S.R. DINODIA & CO. LLP K-39 Connaught Place, New Delhi-110001 INDIA Ph : +91-(0)11-4370 3300 Fax +91-(0)11-4151 3666 Independent Auditor's Report To The Members of Dedicated Freight Corridor Corporation of India Limited Report on theInd AS Financial Statements We have audited the accompanyingind AS Financial Statements of Dedicated Freight Corridor Corporation of India Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as 'Ind AS Financial Statements'). Management's Responsibility for thelnd AS Financial Statements The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (Financial position), profit & loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules issued there under.This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on theselnd AS financial statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit ofInd AS Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thelnd AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of theind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of thelnd AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's directors, as well as evaluating the overall presentation of thelnd AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, theaforesaid Ind AS Financial Statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at March 31, 2018 and its financial performance including other comprehensive income/(loss), its cash flows and the changes in equity for the year ended on that date. E-mail: srdinodia@srdinodia.com Website : www.srdinodia.com LLPIN : AAb-T464 Pune Branch Office : 11, Siddhatek Apartments, 4th Floor, 95/8, Prabhat Road, Opposite Lane No. 11. Pune 411 004 / E-mail : puneoffice@srdinodia.com Ph.: +91-(0)20-2546 9683 Report on Other Legal and Regulatory Requirements 1. The Comptroller and Auditor General of India has issued directions indicating the areas to be examined in terms of sub section (5) of section 143 of the Companies Act 2013, the compliance of which set out in Annexure'A' 2. As required by section 143(3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet, the Statement of Profit and Loss(including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account. (d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder to the extent applicable. (e) As per notification no. G.S.R. 463(E) dated June 05, 2015, the government companies are exempt from the provisions of section 164(2) of the Act, accordingly, we are not required to report whether any directors are disqualified in terms of provisions contained in the said section. (f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure'B'. (g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. On the basis of written representations received from the Management of the Company, the Company has no pending litigations which could impact its financial position in its financial statements except as disclosed in Note No. 32. ii. According to the information and explanation provided to us, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. iii. The provision of transferring the amount to the Investor Education and Protection Fund is not applicable to the Company. 3. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 'C', a statement on the matters specified in the paragraph 3 and 4 of the order. For S.R. Dinodia & Co. LLP Chartered Accountants, Firm's Registration Number 001478N/N500005 (Sandeep Dinodia) Partner Membership Number 083689 Place of Signature:New Delhi Date: . AUG 2018 Annexure 'A' to the Independent Auditors' The Annexure referred to in paragraph 1 under the heading 'Report on Other Legal and Regulatory Requirements' section of our report of even date to the member of Dedicated Freight Corridor Corporation of India Limited on the Ind AS financial statement for the financial year March 31, 2018. S.No. Directions Our Report 1. Whether the Company has clear title According to information and explanations /lease deeds for freehold and leasehold given to us by the management, the Company land respectively? If not, please state the does not own by land either on freehold or area of freehold and leasehold land for leasehold basis. However, the company has which title/lease deeds are not available leasehold rights of two flats of 199.5 sqm. each, in respect of which leasehold deed is yet to be executed. 2. Whether there are any cases of According to information and explanations waiver/write off of debts/loans/interest given to us, there are no cases of waiver /write etc., if yes, the reasons therefore and the off debts/loans/interest etc. amount involved. 3. Whether proper records are maintained The Company does not maintain any for inventories lying with third parties & inventories. According to information and assets received as gift/grant(s) from explanations given to us, the company has not Government or other authorities? received any assets as gift/grant(s) from government or other authorities. For S.R. Dinodia & Co. LLP Chartered Accountants, Firm's Registration Number 001478N/N500005 (San{depfinodla) Partner Membership Number 083689 Place of Signature: New Delhi Date: 1 4 AUG 2018 Annexure 'B' to the Independent Auditors' Report of even date on the financial statement of Dedicate Freight Corridor Corporation of IndiaLimited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") We have audited the internal financial controls over financial reporting of Dedicated Freight Corridor Corporation of India Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the Ind ASfinancial statements of the Company for the year ended on that date. Management's Responsibility for Internal Financial Controls The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditors' Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the Ind ASfinancial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind ASfinancial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the Ind ASfinancial statements. /' ) . r Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operatingeffectively as at March 31, 2018, based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For S.R. Dinodia & Co. LLP Chartered Accountants, Firm's Registration Number 001478N/N500005 (Sand pVn. Partner Membership Number 083689 Place of Signature: New Delhi Date: 4 AUG 2018 Annexure 'C' To the Independent Auditors' Report The Annexure referred to paragraph 3 in Independent Auditor's Report to the members of the Company on the Ind AS financial statements for the year ended March 31, 2018, we report that: i) In respect of Property, Plant and Equipment: a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment. b) The Company has a regular programme of physical verification of its fixed assets once in three years by which fixed assets are verified. In accordance with this programme for the year, no material discrepancies were noticed on such verification. In our opinion, such periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company does not have any immovable properties in its name except two flats on the leasehold basis amounting to Z309.34 lakhs (Deemed Cost), as disclosed in the Note no. 3 to the Ind AS financial Statements, in respect of which leasehold deed is yet to be executed. ii) The Company has been incorporated for running and maintaining dedicated freight corridor since the railway freight corridors are under construction, it does not hold any physical inventories. Therefore, clause 3(ii) of the Order is not applicable. iii) According to the information and explanation given to us, the Company had not granted loans, secured or unsecured, to any of the companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, the provisions of paragraph 3(iii) (a) to (c) of the Companies (Auditor's Report) Order, 2016 are not applicable to the Company. iv) According to the information and explanations given to us, the Company has not given any loans, or made any investments, or provided any guarantee, or security as specified under Section 185 and 186 of the Companies Act, 2013. Accordingly, paragraph 3(iv) of the Order is not applicable. v) In our opinion and according to the information and explanation given to us, since the Company has not accepted any deposits therefore the question of the compliance of any directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under does not arise. vi) On the basis of available information and explanation provided to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Amendment Rules, 2014 dated December 31, 2014 to the current operations carried out by the Company. Accordingly, the provisions of paragraph 3(vi) of the Companies (Auditor's Report) Order, 2016 are not applicable to the Company. vii) In respect of statutory dues: a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Value Added Tax, Goods and Service Tax and any other material statutory dues applicable to it with the appropriate authorities. We have been informed that Employee's State Insurance Scheme, Duty of Customs and Duty of Exciseare not applicable to the Company. Further, there were no undisputed amounts payable in respect of Provident Fund, Income Tax, Sales Tax, Service Tax, Value Added Tax, Cess and any other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from t date they became payable. b) According to the information and explanations given to us, there were no dues of Income Tax or Sales Tax or Service Tax or Value Added Tax which have not been deposited on account of any dispute except the following, which have not been deposited on account of dispute: Nature of (Amount in 7 Period Forum where Name of the Statute Dispute 'Lakhs') (Assessment dispute is pending Income Tax Act,1961 Income Tax 11.89 2009-10 ITAT Income Tax Act, 1961 Income Tax 28.27 2010-11 ITAT Income Tax Act, 1961 Income Tax 16.67 2011-12 ITAT, New Delhi Income Tax Act, 1961 Income Tax 142.10 2013-14 CIT (Appeal) Income Tax Act, 1961 Income Tax 218.20 2014-15 CIT (Appeal) Income Tax Act, 1961 Income Tax 118.06 2015-16 CIT (Appeal) Income Tax Act, 1961 Income Tax 0.58 2009-10 ACIT-TDS Income Tax Act, 1961 Income Tax 1.40 2013-14 ACIT-TDS Income Tax Act, 1961 Income Tax 2.70 2014-15 ACIT-TDS viii) Based on our procedures & according to the information & explanations given to us by the management, the company has not defaulted in repayment of loans & borrowings to any financial institution, bank, and government. According to the information & explanation given by the management, debentures is not applicable. ix) The Company did not raise any money by the way of initial public or further public offer (including debt instruments) during the year. The termloans taken during the year were applied for the purpose for which the same has been raised. x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year. xi) In view of the exemption given in terms of Notification No. G.S.R. No. 463(E) dated June 05, 2015 issued by the Ministry of Corporate Affairs; the provisions of Section 197 read with schedule V to the Companies Act, 2013 regarding managerial remuneration are not applicable to the company. xii) The Company is not a Nidhi Company hence the provisions of paragraph 3(xii) of the Companies (Auditor's Report) Order, 2016 are not applicable to the Company. xiii) As per notification no, 463(E) dated June 05, 2015, the Government companies are exempted from the provisions of section 188 of the Act in respect of contracts or arrangement entered into between the Government companies. Further, according to the information and explanations given to us, the Company has complied with the provisions of Section 177 of the Act, wherever applicable, and the details have been disclosed in Ind AS financial statements as required by the applicable Indian accounting standard. xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of paragraph 3(xiv) of the Companies (Auditor's Report) Order, 2016 are not applicable to the Company. xv) The Company has not entered into any non-cash transactions with directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 andthe provisions of paragraph 3(xv) of