contentskmrc.in/admin/uploads/annual_report1516.pdf · annual report 2015-16 2 kolkata metro rail...

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C O N T E N T S

1. Board of Directors … 3

2. Notice of Annual General Meeting … 7-8

3. Report of the Board of Directors' … 11-23

4. Report on Corporate Governance … 24-29

5. Management Discussion andAnalysis Report … 30-31

6. Certificate of D. Rout & Associatesdated 22.12.2015 … 32

7. Secretarial Audit Report (of D. Raut& Associates) … 33-35

8. Comments of Comptroller andAuditor General of India … 36-38

9. Auditor's Report … 41-46

10. Annual Accounts … 48-64

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KOLKATA METRO RAIL CORPORATION LTD.

Company SecretaryShri S. N. Mukherjee

Registered OfficeKMRCL Bhavan (HRBC Office Compound)Munshi Premchand Sarani, Kolkata - 700021Tel No.: 033 2213 4345Fax no: 2213 4380Website: www.kmrcl.in

Statutory AuditorsM/s. S. K. Naredi & Co.Chartered AccountantsGround Floor, Apsara Apartments67, Park StreetKolkata - 700016

BankersState Bank of India, Kolkata Main Branch, KolkataUnion Bank of India, Dharamtalla Branch, Kolkata

B O A R D O F D I R E C T O R S

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BOARD OF DIRECTORS

1. Shri Mool Chand Chauhan Chairman (from 26.07.2016)

2. Shri Ashwani Kumar Kapoor Chairman (upto 06.04.2016)

3. Shri Aditya Kumar Mittal Chairman (from 13.04.2016 to 31.05.2016)

4. Shri Ashish Kumar Goel Chairman (from 01.06.2016 to 25.07.2016)

5. Shri Satish Kumar Managing Director (from 16.03.2016)

6. Shri Narender Kumar Garg Managing Director (upto 29.02.2016)

7. Shri Kailash Kumar Aggarwal Director

8. Shri Mukund Kumar Sinha Director

9. Smt. Jhanja Tripathy Director

10. Shri Alapan Bandyopadhyay, IAS Director

11. Shri Nagsen Moreshwar Dhoke Director

12. Dr. Samaresh Kanti Panday Director (Finance)

13. Shri Anup Kumar Kundu Director (RS&T)

14. Shri Parashuram Singh Director (Project & Planning)

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NOTICE

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NOTICE OF EIGHTH ANNUAL GENERAL MEETING

Notice is hereby given that the Eighth Annual General Meeting of the Company will be held on Wednesday, 28thSeptember, 2016 at 1.00 P.M. in Room No. 131, Rail Bhawan, Raisina Road, New Delhi - 110 001 to transact thefollowing business:

1. To receive, consider and adopt the audited financial statements for the year ended 31st March, 2016 (includingthe Cash Flow Statement) together with the Reports of the Board of Directors and the Independent (Statutory)Auditors as also the Comments of Comptroller and Auditor-General of India.

2. To fix remuneration of the Independent (Statutory) Auditors for financial year 2016-17 and in this connectionto pass with or without modifications the following as an ordinary resolution:

"RESOLVED, that pursuant to Section 142(1) and other applicable provisions of the Companies Act, 2013, theBoard of Directors of the Company be and is hereby authorised to fix the remuneration payable to S. K. Naredi& Co., Chartered Accountants, the Independent (Statutory) Auditors for financial year 2016-17."

Special Business

To consider and if thought fit to pass with or without modifications the following as Ordinary resolutions:

3. "RESOLVED, that pursuant to Section 152(2) and other applicable provisions, if any, of the Companies Act, 2013and the Rules made thereunder, appointment of Shri Satish Kumar (Director Identification Number: 07505201)as Managing Director of the Company with effect from 16th March, 2016 be and is hereby approved andconfirmed."

4. "RESOLVED, that pursuant to Section 152(2) and other applicable provisions, if any, of the Companies Act, 2013and the Rules made thereunder, appointment of Shri Aditya Kumar Mittal (Director Identification Number:07516472) as part-time Chairman of the Company for the period 13th April, 2016 to 31st May, 2016 be andis hereby approved and confirmed."

5. "RESOLVED, that pursuant to Section 152(2) and other applicable provisions, if any, of the Companies Act, 2013and the Rules made thereunder, appointment of Shri Ashish Kumar Goel (Director Identification Number:07570636) as part-time Chairman of the Company for the period 1st June, 2016 to 25th July, 2016 be and ishereby approved and confirmed."

6. "RESOLVED, that pursuant to Section 152(2) and other applicable provisions, if any, of the Companies Act, 2013and the Rules made thereunder, appointment of Shri Mool Chand Chauhan (Director Identification Number:07590273) as part-time Chairman of the Company with effect from 26th July, 2016 be and is hereby approvedand confirmed."

By order of the Board,

New Delhi, S. N. Mukherjee22nd September, 2016 Company SecretaryNotes:1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and on a poll vote instead of himself. The

proxy need not be a member of the Company. Proxies in order to be effective must be received at the Registered Office of the Companynot less than forty-eight hours before the time for holding the meeting.

2. The statement pursuant to Section 102(1) of the Companies Act, 2013 in respect of the items of special business is annexed.3. The meeting is being held by shorter notice pursuant to consents pursuant to Section 101(1) of the Companies Act, 2013 being received

from all the members.4. Pursuant to application made by the Company in this behalf, Registrar of Companies, West Bengal has vide Order dated 12th September,

2016 granted extension of time by three months i.e. till 30th December, 2016 for holding the Annual General Meeting.5. Pursuant to application made by the Company in this behalf, the Central Government (viz. Ministry of Corporate Affairs) has vide letter

dated 24th August, 2016 been pleased to approve holding the Annual General Meeting at New Delhi.

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Statement pursuant to Section 102(1) of the Companies Act, 2013 in respect of the itemsof special business set out in the Notice convening the Eighth Annual General Meeting tobe held on 30th December, 2016Item no. 3

Government of India, Ministry of Railways, Railway Board has vide letter No. 2014/E(O)II/40/8 dated 16th March,2016 given additional charge on part-time basis of the post of Managing Director of the Company to Shri SatishKumar, Additional General Manager, Eastern Railway with effect from the date of assumption of additional chargetill such time the post is filled up through regular selection process or the date of superannuation or until furtherorders, whichever is the earliest.

Shri Kumar assumed charge of the post of Managing Director w.e.f. 16th March, 2016 (A/N).

Section 152(2) of the Companies Act, 2013, stipulates that save as otherwise expressly provided therein, every Directorshall be appointed by the company in general meeting.

The ordinary resolution set out under item no. 3 of the Notice is intended for the purpose.

Shri Kumar may be deemed to be concerned or interested in the resolution. No other Director, key managerialpersonnel or their relatives is concerned or interested in the same.

Copy of aforesaid letter of Railway Board is available for inspection of members at the Registered Office of theCompany upto the date of the meeting and will also be available at the meeting.

Item no. 4

Government of India, Ministry of Railways (Railway Board) vide letter No. 2012/Proj./KMRCL/ 21/4/Pt. dated 30thJanuary, 2014 conveyed approval to the nomination of General Manager, Metro Railway, Kolkata as Part-time Chairmanon the Board of Directors of the Company.

Shri Aditya Kumar Mittal assumed charge as General Manager, Metro Railway, Kolkata on 13th April, 2016 whichpost he relinquished on 31st May, 2016 (A/N). He was, therefore, part-time Chairman of the Board of Directors forthe period 13th April to 31st May, 2016.

Section 152(2) of the Companies Act, 2013 stipulates that save as otherwise expressly provided therein, every Directorshall be appointed by the company in general meeting.


No Director, key managerial personnel or their relatives is concerned or interested in the same.

Item no. 5

Shri Ashish Kumar Goel assumed charge as General Manager, Metro Railway, Kolkata on 1st June, 2016 which posthe relinquished on 25th July, 2016 (A/N). He was, therefore, part-time Chairman for the period 1st June to 25th July,2016.



No Director, key managerial personnel or their relatives is concerned or interested in the same.

Item no. 6

Shri Mool Chand Chauhan has assumed charge as General Manager, Metro Railway, Kolkata on 25th July, 2016 (A/N).Accordingly, he has become the part-time Chairman w.e.f. 26th July, 2016.



Shri Chauhan may be deemed to be concerned or interested in the resolution. No other Director, key managerialpersonnel or their relatives is concerned or interested in the same.

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REPORT OF THEBOARD OF DIRECTORS

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R E P O R T O F T H E B O A R D O F D I R E C T O R S

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The Board of Directors is pleased to present its 8th Annual Report together with the audited financial statementsof the Company for the year ended 31st March, 2016, Report of the Statutory Auditors and Comments of theComptroller and Auditor-General of India.

Financial highlights

During the year under report, the Company continued to be engaged in implementing the 'East West MetroCorridor' Project - a rail based mass rapid transit system connecting Salt Lake Sector V in the east to Howrah Maidanin the west.

Interest before Tax as per 'Statement of Profit and Loss' forming part of the financial statements for the year ended31st March, 2016 amounting to Rs. 2472.86 lakh has been transferred to 'Capital Work-in-Progress' under'Expenditure Pending Capitalisation'.

The Company had no subsidiary, associate or joint venture company during the year under report.

Status of the Project

Government of India decided on 23rd August, 2012, that the "East West Metro Project" will be transferred toMinistry of Railways ('MoR') and executed as a Central Sector Project. MoR will hold 74% equity of the Companyand Ministry of Urban Development ('MoUD') balance 26%. All shares held in the Company by Government ofWest Bengal ('GoWB') were transferred to MoR.

Government of India also decided that subsequent to execution of the Project, operation of the 'East West Metro'will be merged with North South Corridor under a unified control.

As on 31st March, 2016, equity holding of MoR (including shares transferred by GoWB) in the Company was Rs.546.50 crore (61.72% of the paid-up capital) while that of MoUD was Rs. 339.00 crore (38.28%). MoR has releasedRs. 100 crore towards equity during 2015-16 against which shares have been allotted. Further Rs. 75 crore hasbeen received during 2016-17 against which shares will be allotted in current financial year i.e. 2016-17.

The Project is being executed in two phases - Phase-I from Salt Lake Sector V to Sealdah and Phase-II from Sealdahto Howrah Maidan. Phase-I is targeted for commissioning by June 2018 and Phase-II by December 2019.

