ble Subrme Court of India The Corporation has been paying service tax towards on-board catering services in trains in which catering charges are included in railway fare. The commissioner of VAT vide order dated 23.03.2006 considered on-board catering service in trains as sale of goods within the meaning of section 2(zc)(vii) of the said Act. IRCTC filed an appeal before the Appellate Tribunal Value Added Tax. The Tribunal, while partly allowing the appeal vide Order dated 07.09.2006, held that the observations pertaining to Central Act were beyond the Commissioner’s jurisdiction as they pertained to taxability of the goods on sale or purchase taking place in the course of inter-state sale outside the State. IRCTC assailed the said order by way of filing writ petitions in the Hon’ble High Court of Delhi at New Delhi praying that the services rendered by IRCTC are not liable to Value Added Tax under the Delhi Value Added Tax Act, 2004 and that on-board catering services of the Corporation are primarily services in which food and beverages are also provided and are liable to service tax only. The Hon’ble Delhi High Court upheld the decision of commissioner of VAT and dismissed the petition of IRCTC. The Hon’ble High Court had stated that corporation is liable to pay VAT. However, it may take refund of service tax already paid. Aggrieved by the Judgement, the Corporation has moved to Hon’ble Subrme Court, filing Special leave petition against the judgment dated 19.7.2010 passed by the Hon’ble High Court of Delhi. SLP 25292-25319 of 2010 had been admitted and awaiting its turn. The Hon’ble Subrme Court has granted ad-interim direction in the nature of Status Quo on recovery of the demand raised by VAT authorities. Hence the matter is sub-judice and the corporation is not liable to pay VAT at brsent. However, the corporation has provided VAT liability net of service tax of Rs.7979.01 lakh up to FY 2015-16 across India as a matter of prudent accounting policy and amount pertaining to current year is reduced from sales. Corresponding VAT input admissibility is shown as balance with Govt. authorities (Note-17). NOTE NO. 32 : PAYMENT GATEWAYS Company is handling Railway reservations through internet for which five payment gateways and more than thirty five Net Banking/Debit Card networks of almost all the banks are being used. The volume of transactions in all these accounts is very huge and increasing day by day with increase in Booking of tickets. Transaction wise reconciliation has been carried out for the financial year 2015-16 to smoothen the process. However, certain differences are still persisting for financial years prior to 2015-16 which are because of non-comparability of data cycle of IRCTC and the respective banks. The matter has been taken up with the respective banks to provide the data in comparable form so that persisting differences can be eliminated. NOTE NO. 33 : TRADE RECEIVABLES The Trade Receivables, Trade Payables, Advance to Railways and Security Deposit are unconfirmed and unreconciled. The reconciliation with various parties including Railways has been under taken and is still in progress. However, it has been reported to Board that though reconciliation meetings are held and differences ironed out but minutes are not being signed from the side of Railways. Pending confirmation and reconciliation of Trade Receivables, the Corporation has decided to create a provision of ` 426.09 lakh (brvious year ` 1,061.30 lakh) against receivables from various parties including Railways which in view of the management are doubtful of recovery. NOTE NO. 34 : CAPITAL COMMITMENT Estimated amount of Contracts remaining to be executed on capital account and not provided for amounts to ` 1476.14 Lakh as against ` 2323.13 Lakh in the brvious year. NOTE NO. 35 : In the opinion of Management, value of Current Asset, Loans and advances, if realized in the ordinary course of business, shall not be less than the amount at which the same are stated in the Balance Sheet. However, the balance of Trade Receivables including Railway Trade Receivables and Trade Payables as stated in the Balance Sheet are subject to confirmation. NOTE NO. 36 : EMPLOYEE BENEFITS General description of the defined benefit schemes/defined contribution scheme: (i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. The gratuity ceiling of ` 10 Lakh has been considered for actuarial valuation. Actuarial valuation though was made for all employees irrespective of the completion of 5 years of service. (ii) Leave Encashment: Payable on separation to eligible employees who have accumulated earned leave. Leave