the Orderare not applicable. xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of paragraph 3(xvi) of the Companies (Auditor's Report) Order, 2016 are not applicable to the Company. For S.R. Dinodia & Co LLP. Chartered Accountants, Firm's Registration Number 008352N/N50000N (Sandeep Dinodia) Partner Membership Number 083689 Place of Signature: New Delhi Date 4 AUG Dedicated Freight Corridor Corporation of India Limited Balance Sheet as at March 31, 2018 (All amounts in Z lakhs, unless otherwise stated) Particulars Note No. As At As At March 31, 2018 March 31, 2017 ASSETS Non-current assets (a) Property, plant and equipment 3 1,369.24 1453.36 (b) Capital work-in-progress 3 1,475,70856 886163.98 (c) Other intangible assets 4 27.82 73.88 (d) Intangible assets under development 4 1,130.76 1,130.76 (e) Financial assets (i) Other non-current financial assets 5 809.26 549.92 (g) Deferred tax assets (net) 6 2,095.84 2,132.37 (g) Non current tax assets (net) 7 4,767.87 1,538.52 (h) Other non-current assets 8 782,786.72 681,251.31 Total non current assets 2,268,696.07 1,574,294.10 Current assets (a) Financial assets (i) Cash and cash equivalents 9 147,953.82 144,600.88 (ii) Other Bank balances 10 3,976.01 218,805.75 (ib ) Other current financial assets 11 8,659.16 4,875.74 (b) Other current assets 12 1,358.86 843.59 Total current assets 161,947.85 369,125.96 Total assets 2,430,643.92 1,943,420.06 II. EQUITY AND LIABILITIES Equity (a) Equity share capital 13 765,827.29 765,827.29 (b) Other equity 14 336,259.59 23,434.56 Total equity 1,102,086.88 Liabilities Non-current liabilities (a) Financial liabilities (i) Borrowings 15 1,001,202.45 694,545,99 (ii) Other non-current financial liabilities 16 93,224.05 50,186.44 (b) Long-term provisions 17 2,079.77 1,456.77 (c) Other non-current liabilities 18 39,802.14 32,242.34 Total non-current liabilities 1,136,308.41 778,431.54 Current liabilities (a) Financial liabilities (i) Borrowings 19 6,800.71 (i) Trade payables 20 a) Total outstanding dues to micro and small enterprises b) Total outstanding dues to parties other than micro and small 3,674.15 7,070.70 enterprises (ib ) Other current financial liabilities 21 148,144.80 357,815.83 (c) Other current labilities 22 13,448.17 10,698.81 (c) Snot-term provisions 23 20,180.80 141.33 Total current liabilities 192,248.63 375,726.67 Total liabilities Total liabilities 1,328,557.04 1,154,158.21 Total equity and liabilities 2,430,643.92 1,943,420.06 Summary of Significant Accounting Policies 2.1 The accompanying notes form an integral part of these financial statements As per our Report of even date attached For S.R. Dinodia & Co. LLP. For and on behalf of Board of Directors of Cnartered Accountants F icated Freight Corridor Corporation of India Limited F:rm's Reg trat,on Number 001478N/N500005 (a (Anurag Kumar Sachan) (Naresh Salecha) (Meenu Kapoor) Partner 083689 Managing Director Director Finance & CFO Company Secretary ,4embership Number 063689 ~ DIN-8197908 DIN- 843812 ACS-18954 Place of Sgnature: New Deihi e 4 AUG 2018 Dedicated Freight Corridor Corporation of India Limited Statement of Profit and Loss for the year ended March 31, 2018 (All amounts in Z lakhs, unless otherwise stated) Particulars Note For the year ended For the year ended No. March 31, 2018 March 31, 2017 I Revenue from operations . II Other income 24 12,089.15 15,138.10 Ill Total income 12,089.15 15,138.10 IV Expenses (a) Employee benefits expense 25 1,053.04 - (b) Finance costs 26 45.25 5728 (c) Depreciation and amortization expense 27 277.65 255.25 (d) Other expenses 28 7,801.06 2,999.73 Total Expenses 9,177.00 3,312.26 V Profit/ (loss) before exceptional items and tax (1il-IV) 2,912.15 11,825.84 VI Exceptional Items VII Profit/ (loss ) before tax (V-VI) 2,912.15 11,825.84 VIII Tax expense: (a) Current tax 1,036.27 5,576.03 (b) Deferred tax 57.25 (1,346.52) Total tax expense (IX) 1,093.52 4,229.51 IX Profit/(loss) for the year (VII-VIII) 1,818.63 7,596.33 X Other Comprehensive Income 29 (A) (i) Items that will be reclassified subsequently to statement of . profit and loss (ii) Income tax on items that will be reclassified subsequently to statement of profit and loss (B) (i) Items that will not be reclassified subsequently to statement of profit and loss Re-measurement gains/ (losses) on defined benefit plans (59.87) (26.66) (ii) Income tax on items that will not be reclassified subsequently to statement of profit and loss 20.72 923 Total other comprehensive income for the year, net of tax (39.15) (17.43) XI Total comprehensive income of the year, net of tax 1,779.47 7,578.89 XII Earnings per share: (Face value Z 1,000 per share) 30 1) Basic (amount in Z) 2.37 9.92 2) Diluted (amount in Z) 2.37 9.92 Summary of Significant Accounting Policies 2.1 The accompanying notes form an integral part of these financial statements As per our Report of even date attached For S.R. Dinodia & Co. LLP. For and on behalf of Board of Directors of Charyered Accountants Dedicated Freight Corridor Corporation of India Limited Firm Registration Number 001 478N/N500005 (Sandeep Dinodia) (Anurag Kumar Sachan) (Naresh Salecha) (Meenu Kapoor) Partner Managing Director Director Finance & CFO Company Secretary Membership Number 083689 DIN-8197908 DIN- 843812 ACS-18954 Place of Signature: New Delhi Date: 4 i AUG 2018 Dedicated Freight Corridor Corporation of India Limited Statement of cash flows for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Particulars Note No. For the year ended For the year ended MA h01101 March 3, 206 March 31,21 1. Cash flow from operating activities Profit before tax 2,912.15 11,825.85 Adjustments to reconcile profit before tax to net cash flows: Depreciation 277.65 255.25 (Profit)/Loss on sale of assets 11.50 2 Interest income on financial assets measured at amortised cost (11,903.59) ( 1 5 ,1 2 0 .3 4 ) Operating profit before working capital changes (8,702.29) (3,039.24) Change in working capital: (increase)/ Decrease in other financial assets (4,042.75) 2,611.38 (Increase)/ Decrease in other assets (921.34) 356.89 Increase I (Decrease) in other financial liabilities 12,808.01 (11,043.57) Increase / (Decrease) in provisions 20,662.47 ( Increase / (Decrease) in other liabilities 10,309.16 2 9 , 7 3 5 . 6 2 Cash Generated / (used in) operations 30,113.26 18,621.08 Less: Income Tax Paid (net of refunds) (4,265.62) ( 6 ,9 2 3 . 5 5 ) Net Cash generated from /(used in) operating activities 25,847.64 1 1 , 6 9 7 . 5 3 11. Cash flow from investing activities: Purchase of property, plant & equipments including capital work in progress & asset under development (546,622.62) (287,882.75) Sale of property, plant & equipments 9.67 8.36 (increase)/ Decrease in creditors for capital expenditures 68,362.07 11,043.57 (Increase)/ Decrease in capital advances (101,5352) (228,204.06) Net movement in other bank balances 214,829.74 (216,122.61) Interest received 11,903.59 15,091.56 Net Cash Generated / (Used in) Investing Activities (353,052.97) ( 7 0 6 ,0 6 5 .9 3 ) Ill. Net cash flow from financing activities: Proceeds from Share Application Money 311,045.55 Fund Received/(Utilised) from MOR (285,640.48) 311,045.55 Net proceeds/(Repayment) of Long Term Borrowings 313,551.70 374,014.78 Interest Expense Paid 3 51 3,014.78 Net Cash generated / (used in) Financing Activities 330,558.26 6 8 1 , 4 6 1 . 4 6 Net change in Cash & cash equivalents (1+11+111) 3,352.94 ( 1 2 ,9 0 6 .9 3 ) Cash and cash equivalents as at the beginning of the year 144,600.88 157,507.81 Cash and cash equivalents at the end of the year 147,953.82 144,600.88 Components of Cash And Cash Equivalents With banks - on current account and deposits with banks 147,953.68 94,599.73 In deposit accounts with initial maturity of 3 months or less - 50,001.00 Cheques in nand 0.14 0.15 Total Cash and Cash equivalent 147,953.82 1 4 4 , 6 0 0 . 8 8 Summary of Significant Accounting Policies 2.1 Teaccompanying notes form an integral part of these financial statements As per our Report of even date attached For S.R. Dinodia & Co. LLP. For and on behalf of Board of Directors of Chartered Accountants dicate Freight Corridor Corporation of India Limited Firm's Re ration Number 001478N/N500005 (Sandeep Dinodia) (Anurag Kumar Sachan) (Naresh Salecha) (Meenu Kapoor) Partner Managing Director DirectDr .8 4.31 cro comA-Y S.-tary N1ur hip Numuoe oo b, c59 DfN-8197908 DiN- 843812 ACS-18954 Place of Signature: New Delhi Date. AUG 28 Dedicated Freight Corridor Corporation of India Limited Statement of changes in equity for the year ended March 31, 2018 (Al amounts in ? lakhs, unless otherwise stated) A. Equity share capital Note No. Amount As at March 31, 2017 13 765,827.29 Changes in equity share capital during the year 7 As at March 31, 2018 765-827.29 B. Other equity Reserves & Share application money surplus Remeasurement Total pending allotment Retained of defined benefit earnings plans Balance at March 31, 2017 23,456.80 ( 2 2 .2 4 ) 23,434.56 Changes in accounting policy / prior period errors Restated balance at the beginning of the - 23,456.80 (22.24) 23,43456 reporting period Profit for the year Other comprehensive income for the year 18 6 (39.15) ( 39.15) Total comprehensive income - 25,275.43 ( 61. 39) 25,214.04 Shares issued during the year Additional share application money received 311,045.55 - 311,045.55 during the year Balance at March 31, 2018 311,045.55 25,275.43 ( 61. 39) 336,259.59 Summary of Significant Accounting Policies 2.1 Tnie accompanying notes form an integral part of thesefnnilsaeet As per our Report of even date attached For S.R. Dinodia & Co. LLP. For and on behalf of Board of Directors of Dedicated Chartered Accountants Frend obhlof Boaro DirectorsLofiDed Firm's Registration Number 001478N/N500005 Freight Corridor Corporation of India Limited ande p nodia) ne (Anurag Kumar Sachan) (Naresh Salecha) (Meenu Kapoor) Partner Managing Director Director Finance & CFO Company Secretary Membership Number 083689 DIN-8197908 DIN- 843812 ACS-18954 Place of Signature: New Delhi Date AUG 2018 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 Note 1: Corporate information Dedicated Freight Corridor Corporation of India Limited ("DFCCIL" or "the Company") is a company incorporated on October 30 2006 under the provisions of the Companies Act, applicable in India. DFCCIL has been setup under the administrative control of Ministry of Railway for the construction, maintenance and operation of the Dedicated Freight Corridor. Tne registered office of the Company is located at 5th Floor, Pragati Maidan, Metro Station Building Complex, New Delhi - 110001. Note 2: Basis of preparation of Financial statements These financial statements have been prepared in accordance with Ind AS as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with section 133 of the Companies Act, 2013 and relevant presentation requirements of the Companies Act 2013. The financial statements have been prepared in accordance with the historical cost convention except for certain financial instruments that are measured at fair value as required under relevant Ind AS. The financial statements are presented in Z' and all values are rounded to the nearest lakhs except otherwise stated. Note 2.1: Significant accounting policies a) Bsso esrmn The financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at fair value as required under relevant Ind AS. b) Functional andiresentation currency These financial statements are presented in Indian National Rupee ('INR'), which is the Company's functional currency. c) Use of iudamentz e t In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the company's accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. Information about the judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements have been given below: -Leases: whether an arrangement contains a lease -Classification of leases: Classification of leases under finance lease or operating lease requires judgment with regard to the estimated economic life and estimated cost