In view of land acquisition and rehabilitation related issues in Mahakaran and Central Stations, GoWB has proposedrealignment of the route in Phase-II. The proposed realignment will be detoured through Esplanade where thecorridor shall interface with existing North South Corridor as well as upcoming Joka-Esplanade Metro line. Esplanadebeing located in the central hub of Kolkata with a mega bus terminus, this realigned route will impart betterconnectivity and ridership.

The realignment proposed will result in increase of the route length by 1.878 kilometres between Sealdah andHowrah and necessitate shifting of 'Mahakaran' Station 477 metres south in front of Laldighi. Length of the routewill thus be 16.55 kilometres out of which 5.74 kilometres is elevated portion and 10.81 kilometres undergroundcorridor. There will be 6 nos. elevated and 6 nos. underground stations. Significantly, this revised alignment doesnot involve any land acquisition and/ or major rehabilitation issues.

Hon'ble Minister for Railways has announced that the Project will be executed as per realigned route proposedby GoWB and all costs in this regard will be borne by Government of India.

Work in Phase-II which was stalled since December 2012 due to alignment-related indecision has since been resumedin September 2015.

The Project cost has increased subsequently due to additional expenditure involved in implementation of the samedue to the re-alignment, change in market dynamics in Metro sector due to delay in execution and fluctuation ofIndian currency in international market. The Company during the year under report submitted to MoR a revised

REPORT OF THE BOARD OF DIRECTORS

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Project cost amounting to Rs. 8996.96 crore against sanctioned cost of Rs. 4874.58 crore. Same is presently underconsideration of MoR.

The "East West Metro Project" is a unique Metro rail project where underground tunnels will pass below mightyHooghly river and the first such ambitious attempt in the country. The unique challenge faced by Kolkata's softground condition and densely populated urban environment are being addressed by choice of Earth PressureBalancing Tunnel Boring Machines and well engineered tunnelling operations.

Major constraints faced earlier by the Company leading to delay in Project completion are:

1. Non-availability of land at Duttabad (in Phase-I);

2. Non-availability of land & rehabilitation issues in Central station (in Phase-II);

3. Non-availability of land and rehabilitation issues in proposed Mahakaran station;

4. Non-availability of traffic diversion permission from GoWB for construction of Mahakaran station;

5. Non-finalisation of alignment in Phase-II;

6. Flow of funds not as per requirement.

In addition to above, some contractors have filed suits against the Company on various pleas before the Hon'bleHigh Court at Calcutta. A citizen's forum has also moved a special leave petition in the Hon'ble Supreme Courtof India against the judgement of a Division Bench of Hon'ble High Court at Calcutta, wherein procedure ofacquisition of lands under Land Acquisition Act, 1894 on which the Central Station on original alignment wouldbe constructed has been questioned. The above proceedings (which are pending disposal) have contributed to thedelay.

During the year under report, the Company despite several constraints, made landmark achievements both inelevated viaduct as well as underground construction.

Resettlement and Rehabilitation

The Company has a well defined resettlement and rehabilitation policy for the welfare of Project affected personswhose number is estimated at 677 along original alignment. However, this figure will significantly reduce as therewill be no requirement of rehabilitation in Mahakaran and Central station areas if realignment of route is approved.

Rehabilitation of the Project affected persons have been proposed as per details given below:

] Rehabilitating the entire Shree Market complex comprising of 129 shops in Howrah Maidan area

] Rehabilitating 7 nos. commercial shops in front of erstwhile Bangabasi theatre in Howrah Maidan area

] Constructing 30 nos. temporary shops at Phoolbagan

] Rehabilitating 63 nos. KMC sweeper quarters at Swabhumi by permanent rehabilitation flats

] Rehabilitating 80 families in Duttabad settlement by permanent rehabilitation flats

] Rehabilitating KIT sweeper quarters at Subhas Sarobar.

Progress of Project work:

n Elevated corridor work

Total length of elevated corridor is 5.74 kilometres (including 6 nos. elevated stations, each of 140 metreslength) of which 5.375 kilometres has been completed, leaving a small stretch of 365 metres in Duttabad.The long pending resettlement issue of Project affected persons has been solved with help of GoWB. Workhas started in this stretch since May 2015 and targeted for completion by March 2017.

Structural works of all the 6 nos. elevated stations are completed. Presently the work of Elevated StationRoofing is in progress, which is likely to be completed by December 2016.

The work of architectural finishing and electrical works of elevated stations has also commenced, which willbe completed by March 2018.


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n Underground work

The 10.81 kilometre route of underground corridor for the Project comprises of twin tunnels to be done by'Tunnel Boring' method using precast concrete segmental tunnel liners. There will be six underground stationsto be done by 'cut & cover' method using diaphragm walls as retaining system.

The underground section of the Project in Phase-I from Subhas Sarobar to Sealdah has achieved good progressas entire tunnelling has been completed. The agency deployed two numbers of tunnel-boring machines andcompleted 5,409 metres of tunnelling with six successful and flawless tunnel break-throughs. All the cross-passages in between twin tunnels have been completed using 'NATM' technique. The entire tunnel walkwaysand track bed concreting in Phase-I have also been completed. There is substantial progress in undergroundstations at Phoolbagan and Sealdah also.

n Resolution of stalemate in Phase-II

Tunnelling works in Phase-II was stopped by the agencies since December 2012 due to change in alignmentproposed by GoWB as well as non-availability of land and permission for traffic diversion at Mahakaran andCentral stations. Boring of the west-bound tunnel from Howrah Maidan has started since April 2016 and east-bound tunnel since July 2016.

Major achievements in Underground section are:

Package No. Total Tunneling Tunneling completed Percentage oflength (in metres) (in metres) completion

Phase-I (UG-2 package) 5,409 5,409 100.00

Phase-II (UG-1 package) 12,100 800 6.60

Total: 17,509 6,209 3.46

l All the diaphragm wall panels for Howrah Maidan cross-over, Sealdah cross-over, Sealdah Station andSubhas Sarobar 'cut & cover' and ramp structure have been completed. Work of diaphragm wall panelsin Howrah Station is in progress.

l Entire roof slabs, concourse and base slabs in Sealdah cross-over, Phoolbagan and Subhas Sarobar 'cut& cover' and ramp structure have been cast.

l Casting of roof slabs, concourse slabs and base slabs is in progress at Sealdah Station.

l Excavation completed upto base slab for Howrah Maidan cross-over and casting of base slabs forsubstantial portion has been completed.

n Track work

The ballast-less track work has been completed for 3.4 track kilometres in elevated viaduct. Head HardenedRail & DRBA fastenings for ballast-less track have been procured from abroad.

n Rolling Stock

The tender for supply, manufacturing & testing of 14 rakes, each of 6 car formation, was opened on 28thAugust, 2015. It was awarded to BEML Ltd. on 15th February, 2016 at a total cost of Eq. INR 899.91 crore.Thus, cost per car without taxes comes out to be Eq. Indian Rupees 9.38 crore. BEML Ltd. has also agreedfor expediting the supply and in all probability the first rake will be supplied in October 2017.

n Power supply

Preliminary design for power supply system has been completed. Detailed design as per the list of deliverablesis under progress.

Siemens (Consortium) had demanded cost compensation for abnormal delay in execution of the Project. Theyinitiated Conciliation proceedings for compensation against the inordinate delays in project execution not

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attributable to their account. Conciliation process is over and the Ld. Conciliator issued settlement with theconsent of both parties i.e. the Company and Siemens (Consortium). With the settlement award, the contracthas been extended for another 196 weeks i.e. till June 2018 with a compensation package based on 'FIDIC'formula of compensation for the original validity period.

Siemens (Consortium) has since taken up the detailed designing work.

n Escalators and elevators

Ninety escalators and forty elevators are to be installed at different levels in twelve stations of 'East WestMetro' line to facilitate smooth mobility of passengers including physically challenged & aged persons. Tenderfor installation of forty-one escalators and twenty-six elevators for eight Metro stations of Phase-I was invitedand technical bids opened on 22nd August, 2013. However, the said tender was discharged due to poorparticipation and shall again be f loated matching with revised timeline of the Project.

n Tunnel ventilation system

Tunnel Ventilation System (TVS) shall provide a means to control smoke flow and ensure safe evacuation ofpassengers in case of fire as well as maintain an acceptable environment in the tunnel and station track way.The tender for the TVS was submitted and bids opened on 31st October, 2012. The tender has been dischargeddue to poor participation and shall again be floated matching with revised timeline of the Project.

n Signalling, Telecom and Automatic Fare Collection (AFC) works

The Signalling and Telecommunication contract, for which preliminary design had been completed, is progressingin its detailed design stage. The tendering for AFC works is over and the contract has been awarded to M/s.Indra Sistemas SA (Spain). The AFC work is in preliminary design stage. The Independent Safety Assessmentwork has been awarded to M/s. Certifer (France).

n Platform Screen Door (PSD)

PSDs are a system of motorized sliding doors that provide controlled access to the trains and protect theplatform edge. The PSD system constitutes a full height/half height screen-work load bearing structure installedusing civil inter-face at platform and ceiling level. PSD will restrict suicidal cases at platform apart fromsubstantial saving of electrical energy due to reduced volume of air conditioning. Besides, aesthetic view ofthe platform will also be enhanced. Tender for PSD work has been opened and the same is under evaluation.

n Land acquisition proceedings

Altogether 12 cases under the Land Acquisition Act, 1894 involving acquisition of 3.3015 acres of privateland were initiated by GoWB on behalf of the Company. The Company so far has obtained theoreticalpossession of 1.5233 acres of private land, out of which physical possession of only 0.38 acre was transferredand remaining land was in various stages of acquisition. However, as per realigned route, no further acquisitionof private land will be required.

Besides, 48.30 acres land belonging to GoWB and Railways is needed, out of which 46.12 acres have alreadybeen handed over to the Company.

Environmental issues

A project of the size of 'East-West Metro' passing through the most densely populated areas of Kolkata is a hugeenvironmental challenge. The Company factored this challenge in its planning since inception of the Project.

Both the original Project as well as modified proposal was cleared from environmental criteria by West BengalPollution Control Board as well as Environment Department of GoWB. The Company is strictly implementing theEnvironmental Management Plan as indicated in the EIA study report.

The 'East-West Metro' Project values preservation of the environment and minimising adverse impact on the greenery.About 1,335 trees have been removed for execution of the Project. All these trees have been identified with the


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representative of the local municipality which owned these trees and 6,900 trees have been planted in replacementat a total cost of Rs. 45.61 lakh.