salary is provided for based on valuations, as at the balance sheet date, made by independent actuary. (iii) Half Pay Leave: to eligible employees who have accumulated half pay leaves. Half pay leave is provided for based on actuarial valuations, as at the balance sheet date. (iv) Leave Travel Concession(LTC) : to eligible employees is provided for based on actuarial valuations, as at the balance sheet date. (v) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporation’s contribution to provident fund is charged to revenue. (vi) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists including deemed deputationists (employees who have joined the corporation on deputation for a fixed period from Indian Railways) for the year 2015-16 in terms of Government rules and regulations is charged to revenue on accrual basis. Other disclosures, as required under Accounting Standard(AS)-15(revised) on ‘Employee Benefits’ in respect of defined obligations are: (a) Actuarial assumptions Sr. No. | Description | As at 31st March, 2016 | As at 31st March, 2015 | (i) | Discount rate(per annum) | 7.91% | 7.79% | (ii) | Mortality rate | Indian Assured Lives Mortality (2006-08) (Modified Ultimate) | Indian Assured Lives Mortality (2006-08) (Modified Ultimate) | (iii) | Withdrawal rates( per annum) | | | | Up to 30 Years | 2 | 3 | | From 31 to 44 Years | 2 | 3 | | Above 44 Years. | 2 | 3 | (iv) | Estimated rate of return on plan assets | 0 | 0 | (v) | The estimate of future liability increases considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors | | |
(b) Actuarial Method Projected unit credit (PUC) actuarial method is used to assess the plan's liabilities of exit employees for retirement, death-in-service and withdrawal and also compensated absence while in service. (c) Plan Assets. (i) Changes in the fair value of plan assets (` In Lakh) | | Gratuity | | Leave Encashment | | Half Pay Leave | | LTC | | | | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | a) | Fair value of plan assets at the beginning of the period | 1086.94 | 1086.94 | -- | -- | -- | -- | | -- | b) | Acquisition adjustment | -- | -- | -- | -- | -- | -- | | -- | c) | Expected return on plan assets | 92.74 | 86.96 | -- | -- | -- | -- | | -- | d) | Contributions | 184.69 | -- | 97.76 | 98.04 | -- | -- | 11.69 | 9.07 | e) | Benefits paid | (14.68) | -- | (97.76) | (98.04) | -- | -- | (11.69) | (9.07) | f) | Actuarial gain/(loss) on plan assets | 235.10 | (86.96) | -- | -- | -- | -- | -- | -- | g) | Fair value of plan assets at the end of the period | 1584.79 | 1086.94 | -- | -- | -- | -- | -- | -- |
(ii) Fair value of plan asset. (` in Lakh) | | Gratuity | | Leave Encashment | | Half Pay Leave | | LTC | | | | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | a) | Fair value of plan assets at the beginning of the period. | 1086.94 | 1086.94 | -- | -- | -- | -- | -- | -- | b) | Acquisition adjustment | -- | -- | -- | -- | -- | -- | -- | -- | c) | Actual return on plan assets | 327.84 | -- | -- | -- | -- | -- | -- | -- | d) | Contributions | 184.69 | -- | 97.76 | 98.04 | -- | -- | 11.69 | 9.07 | e) | Benefits paid | (14.68) | -- | (97.76) | (98.04) | -- | -- | (11.69) | (9.07) | f) | Fair value of plan assets at the end of the period | 1584.79 | 1086.94 | -- | -- | -- | -- | -- | -- | g) | Funded status-Surplus/(Deficit) | (659.45) | (354.02) | (1971.48) | (1442.38) | (1257.22) | (775.41) | (63.73) | (27.73) | h) | Excess of actual over estimated return on plan assets | -- | -- | -- | -- | -- | -- | -- | -- |
(d) Reconciliation of the brsent value of the defined benefit obligations (` In Lakh) Sr. No. | Particulars | Gratuity | Leave Encashment | Half Pay Leave | LTC | (i) | Present value of the Projected benefit obligations as at 1st April, 2015 | 1440.96 | 1442.38 | 775.41 | 27.73 | (ii) | Current Service Cost | 316.81 | 317.64 | 7.03 | 4.98 | (iii) | Interest Cost | 113.40 | 110.22 | 61.33 | 1.73 | (iv) | Actuarial gains(-)/losses(+) | 387.75 | 199.00 | 413.45 | 40.98 | (v) | Past Service Cost | -- | -- | -- | -- | (vi) | Benefits Used | 14.68 | 97.76 | -- | 11.69 | (vii) | Present Value of the projected benefit obligations as on 31st March, 2016(i+ii+iii+iv-v-vi) (Amount recognized in Balance sheet). | 2244.24 | 1971.48 | 1257.22 | 63.73 |
(e) Reconciliation of the fair value of the assets and obligations: (` In Lakh) Sr. No. | Particulars | Gratuity | Leave Encashment | Half Pay Leave | LTC | (i) | Net Asset/(Liability) Recognized at the beginning of the period | (354.02) | (1442.38) | (775.41) | (27.73) | (ii) | Employer Expenses | (490.12) | (626.86) | (481.81) | (47.69) | (iii) | Employer Contribution | 184.69 | 97.76 | -- | 11.69 | (iv) | Acquisitions/Divestures | -- | -- | -- | -- | (v) | Net Asset/(Liability) Recognized at the end of the period (Amount recognized in Balance sheet). | (659.45) | (1971.48) | (1257.22) | (63.73) |