of the asset. Tne Company has analysed each lease contract on a case to case basis to classify the arrangement as operating or finance lease, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the fair value of the asset. ii. Assumptions and estimation uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment is included below: -Measurement of defined benefit obligations: key actuarial assumptions; - Recognition of deferred tX assets: availability of future taxable profit against which carry-forward tax losses can be used; -Impairment test: key assumptions underlying recoverable amounts, including the recoverability of development costs; - Useful life of property, plant and equipment and intangible assets o Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources d) Current versus non-current classification The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. Assets: An asset is treated as current when it is: i) Expected to be realised or intended to be sold or consumed in normal operating cycle. ii) Held primarily for the purpose of trading iii) Expected to be realised within twelve months after the reporting period, or iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. Liabilities: A liability is current when: (i) It Is expected to be settled in normal operating cycle (ii) It is held primarily for the purpose of trading (iii) Itis due to be settled within twelve months after the reporting period, or (iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 Operating Cycle The operating cycle of an entity is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. As the Company is still in construction phase, normal operating cycle is not clearly identifiable and is assumed to be twelve months. e) Property lant and equipment Recognition and measurement The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use. In case where the final settlement of bills with contractors is pending, but the asset is complete and ready to use, capitalisation is done on estimated basis subject to necessary adjustment, including those arising out of settlement of arbitration! court cases, in the Capital Work-in-Progress is carried at Cost. Expenditure during construction net of incidental income is capitalized as part of relevant assets. - Capital stores are valued on weighted average cost. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as a separate items (major components) of property, plant and equipment. Any gain on disposal of property, plant and equipment is recognised in Profit and loss account. Subsequent Measurement Suosequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company Depreciation on property, plant and equipment is charged on pro-rata basis from/ upto the date on which the asset is available for Depreciation on property plant and equipment is provided as per Para 219 of Indian Railway Finance Code Volume I which specifies the normal life of the various classes of Railway Assets. In case a particular component of property plant and equipment is not availale in the said Para 219 of Indian Railway Finance Code, then depreciation on these assets are provided on Straight Line Method using the useful life specified in Schedule 11 of the Companies Act, 2013 except in case of certain assets the useful life have been determined based on technical evaluation done by the management's expert which are lower than those specified by Schedule of the Companies Act, 2013, in order to reflect the actual usage of the assets. Property plant and equipment created on Leasehold Land and Leasehold Premises Improvements are depreciated fully over the residual period of lease of respective Land! Leasehold Premises or over the life of respective asset as specified in Schedule 10 of the Companies Act, 2013, whichever is shorter. Where the life and / or efficiency of an asset is increased due to renovation and modernization, the expenditure thereon along-with its unamortized depreciable amount is charged prospectively over the revised n remaining useful life determined by technical Where the cost of the depreciable assets has undergone a change during the year due to price adjustment change in duties or similar factorsthe unamortised balance of such assets is depreciated prospectively over the residual life of such assets. Depreciation methods, useful lives and residual values are reviewed in each financial year end and changes, if any, are accounted for prospectively. Assets purchased during the year costing 5,000 or less are depreciated at the rate of 100% f) Intancible ssets Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Cost of Software is recognised as Intangible Assets and is amortized on Straight Line method over a period of legal right to use or three years, whichever is earlier. Other intangible Assets are amortized on Straight Line Method over the period of legal right to Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company. g) Financial in strm ents A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign currency forward contracts, cross currency interest rate swaps, interest rate swaps and currency options; and embedded derivatives in the host contract. Financial Assets Initial recognlitin and measurement All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value thr, fit or loss, transaction costs that are attributable to the acquisition of the financial asset. Classification and subsequent measurement Classifications Tne company classifies its financial assets as subsequently measured at either amortised cost or fair Value de endirgi,f company's business model for managing the financial assets and the contractual cash flow characteristics of the financiasse{ss The company makes an assessment of the objective of a business model in which an asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 Debt instruments at amortised cost A financial asset is measured at amortised cost only if both of the following conditions are met: i) it is held within a business model whose objective is to hold assets in order to collect contractual cash flows. ii) the contractual terms of the financial asset represent contractual cash flows that are solely payments of principal and interest. After initial measurement such financial assets are subsequently measured at amortised cost using the effective interest rate method, Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. Debt instrument at fair value through Other Comprehensive Income (FVOCI) Debt instruments with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model wnose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI. Debt instrument at fair value through profit and loss (FVTPL) Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVOCI, is classified as at FVTPL. In addition, the company may elect to classify a debt instrument, which otherwise meets amortized cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as 'accounting mismatch'). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss. Equity Instruments All equity instruments in scope of Ind AS l09 are measured at fair value. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OC. This election is made on an nvestment-by-investment basis. All other Financial Instruments are classified as measured at FVTPL. Derecognition of financial assets A financal asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the company's balance sheet) when: - The rights to receive cash flows from the asset have expired, or cThe company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all tne risks and rewards of the asset, but has transferred control of the asset When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company's continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained, Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in 0 n is recognised in profit or loss. Impairment of financial assets The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk, With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial Liabilities measured at amortised cost After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using* efevtry4, interest rate method- Gains and losses are recognised in profit or loss when~ the li bilitjQ5ej di' erecagniseCo as well as Mhrou0gh the fiN amortsation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective rate interest amortisation is included as finance costs in the statement of profit and loss. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 Financial liabilities at fair value thof oro it or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through Profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains! losses attributable to changes in own credit risk are recognized in OCI. These gains! loss are not subsequently transferred to P&L. However the group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognisecl in the statement of profit or loss. Derecognition of financial liabilities The company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Modifications of financial assets and financial liabilities If the terms of a financial asset are modified, the company evaluates whether the cash flows of the modified asset are substantially different. If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financal asset is derecognised and a new financial asset is recognised at fair If the casn flows of the modified asset carried at amortised cost are not substantially different, then the modification does not result in derecognition of the financial asset. In this case, the company recalculates the gross carrying amount of the financial asset and recognises the amount arising from adjusting the gross carrying amount as a modification gain or loss in profit or loss. If such a modification is carried out because of financial difficulties of the borrower, then the gain or loss is presented together with impairment losses. In other cases, it is presented as interest income. The company derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss. h) Revenue! Other income iRevenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates, value added taxes and amounts collected on behalf of third parties.The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity. ii. Interest income is recognized using the Effective Interest Rate ('EIR') method, The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, where appropriate to the net carrying amount of the financial asset. The EIR is computed basis the expected cash flows by considering all the contractual terms of the financial instrument. The calculation includes all fees, transaction costs, and all other premiums or discounts paid or received between parties to the contract that are an integral part of the effective interest rate. iii. Other items of Income are accounted for as and when the right to receive is established. iv. Service Charges Income is recognized as per the terms of tne contracts. I)Frin currency translation l-orelgn currency transactions are transiatea into tne Tunctionai currency using tne excnange rates at tne dates or tne transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets ano labilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. Foreign exchange differences regarded as an adjustment to borrowing costs, in terms of Para 6(e) of Ind AS-23, are presented in the statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis within other gains! (losses). j) Em2loye benefits i. Short term employee benefits Short-.term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if tne Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Provision/liabiiities towards Foreign Service Contribution are made in terms of Government Rules & Regulations for employees on deputation and charged to development account. il. Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided. The has following defined contribution plans: 0 a) Provident Fund The company net obligation in respect of defined benefit plans is calculated separately for each plan by estimatin nt of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. Wen the calculation results in a potential asset for the company, the recognised asset is limited to the present value of economic penefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements. Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailmen~t is recognised immediately in profit or loss. The company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. The company has following defined benefit plans: a) Gratuity iv. Other long-term employee benefits The Company's net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Re- measurements are recognised in profit or loss in the period in which they arise. The company has following long term employment benefit plans: a) Earned leave b) Half pay leave c) Leave travel concession Termination benefits Expenses on ex-gratia payments & notice pay under voluntary retirement scheme are charged to revenue at the earlier of the following dates: a) When the Company can no longer withdraw the offer of those benefits; and b) When tne Company recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits. k) Borrowing Costs General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitaiised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred. 1) Taxation Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company: 1) Has a legally enforceable right to set off the recognised amounts; and ii) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available againt which they can ie used. Deferred tax is measured at the that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substan 61 at the reponing date. - Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 The measurement of deferred tax reflects the tax consequences 1hat would follow from the manner in which the company expects, at the reportng date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if: i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity. m) Provisions a Contingent Liabilities and Contingent Assets Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow witf respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. A disclosure for Contingent Liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. The provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect. n) Im airment of non-financial assets At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication on impairment, If any such indication exists, then the asset's recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely nndependent of the cash inflows of other assets or CGUs. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment loss in respect of assets other than goodwill is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. o) Leases Determining whether an arrangement contains lease At inception of an arrangement, the Company determines whether the arrangement is or contains a lease. The arrangement i s, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. A lease is classified at the inception date as a finance lease or an operating lease. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessors are classified as operating lease. Lease payments for assets taken on operating leases are recognized as an expense in the Profit and Loss Account over the lease term on a straight line basis except where the increment in lease rentals is in line with general rate of inflation. p) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and on hand and short-term money market deposits with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of Directors of the Companyhave been identified as being the chief operating decision maker by the Mana f the company. Refer note 33 for segment information presented. r) Miscellaneous i~ -*I. Liquidation damages are recognised at the time of actual recovery.Vx & ii. Insurance claims are accounted for based on Management best assessment of the quantum of loss & coverage the offj~e Insurance policy. Any shortfall excess are adjusted on the settlement of claims. Claim towards loss of CWIP, for whic ~urance are obtained by Contractors under the provisions of respective contract agreement, are not accounted in the books of the company. III. Liabilities for goods in transit/ Capital works executed but not certified are not provided for, pending inspection and acceptance by the corporation. iv. Claims including price variation are accounted for on acceptance. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 Recent accountinq Pronouncements-Standards issued but not vet effective: Aendix B to nd AS 21 Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 01, 2018. The Company is evaluating the requirements of the amendment and its effect on the financial statementse nd AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Id AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers. The standard permits two possible methods of transition: i Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance withnd AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors. caRetrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of 2d AS 115 is financial periods beginning on or after April 01, 2018. Amendment o hd AS 12 : The amendment to Ind AS 12 requires the entities to consider restriction in tax laws in sources of taxable profit against which entity may make deductions on reversal of deductible temporary difference (may or may not have arisen from same source) and also consider probable future taxable profit. 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Dedicated Freight Corridor Corporation of India Limited ..Notes to the financial statements for the year ended March 31, 2018 Note : 4 Other Intangible Assets (All amounts in T lakhs, unless otherwise stated) Particulars Licenses/ Intangible Assets At Cost - ares Total under development Gross block As at March 31, 2016 194.44 194.44 Add Additions during the year 1.51 1 51 141.22 Less: Disposals / adjustments during the year - - - As at March 31, 2017 1 Jo 195.95 1,130.76 Add: Additions during the year 44.70 44.70 - Less: Disposals / adjustments during the year - - - As at March 31, 2018 240.65 240.65 1,130.76 Arnortisation and impairment As at March 31, 2016 54.58 54.58 - Add: Amortisation charge for the year 67.49 67.49 Less On disposals / adjustments during the year - As at March 31, 2017 124.Ul 122.07 Add: Amortisation charge for the year 90.76 90.76 Less: On disposals / adjustments during the year - As at March 31, 2018 212.83 2 12.83 - Net book value As at March 31, 2018 27-82 27.82 1,130.76 As at March 31, 2017 73.88 73.88 1,130.76 As at March 31, 2016 139.86 139.86 989.54 Note: The Corrip@ny has elected Ind AS 101 exemption and continue with the carrying value for all of intangible assets as its deemed cost as at ,he da, e of transition. G [This page has been /eft blank intentionally] Dedicated Freight Corridor Corporation of India Limited Notes to the financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Note 5 : Other non-current financial As At As At assets March 31, 2018 March 31, 2017 Security deposits (Refer note below) Otners advances 737.61 51244 809.26 549.92 Note: The Company has determined its security deposits not to be in the nature of loans and accordingly have been classified as pan of other financial assets. As At As At Note 6 : Deferred tax assets (net) March 31, 2018 March 31, 2017 Deferred tax assets 2,095 84 2,13237 Deferred Tax/ Income Tax 2,095.84 2,132.37 A. Amounts recognised in statement of profit and loss For the year ended For the year ended CurenttaxexpnseMarch 31, 2018 March 31, 2017 Current tax expense Current year1,3.75760 Adjustment for change in estimates for prior period 1 0 1,036.27 5,576.03 Deferred tax expense Origination and reversal of temporary differences 57.25 ( 1 , 3 4 6 . 5 2 ) 57.25 (1,346.52) Total Tax Expense 1,093.52 4, 229. 51 B. Amounts recognised in Other Comprehensive Income For the year ended March 31, 2018 For the year ended March 31, 2017 BeoetxTax (Expense)/ Ta(xes/ incm Net of tax Before tax T(Exsene N of tax Remeasurements of defined (59.07) 20.72 (39.15) (26.66) 9.23 (17.43) benfitlibilty(59.87) 20.72 (39.15) (26.66) 9.23 ( 1 7 . 4 3 ) C. Reconciliation of effective tax rate For the year ended For the year ended March 31, 2018 March 31, 2017 Rate Amount Rate moun t Profit before tax from continuing operations 2,912.15 1 1 , 8 2 5 . 8 4 Tax using the Company's domestic tax rate 34.6080% 1,007.84 34.6080% 4,092.69 Tax effect of amounts which are not deductible (taxable) in calculating taxable income Corporate socia responsibility expense 1.7970% 52.33 0.5787% 68.44 Property, Plant & Equipment -00916% (2.67) 0.0000% 6 Income/ expenses capitalised since the Company is in pre- 0.7114% 20.72 0.106% 46.56 Non-deductible expenses 0.3144 9.16 0.1676% 19.62 Changes in estimates related to prior years 0.219.% 6.14 0 . 0 0 0 0% 1 37.5499% 1,9.235.7650% 4,229.51 D. Movement in deferred tax balances As At Recognized in Recognized in OCI As At March 31, 2017 P&L Mrh31, 2018 Deferred Tax Assets Property, plant and equipment including capital 2,132.37 (36.53) 2,095.84 Work in progress 2,132.37 (36,53) -2,095.84 Deferred Tax Liabilities N e t d e f e r r e d t a x a s s e t ( b ) - ( a ) 2,132.37 ( 3 6 . 5 3 ) 2 ,2,95.8 The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the ceferreo tax assets ano deferred tax liabilities relate to income taxes levied by the same tax authority, Dedicated Freight Corridor Corporation of India Limited -Notes to the financial statements for the year ended March 31, 2018 (All amounts in Y lakhs unless otherwise stated) Note 7: Non current tax assets (net) As At As At March 31, 2018 March 31, 2017 Advance Income Tax 4,76787 1,53852 [Net of provision of 7 6,612.30 lakhs (March 31, 2017 : Z 5576,03 lakhs)] 4,76.71585 Note 8 : Other non-current assets (Unsecured and considered good, unless otherwise stated) March 31, 2018 March 31, 2017 Capital advances - Mobilisation Advance [Secured against hypothecation of plant and machinery in favour of DFCCIL 334,749.29 334,567.90 Z 2,346.27 lakhs as at March 31, 2018 (March 31, 2017 : Z 2,346.27 lakhs)] - Advance for Shifting of Utilities - Advance for ROB/RUB 344,901.85 271,239.82 Advance for Capital Works-Others 46,038.88 40,809.82 - Interest accrued on mobilization advances & others 3,642.94 2,822.07 Prepaid expenses 2,241.70 2,805.88 Other loans and advances 2,494.30 3,005.82 782,786.7 681,251.31 Note 9 : Cash and cash equivalents As At As At March 31, 2018 March 31, 2017 - In current account and flexi 147,953.68 94,599.73 - In deposit accounts with initial maturity of 3 months or less 1 94,599.73 Less: Interest accrued on fixed deposit presented as other financial assets - 5608.26 Cheque in hand - (607.26) 0147,953.8 144,600.88 a) For the purpose of the statement of cash flow, cash and cash equivalents comprise of the following: As At As At March 31, 2018 March 31, 2017 Balance with banks: - in current account and flexi 147,953.68 94,599.73 - In deposit accounts with initial maturity of 3 months or less 1 9 6,599.73 Less: Interest accrued on fixed deposit presented as other financial assets - 5608.26 Cheque in hand 0.14 0. 