Financial outlay

The revised budgeted allocation of MoR for the Company for 2015-16 was Rs. 899.4 crore. During the year underreport, MoR released an amount of Rs. 100.00 crore towards equity, Rs. 28.81 crore as Subordinate Debt andanother Rs. 200 crore as Pass Through Assistance (PTA).

MoUD did not release any amount against the sanctioned budget of Rs. 29.88 crore.

Deposits

During the year under report, the Company did not invite deposits from public under Section 73 of the CompaniesAct, 2013.

Audit Committee

The Audit Committee for the time being is constituted with three Directors viz. Smt. Jhanja Tripathy (as Chairman);Shri Kailash Kumar Aggarwal and Shri Mukund Kumar Sinha.

Scope of the Audit Committee/terms of reference of Audit Committee is:

1. Discussions with the Auditors periodically about the internal control system and the scope of audit includingobservations of the Auditors.

2. Review of annual financial statement before submission to the Board of Directors.

3. Ensure compliance of internal control system.

4. Investigations into any of the afore-stated matters or as may be referred to by the Board.

5. Review of Management Information Systems etc.

During financial year 2015-16, the Audit Committee met three times - on 20th August, 2015; 9th October, 2015and 5th February, 2016. All the Directors on the Committee attended the meetings.

Statutory Auditors

Comptroller and Auditor General of India appointed S. K. Naredi & Co., Chartered Accountants, as Statutory Auditorsof the Company for financial year 2015-16 and re-appointed them for financial year 2016-17.

Board of Directors

Since the last report, Shri Ashwani Kumar Kapoor ceased to be (part-time) Chairman of the Board w.e.f. 6th April,2016 consequent upon his relinquishing charge of the post of General Manager, Metro Railway, Kolkata. The Boardrecords its sincere appreciation of the services rendered by Shri Kapoor during his tenure of office.

Shri Aditya Kumar Mittal assumed charge as General Manager, Metro Railway, Kolkata w.e.f. 13th April, 2016. Interms of letter dated 30th January, 2014 of Government of India, Ministry of Railways (Railway Board), Shri Mittalwas appointed (part-time) Chairman of the Board. However, he relinquished charge as General Manager, MetroRailway, Kolkata w.e.f. 1st June, 2016 and ceased to be Chairman. The Board records its sincere appreciation ofthe services rendered by Shri Mittal during his tenure of office.

Shri Ashish Kumar Goel assumed charge as General Manager, Metro Railway, Kolkata w.e.f. 1st June, 2016 andwas appointed (part-time) Chairman of the Board. However, he relinquished charge of the post w.e.f. 26th July,2016 and ceased to be Chairman. The Board records its sincere appreciation of the services rendered by Shri Goelduring his tenure of office.

Shri Mool Chand Chauhan assumed charge as General Manager, Metro Railway, Kolkata w.e.f. 26th July, 2016 andhas been appointed part-time Chairman of the Board from that date.

Shri Narender Kumar Garg assumed charge as Managing Director w.e.f. 28th April, 2015 and was to hold the posttill such time it was filled up through regular selection process or the date of his superannuation or until furtherorders, whichever is the earliest. He relinquished charge w.e.f. 1st March, 2016 consequent upon attaining the age

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of superannuation. The Board records its sincere appreciation of the valuable services rendered by Shri Garg duringhis tenure of office.

Railway Board vide letter dated 16th March, 2016 conveyed decision that additional charge of the post of ManagingDirector of the Company may be entrusted to Shri Satish Kumar, AGM/Eastern Railway on part-time basis, in additionto his own, as an interim arrangement. Shri Kumar assumed charge of the post w.e.f. 16th March, 2016 (A/N).He will hold the same till such time it is filled up through regular selection process or the date of his superannuationor until further orders, whichever is the earliest.

In compliance of Section 152(2) of the Companies Act, 2013 (hereafter referred to as "the Act"), resolutions forconfirming appointments of Shri Mittal; Shri Goel; Shri Chauhan and Shri Kumar will be proposed at the ensuingAnnual General Meeting of the Company.

There is no "independent director" as defined by Section 2(47) of the Act on the Board for the time being. As perthe procedure laid down by Government of India, Department of Public Enterprises for appointment of non-officialDirectors on the Boards of CPSEs, the proposals for the same are to be initiated by the concerned AdministrativeMinistry/Department. The Company has written to MoR for appointment of two Independent Directors on its Board.

Government of India, Ministry of Corporate Affairs has issued a Notification dated 5th June, 2015. In terms of thesame, the provisions of Section 152(6) and 152(7) of the Act shall not apply to Government companies in whichthe entire paid-up share capital is held inter alia by the Central Government. In view of the same, no Director ofthe Company is required to retire by rotation at the ensuing Annual General Meeting.

Number of meetings of the Board

During the year under report, 7 (seven) meetings of the Board of Directors of the Company were held - on 28thMay, 2015; 15th July, 2015; 7th September, 2015; 28th October, 2015; 19th November, 2015; 22nd December,2015; and 5th February, 2016. All the meetings were held at Kolkata.

Directors' Responsibility Statement

In compliance of Section 134(3)(c) of the Act, the Board of Directors states that in relation to the financial statementsfor the year 2015-16:

(1) in the preparation thereof, the applicable accounting standards had been followed and there are no materialdepartures.

(2) such accounting policies were selected and applied consistently and judgments and estimates that are reasonableand prudent made so as to give a true and fair view of the state of affairs of the Company at the end offinancial year and of the income and expenditure during that period.

(3) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities.

(4) the accounts had been prepared on a 'going concern' basis.

(5) proper systems had been devised to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.

Key Managerial Personnel

In compliance of Section 203 of the Act read with Government of India, Ministry of Corporate Affairs Notificationdated 5th June, 2015, Shri S. N. Mukherjee, Company Secretary and Shri Debabrata Nandi, Chief Financial Officerare the 'key managerial personnel' of the Company for the time being.

Extract of the Annual Return

Extract of the Annual Return in the prescribed form as provided under Section 92(3) of the Act is annexed(Annexure-I).


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Auditors' Report

Report of the Statutory Auditors on financial statements of the Company for year ended 31st March, 2016 isannexed.

The said Report read with Notes to the Accounts is self-explanatory. No qualification, reservation or adverse remarkor disclaimer is made therein.

Comments of Comptroller and Auditor General of India

Comments of the Comptroller & Auditor General of India ("CAG") on the financial statements for the year ended31st March, 2016 under Section 143(6) of the Act are also annexed.

CAG has highlighted certain significant matters as stated therein. Explanations thereto are given as under:

A. Provision for Income Tax: provision for Income Tax was written back on the strength of orders passed by CIT(Appeals). However, observation of CAG has been noted.

B. Provision for outstanding liability towards contractors' bills as on Balance Sheet date: a mechanism has alreadybeen put in place to include bills received towards 'Other Current Liabilities' and will be reflected in theaccounts of financial year 2016-17.

C. Disclosure regarding invocation of bank guarantees: the observation of CAG has been noted.

Secretarial Audit Report

In compliance of Section 204 of the Act and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014, the Company appointed D. Raut & Associates, Company Secretaries, Kolkata, to undertakesuch audit. Copy of the Report given by them is also annexed.

D. Raut & Associates have in their report observed that "since the Company has no Independent Director, compositionof the Board is not in order in terms of Section 149(4) of the Act and Rule 4 of Companies (Appointment andQualification of Directors) Rules, 2014 and also the composition of the Committees in terms of provisions of Section177, 178 and 135 of Companies Act 2013 are not in order".

The Board states that the Company, being a Central Public Sector Enterprise, is taking action to comply with thisrequirement based on advice/instructions of MoR.

Loans, guarantees or investments

During the year under report, the Company did not directly or indirectly give any loan/give any guarantee or providedany security/acquired by way of subscription, purchase or otherwise the securities of any other body corporatecoming within the purview of Section 186 of the Act.

Contracts or arrangements with related parties

During the year under report, the Company did not enter into any contract or arrangement with related partiesreferred to in Section 188(1) of the Act.

Hence, no particulars in the prescribed 'Form AOC-2' can be furnished.

Material changes and commitments affecting the financial position of the Company

There are no material changes or commitments affecting the financial position of the Company which have occurredbetween the end of the financial year i.e. 31st March, 2016 to which the financial statements relate and the dateof the report.

Conservation of energy, technology absorption, foreign exchange earnings & outgo

The Company has initiated various energy conservation measures at the design stage to ensure optimal use andalso selecting appropriate technology for various systems. However, the detailed measures are as under:

(A) Conservation of energy -

(i) the steps taken or impact on conservation of energy:l LED-type lighting has been envisaged in the stations and in train coaches.

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l Provision of Platform Screen Doors in underground stations, which would reduce air conditioningrequirement substantially and thereby reduce consumption of non-traction energy.

l Rolling Stock planned to be procured for the Project envisages regenerative braking - so that poweris generated at the time of braking, which would be consumed by other powering trains runningin the system.

l Elevated station architecture kept in such a way to use natural lights in day time to the extentpossible. Use of polycarbonate sheets on elevated stations has been given a fillip to reduce carbonfootprint.

l High COP-type air-conditioning units have been envisaged for stations alongwith energy managementsystem so as to optimize use of chillers, cooling towers, pumps, etc.

(ii) the steps taken by the Company for utilising alternate sources of energy:

Large banks of solar cells shall be provided at the Maintenance Depot to generate energy for internalconsumption. Depot layout has been kept in such a way so as to use natural lights to the extent possible.

(iii) the capital investment on energy conservation equipments:

This will be quantified at an appropriate stage of the Project.

(B) Technology absorption -

(i) the efforts made towards technology absorption:

The mandate of the Company is to implement the Project. Efforts shall be made in procurement stageto explore the possibility of technology absorption.

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution:

The benefits derived shall be detailed at appropriate stage in future.

(C) Foreign exchange earnings and outgo during financial year 2015-16 is as under:

Rs. in lakh

1. Earnings in foreign currency 0.00 (2014-15: 0.00)

2. Expenditure in foreign currency 10396.16 (2014-15: 18010.15)

Employees

The Company during financial year 2015-16 had no employee in receipt of remuneration which in the aggregatewas more than Rs. 60 lakhs (where employed throughout the financial year) or more than Rs. 5 lakhs per month(if employed for a part of the financial year).

Risk management policy

The Company is currently implementing the 'East West Metro Corridor' Project. As per decision of Governmentof India, operation of the 'East West Metro' will be merged with the existing North-South Metro line of MetroRailway, Kolkata.