(f) Expenses recognized in the Statement of Profit & Loss Account for the year ended 31st March, 2016: (` In Lakh) Sr. No. | Particulars | Gratuity | | Leave Encashment | | Half Pay Leave | | LTC | | | | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | (i) | Current Service Cost | 316.81 | 273.31 | 317.64 | 219.25 | 7.03 | 297.10 | 4.98 | 1.32 | (ii) | Interest Cost | 113.40 | 86.64 | 110.22 | 85.56 | 61.33 | 33.78 | 1.73 | 1.91 | (iii) | Actuarial Gain(-)/ Losses(+) | 152.65 | 215.84 | 199.00 | 92.44 | 413.45 | 12.59 | 40.99 | 9.07 | (iv) | Past Service Cost | -- | -- | -- | -- | -- | -- | -- | -- | (v) | Expected return on plan assets | (92.74) | (86.95) | -- | -- | -- | -- | -- | -- | (vii) | Total(i+ii+iii+iv+v) | 490.12 | 488.84 | 626.86 | 397.25 | 481.81 | 343.47 | 47.70 | 12.30 | (viii) | Employee Remuneration and benefits | -- | -- | -- | -- | -- | -- | -- | -- | | Charged to Profit and Loss Account | 490.12 | 488.84 | 626.86 | 397.25 | 481.81 | 343.47 | 47.70 | 12.30 | (ix) | Actual Return on Plan Assets | 327.84 | -- | -- | -- | -- | -- | -- | -- |
(g) Other Disclosures: Gratuity | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 2244.24 | 1440.96 | 952.13 | 618.91 | 777.41 | Fair Value of plan assets as at the end of | 1584.79 | 1086.94 | 1,086.94 | 1019.28 | 936.63 | Surplus / (Deficit) (ii-i) | (659.45) | (354.02) | 134.82 | 400.37 | 159.22 | Experience adjustment on plan liabilities (loss)/gain | (387.75) | (128.88) | (144.90) | 360.38 | (28.38) | Experience adjustment on plan assets (loss)/gain | 235.10 | (86.96) | 9.60 | 9.32 | 3.17 |
Leave | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 1971.48 | 1442.38 | 1143.17 | 650.86 | 801.19 | Surplus/(Deficit) | (1971.48) | (1442.38) | (1143.17) | (650.86) | (801.19) | Experience Adjustment on plan liabilities (loss)/gain | (199.00) | (92.44) | (402.92) | 365.99 | 8.54 |
Half Pay Leave | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 1257.22 | 775.41 | 431.94 | -- | -- | Surplus/(Deficit) | (1257.22) | (775.41) | (431.94) | -- | -- | Experience Adjustment on plan liabilities (loss)/gain | (413.45) | (12.60) | (294.49) | -- | -- |
LTC | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 63.73 | 27.73 | 24.50 | -- | -- | Surplus/(Deficit) | (63.73) | (27.73) | (24.50) | -- | -- | Experience Adjustment on plan liabilities (loss)/gain | (40.99) | (9.07) | -- | -- | -- |
(h) The Employees’ Gratuity Fund Scheme managed by a Trust (SBI Life Insurance Co. Ltd) is a defined benefit plan. The brsent value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method. NOTE NO. 37 : During the year 2015-16, the sharing with various Zonal Railways has been made in terms of Memorandum of Understanding dated 17.01.2007, executed with the Ministry of Railways. NOTE NO. 38 : RELATED PARTY DISCLOSURE As per Accounting Standard-18-‘Related Party Disclosure’ issued by the Institute of Chartered Accountants of India, the names of the related parties are given below:- Nature of Relationship | Name of the related Party | Joint Venture | Royale Indian Rail Tours Limited | Key Managerial Personnel | (i) Dr. A.K. Manocha, CMD (ii) Shri M.P. Mall, Director (Finance) (iii) Shri R.N. Kalita, Director(CS) (Ceased w.e.f.01.03.2016) (iv) Smt. A.K. Brar, Director (T&M) (v) Shri V.Sriram, Director (CS) (Joined w.e.f. 11.03.2016) |
Details of transactions between the Corporation and the related parties, as defined in the Accounting Standard, during the year, are given below - (` In Lakh) Sr. No. | Nature of Transaction | Joint Venture | | Key Management Personel | | | | As at 31st March, 2016 | As at 31st March, 2015 | As at 31st March, 2016 | As at 31st March, 2015 | (i) | Investments | 250 | 250 | -- | --- | (ii) | Provision for dimunition in investment | 250 | 250 | -- | --- | (iii) | Advance Lease Rent | 1741.50 | 1,741.50 | -- | --- | (iv) | Lease Rent Receivable | 269.08 | 269.08 | -- | --- | (v) | Trade Payables | (1471.71) | (1,471.71) | -- | --- | (vi) | Lease Rent Income | - | - | -- | --- | (vii) | Managerial Remuneration | N.A. | N.A. | 175.78 | 116.86 |