15 147,953.82 144,600.88 Note 10 : Other bank balances As At As At March 31, 2018 March 31, 2017 In deposit accounts 216,615.24 Less: Interest accrued on fixed deposit presented as other financial assets - 21,615.24 Earmarked balances with banks - (1,615.24) Deposits with original maturity of more than 3 months but less than 12 months* 416.34 416.34 3976.01 218,805.75 -This fixed deposit is pledged with Delhi Metro Rail Corporation Limited. Dedicated Freight Corridor Corporation of India Limited Notes to the financial statements for the year ended March 31, 2018 (l amounts in lakhs, unless otherwise stated) Note 11 : Other current financial assets As At As At (Unsecurea and considered good, unless otherwise stated) March 31, 2018 March 31, 2017 nterest accrued on fixed deposit Expenditure on land acquisition - recoverable from MOR 5,385.5 1,047.80 Expenditure on PETS survey - recoverable from MOR 1,959.52 679.81 Other recoverable 422.24 374.66 Security deposits 71.65 9.98 Employee advances 71.65 9.98 Advances to contractors/consultants 54.33 34.20 8,659.16 4,875.74 As per the directions of Ministry of Railways (MOR), Land for the project shall be acquired in the name of MOR under The Railways Act, 1989 as modifie ny The Railways (Amendment) Act, 200 and the Land so acquired shall be leased to the Company at lease rent of 6% per annum of the Cost of Land on the date of handing over to DFCCIL Lease rent shall commence from the date of commissioning. Funds for acquisition of land are being provided by MOR to separate bank accounts, being operated jointly by the State Land Acquisition Officer, being the Competent Authority under the above Act and a nominated official of the Company. Such Bank Accounts do not form part of the Company's Accounts. Note 12 : Other current assets As At As At (Unsecured and considered good, unless otherwise stated) March 31, 2018 March 31, 2017 Prepaid expenses Interest accrued but not due on retention money 685.78 588.92 Other loans and advances 555.52 198.36 Gold silver medallion for employees in hand 115.54 54.29 2.02 2.02 1,358.86ta843.59 [This page has been left blank intentionally] X '~ Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Note 13 : Equity Share capital As At As At March 31, 2018 March 31, 2017 Authorised: 220,000,000* (March 31, 2017 : 80,000,000 ) equity shares of T 1,000 each 2,200,000.00 800,000.00 Issued, subscribed & fully paid up: 76,582,729' (March 31, 2017 : 76,582,729) equity shares of Z 1,000 each 765,827.29 765,827.29 765,827.29 75872 'Number of shares are presented in actual numbers. a) Reconciliation of authorised, issued and subscribed share capital: i. Reconciliation of authorised share capital as at year end : (Number of Shares) (Amount in Z'Lakhs') As At As At As At As At March 31, 2018 .March 31, 2017 March 31, 2018 March 31, 2017 Balance at the begning of the year 80,000,000.00 80,000,000.00 800,000.00 800,000.00 Increase/(decrease) during the year 140,000,00.000 1,400,000.00 - Balance at the end of the year 220,000,00000 80,000,000.00 2,200,000.0 800,000.00 ii. Reconciliation of issued and subscribed share capital as at year end (Number of Shares) (Amount in T'Lakhs) As At As At As At As At March 31, 2018 March 31, 2017 March 31, 2018 March 31, 2017 Balance at the begning of the year 76,582,729.00 76,582,729.00 765,827.29 765,827.29 Increase/(decrease) during the year 7 8 Balance at the end of the year 76,582,729.00 76,582,729.00 7 6 5 ,8 2 7 .2 9 765,827.29 b) Terms/ rights attached to equity shares: The company nas only one class of equity shares having par value of Z 1,000 per share. Each holder of equity shares is entitled to one vote per share and entitled to receive dividens as declared from time to time. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, aher distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the snareholders. c) Shareholders holding more than 5% shares in the company As at March 31, 2018 As at March 31, 2017 Note 14: Other equity As At As At -March 31. 2018 March 31, 2017 a) Share Application Money Pending Allotment Balance at the beginning of the year Add: Share application money received from Ministry of Railways 311,045.55 2 Less: Shares issued during to Ministry of Railways (285,560.41) Balance at the end of the year 311,045.55 Company has closing balance of Z 311,045.55 (March 31, 2017 : Z Nil) of Share Application Money received from Ministry of Railways as on March 31, 2018. b) Retained earnings As At As At March 31, 2018 March 31, 2017 Balance at the beginning of the year 23,456.80 15,860.6 Add: Profit for the year after taxation as per statement of Profit and Loss 1,818.63 7, 596. 34 Balance at the end of the year 25,275.43 2 3 , 4 5 6 . 8 0 c) Remeasurement of defined benefit plans As At As At March 31, 2018 March 31, 2017 Balance at the beginning of the year (22.24) (4.81) Addition during the year (22.24)1(4181) Balance at the end of the year Total (a+b+c) 336,259.59 23,434.56 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in Z lakhs, unless otherwise stated) Note 15: Borrowings As At As At March 31, 2018 March 31, 2017 Term loans (unsecured) -JICA 729,162.85 493,644.17 Total 342,91432 237,336.11 Ls:ac 1,072,077.17 730,980.28 Less: accrued interest on JICA loan (Refer note 16) (68,529.21) (35,133.30) Less: accrued interest on IBRID loan (Refer note 20) (2,345.51) (1,300.99) 1,001,202.45 694,545.99 Term of repayment and interest are as follows Carrying Amount Loan From Repayment Terms Year of Maturity Rate of Interest As At As At .a Mrch 31, 2018 March 31, 2017 MoR for EAP Projects JICA - 205 Refer Note (a) below 2049 7% - Fixed 17,026.25 16,138.98 MoR for EAP Projects JICA - 209 Refer Note (a) below 2050 7% - Fixed 503,963.68 381,899.33 MoR for EAP Projects JICA - 212 Refer Note (a) below 2050 7% - Fixed 9,447.36 8,745.99 MoR for EAP Projects JICA - 229 Refer Note (a) below 2053 7% - Fixed 125,571.60 67,541.70 MoR for EAP Projects JICA - 209 A Refer Note (a) below 2050 7% - Fixed 23,489.00 14,347.29 MoR for EAP Projects JICA - 229 A Refer Note (a) below 2053 7% - Fixed 5,487.32 4,970.88 MoR for EAP Projects JICA -253 Refer Note (a) below 2056 7% - Fixed 44,177.63 - MoR for EAP/IBRD Projects -8066 Half Yearly 2033 in 30 2.18% - Variable 204,970.50 157,007.23 instalm ents IBRD for EAP Projects- 8318 Half Yearly 2035 in 30 2.18% - Variable 119,884.01 67,148.85 instalments IBRD for EAP Projects- 8513 Half Yearly 2037 in 30 2.38% - Variable 24,860.53 13,180.03 instalments Less. accrued interest nstalments Total (Refer note 15 & 19) 1,008,003.16 6 9 4 , 5 4 5 . 9 9 L. External Aided Proects lA) Japan International Cooperation Agency ('JICA') Loan Loan by JlCA is being given to Ministry of Railways as an externally aided components of Gross Budgetary Support (GBS) through Ministry of Finance. This loan is passed on to DFCCIL on back to back basis. As per clarification received from MOR vide letter number 2009/Ilnfra/3/1/26 Pt-1 dated 06/02/2015, tne tenure of loan is 40 years, rate of interest is 7%/ and moratorium period is 10 years. The accumulated interest accrued during the period of moratorium is payable after completion of 10 years. This interest will accrue on simple interest basis. EAP International Bank for Reconstruction and Develop2ment IBRU') Loan The Government of India (GOI) through the Ministry of Finance has entered into a Loan Agreement dated October 27, 2011 with IBRD to avail a loan of USD 975 Million that has been reduced to tSi 800 Million vide letter dated June 29, 2017 with Loan ID-8066 IN with the IBRD which shall be utilized towards Institutional Development Activities and Design, Construction and Commissioning of 343 Kms of double track electrified railway on the Khurja- Bhaupur Section of the Eastern Dedicated Freight Corridor (EDFC). In terms of the Loan Agreement, DFCCIL has been identified as the Project Implementing Entity for implementation of the project. Further, to facilitate the carrying out of the project by DFCCIL, as through the MOR is required to make the proceeds of the Loan available to DFCCIL by way of MOR Loan under a Subsidiary Loan Agreement between the GOI through MOR and DFCCIL, under terms and conditions satisfactory to the Bank. The repayment of IBRD Loan ID-8066 IN along with interest will be made by DFCCIL to MOR in Rupee equivalent of the USD Loan/interest amount. The DFCCIL nas entereo into another Loan Agreement with the IBRD dated December 11, 2014 to avail a loan of USD 1100 Million that has been recucec to USD 910 Million vide letter dated June 30, 2017 with Loan ID-8318 IN. This Loan shall be utilized towards Institutional Development Activities and Design, Construction and Commissioning of 393 Kms of double track electrified railway on the Kanpur-Mughal Sara section of the EDFC In this agreement the Government of India (GOI) has given Sovereign Guarantee and charges guarantee fees which has been included in note 26. The DFCCIL has entered into another Loan Agreement with the IBRD dated October 21, 2016 to avail a loan of USD 650 Million with Loan ID-8513 IN. This Loan shall be utilized towards Institutional Development Activities and Design, Construction and Commissioning of 401 Kms of double track elecrfiec railway on the Ludhiana - Khurja section of the EDFC. In this agreement the Government of India (GOI) has given Sovereign Guarantee and cnarges guarantee fees whicn has been includeo in note 26. Note 16 : Other non-current financial liabilities As At As At March 31, 2018 March 31, 2017 Deposits/ Retention money 24,694.84 15,053.14 Interest accrued but not due on Loan 68,529.21 35,133.30 93,224.05 50,186.44 Note 17 : Long-term provisions As At As At March 31, 2018 March 31, 2017 Provision for employee benefits - Gratuity 664.41 457.10 - Leave encashment . ... i 69.99 45.11 - Leave travel concession 145.37 134.56 2,079.77 1,456.77 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (Al amounts in Z Iakhs, unless otherwise stated) Note 18 : Other non-current liabilities As At As At March 31, 2018 March 31, 2017 Advance for ROB/ RUB* 26,397.82 25,938.00 Income received in advance 216.92 211.07 Advance received from customers against deposit work 26.92 2 Other advances received 12,640.80 5,561.52 546.60 531.75 39,802.14 _ 32,242.34 per is working on few ROBs on cost sharing basis which is being done in terms of MOR letter number 2007/Infra/6/8-Pt 11 dated 03.02.2012. As per tnis arrangement, sharing of cost of ROB between Railways and State Government shall be as per the principle of 50:50. Further, sharing of railways share of cost of ROB between Railways and DFCCIL will be on 50:50 basis Note 19: Borrowings As At As At Term loans (unsecured) March 31, 2018 March 31, 2017 - IBRD 6,800.71 Note 20 : Trade Payables As At As At March 31, 2018 March 31, 2017 - Outstanding dues to micro and small enterprises - Outstanding dues to parties other than micro and small 3,674.15 7,070.70 3,674.15 7,070.70 a) Trade payables are non-interest bearing and are normally settled as per the terms of the contract. b) Trace payables to related parties amounts to Z Nil (March 31, 2017 Z Nil). Note 21 : Other current financial liability As At As At March 31, 2018 March 31, 2017 Earnest money deposit 175.78 222.44 Employee related liabilities 175.78 222.44 Deposits/ retention money 1,678.90 1,878.18 Creditors for capital expenditure* 100,674.60 39,851.63 Funds received from MOR pending adjustment 10,4.0 39,85.63 Interest accrued but not due on loan 25,405.07 311,045.55 148,144.80 357,815.83 Creditors for capital expenditure includes Z 1,550.28 lakhs (March 31, 2017 : Z 220.83 lakhs) due to related parties. Note 22 : Other current liabilities As At As At March 31, 2018 March 31, 2017 Advance for land (Pending for transfer to SLAO A/c) 3,559.67 3,389.41 Advance received from customers against deposit work 3 3 .41 Duties and taxes payable 9 6 Income received in advance 9,884.39 7,297.36 13,448.17 10,698.81 Note 23 : Short-term provisions As At As At March 31, 2018 March 31, 2017 O A Provision for emp oyee benefits (Refer note 36) -Gratuity - Gatuty50.74 28.30 - Leave encashment .