Formulating a risk management policy specific to operations of rail-based mass rapid transport system will beconsidered at an appropriate time in future. To cover financial risks, adequate internal control measures have beenput in place by engaging an external firm of chartered accountants as internal auditors (in addition to regular auditby the Statutory Auditors as well as supplementary audit by CAG).

Corporate Social Responsibility

A 'Corporate Social Responsibility Committee' of the Board has been constituted. The Committee is presentlycomprised of Shri Nagsen Moreshwar Dhoke; Dr. Samaresh Kanti Panday; and Shri Anup Kumar Kundu.

Since the Company is in the project implementation stage, it has not made any profit during any of the threeimmediately preceding financial years. Hence, the requirement of spending in every financial year at least two per


19

cent of the average net profits made during the three immediately preceding financial years on Corporate SocialResponsibility required by Section 135 of the Companies Act, 2013 is not applicable to it.

Report on Corporate Governance

As required by the "Guidelines on Corporate Governance for Central Public Sector Enterprises" issued by Departmentof Public Enterprises, Government of India, a report on Corporate Governance is annexed (Annexure-II). The sameforms a part of this Report.

As required under the aforesaid Guidelines, a separate report on 'Management Discussion and Analysis' is alsoannexed (Annexure-III).

Acknowledgements

The Board of Directors wishes to place on record the co-operation and untiring support received from the Ministryof Railways, Ministry of Urban Development and Ministry of Finance (Government of India) in execution of theProject. The Board also acknowledges similar support received from Government of West Bengal.

The Board also records its deep appreciation for the cooperation and support received from The Kolkata MunicipalCorporation, Kolkata Metropolitan Development Authority, Bidhannagar Municipality, Kolkata Police, Bharat SancharNigam Ltd., CESC Ltd., West Bengal State Electricity Distribution Corporation Ltd. and various other authorities andagencies.

The help in the form of soft loan assistance extended by Japan International Cooperation Agency (JICA) to thisProject is invaluable. The Board deeply acknowledges the importance of this assistance in execution of the Project.

The Board also acknowledges and extends its sincere thanks to various national and international contractors,consultants and technical experts for their continued support and co-operation.

The Board's special appreciation and thanks are also due to the print and electronic media.

The residents, shopkeepers, pedestrians in different parts of Kolkata, Salt Lake and Howrah where the constructionactivities are in progress are inconvenienced by the activities on site. The Board is grateful to all these persons andthe citizens for bearing with these activities patiently, recognizing the potential of the Project in changing the faceof urban transport in the Greater Kolkata region.

The Board wishes to place on record its appreciation for the untiring efforts, commitment, hard work and contributionsmade by the employees of the Company at all levels for the successful completion of the Project.

For and on behalf of the Board of Directors of Kolkata Metro Rail Corporation Ltd.

Satish KumarManaging Director

New Delhi, Parashuram Singh28th September, 2016 Director (Project & Planning)

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Annexure-I

EXTRACT FROM ANNUAL RETURNas on the financial year ended on 31st March, 2016

[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) ofthe Companies (Management and Administration) Rules, 2014]

I. Registration and other details:

(i) CIN : U60100WB2008GOI127338(ii) Registration Date : 9th July, 2008(iii) Name of the Company : Kolkata Metro Rail Corporation Limited(iv) Category/Sub-Category of the Company : Public company/limited by shares(v) Address of the Registered Office and : 'KMRCL Bhavan', HRBC Office Compound,

contact details Munshi Premchand Sarani, Kolkata - 700021.

Tel: (033) 2213-4345;Fax: (033) 2213-4380

(vi) Whether listed company : No

(vii) Name, Address and contact details of : Not Applicable Registrar and Transfer Agent, if any

II. Principal Business Activities of the Company:

All the business activities contributing 10% or more of the total turnover:

Sl. No. Name and description of main NIC Code of the % to totalproducts/services product/service turnover

Company in Project execution stage N.A. N.A.

III. Particulars of Holding, Subsidiary and Associate Companies: Nil

IV. Shareholding Pattern (equity share capital break-up as percentage of total equity):

(i) Category-wise shareholding : Indian Promoters

Central Government (President of India) :

No of shares held at the beginning of the year:Demat : NilPhysical : 58,55,00,000% of total shares : 100%

No of shares held at the end of the year:

Demat : Nil

Physical : 88,55,00,000

% of total shares : 100%

% change during the year : 51.24


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(ii) Shareholding of Promoters

Sl. Shareholder's Shareholding at the beginning Shareholding at the end ofNo. name of the year the year

No. of % of total % of shares No. of % of total % of shares % of changeshares shares of pledged/ shares shares of pledged/ in share-

the encumbered the encumbered holdingcompany to total company to total during the

shares shares year1. President of India 24,65,00,000 42.10 – 54,65,00,000 61.72 – –

(a/c. Ministry ofRailways)

2. President of India 33,90,00,000 57.90 – 33,90,00,000 38.28 – –(a/c. Ministry ofUrban Developmet

Total 58,55,00,000 100.00 0 88,55,00,000 100.00 Nil Nil

(iii) Changes in Promoters' shareholding

Sl. Shareholding at the beginning of Cumulative shareholding duringNo. the year the year

No. of shares % of total shares No. of shares % of total shares of the Company of the Company

At the beginning of the year 58,55,00,000 100 58,55,00,000 100

Date-wise increase/decrease in 09.04.2015 - 33.88 – –Promoters' shareholdingduring the year specifying the 30,00,00,000reasons for increase/ (shares allotted)decrease At the end of the year 88,55,00,000 100 88,55,00,000 100

(iv) Shareholding Pattern of top ten shareholders (other than Directors, Promoters andHolders of GDRs and ADRs) :

Sl. Shareholding at the beginning of Cumulative shareholdingNo. the year during the year

For each of the Top 10 No. of % of total shares No. of % of total sharesShareholders shares of the Company shares of the Company

1. Shri Amar Prakash Dwivedi 100 0.0001 100 0.0001

2. Shri Sudheer Kumar 100 0.0001 100 0.0001

3. Shri Sanjay Lavania 100 0.0001 100 0.0001

4. Shri Shree Bhagwan Bhamu 100 0.0001 100 0.0001

5. Shri Tarun Beniwal 100 0.0001 100 0.0001

6. Smt. Ruth Changsan 100 0.0001 100 0.0001

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(v) Shareholding of Directors and Key Managerial Personnel (KMP)

Sl. Name of Director/Key Shareholding at beginning Cumulative Shareholding atNo. Managerial Personnel of the year (01.04.2015) end of the year (31.03.2016)

No. of shares % of total shares No. of shares % of total sharesof the Company of the Company

1. Shri K. K. Aggarwal 100 0.0001 100 0.0001

2. Shri Mukund Kumar Sinha 100 0.0001 100 0.0001

Note: All the above persons are Directors of the Company. No other KMP held any shares during the year.

V. Indebtedness

Indebtedness of the Company including interest outstanding/accrued but not due for payment:Secured Loans Unsecured Deposits Total indebt-

excluding Loans ednessdeposits (Rs.) (Rs.) (Rs.) (Rs.)

Indebtedness at the beginningof the financial year(i) Principal Amount - 1260.98.07,637 - 1260,98,07,637(ii) Interest due but not paid - - - -(iii) Interest accrued but not due - 30,21,99,999 - 30,21,99,999

Total (i + ii + iii) - 1291,70,07,636 - 1291,70,07,636

Change in Indebtedness duringthe financial year

- Addition - 103,80,60,417 - 103,80,60,417- Reduction - - - -

Net Change - 103,80,60,417 - 103,80,60,417Indebtedness at the end of thefinancial year(i) Principal Amount - 1393,59,67,784 - 1393,59,67,784(ii) Interest due but not paid - - - -(iii) Interest accrued but not due - 42,54,60,861 - 42,54,60,861

Total (i + ii + iii) - 1436,14,28,645 - 1436,14,28,645

VI. Remuneration of Directors and Key Managerial PersonnelRemuneration to Managing Director, Whole-time Directors and/or Manager:Gross salary -(a) salary per provisions contained in Section 17(1) of Income-tax Act, 1961 : Rs. 25,07,531(b) value of perquisites under Section 17(2) of Income-tax Act, 1961 : Rs. 4,55,637(c) profits in lieu of salary under Section 17(3) of Income-tax Act, 1961 : NilStock Option : NilSweat equity : NilCommission - as % of profit : NilOthers : Nil Total : Rs. 29,63,168Ceiling as per the Companies Act, 2013 : Not applicable

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VII. Penalties/Punishments/Compounding of Offences

Type Section of the Brief Details of penalty/ Authority AppealCompanies Act description punishment/comp- [RD/NLCT/ made, if

ounding fees Court] any (giveimposed details)

A. COMPANY

Penalty Nil N.A. - - -

Punishment Nil N.A. - - -

Compounding Nil N.A. - - -

B. DIRECTORS




C. OTHER OFFICERS IN DEFAULT




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Annexure-II

REPORT ON CORPORATE GOVERNANCE

01. Company's philosophy on Corporate Governance:

The Company's philosophy on Corporate Governance is aimed at:

(a) Enhancing long-term stakeholder value and its own wealth generating capacity through-

l assisting top management in taking sound business decisions;

l prudent financial management.

(b) Achieving transparency and professionalism in all its decisions and activities.

(c) Adhering to the disclosure compliances.

(d) Achieving excellence in Corporate Governance by-

l conforming to the prevalent guidelines on Corporate Governance and excelling in, wherever possible;

l reviewing periodically the existing systems and controls for further improvements;

l setting high ethical standards in conduct of business;

l complying with laws and regulations;

l strategic guidance and effective monitoring by the Board.

02. Board of Directors:

2.1 Composition:

The Company is a 'Government company' within the meaning of Section 2(45) of the Companies Act, 2013.At present the entire paid-up share capital is held by the President of India through the Ministry of Railways(administrative Ministry) and the Ministry of Urban Development.

In terms of Article 124(B) of the Articles of Association of the Company, the Board of Directors shall consistof the following Directors:

(i) Directors nominated by the President of India through Ministry of Railways & Ministry of UrbanDevelopment.

(ii) Managing Director.

(iii) Whole-time Directors/Functional Director(s).

(iv) Director(s) nominated by the debenture holders.

(v) Independent Director(s).

In terms of Article 124(B), the President of India has the right by notice in writing addressed to the Company,to nominate ten persons on the Board of the Company including its Chairman.

In terms of Article 125, strength of the Board shall not be less than three or more than fifteen excludingnominee directors.

Government of India has not yet advised the strength of the Board.