The provision for diminution in investment has been made for IRCTC share of investment i.e. 250.00 Lakh as the cumulative losses of RIRTL has wiped out its net worth. Further, the Balance Sheet of RIRTL for 2010-11, 2011-12, 2012-13 , 2013-14, 2014-15 & 2015-16 have not been finalized pending dispute with M/s Cox and Kings (India) Ltd. NOTE NO. 39 : FINANCIAL REPORTING OF INTEREST IN JOINT VENTURES As per Accounting Standard-27-‘Financial reporting of interest in Joint Ventures’ issued by the Institute of Chartered Accountants of India, the Corporation’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company as at 31st March, 2016 are not available in view of non-finalization of its accounts because of dispute between the parties. (` In Lakh) Sr. No. | Name of the Joint Venture Company | % of Corporation’s ownership interest | Assets | Liabi lities | Income | Expen diture | Contingent Liabilities | Capital Commitments | 1. | RIRTL | 50 % | Not available | Not available | Not available | Not available | Not available | Not available |
NOTE NO. 40 : IMPAIRMENT OF ASSETS Pursuant to Accounting Standard (AS 28) impairment of Assets issued by the Institute of Chartered Accountants of India, the Corporation made an assessment on 31st March, 2016 for any indication of impairment in the carrying amount of Corporation’s Fixed Assets. On the basis of such assessment, in the opinion of the management no provision for the impairment of Fixed Assets of the Corporation is required to be made during the year. NOTE NO. 41 : Licensee managed static catering stalls, which were awarded by Railways, were transferred to IRCTC. As per directive of Ministry of Railways, IRCTC has advised Licensees of static catering stalls for payment of license fee on GDP basis w. e. f. 1st November 2006. However, no written contract with regard to the same exists between IRCTC and licensees of catering stalls. It has been noticed that many of the licensees are not paying license fee fixed on GDP basis and they have gone to court challenging the fixation of license fee on GDP basis and have obtained stay order from the Hon’ble Subrme Court. There are uncertainties regarding the determination of the amount to be realized from the licensees. The Corporation has recognized income as per Accounting Standard (AS-9) in respect of such licensee catering stalls on the basis of old licensee fees fixed by Indian Railways or amount actually received from licensees, whichever is higher. NOTE NO. 42 : (i) Expenditure incurred on civil work on brmises located on Railway land other than Railneer Plants has been accounted as lease hold improvement and has been debrciated over a period of ten years. (ii) Residential flats constructed on railway land are on lease for a period of 30 years and the same has been debrciated over that period. NOTE NO. 43 : IRCTC has taken land from Railways on lease basis for setting up of Railneer Plants at Nangloi, Danapur, Palur and Ambernath for which lease period has not been fixed by Railway authorities. As per the policy of the Railways the maximum period of lease can be for a period of 35 years which is further renewable for a period of 35 years. Debrciation on buildings of Railneer Plants at Nangloi, Danapur, Palur and Ambernath has been provided on straight line basis as per accounting policy being followed consistently. IRCTC has written to concerned Railways to confirm the maximum period of lease of such land provided to IRCTC, reply of which is awaited. NOTE NO. 44 : SEGMENT REPORTING (AS-17) The corporation has disclosed business segment as the primary segment. The segment has been identified taking into account the nature of services rendered, organization structure and internal reporting system. The corporation’s operations brdominantly relate to arranging: · Licensee Catering · Departmental Catering · Railneer · Tourism · Internet Ticketing. The corporation caters mainly to the needs of the domestic market. As such there are no reportable geographical segments. The accounting principles used in the brparation of the financial statements is consistently applied to record revenue & expenditure in individual segments, as set out in the note of significant accounting policies. Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective segment while the remainder of the costs are categorized as unallocated expenses .The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income of the Corporation. The overall percentage of such unallocable expenses to total revenue is not material. Assets and liabilities contracted are allocated to different segments based on their individual identity. The fixed assets of corporate/ Zonal/ Regional office have been allocated on the basis of usage and assets / liabilities, which cannot classify to segments, are shown as unallocated assets/ liability. The overall percentage of such unallocable Assets/ Liabilities to total Assets/ Liabilities is not material.