> 50.74 2.37 - Lcav travel concession 14.930 3. Provision for project expenses 35.90 20,180.80 141.33 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in 4 :akhs, un lss otherwise stated) Note 24 : Other income For the year ended For the year ended nterest income March 31, 2018 March 31, 2017 - on Flexi FDR - on others 11,903.5945 Foreign currency fluctuation gain 14550A8 Miscellaneous income - 56.46 Excess Provision Return Back 71.34 7.53 Application money received 17.96 7 Recovery on sub- lease 20.00 23.00 Rent recovery on sub-lease 340.01 282.43 Housekeeping expenses recovered from sub-lessee 19.59 13.91 Office Security expenses recovered from sub-lessee 32.93 21.91 Electricity expenses recovered from sub-lessee 32.13 25.83 Annual maintenance charges recovered from sub-lessee 13.08 18.29 Other charges recoverable 138 1.29 Composite rent and facility management charges 362.99 317.48 Less: Expenses on sub- lease 802.11 681.24 Housekeeping expenses Rent 17.41123 1340.01 282.43 Composite rent & facility management expenses 340.01 22.43 Office repair and maintenance 297.74 225.65 Office security expenses 1.23 1.24 Electricity expenses office 29.27 19.48 Annual maintenance charges 8.563 1625 725.85 580.37 76.26 100.87 Other Income 12,089 15 15,269. Less: Transferred to development account (net of tax impact) 12.50 Net other income 89.15 15,138.10 Note 25: Employee benefits expense For the year ended For the year ended March 31, 2018 March 31, 2017 Salaries and wages 11,827.12 10,908.02 Contribution to provident and other funds 1,2.12 190.02 Gratuity 183.18 130.01 Staff welfare expenses 183.1 37.6 383.71378.96 12,824.10 11,774.62 Less: Transferred to development account (refer note 31) 11,771.06 11,774.62 1,053.04 Note 26 : Finance cost For the year ended For the year ended March 31, 2018 March 31, 2017 Interest Expenses on: EAP/JICA loan IBRD loan 33,395.91 18,880.69 InRe on 5,521.01 2,663.29 Interest on Income TaxTDS 23.78 57.27 Interest on Other Taxes214 Other Borrowing Cost 21.47 Other finance cost 3,996.39 Exchange differences regarded as adjustment to interest cost 253.25 (6,231.63) 43,827.18 17,059.31 Less: Transferred to development account (refer note 31) 43,781.93 17,002.03 45.25 57.28 00 A57.2 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in Z lakhs, unless otherwise stated) Note 27 : Depreciation & Amortization Expenses For the year ended For the year ended March 31, 2018 March 31, 2017 Depreciation - EDP assets 274.56 261.39 Depreciation - Office equipment 56.70 62.83 Depreciation - Furniture and fixture 64.74 77.51 Depreciation - Leasehold improvement 79460 71.36 Depreciation - Leasehold flat 10.66 10.66 Depreciation - Plant and machinery 0.29 0.29 486.55 484.04 Less: Transferred to development account (Refer note 31) 208.90 228.79 277.65 255.25 Note 28 : Other expenses For the year ended For the year ended March 31, 2018 March 31, 2017 Rent expense 1,779.09 1,647.95 Tours, travels and conveyance 2,904.95 2,449.25 Cost of outsourced staff (placement) 691.43 581.74 Seminar and training expenses 525.77 371.50 Advertisement expenses 228.09 379.88 Housekeeping expenses 424.92 372.84 Office security expenses 201.30 199.52 Legal and professional charges 241.50 154.16 Corporate social responsibility 151.21 197.76 Communication expenses 153.12 137.77 Printing ano stationary 146.28 156.59 Consultancy fees to consultants 885.05 446.91 Recruitment expenses 8.78 410.92 Electricity expenses 140.21 125.68 Repair and maintenance - others 170.18 113.12 Rates and taxes 26.15 286.88 Foundation day expense 18.37 26.88 Computer job work 79.31 44.99 Payment to statutory auditors 13.32 15.07 Meeting and conference 63.58 63.24 Office expenses 59.16 49.33 Hospitality expenses 33.06 36.24 Foreign currency fluctuation loss 1,395.28 Miscellaneous expenses 3,225.30 173.69 13,565.41 8,441.91 Less: Transferred to development account (Refer note 31) 5,764.35 5,442.18 Total 7,801.06 2,999.73 * Payment to Statutory Auditors includes For the year ended For the year ended March 31, 2018 March 31, 2017 Statutory audit fee 8.40 8.40 Tax audit fee 1.95 1.95 Other audit fees (EDFC-1 audit) 1.72 1.72 Other audit fees (EDFC-1I audit) 1.00 1.00 Other audit fees (EDFC-11 audit) 0.25 - Service Tax - 1.95 Reimbursement of expenses 0.05 13.32 15.07 Note 29 : Components of Other Comprehensive Income For the year ended For the year ended March 31, 2018 March 31, 2017 Re-measurement gains/ (losses) on defined benefit plans (59.87) (26.66) Income tax expense 20.72 9.23 j, (39.15) (17.43) Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Note 30 : Earning per share For the year ended For the year ended Basic earning per share March 31, 2018 March 31, 2017 Total profit/ (loss) for the year 1,818.63 7,596.33 Weighted average number of equity shares of 7 1,000 each (In lakhs) 766.68 765.83 EPS - Basic 2.37 9.92 Diluted earning per share Total profit/ (loss) for the year 1,818.63 7,596.33 Weighted average number of equity shares of Z 1,000 each (In lakhs) - 766.68 765.83 Diluted EPS - Diluted 2.37 9.92 Note 31 : Development account (pending capitalisation) For the year ended For the year ended March 31, 2018 March 31, 2017 Employees benefit expense 11,771.06 11,774.62 Finance cost 43,781.93 17,002.03 Depreciation and amortization expense 208.90 228.79 Oter expenses 5,764.35 5,442.18 Total(A) 61,526.24 34,447.62 Less: Liquidated damages (LDA) (2,629.43) 270.06 Interest income on retention money 507.37 . Interest on mobilization advance 252.82 1,298.57 Interest on advance consumption deposit 24.42 32.11 Arbitration Expenses (1,351.42) Interest on advances - employees 4.71 2.42 D&G, supervision & plant estimation charges received 2.13 5.44 Security deposit/EMD forfeited 1.66 1.39 Sale of tender 18.15 30.08 Profit on sale of property, plant and equipment (1.50) (3,181.09) (8.36) 1,63171 Total (B) (3,181.09) 1,631.71 Net expenditure (A-B) 64,707.33 32,815.91 Income transferred from other income 131.40 Total transferred to capital work in progress (CWIP) 64,707.33 32,684.51 [This page has been left blank intentionally] r-r , Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Note 32 : Contingent liabilities, contingent assets and commitments A. Commitments (i Estimated amount of contracts remaining to be executed on capital account and not provided for Z 3,794,536.99 lakhs (March 31, 2017 : Z 3,989,915.40 lakhs) (ii) As per JlCA loan agreement, the eligible nationality of the supplier(s) shall Japan in the case of of the prime contractor. In case where the prime contractor is a joint venture, such joint venture will be eligible provided that the nationality of the lead partner is Japan, that the nationality of the other partners is Japan and/or India and that the total share of work of Japanese partners in the Joint venture is more than fifty percent(50%) of the contract amount. The Company is comiitted to follow the aforementioned loan condition. B. Contingent Liabilities As At As At March 31, 2018 March 31, 2017 Claims against Company not acknowledged as debt 79,746.24 34,994.92 Other money for which the Company is contingently liable Disputed liability under Income Tax (refer (iii) below) 539.87 502.65 80,286.11 35,497.57 (i) Pencing resolution of the respective proceedings, it is difficult for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgement/decisions pending with various forums/authorities. (ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position. (iii) The Company has been advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary. (iv) A number of cases are lying for adjudication at different forums pertaining to land compensation. Since land acquisition is being done by the company as a facilitator for Ministry of Railways, company is not subject to any liability that may arise pursuant to the decision of aforesaio adJuoicating authorities Note 33: Segment information A. Description of segments and principal activities Segment information is presented in respect of the company's key operating segments. The operating segments are based on the company's management and internal reporting structure. Operating Segments The Company's Board of Directors have been identified as the Chief Operating Decision Maker ('CODM'), since they are responsiole for all major decision w.r.t. the preparation and execution of business plan, preparation of budget, planning, expansion, alliance, and expansion of any new facility. Accordingly, management has identified Eastern corridor and Western corridor as two operating segments for the Company. B. Information about reportable segments Information related to each reportable segment is set out below. Since the Company is in construction stage, hence profit and loss is not reviewed by the CODM. However, the Segment assets and liabilities are used to measure performance because management believes that this information is the most relevant in evaluating the performance of the respective segments. Total assets Total liabilities Segment Unallocated Segment Unallocated assets corporate assets liabilities corporate liabilities Total liabilities As at March 31, 2018 EDFC 881,105.67 - 881,105.67 413,281.58 413,281.58 WDFC 1,156,019.68 - 1,156,019.68 760,247.23 - 760,247.23 U n allo cate d - 3 9 3 ,5 18 .57 39 3 ,5 18 .57 - 1,2 57 ,1 15 .1 1 1,2 57 ,1 15 .1 1 Total 2,037,125.35 393,518.57 2,430,643.92 1,173,528.81 1,257,115.11 2,430,643.92 As at March 31, 2017 EDFC 658,922.42 - 658,922.42 267,726.11 - 267,726.11 VVDFC 915,839.53 - 915,839.53 537,842.42 - 537,842.42 Unalocated - 368,658.11 368658.11 - 1,137,851.53 1,137,851.53 Total 1,574,761.95 368,658.11 1,943,420.06 805,568.53 1,137,851.53 1,943,420.06 C. Geographic information The Company is in construction phase and does not have any operation in economic environment with different risk and returns, hence its considered operating in single geographical segment. :9> Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in Z lakhs, unless otherwise stated) Note 34 : Leases Operating lease The Companys significant leasing arrangements are in respect of operating leases of premises for offices and guesthouses. These easing arrangements, which are not non-cancellable, are typically for a period of 11 months to 5 years and are usually renewable on mutually agreeable terms. The future Minimum Lease Payments under non-cancellable operating lease are as under: Minimum Lease Payments Marh3,21 March 31, 2017 Ii Not later than in 1 year 715.42 688.84 Amounts recognised in profit and loss account Particular For the year ended March 31, 2018 March 31, 2017 Rentexpense 2,357.40 2,156.04 Sub-lease income 340.40 282.4 Note 35 : Disclosure as required under section 22 of the micro, small and medium enterprises development act, 2006 is as follows Particulars As At As At March 31, 2018 March 31, 2017 PrincipaJ amount remaining unpaid to micro, small and medium enterprise Interest accrued on principal amount remaining unpaid as (i) above Amount of interest paid during the FY along with the payment of principal amount made eyond 15 days or agreed time from the date of delivery/ rendering of Nil Nil services Interest due but yet to be paid on principal paid during the F.Y. Amount of further interest remaining due and payable even in the succeeding period, until such date when the interest dues as above are actually paid to theNiNl small enterprise, for the purpose of disallowance as deductible expenditure Nil Nil [This page has been left blank intentionally] Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (Al amounts in T lakhs, unless otherwise stated) Note 36 :Employee benefits The Company contributes to the following post-employment defined benefit plans in India. (i) Defined Contribution Plans: The Company makes contributions towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. For the year ended For the year ended March 31, 2018 March 31, 2017 Contribution to Provident Fund (ii) Defined Benefit Plan: The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is an unfunded plan. T2e most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at March 31, 2018 The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Metnod A. Basea on the actuaral valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company s financial statements as at balance sheet date: As At As At Net defined benefit liability March 31, 2018 March 31, 2017 Liability for Gratuity 715.15 485.41 Total employee benefit liabilities 715.15 485.41 Non-current 664.41 457.10 Current Cret50.74 28.31 B. Movement in net defined benefit (asset) liability The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components: Defined benefit obligation As At As At 'March 31, 2018 March 31, 2017 Balance at begning of the year Mrh3,0 321 Included in profit or loss32413 Current service cost Past service credit 147.47 110.30 Interest cost (income) 35.71 24.31 Included in OCI Remeasurements loss (gain) Actuarial loss (gain) arising from: - experience adjustment 59.87 26.66 Other Contributions paid by the employer Benefits paid (1 30) (13.30) Balance at closing of the year 715.15 485.40 D. Actuarial assumptions a) Economic assumption The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages). As At As At March 31, 2018 March 31, 2017 Discount rate 7.80% 7,50% Expected rate of future salary increase 7.80% 7.50% 6.00% 6.00% b) Demographic assumption As At As At March 31, 2018 March 31, 2017 Retirement age (years) 60 60 Mortality rates inclusive of provision for disability IALM (2006-08) Attrition at Ages Withdrawal Withdrawal Ut30erRate (%) Rate (%) Up to 30 Years 5.00% 5.00% From 31 to 44 years 5.00%/0 5.00%/ Above 44 years 5.00% 5.00% As at March 31, 2018, the weighted average duration of the defined benefit obligation was 12.85 years (March 31, 2017 :15 years) Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts In T lakhs, unless otherwise stated) E. Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below. March 31, 2018 March 31, 2017 Increase Decrease Increase D e c re a se Discount rate (0.5% movement) (27.84) 29.99 (18.89) 40.78 Expected rate of future salary increase (0.5% movement) 30.07 (28.13) 22.01 19.30 Sensitivities due to mortality & withdrawals are not material & hence impact of change not calculated. Sensitivities as to rate of inflation rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement. Pending approval of superannuation scheme by MOR in terms of Para 2(iii) of DPE OM no 2(70)108.DPE (WC)-GL-VlI/09 dated 02.04.2009, no provision has been made in the accounts towards Pension & Post Superannuation medical benefits since there is no obligating event pending approval of MOR. (ii) Other long-term employee benefits: a) Earned leave and half pay leave During the year ended March 31, 2018, the Company has incurred an expense on earned leave and half pay leave amounting to f 388.96 (March 31, 2017 : Z 302.40). The Company determines the expense and the present value of the obligation for earned leave and half pay leave as per actuarial valuation, using the Projected Unit Credit Method. b) Leave travel concession During the year ended March 31, 2018, the Company has incurred an expense on leave travel concession amounting to Z 34.51 (March 31, 2017 Z 52.20). The Company determines the expense and the present value of the obligation for leave travel concession as per the actuarial valuation, using the Projected Unit Credit Method. Note 37 : Related parties A. Related parties and their relationships i. Government entities The Company is a Central Public Sector Undertaking (CPSU) controlled by Central Government through Ministry of Railways by holding its entire shares (refer Note 13). Pursuant to Paragraph 25 & 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. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements. Such entities with which the Company has significant transactions include but not limited to Ministry of Railways, various divisional tzonal railways under MOR, Ministry of Corporate Affairs, BSNL, IOCL, RailTel, NHAI, PGCIL, GAIL and CRWC. ii. Key Managerial Personnel (KMP) Sh. AX.Mital Part Time Chairman (Official) (Upto August 29, 2017) Sh. Ashwani Lohani Part Time Chairman (Official) (w.e.f. August 30, 2017) Sh. Adesh Sharma Managing Director (Up to June 30, 2017) Sh. Anshuman Sharma Managing Director (Additional Charge Upto August 03, 2018) Sh. Anurag Kumar Sachan Managing Director (w.e.f. August 04, 2018) Sh. Naresh Salecha Chief Financial Officer Sh. H.D. Gujrati Director (Operations & Business Development) (Upto January 17, 2018) Sh. Naveen Kumar Shukla Director (Operations & Business Development) (Additional Charge) (wef. January Sh. 0. S Rana Director (infrastructure ) Sh. Sushant Kumar Mishra Part time Official Director -Government Nominee-MOR (wef. July 05, 2017) Sh. Yaduvendra Mathur Part-time Official -Government Nominee-Niti Aayog (we.f. June 08, 2017) Sh. Ravi Mathur Independent Director Smt. Shakti Munshi Independent Director Sh. Y. S. Malik Part time Official Director -Government Nominee-Niti Aayog (Upto June 08, 2017) Ms. Meenu Kapoor Coinpany Secreta[ B. Transactions with the above in the ordinar course of business Nam Nature of Transaction Foreth ar ended March 31, 2018 March 31, 2017 Ministry of railways & its Fund Received from MR275,0 00.0 0 625,300.00 constituent Expenditure for land acquisition 442,159.00 Recoverable for PETS survey from MOR 1,279.71 1,293.25 Recoverable from MOR towards land facilitation 4,337.52 2,440.18 expenses \001A for shifting of utilities, capital advance, rob Works 49,796.96 262,135.04 and construction of Flats Guarantee Fee 2,690.97 Advance received for ROB/RUB 50000 25,938.00 Advance given for ROB/RUB 2,887.16 -DAC Rental Income from Railway Board 439.12 - Ministry of Corporate Affairs Stamp duty expense2500 285.57 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 -CI_a"munI'inT1aIh.,nI. oh-ssted (Al aonsn lkh, unless otherwise stated) Other entities BSNL - For shifting of utiliies & capital wor,ks 365.17 641.62 PGCIL - For shifting of utilities & capital works 1,90589 116330 RailTel corporation Ltd - For shifting of utilities & 26.85 101.37 capital works NHAI - For shifting of utilities & capital works - 9,636.96 IOCL - For shifting of utilities & capital works - 9 CRWC New Delhi - For shifting of utilities & capital 811.80 works GAIL - For shifting of utilities & capital works _* RDSO/LKO - shifting of utilities & capital works 0.50 Total34,6.5 1310.2 Remuneration to Key 340,06er mloe bnfis16.65 1,374 Managerial Personnel b) post-employment benefits 16.98 23.54 c) other long-term benefits 62.88 5.961 176.37 253.11 Other expenses- legal (sitting fees) 5.61 6.67 Total I-- - -- - 5.61 6.67 Outstandin balances with related arties Name of Related Party Nature of Transaction As At As At March 31, 2018 March 31, 2017 Recoverable Balancs Ministry of railways & its Expenditure on PETS survey - recoverable from 1,959.52 679.81 constituent MOR Recoverable from MOR towards land facilitation 5,385.56 1,566.57 expenses Shifting of utilities, capital advance, ROB works 216,206.37 168,748.44 and construction of flats Other entities SNL - shifting of utilities & capital works 1,029.57 641.2 ONGC - shifting of utilities & capital works 10,086.00 10,086.00 PGCIL - shifting of utilities & capital works 33,702.38 31,662.38 RailTel corporation Ltd -shifting of utilities & capital 1,569.74 1,596.87 works NHAI - shifting of utilities & capital works 9,636.96 9,636.96 IOCL - shifting of utilities & capital works 12505.07 11,506 .53 CRWC New Delhi - shifting of utilities & capital 1, 190.64 3,8.4 GAIL - shifting of utilities & capital works 1,912.29 3,372.9 RDSO\aLKO - shifting of utilities & capital works 1,912 29 Recoverable from other entities 2,215.47 11a 8 N 297,401.03 2__3_9,529.13 oExpenditure on and acquisition 3559.67 3,389.41 Advance received for ROB/RUB 26,39782 S 25,938,00 .Total55,362.56 340,372.96 )lteh ta so eihneG deltedaea e Dmrnaede on terms equivlent aothosethatNprevail in arm's length transactions. The Government of India Note 38 : Corporate Social Responsibility ( 2r afmaunth r sto be spent by the Company during the year (e e 2% of Average Net profits uls 198 of Companies Z 166.51 lakhs (b) Amount spent during the year: S. 0upose for which Amount in Cash/ deelpmn p No. expenditure incurred Cheque To ta O Standing enoun (v ocaiostructki/acqustion of21 any asset - (ii) On urposes other than (i) O1 abovepromoting preventive healthcare and sanitation projects 47.00 Payment for rural development projects 74.1 -Paymenttfor educational & employment enhancing vocation skills4 292 iters Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 'All amounts in flakhs, unless otherwise stated) Note 39 : Financial instruments - Fair values and risk management . Fair value measurements A. Financial instruments by category As At As At March 31, 2018 March 31, 2017 Financial assets Non-Current Other non-current financial assets (Refer Note 5) -Security Deposits 737.61 -Others- 71.65 512.44 --O37e48 Current 37.46 Cash and cash equivalents (Refer Note 9) 147,95362 144,600.88 Bank balances other than above (Refer Note 10) - - 3,976.01 - 218,805.75 Other current financial assets (Refer Note 11) -interest accrued on fixed deposits 498.90 2,222.50 -Expenditure on lana acquisition - recoverable - 5,385.56 - 1,047.80 from MOR -Expenditure on PETS survey - recoverable from 1,959.52 679.81 MOR -Other recoverable 422.24 374.66 -Security deposits - 71.65 3 . -Employee advances 54.33 34.20 -Advances to contractors/consultants 4266.96 34 16,9OL 368,832.29 Financial liabilities Non-Current Borrowings (Refer Note 15 & 19)1,00316945.9 Other non-current financial liabilities (Refer Note - 1,093,224.05 - 50,16.44 Current -race Payables (Refer Note 20) - 50.44 Other current financial liabilities (Refer Note 21) - 3,674.15 7 -Earnest money deposit 175.78 222.44 -Employee related liability 1,678.90 - 8 .18 -Deposits/ retention money 17,864.94 . - 3,517.04 -Creditors for capital expenditure 100,674.60 - 39851.63 -Funas received from MOR pending adjustment - 25,405.07 - 311045.55 -Interest accrued but not due on loan 2,345.51 - 300.99 - - 1,253,046.16 -1,109,618.97 8. Fair value hierarchy This section explains the judgements and estimates made in determining the fair values of the financial instruments that are: (a) recognised and measured at fair value and (b) measured at arnortised cost and for which fair values are disclosed in the financial statements. To proviae an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table. Assets and liabilities which are measured at amortised st for hich fair values are disclosed As at March 31, 2018 Financial assets Employee advances 71.65 71. 65 Total financial assets 7. Financial liabilities Borrovings 1,001,202.45 1.001,202.45 Deposits, Retention money 20244 10,202.4 Total financial liabilities 1,24,694.84 24,694.84 Assets and liabilities which are measured at aortised cost for hich fair values are disclosed As at March 31, 2017 Level 1 Level 2 Level 3 Total Financial assets Employee advances h Z 74 74 Total financial assets 37.48 37.48 Financial liabilities Borrowings69,499 6,559 Depositsi Retention money 0694545,99 694,545.99 Total financial liabilities - _ 15,53.14 15,53.14 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in lakhs, unless otherwise stated) Measurement of Fair Value Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds tnat have cuoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at Level 2: Tne fair value of financiam instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. There are no transfers between level 1 and level 2 during the year C. Fair value of financial assets and liabilities that are not measured at fair value (but fair value disclosures are required) Set out below is a comparison by class of the carrying amounts and fair value of the Company's financial instruments, other than those with carrying amounts that are reasonable approximations of fair values: Carrying Values Fair Values As At As At As At As At Fi ancial assets measured at amortized cost Employee advances 71.65 37.48 71.65 37. 