As on 31.03.2016, the number of Directors on the Board of the Company was 10 (ten), including 4 (four)functional Directors viz., Managing Director; Director (Project & Planning); Director (Finance) and Director(RS&T). All the functional Directors were holding additional charge of their respective posts on part-time basispursuant to order of Ministry of Railways. The number of Directors as on date remains unchanged at 10 (ten)Directors. All the Directors (including functional Directors) have been nominated by Ministry of Railways.

R E P O R T O N C O R P O R A T E G O V E R N A N C E

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The Board has no 'Independent Director' (as defined in paragraph 3.1.4 of the "Guidelines on Corporate Governancefor Central Public Sector Enterprises" issued by Government of India, Ministry of Heavy Industries and PublicEnterprises, Department of Public Enterprises in May 2010). Hence, its composition during the year was not inconformity with the provisions of the Guidelines.

Brief backgrounds of the Directors who were appointed during financial year 2015-16 are as follows:

(1) Shri Ashwani Kumar Kapoor - General Manager, Metro Railway, Kolkata as part-time Chairman in terms ofMinistry of Railways letter No. 2012/Proj./KMRCL/21/4/Pt. dated 30.01.2014.

(2) Shri Narender Kumar Garg - CAO/Con.-II/Eastern Railway, Kolkata as Managing Director in terms of Ministryof Railways letter No. 2014/E(O)II/40/8 dated 17.04.2015.

(3) Shri Parashuram Singh - Chief Engineer, Metro Railway, Kolkata as Director (Project & Planning) in terms ofMinistry of Railways letter No. 2014/E(O)II/40/8 dated 07.07.2015.

(4) Shri Satish Kumar - Additional General Manager, Eastern Railway, Kolkata as Managing Director in terms ofMinistry of Railways letter No. 2014/E(O)II/40/8 dated 16.03.2016.

The following Directors ceased to hold office during financial year 2015-16:

(1) Shri Radhey Shyam ceased to be (part-time) Chairman w.e.f. 26.08.2015 upon his relinquishing charge asGeneral Manager, Metro Railway, Kolkata.

(2) Shri Anand Kishore Jha relinquished charge as Managing Director w.e.f. 28.04.2015 pursuant to Ministry ofRailways letter No. 2014/E(O)II/40/8 dated 17.04.2015.

(3) Shri Narender Kumar Garg relinquished charge as Managing Director with effect from 01.03.2016 uponattaining the age of superannuation.

(4) Shri Hemant Kumar Sharma ceased to hold the post of Director (Project & Planning) with effect from 01.08.2015upon attaining the age of superannuation.

Composition of the Board and the number of Directorships held by the Directors as on 31.03.2016 are given below:

Name of Director Category of No. of other Committee membershipDirectorship Boards in held in other companies

which a memberor Chairperson

as Member as Chairman

01. Shri Ashwani Kumar Kapoor Chairman Nil - - (w.e.f. 26.08.2015)

02. Shri Satish Kumar Managing Nil - - (w.e.f. 16.03.2016) Director

03. Shri Kailash Kumar Aggarwal Director 4 2 -

04. Shri Mukund Kumar Sinha Director 8 4 1

05. Smt. Jhanja Tripathy Director 8 3 -

06. Dr. Samaresh Kanti Panday Director Nil - -(Finance)

07. Shri Anup Kumar Kundu Director Nil - -(RS & T)

08. Shri Alapan Bandyopadhyay Director 4 - -

09. Shri Nagsen Moreshwar Dhoke Director Nil - -

10. Shri Parashuram Singh Director Nil - - (w.e.f. 03.08.2015) (Project & Planning)

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2.2 Board meetings :

Meetings of the Board are convened by giving appropriate notice after obtaining approval of Chairman.Structured agenda notes and other papers backed by comprehensive background information are circulatedto the Board members seven days prior to the meeting for facilitating meaningful discussions at the meetings.Where it is not found practical or otherwise to attach or send the relevant background information as partof the agenda notes/papers, the same are tabled at the meeting.

Meetings and attendance:

During the financial year ended 31.03.2016, the Board of Directors of the Company met 7 (seven) times -on 28.05.2015; 15.07.2015; 07.09.2015; 28.10.2015; 19.11.2015; 22.12.2015; and 05.02.2016. All themeetings were held at Kolkata.

Attendance of Directors at the Board meetings and at the Annual General Meeting (AGM):-

Names of Directors No. of meetings Attendance at the last AGM attended held on 30.12.2015

Shri Radhey Shyam 2 N.A.

Shri Ashwani Kumar Kapoor 4 Yes

Shri Anand Kishore Jha Nil N.A.

Shri Narender Kumar Garg 7 Yes

Shri Hemant Kumar Sharma 2 N.A.

Shri Kailash Kumar Aggarwal 5 Yes

Shri Mukund Kumar Sinha 5 No

Smt. Jhanja Tripathy 4 No

Dr. Samaresh Kanti Panday 7 Yes

Shri Anup Kumar Kundu 7 Yes

Shri Nagsen Moreshwar Dhoke 2 No

Shri Alapan Bandyopadhyay 4 No

Shri Parashuram Singh 5 Yes

Minutes of the proceedings of each Board meeting were recorded and entered in the minutes book signedby the Chairman. The draft minutes of each meeting were submitted for confirmation of the Board at its nextmeeting.

03. AUDIT COMMITTEEE :

The Audit Committee was reconstituted on 20.08.2014 with Smt. Jhanja Tripathy (as Chairperson), Shri KailashKumar Aggarwal and Shri Mukund Kumar Sinha. Composition of the Committee is unchanged since then.

Dr. Samaresh Kanti Panday, Director (Finance) attended all the meetings of the Committee held during financialyear ended 31.03.2016. The Company Secretary acts as Secretary of the Committee.

Terms of reference of the Audit Committee (as approved by the Board of Directors at its meeting held on27.08.2009) are as under:1. Discussions with the Auditors periodically about the internal control system and the scope of audit

including observations of the auditors;2. Review of annual financial statements before submission to the Board of Directors;3. Ensuring compliance of internal control systems;4. Investigations into any of the afore-stated matters or as may be referred to by the Board; and5. Review of Management Information Systems, etc.


27

Consequent upon the Company becoming a Central Public Sector Enterprise, the role assigned to AuditCommittee in terms of paragraph 4.2 of the "Guidelines on Corporate Governance for Central Public SectorEnterprises" issued by Government of India, Ministry of Heavy Industries and Public Enterprises, Departmentof Public Enterprises in May, 2010 is also being followed.

The Committee acts as a link between the Management, the Statutory and Internal Auditors and the Boardof Directors and assesses financial reporting system.

However, having regard to the strength and composition of the Board, the Audit Committee has beenconstituted only with non-functional Directors.

During financial year ended 31.03.2016, the Committee met three times - on 20.08.2015, 09.10.2015; and05.02.2016. All members of the Committee attended the above meetings.

04. REMUNERATION COMMITTEE:

In compliance of Section 178(1) of the Companies Act, 2013, a "Nomination and Remuneration Committee"was constituted during the year. However, constitution of such Committee was not compliant with theGuidelines which stipulate that an Independent Director shall head such Committee. However, no amountis distributed to personnel of the Company as annual bonus/variable pay.

No remuneration was paid to any other Director (whether by way of salary or fee) during financial year2015-16.

05. CODE OF CONDUCT:

The Board of Directors has laid down the "Code of Business Conduct and Ethics for Board Members andSenior Management" for maintaining standards and ensuring compliance with legal requirements. It is displayedon the website of the Company

06. ANNUAL GENERAL MEETINGS:

Details of the last three Annual General Meetings

Financial year Date and Time Venue Special resolution(s)passed, if any

2014-15 30.12.2015 Rail Bhawan, Raisina Road, Noneat 15:00 Hours New Delhi - 110 001.

2013-14 26.11.2014 Rail Bhawan, Raisina Road, Noneat 11:30 Hours New Delhi - 110 001.

2012-13 27.09.2013 Registered Office at 'KMRCL Bhavan', Noneat 11:00 Hours HRBC Office Compound

Munshi Premchand SaraniKolkata - 700 021.

Annual General Meeting for the financial year 2015-16 will be held at Rail Bhawan, New Delhi on 28.09.2016at 13:00 Hours.

07. DISCLOSURES:

i) Materially significant related party transactions that may have potential conflict with the interests of theCompany at large - there is no such transaction. However, the disclosure as required under AccountingStandard AS 18 has been incorporated in 'Notes to the Accounts'.

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ii) Details of non-compliance by the Company, penalties, strictures imposed on the Company by any statutoryauthority on any matter related to any guidelines issued by the Government, during the last three years- None.

iii) Whistle Blower Policy and affirmation that no personnel have been denied access to the Audit Committee- the Company has as on date adopted a 'Whistle Blower Policy'. No personnel of the Company havebeen denied access to the Audit Committee.

iv) Details of compliance with the requirements of the Guidelines - the Company has generally compliedwith the requirements of the Guidelines. However, Ministry of Railways is required to appoint the requirednumber of Independent Directors on the Board of the Company.

v) Details of Presidential Directives issued by the Central Government and their compliance during the yearand also in the last three years - no Presidential Directives were issued during the year and also in thelast three years.

vi) Items of expenditure debited in the books of account, which are not for the purposes of business - thereis no such item of expenditure during the year.

vii) Expenses incurred which are personal in nature and incurred for the Board of Directors and TopManagement - None.

viii) Details of administrative and office expenses as a percentage of total expenses vis-à-vis financial expensesand reasons for increase - administrative and office expenses during 2015-16 were 10.54 % of totalexpenses against 20.3 % for 2014-15. Thus, there has been no increase.

08. MEANS OF COMMUNICATION:

The shares issued by the Company are not listed on any Stock Exchange. Hence, quarterly results are notpublished in newspapers. However, annual audited financial results are displayed on the website of theCompany (www.kmrc.in).

Address for correspondence:

Kolkata Metro Rail Corporation Ltd.'KMRCL Bhavan', HRBC Office CompoundMunshi Premchand Sarani, Kolkata - 700 021.

09. AUDIT QUALIFICATIONS:

There is no qualification in the Independent Auditor's Report on financial statements of the Company for2015-16.

10. TRAINING OF BOARD MEMBERS:

The Company is a special purpose vehicle for implementing the 'East-West Metro Corridor' Project in Kolkata.As per decision of the Union Cabinet (vide minutes of the meeting held on 23.08.2012), the Company is only"Project Implementation Unit" of the East-West Metro Corridor Project, Kolkata. It will continue to functiontill the completion of the execution of the Project. However, all the shares of the Company will be held byGovernment of India, who after completion of the Project would run the system alongwith existing North-South Corridor under a unified control. Subsequent to execution of the Project, the operation of the East-West Metro Corridor will be merged with those of the Metro Railway, Kolkata.