NOTE NO. 45 : EARNING PER SHARE Earnings Per Share The elements considered for calculation of Earnings per Share (Basic and Diluted) are as under: | 2015-16 | 2014-15 | Net Profit used as a numerator (` in Lakh) | 18,863.49 | 13,062.81 | Number of Equity Shares used as denominator (Nos in Lakh) | 200 | 200 | Earnings Per Share-Basic (In `) | 94.32 | 65.31 | Earnings Per Share-Diluted (In `) | 94.32 | 65.31 | Face Value Per Share (In `) | 10.00 | 10.00 |
NOTE NO.46 : DIVIDEND During the year 2015-16, the board of Directors has recommended final dividend of ` 7,545.40 lakh (`37.73 per share, Face value ` 10 per share). The total dividend for the financial year 2015-16 is `9,081.49 lakh (including ` 1,536.09 lakh dividend distribution tax), ` 45.41 per share (Face value ` 10 per share). NOTE NO. 47 : Value of Imports calculated on CIF basis by the Company for year 2015-16 in respect of Raw Materials | - | Components and Spare parts | - | Capital goods | NIL |
NOTE NO. 48 : EXPENDITURE IN FOREIGN CURRENCY Expenditure in Foreign Currency: - (` In Lakh) Nature of Expenses | 2015-16 | 2014-15 | Foreign Travelling Expenses Directors | 4.82 | 8.67 | Foreign Travelling Expenses-others | 26.32 | 31.28 | Total | 31.14 | 39.95 |
NOTE NO. 49 : EARNINGS IN FOREIGN EXCHANGE Earnings in Foreign Exchange is for year 2015-16 in respect of (` In Lakh) Particulars | 2015-16 | 2014-15 | Export of goods calculated on F.O.B basis | - | - | Royalty, knowhow, professional and consultation fees | - | - | Interest and Dividend | - | - | Other Income | 3,522.72 | 2188.53 |
NOTE NO. 50 : LEASES The Company’s leasing arrangements in respect of its various offices are in the nature of operating lease. The rentals for the same are being charged to Statement of Profit & Loss on the basis of lease agreements. The total amount charged to statement of profit & loss is Rs. 1,044.82 lakh (brvious year Rs. 1,030.31 lakh). However, in under noted cases leases have expired and are awaiting renewals:- (a) Office space of 2,300 Sq.Ft 31.03.2008 at Patna. NOTE NO. 51 : Ministry of Railways vide letter no 2009/TG-III/600/25 Dt 21.07.10 has issued catering policy 2010 which stipulates that: (i) Railway shall progressively take over management of all mobile catering services including base kitchen and mobile catering through departmental catering in a phased manner. (ii) IRCTC will primarily responsible for running of Food Plaza, Food Courts, Fast Food units within the ambit of this policy. In line with above policy, most of the licensee catering business has been transferred. Hence income from such transferred business has been accounted for till the date of handing over. NOTE NO. 52 : ACCOUNTING FOR TAXES ON INCOME As per Accounting Standard (AS22) – Accounting for Taxes on Income issued by Institute of Chartered Accountants of India, the deferred tax asset arising on account of timing differences, being the difference between taxable incomes and accounting income has resulted into net deferred tax asset to the tune of ` 6,761.05 Lakh for the F.Y. 2015-16. The Deferred Tax asset for the F.Y 2015-16 amounted to ` 7,692.90 Lakh & Deferred Tax liabilities for the F.Y 2015-16 amounted to ` 931.85 Lakh. Keeping in view, the more prudence policy, the management has decided not to recognize deferred tax asset. Since, the management is not sure about the virtual certainty for realizing the asset. NOTE NO. 53 : IHHA CONFERENCE During the F.Y. 2012-13, the company had organized IHHA Conference as per the request of the Ministry of Railway. The balance amount of Nil (brvious year ` 162.40 Lakh) being payable to Railways is shown as current liabilities in the Balance Sheet. IRCTC has recovered their charges. NOTE NO. 54 : GOVERNMENT CAPITAL SUBSIDY During the F.Y 2009-10, the Company acquired a Pan India Luxury Tourist Train. The total cost of said train was ` 5,046.57 Lakh. The Tourism Ministry had given capital subsidy of ` 1,237.00 Lakh and the Train was capitalized in the books at Rs. ` 3,809.57 Lakh in the F.Y 2009-10. NOTE NO. 55 : DUTY CREDIT LICENSE During F.Y.2015-16, the duty credit license has been utilized for an amount of 4.14 lakh (brvious year Rs. 2.57 lakh) against payment of duty under “Served from India Scheme”. NOTE NO. 56 : CSR EXPENDITTURE (a) Gross amount required to be spent by the Company during the year is Rs. 290.67 lakh. (b) Details of amount spent during the year :- (` In Lakh) Sr. No. | Particulars | In cash | Yet to be paid in cash | Total | (i) | Construction/acquisition of any asset | 295.12 | -- | | (ii) | On purchase other than (i) above | 104.65 | -- | |