48 71.65 37.48 71.65 37.4 Financial liabilities measured at amortized cost Borrowings 1,001,202.45 694,545.99 1,001,20245 694,545.99 Deposits Retention money 24,694.84 15,053.14 2464.84 15,053.14 1,025,897.29 ::709,599.13 1,2,97209591 The carrying amounts of current financial assets and liabilities such as cash and cash equivalent, bank balances, expenditure on land acquisition, expenditure on pets survey, recoverable from staff! consultants, security deposits, other payables, interest accrued, security deposit NDMC, employee advances, earnest money deposit, other payables, funds received from MOR pending adjustment, interest accrued on loan from GIRD approximate their fair values, due to their shon-term nature. The fair values for employee advances ware calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in tne fair value hierarchy due to the inclusion of unobservable inputs including counterparly credit The fair values of non-current borrowings, deposits and retention money are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. II. Financial risk management The Company has exposure to the following risks arising from financial instruments: -Creoit risk, - Liquidity risk; and Market risk Risk management framework The Company's Audit Committee has overall responsibility for the establishment and oversight of the Company's risk management framework (RMF'). As per RMF Company has well laid down a organisation structure for identifying, prioritising and mitigation of the risk. The Audit Committee has established the Risk Management Committee ('RMC'), which in association with Risk Mitigation Plan Owners is responsible for identification, prioritisation and mitigation of the risk. A risk library of top 20 risk and mitigation plan is in place. These risks and mitigation plan are monitored periodically for updation of risks and its mitigation. The RMC reports to the Audit Committee on periodical basis on its activities. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Company's Audit Committee oversees how management monitors compliance with the Company's risk management framework, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee. ii. Credit risk Credit risk is the rSK of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investments in debt securities. At present Company is in construction phase and do not have any customer or investment in debt securities. The financial asset mainly consists of money held in banks pending utilisation in construction activity. Company does not perceive any credit risk in respect of these fnancial assets. The carrying amount of financial assets represents the maximum credit exposure. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Other receivables Other receivables mainly consist of recoverable from employees. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of other receivables. Basis the evaluation, the management has determined that there are no credit impairment loss on other receivables. iii. Liquidity risk Liquiity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Company is in construction of freight corridor for which loan from World Bank and JICA has since been tied up. As per the extant mechanism, based on the budget estimate and fund requirement, funds are received from Ministry of Railways (MOR) towards Equity and Externally Aided Component i.e. Loan. Company keeps on meeting contractual liability from that fund and thereafter sought reimbursement from World Bank and JICA for the share of loan. Once reimbursement is received from these agencies, equivalent amount is adjusted in account of Government of India. So Company at present does have any liquidity risk. (a) Financing arrangements The Company had access to the following undrawn borrowing facilities at the end of the reporting period: As At As At March 31, 2018 March 31, 2017 Loan from JICA 1,339,087.79 879,419.90 Loan from BID 1,184,217.97 1,534,235.59 2,523,305.77 2,413,655.49 The above mentioned amounts are INR equivalent and have been calculated at the closing exchange rate as at the Balance Sheet date The credit facilities may be drawn by the Company basis the future cash projections. The loan facilities may be drawn in INR (JICA) and USD (IBRD) and have an average maturity uf 33.6 years (March 31, 2017 - 33.7 years) for JICA loan and have an average maturity of 17.5 years (March 31, 2017 - 17.5 years) for IBRD loan (b) Maturities of financial liabilities The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and excluding contractual interest payments the impact of netting agreements. Carrying Contractual cash flows March 31, 2018 Total Upto 1 year Between 1 and Between 2 and 5 More than 5 years years Borrowings 1,008,003.16 1,008,893.47 6,800.71 13,601.41 57,557.22 930,934.14 Deposit/ retention money 42,559.78 42,55g.78 26,898.54 7,224.'01 8,437.23 - interest accrued but not due on loan - JICA 68,52921 75,407.04 - 2,360.40 7,297.46 65,749.16 Earnest money deposit 175.78 175.78 175.78 - 7 Employee related liability 1,678.90 1,678.90 1,678.90 - Trade Payables 3,674.15 3,674.15 3,674.15 - Others payabies 100,674.60 100,674.60 100,674.60 Funis received from MOR pending adjustment 25,405.07 25,405.07 25,405.07 - Interest accrued but not due on loan from IBRD 2,34551 2,345.51 2,345.51 - Total non-derivative liabilities 1,253,046.16 1,260,814.30 167,653.26 23,185.83 73,291.91 996,683.32 Carrying Contractual cash flows March 31, 2017 Total Upto 1 year Between 1 and Between 2 and 5 More than 5 years years years Borrowings 694,545.99 695,120.68 - 5,220.04 67,095.87 622,804.77 Deposit/ retention money 18,570.18 20,310.43 3,517.04 - 16793.39 6 Interest accrued but not due on loan - JICA 35,133.30 35,133.30 - 1735,133.30 Earnest money deposit 222.44 222.44 222.44 Employee related liability 1,878.18 1,878.18 1,878.18 - Trace Payables 7,070.70 7,070.70 7,070.70 < - Others payables 39,851.63 39,851.63 39,851.63 Funds received from MOR pending adjustment 311,045.55 311,045.55 311,045.55 interest accrued but not due on loan from IBRD 1,300.99 1,300.99 1,300.99 Total non-derivative liabilities 1,109,618.97 1,111,933.91 364,886.54 5,220.04 83 889.26 657,938.07 The interest payments on variable interest rate loans in the table above reflect current interest rates at the reporting date and these amounts may change as market interest rates change. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in Z lakhs, unless otherwise stated) iv. Market risk Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Company does not uses derivatives to manage market risks. Currency risk The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar (USD) and Japanese Yen (JPY). Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company's functional currency (INR). The rnsk is measured through a forecast of highly probable foreign currency cash flows. In respect of other monetary assets and liabilities denominated in foreign currencies, the Company's policy is to ensure that its net exposure is kept to an acceptable level. Exposure to currency risk The Company's exposure to foreign currency risk at the end of the reporting period expressed in INR is as follows: As At As At March 31, 2018 March 31, 2017 USD .JPY USD JPY _ Financial liabilities Borrowings 348,259.83 - 236,609.81 - Others payaoles 1,075.89 38,560.96 29.07 13,706.79 Interest accrued but not due on loan from IBRD 2,345.51 - 1,300.99 - Net statement of financial position exposure 351,681.23 38,560.96 237,939.87 06.79 The following significant exchange rates have been applied Average Rates Year end spot rates 31 March 2018 31 March 2017 31 March 2018 31 March 2017 USJ 1 64.45 67.1200 64.94 64.9852 JIY10.58 0.6200 0.62 0.5849 Sensitivity analysis A reasonably possible strengthening (weakening) of the INR against all other currencies at 31 March would have affected the measurement of fnancial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Profit or loss after tax Equity, net of tax Strengthening Weakening Strengthenng Weakening March 31, 2018 USD (1% movement) (2,299.71) 2,299.71 (2,299.71) 2,299.71 JPY (10% movement) (252.16) 252.16 (252.16) 252.16 March 31, 2017 USJ (1% movement) (1,555.94) 1,555.94 (1,555.94) 1,555.94 JPY (1 % movement) (89.63) 89.63 (89.63) 89.63 Interest rate risk The Company's main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain most of its borrowings at fixed rate. During March 31, 2018 and March 31, 2017, the Company's borrowings at variable rate were mainly denominated in USD. The Company's fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. Exposure to interest rate risk The interest rate profile of the Group's interest-bearing financial instruments as reported to the management of the Group is as follows. Nominal Amount As At As At March 31, 2018 March 31, 2017 Fixed-rate instruments Financial liabilities 660,633.65 458,510.87 660,633.65 458,510.87 Variable-rate instruments Financial liabilities 348,259.83 236,609.81 348,259.63 236,609.81 Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Fair value sensitivity analysis for fixed-rate instruments The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss. A change of 100 basis points in interest rates would have increased or decreased equity by following. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. Equity, net of tax 100 bp 100 bp increase decrease March 31, 2018 Fixed-rate instruments (13,725.94) 18,822.72 Fair flow sensitivity (net) (13,725.94) 18,822.72 March 31, 2017 Fixed-rate instruments (8,556.07) 11,802.04 Fair flow sensitivity (net) (8,556.07) 11,802.04 Cash flow sensitivity analysis for variable-rate instruments A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. Profit or loss Equity, net of tax 100 bp 100 bp 100 bp 100 bp increase decrease increase decrease March 31, 2018 Variable-rate instruments (2,277.34) 2,277.34 (2,277.34) 2,277.34 Cash flow sensitivity (net) (2,277.34) 2,277.34 (2,277.34) 2,277.34 March 31, 2017 Variable-rate instruments (3.171.84) 3,171.84 (3,171.84) 3,171.84 Cash flow sensitivity (net) (3,171.84) 3,171.84 (3,171.84) 3,171.84 Note 40: Capital management Company is in construction phase for construction of railways track for freight with equity funding from MOR and debt funding from World Bank and JICA. Considering the estimated cost, which has been approved by Cabinet Committee on Economic Affairs, Government of India, Company has definitive source of capital. Company expect to maintain adequate Capital in the Operation phase, since as per the Concession Agreement with MOR, Track Access Charges, which will be the tariff for use of tracks by authorised rail user, inter-alia includes return on equity for sustainable development of the Company. As At As At The Company's adjusted net debt to equity ratio was as follows: March 31, 2018 March 31, 2017 Borrowings (Refer Note 15 & 19) 1,008,003.16 694,545.99 Trade payables (Refer Note 20) 3,674.15 7,070.70 Other non current liabilities & current liabilities (Refer Note 18 & 22) 53,250.31 42,941.15 Less cash ano casn equivalents 147,953.82 144,600.88 Net debt 916,973.80 599,956.97 Equity share capital (Refer Note 13) 00 765,827.29 765,827.29 Other equity (Refer Note 14) 336,259.59 23,434.56 Total Capital 1,102,086.88 789,261.85 Capital and net debt 2,019,060.68 1,389,218.82 Gearing ratio 45.42% 43.19% Note 41 : The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With regard to payments made to JICA funded projects which are covered under 'Reimbursement Mechanism' all parties issue 'Payment Receipt' based on which JICA releases loan disbursements. Payments covered under Commitment mechanism are released directly by JICA to account of Contractors through LC Mechanism. in both JICA and World Bank funded Contracts, payment position is indicated by parties in each bill preferred to DFCCIL which in itself is acknowledgment of funds receipt. Apart from above, so far as trade/other payables and loans and advances are concerned, the Ilance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) 'External Confirmations', were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact. Dedicated Freight Corridor Corporation of India Limited Notes to financial statements for the year ended March 31, 2018 (All amounts in T lakhs, unless otherwise stated) Note 42 Figures have been rounded off to nearest lakhs upto two decimals thereof, except otherwise stated. Note 43 The financial statements of the Company for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on August 13, 2018 For and on behalf of Board of Directors of Dedicated Freight Corridor Corporation of India Limited (Anurag Kumar Sachan) (Naresh Salecha) (Meenu Kapoor) Place of Signature New Delhi Managing Director Director Finance & CFO Company Secretary Dete: UDIN-8197908 DIN- 843812 ACS-18954 1 h AG 201