Hence, need to train Board members in the business model of the Company have not been felt till now.However, this will be considered at an appropriate time in future.

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11. WHISTLE BLOWER POLICY:

The Company has adopted a 'Whistle Blower Policy', which is displayed on its website. Such Policy providesa framework to enable the employees wishing to raise a concern about serious irregularities within theCompany without fear of victimization and covers protected disclosures by all categories of employees.

12. COMPLIANCE CERTIFICATE :

This report duly complies with the requirements of "Guidelines on Corporate Governance for Central PublicSector Enterprises". Quarterly reports on compliance with Corporate Governance prescribed by Departmentof Public Enterprises are sent to Ministry of Railways.

Certificate obtained from a practicing Company Secretary regarding compliance of the aforesaid Guidelineson Corporate Governance has been annexed to this Report.

For and on behalf of the Board of Directors

Satish KumarManaging Director

Kolkata, Parashuram SinghDate: 23rd September, 2016 Director (Project & Planning)

Annexure-III

Management Discussion and Analysis Report

Modern cities in today's world are densely populated and require efficient mass rapid transit system (MRTS). Such asystem should be pollution-fee and environment friendly. MRTS has been found to be ideal in this regard, as evidencedby the increasing number of cities opting for the same both in India and other countries.

The Company has been formed to work as a special purpose vehicle for implementation of the 'East West MetroCorridor' connecting Salt Lake Sector V in the east to Howrah Maidan in the west. Legal coverage of the Project shallbe under the Metro Railways (Construction of Works) Act, 1978 and Calcutta Metro Railways (Operation andMaintenance) Temporary Provisions Act, 1985. Government of India ('GoI') has decided that the Company will onlybe the "Project Implementation Unit" and continue to function till the completion of execution of the Project. However,all shares of the Company will be held by GoI, who after completion of the project would run the system alongwithNorth-South Corridor under a unified control.

Vision, Mission and Objective

Vision:

To emerge as the most efficient implementation unit for rail-based urban infrastructure with sound financial andtechnological base adopting global project implementation practices for efficient completion of the projects.Subsequently, efforts will be made towards accomplishment as the most efficient MRTS service provider nationallywith utmost care towards safety and satisfaction of the users in an environment of synergy between public serviceand financial sustainability.

Mission:

To implement the 'East-West Metro Corridor' MRTS Project in the urban conglomeration in the city of Kolkata andits urbanized surroundings of Howrah and Salt Lake to meet the growing demand of urban mobility in this region.

Objective:

1. To establish the 'East West Metro' as a state-of-the-art urban passenger Mass Transit System, providing affordable,hassle-free, safe and pollution-free conveyance to city life.

2. To promote and facilitate Metro ridership as a part of integrated traffic rationalization plan and comprehensivemobility plan for Kolkata City.

3. To mobilise the required resources for project implementation in order to achieve financial soundness andsustainability.

4. To execute the Project with least cost escalation with proper improvisation skills to harmonize available financialand technological resources in order to achieve optimum time targets.

5. To maintain a cost effective organizational set up and to implement proper training and value addition programsof best standards for generating a motivated and result oriented Project team.

6. To maintain highest standards of quality and safety during execution.

Difficulties faced in Project execution

Schedule of implementation of the Project has been affected and there have been time as well as cost over-runs.The Project is being implemented in two phases viz. Phase-I from Salt Lake Sector V to Sealdah and Phase-II fromSealdah to Howrah Maidan.

In Phase-I, non-availability of land at Duttabad affected construction of elevated viaduct on a 365-metre stretch.However, the project affected persons on the land have since been rehabilitated and construction work has resumed.

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M A N A G E M E N T D I S C U S S I O N A N D A N A L Y S I S R E P O R T

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In Phase-II, due to non-availability of land for construction of proposed Central and Mahakaran stations, Governmentof West Bengal has proposed realignment of the route which will lead to its extension by 1.878 kilometres. This(executing the Project as per realigned route) involves additional cost. Clearances have also to be obtained fromArchaeological Survey of India (as certain protected monuments lie in the vicinity of the route) and Defence authorities(since one of the stations will be under land owned by the Army).

Opportunities

If the Project is executed as per revised alignment, it is expected that there will be significantly higher passenger trafficthrough proposed Esplanade station (inter-change station of East-West, North-South Metro lines). The Joka-BBD BagMetro line will also terminate at Esplanade. A bus hub is located in Esplanade close to the proposed station. Besides,it is also proximate to the central business district of Kolkata. Upon completion, the Project will also provide inter-nodal connectivity with two busy surface rail stations at Howrah and Sealdah, connection to ferry, bus, tram andrickshaw stands. Perhaps no other mass transit system in the contemporary world links so many diverse modes oftransportation.

Having regard to the population density of Kolkata, the potential demand for ridership of the 'East-West Metro' lineis considered to be unique in the world.

The 'East-West Metro' has also been conceived in such a manner that there will be potential for connection to NetajiSubhas Chandra Bose International Airport either from Salt Lake Central Park or from Rajarhat. Similarly, on thewestern fringe, the line can be extended to Santragachhi or Ramrajatala, depending on need, and further northwardsto Bally/Belur.

Howrah and Sealdah stations are among the busiest major rail stations in the world. They will generate huge commutertraffic along the Metro connecting these stations in both morning and evening rush hours. The East-West Metro linewill provide significant benefits to the commuters within central business district and out to the New Town, Salt Lakeand Rajarhat in the east, and to residents of Howrah and surrounding areas in the west.

Threats

In order to ensure delivery of the Project as per revised time schedule, coordinated efforts are required among allthe stakeholders viz. Ministry of Railways, Ministry of Urban Development, Ministry of Finance, Government of WestBengal, Japan International Cooperation Agency, etc. However, even the coordinated efforts may not be adequateto ensure that the Project gets executed on time. Relocation of different utilities (mostly underground) falling withinthe revised alignment also poses a threat of time overrun. For proper implementation of the Project, availability ofqualified and experienced staff by the various contracting agencies and General Consultants needs to be ensured.

Internal Controls

A strong internal control framework is an essential pre-requisite to provide a reasonable assurance that in pursuit ofthe organisation's mission, the general objectives of executing the Project are ethically, economically and effectivelyachieved. In this context, the internal control systems of the Company are adequate and commensurate with its size.

Future outlook

The Company intends to establish the 'Kolkata East West Metro' as a state-of-the-art urban passenger MRTS, providingaffordable, hassle-free, safe and pollution-free conveyance to city life. With this end in view, the Company is committedto ensure the quality as well as safety in implementation of the Project. In this regard, the Company has proposedto form its own cadre for operation of the 'Kolkata East-West Metro' system bench-marking the same against theother metro rail systems in India.

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32

Commerce House, 7th Floor, Room No. 102A-Ganesh Chandra Avenue, Kolkata-700 013Ph. No/Fax 033-22259585, Mob. : 96810 92896

E-mail : [email protected]

To

The Members

Kolkata Metro Rail Corporation Limited

KMRCL Bhawan, HRBC Office Compound

Munshi Premchand Sarani

Kolkata-700 021.

We have examined the compliance of conditions of Corporate Governance by Kolkata Metro Rail Corporation

Limited (hereinafter referred to as “the Company”) for the year ended 31st March, 2016, as stipulated in the

“Guidelines on Corporate Governance for Central Public Sector Enterprises 2010” issued by the Government of

India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises and annexures mentioned

there under (hereinafter referred to as 'the Guidelines').

The compliance of conditions of corporate governance is the responsibility of the Management. Our examination

was limited to procedures and implementation thereof adopted by the Company for ensuring the compliance of

the conditions of corporate governance as stipulated in the Guidelines. It is neither an audit nor an expression of

opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and based on

representations made by the directors and management, we certify that the Company has complied with the

stipulations of the Guidelines except that the Company does not have Independent Directors (non-compliance of

Composition of Board and Audit Committee) pursuant to the Corporate Governance norms for a non-listed Public

Sector Exterprise.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiency of the effectiveness with which the Management has conducted the affairs of the Company.

For D. Raut & AssociatesCompany Secretaries

Debendra RautProprietor

Place : Kolkata ACS No. 16626Date : 23rd September, 2016 C.P. No. 5232

D. RAUT & ASSOCIATESCOMPANY SECRETARIES

CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

S E C R E T A R I A L A U D I T R E P O R T

33

Commerce House, 7th Floor, Room No. 102A-Ganesh Chandra Avenue, Kolkata-700 013Ph. No/Fax 033-22259585, Mob. : 96810 92896

E-mail : [email protected]

D. RAUT & ASSOCIATESCOMPANY SECRETARIES

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED ON 31ST MARCH, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule no. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

ToThe MembersKOLKATA METRO RAIL CORPORATION LIMITED(CIN : U60100WB2008G0I127338)'KMRCL Bhavan', HRBC Office CompoundMunshi Premchand SaraniKolkata-700 021.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherenceto good corporate practices by Kolkata Metro Rail Corporation Limited (hereinafter called "the Company"). SecretarialAudit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other recordsmaintained by the Company and also the information provided by the Company, its officers, agents and authorisedrepresentatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has,during the audit period covering the financial year ended on 31st March, 2016 complied with the statutory provisionslisted hereunder and also that the company has proper Board-processes and compliance-mechanism in place tothe extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by theCompany for the financial year ended on 31st March, 2016 according to the provisions of :

i) The Companies Act, 2013 ("the Act") and the rules made thereunder;

ii) The Company is not a listed company. Hence, Securities Contracts (Regulation) Act, 1956 ('SCRA') and therules made thereunder are not applicable to it;

iii) The Company is not a listed company. Hence, the Depositories Act, 1996 and the Regulations and Bye-lawsframed thereunder are not applicable to it;

iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent ofForeign Direct Investment, Overseas Direct Investment and External Commercial Borrowings are not applicableto the Company;

v) The Company is not a listed company. Hence, the following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act, 1992 ('SEBI Act) are not applicable to it :-

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34

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,2009 (Not applicable to the Company during the Audit Period);

d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock PurchaseScheme) Guidelines, 1999 (the Company has no employee hence not applicable to the Company duringthe audit period);

e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (notapplicable to the Company during the audit period);

f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,1993 regarding the Companies Act, 2013 and dealing with client;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (not applicableas the Company has not delisted/propose to delist its equity share from any stock exchange during thefinancial year under review ) and

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable asthe Company has not bought back/propose to bought back its securities during the financial year underreview).

vi) The Company (a Central Government undertaking under the Ministry of Railways) is engaged in implementingthe rail-based 'East West Metro Corridor' Project in Kolkata. As identified by the Management the followingspecific laws are applicable to it:

a. Labour laws;

b. Provident fund;

c. Provision of basic safety & health provisions and worksites under various laws;

d. Laws relating to equal remuneration;

e. Environmental laws.