The CSR trust was operative for the purpose of incurring CSR expenditure during F.Y.2014-15 which was dissolved in March, 2015. The unutilized funds of Rs. 133.83 lakh had been transferred by the trust to the Company which was shown as advance received under current liabilities as on 31st March, 2015. During F.Y. 2015-16, the Corporation has spent Rs. 399.77 lakh on Corporate Social Responsibility against the budget of Rs. 290.67 lakh in accordance with the provisions of sub-section (5)(i) of section 135 of Companies Act, 2013. The excess expenditure amounting Rs. 109.10 lakh has been adjusted against the said advance of Rs. 133.83 lakh. The balance amount of Rs. 24.73 lakh is shown as advance for incurring the CSR expenditure in future. NOTE NO. 57 : INVENTORIES Standardization of Valuation Work in progress comprise of br-inspection manufactured bottles. Up to brvious financial year the same was shown as finished goods. Further, with effect from current financial year, the Company standardized the valuation of inventory across the Railneer plants to first in first out basis as against weighted average basis followed by some units. NOTE NO. 58 : CASH & CASH EQUIVALENTS IRCTC has availed overdraft facility for Rs.100 crore from State Bank of India against fixed deposit of Rs.120 crore. The OD facility shall be availed @0.25% higher than the rate on fixed deposit for the period for which OD is being availed. Fixed deposits to that extent are under lien. NOTE NO. 59 : RAILWAY SHARE License fees/service charges are shown at gross value and corresponding share paid/payable to Indian Railways have been shown as expense under note no.24, 25 & 26. NOTE NO. 60 : CAPITALIZATION OF CROCKERY, CUTLERY ETC. Change in Accounting Policy The crockery/cutlery/utensils, etc. were initially capitalized as fixed assets under office equipments and debrciated over a period of 5 years. With effect from current financial year the same was treated as revenue expense. As a result such items purchased during the year amounting to Rs. 13.46 lakh were booked as expense along with Rs. 14.20 lakh, being the debrciated value as at 1st April, 2015. NOTE NO. 61 : REVENUE SHARE ON INTERNET TICKETING The request of the company for waiver of revenue sharing against Internet Ticketing service charges with Indian Railway (80:20 between IRCTC : Indian Railways) was not accepted by the Railway Board and the liability was accepted by the company in the AGM held on 18th Sept, 2015. As rebrsented upon crystallization during the year sum of Rs.15.67 crore was provided/paid during the f.y. 2015-16. NOTE NO. 62 : PROVISION AGAINST SEVENTH PAY COMMISSION The Company has made a provision of Rs.41.57 lakh against differential amount payable to employees who fall under Central Dearness Allowance (CDA) pattern. NOTE NO. 63 : CAPITAL ADVANCES FOR FLATS & LAND The following amounts were paid for allotment of flats which are still pending as on date:- - Rs.211.43 lakh paid to Indian Railways in the year 2002-03/2006-07. - Rs 342.00 lakh to RVNL in the f.y. 2010-11. NOTE NO. 64 : ADVANCE PAID TO CRIS The advance of Rs. 6.68 crore was paid to Central Railway Information System (CRIS) for procurement of dedicated gateway, is yet to be capitalize on account of complete commissioning and provision of progress report by CRIS.
NOTE NO. 65 : DISCLOSURE WITH REGARD TO DISCONTINUED OPERATION
Up to F.Y. 2014-15, the profit/(loss) from discontinued operations was disclosed separately which includes the revenue & expenditure from licensee operated catering business excluding food plazas & food courts which was taken over by railways in accordance with the Catering Policy-2010 of the Railway Board. However, the Corporation is operating some temporary part of the licensee business as per the directions received from the Railways from time to time. Due to this, revenue & expenditure are reflecting in the accounts from this activity. Further, as per the Railway Budget-2016, the catering services are to be provided by IRCTC. Considering above facts, the said licensee catering business is no longer discontinued operations and necessary changes are being carried out in the annual financial statements for F.Y.2015-16 to eliminate the profit/(loss) from discontinued operations. NOTE NO. 66 : The brvious year figures have been re-arranged /regrouped and re-casted, where ever necessary.
Disclosure of employee benefits explanatoryNOTE NO. 36 : EMPLOYEE BENEFITS General description of the defined benefit schemes/defined contribution scheme: (i) Gratuity: Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. The gratuity ceiling of Rs. 10 Lakh has been considered for actuarial valuation. Actuarial valuation though was made for all employees irrespective of the completion of 5 years of service. (ii) Leave Encashment: Payable on separation to eligible employees who have accumulated earned leave. Leave salary is provided for based on valuations, as at the balance sheet date, made by independent actuary. (iii) Half Pay Leave: to eligible employees who have accumulated half pay leaves. Half pay leave is provided for based on actuarial valuations, as at the balance sheet date. (iv) Leave Travel Concession(LTC) : to eligible employees is provided for based on actuarial valuations, as at the balance sheet date. (v) Provident Fund: 12% of the Basic Pay plus Dearness Allowance of Employees and equivalent Contribution of the Corporation is contributed to the Provident Fund maintained with the Regional Provident Fund Commissioner, New Delhi. Corporations contribution to provident fund is charged to revenue. (vi) Foreign Service Contribution: Foreign service contribution payable for leave salary and pension in respect of deputationists including deemed deputationists (employees who have joined the corporation on deputation for a fixed period from Indian Railways) for the year 2015-16 in terms of Government rules and regulations is charged to revenue on accrual basis. Other disclosures, as required under Accounting Standard(AS)-15(revised) on Employee Benefits in respect of defined obligations are: (a) Actuarial assumptions Sr. No. | Description | As at 31st March, 2016 | As at 31st March, 2015 | (i) | Discount rate(per annum) | 7.91% | 7.79% | (ii) | Mortality rate | Indian Assured Lives Mortality (2006-08) (Modified Ultimate) | Indian Assured Lives Mortality (2006-08) (Modified Ultimate) | (iii) | Withdrawal rates( per annum) | | | | Up to 30 Years | 2 | 3 | | From 31 to 44 Years | 2 | 3 | | Above 44 Years. | 2 | 3 | (iv) | Estimated rate of return on plan assets | 0 | 0 | (v) | The estimate of future liability increases considered in actuarial valuation, takes into account inflation rate, seniority, promotion and other relevant factors | | |
(b) Actuarial Method Projected unit credit (PUC) actuarial method is used to assess the plan's liabilities of exit employees for retirement, death-in-service and withdrawal and also compensated absence while in service. (c) Plan Assets. (i) Changes in the fair value of plan assets (Rs. In Lakh) | | Gratuity | | Leave Encashment | | Half Pay Leave | | LTC | | | | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | a) | Fair value of plan assets at the beginning of the period | 1086.94 | 1086.94 | -- | -- | -- | -- | | -- | b) | Acquisition adjustment | -- | -- | -- | -- | -- | -- | | -- | c) | Expected return on plan assets | 92.74 | 86.96 | -- | -- | -- | -- | | -- | d) | Contributions | 184.69 | -- | 97.76 | 98.04 | -- | -- | 11.69 | 9.07 | e) | Benefits paid | (14.68) | -- | (97.76) | (98.04) | -- | -- | (11.69) | (9.07) | f) | Actuarial gain/(loss) on plan assets | 235.10 | (86.96) | -- | -- | -- | -- | -- | -- | g) | Fair value of plan assets at the end of the period | 1584.79 | 1086.94 | -- | -- | -- | -- | -- | -- |
(ii) Fair value of plan asset. (Rs. in Lakh) | | Gratuity | | Leave Encashment | | Half Pay Leave | | LTC | | | | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | 31/03/2016 | 31/03/2015 | a) | Fair value of plan assets at the beginning of the period. | 1086.94 | 1086.94 | -- | -- | -- | -- | -- | -- | b) | Acquisition adjustment | -- | -- | -- | -- | -- | -- | -- | -- | c) | Actual return on plan assets | 327.84 | -- | -- | -- | -- | -- | -- | -- | d) | Contributions | 184.69 | -- | 97.76 | 98.04 | -- | -- | 11.69 | 9.07 | e) | Benefits paid | (14.68) | -- | (97.76) | (98.04) | -- | -- | (11.69) | (9.07) | f) | Fair value of plan assets at the end of the period | 1584.79 | 1086.94 | -- | -- | -- | -- | -- | -- | g) | Funded status-Surplus/(Deficit) | (659.45) | (354.02) | (1971.48) | (1442.38) | (1257.22) | (775.41) | (63.73) | (27.73) | h) | Excess of actual over estimated return on plan assets | -- | -- | -- | -- | -- | -- | -- | -- |
(d) Reconciliation of the brsent value of the defined benefit obligations (`Rs.In Lakh) Sr. No. | Particulars | Gratuity | Leave Encashment | Half Pay Leave | LTC | (i) | Present value of the Projected benefit obligations as at 1st April, 2015 | 1440.96 | 1442.38 | 775.41 | 27.73 | (ii) | Current Service Cost | 316.81 | 317.64 | 7.03 | 4.98 | (iii) | Interest Cost | 113.40 | 110.22 | 61.33 | 1.73 | (iv) | Actuarial gains(-)/losses(+) | 387.75 | 199.00 | 413.45 | 40.98 | (v) | Past Service Cost | -- | -- | -- | -- | (vi) | Benefits Used | 14.68 | 97.76 | -- | 11.69 | (vii) | Present Value of the projected benefit obligations as on 31st March, 2016(i+ii+iii+iv-v-vi) (Amount recognized in Balance sheet). | 2244.24 | 1971.48 | 1257.22 | 63.73 |