We have also examined compliance with the applicable clauses of the following:

i) Secretarial Standards issued by The Institute of Company Secretaries of India (notified on 10th April, 2015).

ii) The Company has not entered into any listing agreement with any Stock Exchange(s) with respect to thesecurities (shares) issued by it.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations,Guidelines etc. mentioned above, except the following observation :

1. Since the company has no Independent Director, the composition of Board is not in order in terms of section149(4) of the Act and Rule 4 of companies (Appointment and qualification of Directors), Rules, 2014 and alsothe composition of the Committees in terms of provisions of Section 177, 178 and 135 of Companies Act, 2013are not in order.

Management Responsibility :

1. Maintenance of Secretarial records is the responsibility of the management of the Company. Our responsibilityis to express an opinion on these secretarial recrords based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance aboutthe correctness of the contents of the secretarial records. The verification was done on the test basis to ensure

S E C R E T A R I A L A U D I T R E P O R T

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that correct facts are reflected in secretarial records. We believe that the processes and practices, we followedprovide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and books of account of theCompany.

4. Wherever required, we have obtained the Management's representation about the compliance of laws, rulesand regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is theresponsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial audit report is neither an assurance as to the future viability of the Company nor of the efficacyor effectiveness with which the Management has conducted the affairs of the Company.

We further report that :

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-ExecutiveDirectors except Independent Directors as mentioned above. The changes in composition of the Board of Directorsthat took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board meetings, agenda and detailed notes on agenda weresent at least seven days in advance, and a system exists for seeking and obtaining further information and clarificationson the agenda items before the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members' views (if any) are captured and recorded as partof the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size andoperations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, the Company has allotted on 9th April, 2015 for cash at par30,00,00,000 (thirty crore) equity shares of Rs. 10 each to the President of India (a/c. Ministry of Railways).

For D. Raut & AssociatesCompany Secretaries

Debendra RautProprietor

Place : Kolkata ACS No. 16626Date : 23rd September, 2016 C.P. No. 5232

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36

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER

SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL

STATEMENTS OF KOLKATA METRO RAIL CORPORATION LIMITED FOR THE

YEAR ENDED 31 MARCH 2016.

The preparation of financial statements of Kolkata Metro Rail Corporation Limited (KMRCL) for the year ended 31

March 2016 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act)

is the responsibility of the management of the company. The statutory auditor appointed by the Comptroller and

Auditor General of India under section 139 (5) or 139 (7) of the Act is responsible for expressing opinion on the

financial statements under section 143 of the Act based on independent audit in accordance with the standards

on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their Audit

Report dated 19 August 2016.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section

143(6)(a) of the Act of the financial statements of KMRCL for the year ended 31 March 2016. This supplementary

audit has been carried out independently without access to the working papers of the statutory auditors and is

limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some

of the accounting records. Based on my supplementary audit, I would like to highlight the following significant

matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary

for enabling a better understanding of the financial statements and the related audit report.

A. Comment on Profitability

1. Current Tax Expense-NIL

The above does not include Rs.12.01 crore being the amount of income tax payable for current year.

The Company had made provision for Income Tax in its Financial Statements on 'other income' (being

interest income on short term deposit), till the financial year 2014-15 consistently. The Company appealed

before the Commissioner of Income Tax (CIT) for disallowing interest income on short term deposits

with banks. Based on the above appeal, the CIT passed an order in favour of KMRCL for the Assessment

Year 2010-11 and 2011-12. However, the Income Tax Department appealed before the Appellate Tribunal

against the order of the CIT.

The Company has also written back the provisions for taxation amounting to Rs. 10.86 crore relating

to previous years. As the matter of assessment of Income tax for the years 2010-11 and 2011-12 is

pending with Appellate Tribunal, non provisioning of income tax for the year and write back of the

earlier year's provision for income tax has resulted in understatement of Current Liability by Rs. 22.87

crore, understatement of Tax Expense by Rs. 12.01 crore, overstatement of Prior Period Adjustment by

Rs. 10.86 crore and overstatement of 'Net Income After Tax' by Rs. 22.87 crore.

In view of this, the disclosure made by the Company vide Note no. 20.2 of 'Notes to the Financial

Statements' stating that the Company is not required to make provision for taxation, is factually incorrect.

37

C O M M E N T S O F T H E C O M P T R O L L E R A N D A U D I T O R G E N E R A L O F I N D I A

38

B. Comment on Balance Sheet

2. Other Current Liabilities (Note No.06) : Rs. 32344.30 lakh

The above do not include an amount of Rs. 8.65 crore for the bills received from various contractors /

consultants relating to East West Metro Project, Kolkata. As the bills pertain to the work done during

the year 2015-16, the same should have been accounted for in the current year. This has resulted in

understatement of Capital Work in Progress, understatement of Other Current Liabilities by Rs. 8.65

crore each and in contravention of their own Significant Accounting Policy no. 1.7 (a) (iv) on 'Provisions,

Contingent Liabilities and Contingent Assets'.

C. Comments on Disclosure

3. A Settlement Agreement was arrived between the Company and CAF-MELCO, a consortium farm, for

design, manufacture, supply, testing, commissioning & integration of passenger rolling stock (electrical

multiple units) and training of personnel in relation to the Kolkata East West Metro Project on 27.04.2016.

As per agreement, the consortium firm waived its right to recover any and all amounts encashed and

retained by the Company on account of invocation of the Bank Guarantees amounting to Rs. 79.54

crore (which was included in Other Current Liabilities) along with the interest accrued therein.

This fact has not been disclosed by the Company in the financial Statements for the year ended March

2016.

For and on behalf of theComptroller & Auditor General of India

Satish Kumar GargPrincipal Director of Audit

Place : Kolkata RPU & Metro RailwayDate : 27 September, 2016 Kolkata

A N N U A L R E P O R T 2 0 1 5 - 1 6

AUDITORS' REPORT

39

40


41

Independent Auditor's Report

To the Members of Kolkata Metro Rail Corporation Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Kolkata Metro Rail Corporation Limited ("the company"),which comprises the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, the Cash Flow Statementfor the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financialposition, financial performance and cash flows of the Company in accordance with the accounting principles generallyaccepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 ofthe Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventingand detecting the frauds and other irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internalfinancial control, that were operating effectively for ensuring the accuracy and completeness of the accountingrecords, relevant to the preparation and presentation of the financial statements that give a true and fair view andare free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters whichare required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit 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 reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment, including the assessment of the risks ofmaterial misstatement of the 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 the financial statements thatgive true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on whether the company has in place an adequate internal financial control systemover financial reporting and the operating effectiveness of such controls. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company'sDirectors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financialstatements give the information required by the Act in the manner so required and give a true and fair view in

Ground Floor, Apsara Apartments, 67, Park Street, Kolkata-700 016Phone : 033-2226 8433, [email protected], Website : www.sknaredi.com

S.K. Naredi & Co. CHARTERED ACCOUNTANTS

A U D I T O R S ' R E P O R T

42

conformity with the accounting principles generally accepted in India, of the State of Affairs of the Company as atMarch 31, 2016, its Profit and its Cash Flows for the year ended on that date.

Report on other Legal and Regulatory Requirements1. 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 - A, a statement onthe matter specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we further 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

appears from our examination of those books;c) the Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report

are in agreement with the books of account;d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under

Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.e) on the basis of written representations received from the directors as on 31st March, 2016, taken on

record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016, from beingappointed as a director in terms of Section 164(2) of the Act.

f) In our opinion and to the best of our knowledge and according to information and explanation given tous, the said Financial Statements, read together with the Notes to Accounts (Note No 1 to Note 22 andAccounting Policies annexed thereto) and in absence of Confirmation of Balances from Parties to whomthe Capital Advances has been given remain unadjusted vide Note No 10, give the information as requiredby the Companies Act, 2013 in the manner so required and give a true and fair view in conformity withthe Accounting Principles generally accepted in India:(i) In the case of the Balance Sheet, the State of Affairs of the Company as at 31st March, 2016(ii) In the case of Statement of Profit & Loss, of the Net Income for the year ended on that date;(iii) In the case of Cash flow Statement, of the cash flows of the Company for the year ending on that

date.(g) 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"; andh) 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 andaccording to the explanations given to us:i. The Company has disclosed the impact of pending litigations on its financial position in its financial

statements - Refer Note 20.3 to the financial statements;ii. The company did not have any long term contracts including derivate contracts and as such the

question of commenting on any material foreseeable losses thereon does not arise.iii. There were no amount which was required to be transferred to the Investor Education and Protection

Fund.

For S.K. Naredi & CoChartered AccountantsFirm Registration No - 003333C

Rashmi ChhawchhariaPartnerMembership No. 401727

Place: KolkataDated: 19.08.2016

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43

ANNEXURE - A TO THE AUDITORS' REPORT

The Annexure referred to in Independent Auditors’ Report to the members of Kolkata Metro Rail Corporation

Limited (company) on the financial statements for the year ended 31st March' 2016

On the basis of such checks as we considered appropriate and according to the information and explanation given

to us during the course of our audit, we report that:

(i) (a) The company has maintained proper records showing full particulars, including quantitative details and

situation of fixed assets

(b) As explained and informed to us, fixed assets have been physically verified by the management at reasonable

intervals, in our opinion programme for verification is reasonable in relation to the size of the company

& nature of its assets. As informed to us, one discrepancy was noticed on such verification. The office

building was put to use on 1st February, 2013 but had not been capitalized till date. The same has been

capitalized on 1st April, 2015 and necessary adjustments with regard to Depreciation has been made in

the books (Refer Note 8.1)

(c) The title deeds of the Immovable properties consisting of Freehold Land worth Rs. 42,03.01 lakhs could

not be verified in the name of the Company. The Lands has been acquired by Land Acquisition Officer,

West Bengal for the implementation of the project and possession of the same had been handed

over by the concerned Authority.