(e) Reconciliation of the fair value of the assets and obligations: (Rs. In Lakh) Sr. No. | Particulars | Gratuity | Leave Encashment | Half Pay Leave | LTC | (i) | Net Asset/(Liability) Recognized at the beginning of the period | (354.02) | (1442.38) | (775.41) | (27.73) | (ii) | Employer Expenses | (490.12) | (626.86) | (481.81) | (47.69) | (iii) | Employer Contribution | 184.69 | 97.76 | -- | 11.69 | (iv) | Acquisitions/Divestures | -- | -- | -- | -- | (v) | Net Asset/(Liability) Recognized at the end of the period (Amount recognized in Balance sheet). | (659.45) | (1971.48) | (1257.22) | (63.73) |
(f) Expenses recognized in the Statement of Profit & Loss Account for the year ended 31st March, 2016: (Rs.In Lakh) Sr. No. | Particulars | Gratuity | | Leave Encashment | | Half Pay Leave | | LTC | | | | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | 2015-16 | 2014-15 | (i) | Current Service Cost | 316.81 | 273.31 | 317.64 | 219.25 | 7.03 | 297.10 | 4.98 | 1.32 | (ii) | Interest Cost | 113.40 | 86.64 | 110.22 | 85.56 | 61.33 | 33.78 | 1.73 | 1.91 | (iii) | Actuarial Gain(-)/ Losses(+) | 152.65 | 215.84 | 199.00 | 92.44 | 413.45 | 12.59 | 40.99 | 9.07 | (iv) | Past Service Cost | -- | -- | -- | -- | -- | -- | -- | -- | (v) | Expected return on plan assets | (92.74) | (86.95) | -- | -- | -- | -- | -- | -- | (vii) | Total(i+ii+iii+iv+v) | 490.12 | 488.84 | 626.86 | 397.25 | 481.81 | 343.47 | 47.70 | 12.30 | (viii) | Employee Remuneration and benefits | -- | -- | -- | -- | -- | -- | -- | -- | | Charged to Profit and Loss Account | 490.12 | 488.84 | 626.86 | 397.25 | 481.81 | 343.47 | 47.70 | 12.30 | (ix) | Actual Return on Plan Assets | 327.84 | -- | -- | -- | -- | -- | -- | -- |
(g) Other Disclosures: Gratuity | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 2244.24 | 1440.96 | 952.13 | 618.91 | 777.41 | Fair Value of plan assets as at the end of | 1584.79 | 1086.94 | 1,086.94 | 1019.28 | 936.63 | Surplus / (Deficit) (ii-i) | (659.45) | (354.02) | 134.82 | 400.37 | 159.22 | Experience adjustment on plan liabilities (loss)/gain | (387.75) | (128.88) | (144.90) | 360.38 | (28.38) | Experience adjustment on plan assets (loss)/gain | 235.10 | (86.96) | 9.60 | 9.32 | 3.17 |
Leave | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 1971.48 | 1442.38 | 1143.17 | 650.86 | 801.19 | Surplus/(Deficit) | (1971.48) | (1442.38) | (1143.17) | (650.86) | (801.19) | Experience Adjustment on plan liabilities (loss)/gain | (199.00) | (92.44) | (402.92) | 365.99 | 8.54 |
Half Pay Leave | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 1257.22 | 775.41 | 431.94 | -- | -- | Surplus/(Deficit) | (1257.22) | (775.41) | (431.94) | -- | -- | Experience Adjustment on plan liabilities (loss)/gain | (413.45) | (12.60) | (294.49) | -- | -- |
LTC | 31.03.2016 | 31.03.2015 | 31.03.2014 | 31.03.2013 | 31.03.2012 | Present value of obligation as at the end of | 63.73 | 27.73 | 24.50 | -- | -- | Surplus/(Deficit) | (63.73) | (27.73) | (24.50) | -- | -- | Experience Adjustment on plan liabilities (loss)/gain | (40.99) | (9.07) | -- | -- | -- |
(h) The Employees Gratuity Fund Scheme managed by a Trust (SBI Life Insurance Co. Ltd) is a defined benefit plan. The brsent value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method. Disclosure of enterprise's reportable segments explanatoryThe corporation has disclosed business segment as the primary segment. The segment has been identified taking into account the nature of services rendered, organization structure and internal reporting system. The corporations operations brdominantly relate to arranging: Licensee Catering Departmental Catering Railneer Tourism Internet Ticketing. The corporation caters mainly to the needs of the domestic market. As such there are no reportable geographical segments. The accounting principles used in the brparation of the financial statements is consistently applied to record revenue & expenditure in individual segments, as set out in the note of significant accounting policies. Revenue and direct expenses in relation to segment are allocated based on items that are individually identifiable to the respective segment while the remainder of the costs are categorized as unallocated expenses .The management believes that it is not practical to provide segment disclosure to these expenses and accordingly these expenses are separately disclosed as unallocated and adjusted only against the total income of the Corporation. The overall percentage of such unallocable expenses to total revenue is not material. Assets and liabilities contracted are allocated to different segments based on their individual identity. The fixed assets of corporate/ Zonal/ Regional office have been allocated on the basis of usage and assets / liabilities, which cannot classify to segments, are shown as unallocated assets/ liability. The overall percentage of such unallocable Assets/ Liabilities to total Assets/ Liabilities is not material. |