(ii) The Company during the period under the Audit did not have any trading and other Commercial Activities so

the question of maintenance of Inventories does not arise.

(iii) Accordingly to the information & explanations given to us and on the basis of examination of the books of

accounts, the company has not granted any loans, secured or unsecured to any company, firms, Limited Liability

partnership or other parties covered in the register maintained under section 189 and of the Companies Act,

2013 and hence the provisions of the clause is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with

the provisions of Section 185 and 186 of the Companies Act, 2013.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act,

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the

records of the Company, amount deducted/accrued in the books of accounting respect of undisputed

statutory dues including provident fund, employees 'state insurance, income-tax, sales-tax, value added

tax, duty of customs, service tax, duty of excise, cess, and any other material statutory dues have been

regularly deposited during the year by the company with the appropriate authorities.

According to the information and explanations given to us, there is no undisputed amount payable in

respect of provident fund, income tax, sale tax, value added tax, duty of customs, service tax, cess and

other material statutory dues were in arrear as at 31st March' 2016 for a period of more than six months

from the date they became payable.


44

(b) According to the information and explanations given to us, there are materials dues of income tax orservice tax that have not been deposited on account of disputes given below:

Particulars Financial Year Authority Amount (in Rs.)Demand of Service Tax for 2009-10 to Commissioner 18,54,944.00F.Y. 2009-10 to F.Y. 2012-13 2012-13 Appeal (11),

Central ExciseDemand of Income Tax for 2009-10 Appellate 11,31,842.00the F.Y. 2009-10 Tribunal

‘C’ BenchDemand of Income Tax for 2010-11 Appellate 36,25,100.00the F.Y. 2010-11 Tribunal

'B' Bench, Kolkata

(viii) The company has not defaulted in repayment of loans or borrowing to a financial institution or bank, governmentor due to debenture holders during the year.

(ix) The Company did not raise any money by way of public issue or further public offer (including debt instruments)and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.

(x) According to the information and explanations given to us, no material fraud by the company or on the Companyby its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on our examination of the records ofthe Company, the Company has paid / provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

(xii) !n our opinion and according to the information and explanations given to us, the Company is not a NidhiCompany. Accordingly, paragraph 3 (xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records ofthe Company, transactions with the related parties are in compliance with Section 188 and 177 of CompaniesAct, 2013 where applicable and the details of such transactions have been disclosed in the Financial Statementsas required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records ofthe Company, the Company has made preferential allotment placement of shares during the year.

(xv) According to the information and explanations given to us and based on our examination of the records ofthe Company, the company has not entered into any non-cash transactions with directors or persons connectedwith him. Accordingly, paragraph 3 (xv) of the Order is not applicable.

(xvi) The Company is not required to registered under section 45 - IA of the Reserve Bank of India Act, 1934 andaccordingly the provision of clause 3 (xvi) of the order are not applicable to the Company and hence notcommented upon.




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ANNEXURE - B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Kolkata Metro Rail Corporation Limited("the Company") as of 31st March 2016 in conjunction with our audit of the financial statements of the Companyfor 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 theinternal control over financial reporting criteria established by the Company considering the essential componentsof internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India ('ICAl'). These responsibilities include the design, implementationand maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, theprevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and thetimely 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 basedon my/our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing, to the extent applicable to an audit ofinternal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting was established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financialcontrols system over financial reporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controls over financial reporting, assessingthe risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial 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 auditopinion 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 assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonabledetail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorization of management and directors of the company; and (3) provide reasonable


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46

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'sassets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraud may occur andnot be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to futureperiods are subject to the risk that the internal financial control over financial reporting may become inadequatebecause 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 financialreporting and such internal financial controls over financial reporting were operating effectively as at 31st March2016, based on the internal control over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India,




47

KOLKATA METRO RAIL CORPORATION LIMITED

ANNUAL ACCOUNTS 2015-16

48

KOLKATA METRO RAIL CORPORATION LIMITEDBalance Sheet as at 31st March, 2016

Note As at 31st March, 2016 As at 31st March, 2015(Rs in lakhs) (Rs in lakhs)

A EQUITY AND LIABILITIES

1 SHAREHOLDERS' FUNDS

a) Share Capital 2 88,550.00 58,550.0088,550.00 58,550.00

2 Share Application Moneypending allotment 2D 10,000.00 30,000.00

3 Non-Current Liabilitiesa) Long Term Borrowings 3 1,39,359.68 1,26,098.08b) Other Long Term Liabilities 4 6,168.10 6,601.72c) Long Term Provisions 5 13.28 14.86

1,45,541.06 1,32,714.65

4 Current Liabilitiesa) Other Current Liabilities 6 32,344.30 33,250.04b) Short Term Provisions 7 - 1,086.17

Total 2,76,435.36 2,55,600.86

B ASSETS

1 Non-Current Assetsa) Fixed Assets

i) Tangible Assets 8 4,660.10 4,467.07ii) Capital Work in Progress 9 1,81,820.47 1,69,359.15

1,86,480.61 1,73,826.21 b) Long Term Loans and advances 10 24,313.71 17,948.39

c) Other Non-Current Assets 11 2,270.94 1,045.5126,584.64 18,993.89

2 Current Assetsa) Cash and Cash Equivalents 12 62,747.38 62,174.28b) Short Term Loans and Advances 13 622.73 606.47

63,370.11 62,780.75

Total 2,76,435.36 2,55,600.86

Corporate Information & Significant Accounting Policies 1Accompanying Notes to Financial Statements are anintegral part of the Financial Statements 2-20

A N N U A L R E P O R T 2 0 1 5 - 1 6

Satish Kumar Dr. S. K. PandayManaging Director Director (Finance)

D. Nandi S. N. MukherjeeChief Financial Officer Company Secretary

In terms of our report attached.For and on behalf of the Board of DirectorsFor S.K. Naredi & Co.

Chartered AccountantsRegistration No. : 003333C


Place : Kolkata

A N N U A L A C C O U N T S 2 0 1 5 - 1 6

49

KOLKATA METRO RAIL CORPORATION LIMITEDStatement of Profit and Loss for the

year ended 31st March, 2016

Note For the year ended For the year ended31st March, 2016 31st March, 2015

(Rs in lakhs) (Rs in lakhs)

INCOME

1 Income From Operation - -

2 Other Income 14 3,476.93 1,812.99

3 Total Income 3,476.93 1,812.99

4 EXPENDITURE

a) Employee Benefits Expenses 15 300.56 282.84

b) Finance Cost 16 1,464.04 1,791.97

c) Depreciation and Amortization 17 56.19 64.47

d) Other Expenses 18 248.57 192.41

Total Expenses 2,069.36 2,331.69

5 Net Income before Prior Periodadjustments and Tax 1,407.57 518.70

6 Prior Period Adjustment 19 1,065.29 0.15

7 Net Income Before Tax 2,472.86 518.55

8 Tax Expense :

Current Tax Expense [Refer Note 20.2(i)] - 585.69

9 Net Income carried over to Balance Sheetunder Capital Work in Progress 2,472,86 1,104.24

Corporate Information & Significant Accounting Policies 1Accompanying Notes to Financial Statements are anintegral part of the Financial Statements 2-20






Place : KolkataDate : 19/8/16

KOLKATA METRO RAIL CORPORATION LIMITEDCash Flow Statement for the year 2015-16

Particulars For the year ended For the year ended31st March, 2016 31st March, 2015

(Rs in lakhs) (Rs in lakhs)A. Cash Flow from operating Activities

Net Income/Expenditure before extraordinary items and tax 2,472.86 (518.54)Adjustments for:

Depreciation & Amortisation 77.17 65.21Decrease/Increase in Long Term Provision 1.57 6.37Decrease in Short Term Provision 1,086.17 585.69Interest Income 3,471.74 1,808.41Operating profit/(loss) before working capital changes (2,009.45) (1,669.68)

Changes in working capital :Increase/Decrease in Short Term Loan & Advances 0.64 5,414.95Increase/Decrease in Other Current Liabilities 905.74 11,259.99Cash generated from operations (2,915.82) 15,005.26Less : Net income tax (paid)/refunds - -Net cash flow from/(used in) operating activities (A) (2,915.82) 15,005.26

B Cash Flow from investing activities:Net Increase in Fixed Assets (270.25) (207.11)Net increase in Capital Work in Progress (14,934.19) (17,208.23)Interest Received 3,093.38 1,186.10Net cash flow from/(used in) investing activities (B) (12,111.05) (16,229.24)

C Cash flow from financing activitiesProceeds from Issue of share capital 30,000.00 10,500.00Proceeds from Long Term Borrowing(sub-ordinate debt from MoR) 2,881.00 -Increase in Non-Current Assets (862.69) -Loan From JICA 10,380.60 17,999.21Proceeds from Share Application Money Capitalised 10,000.00 30,000.00Decrease in Long Term Loan & Advances (6,365.32) 5,889.34Increase in other Long Term Liabilities (433.62) 1,048.42Share Application Money Capitalised (30,00.00) (10,500.00)Net cash flow from/(used in) financing activities (C) 15,599.98 54,936.97

Net increase/(decrease) in Cash and cash equivalents (A+B+C) 573.10 53,712.99Cash and cash equivalents at the beginning of the year 62,174.28 8,461.29Cash and cash equivalents at the end of the year* 62,747,38 62,174.28* Comprises :Balances with Bank :i) Balances with Scheduled Bank (409.16) (33.89)ii) Deposits with Bank in Sweep Accounts 8,156.54 32,208.17iii) Short Term Deposits 55,000.00 30,000.00

62,747,38 62,174.28Notei) Cash and Cash Equivalents comprises balances with Bank and investments in short term deposits with Banks.

A N N U A L R E P O R T 2 0 1 5 - 1 6

50






Place : Kolkata

A N N U A L A C C O U N T S 2 0 1 5 - 1 6

51

Significant Accounting Policies and Notes to Accounts

1.1 CORPORATE INFORMATION AND BASIS OF PREPARATION OF FINANCIAL STATEMENT :a) Kolkata Metro Rail Corporation Limited is a Public Company Limited by Shares domiciled in India .The

Company is engaged in implementing the "East West Metro Corridor Project"- a Rail based Mass RapidTransit System connecting Salt Lake, Sector -V to Howrah Maidan in the city of Kolkata.

b) The Financial Statements of the Company have been prepared in accordance with generally acceptedaccounting principal in India (Indian GAAP) and in compliance with the Accounting Standards referredto in Section 133 of the Companies Act, 2013 , read together with Paragraph 7 of the Companies (Account)Rules, 2014.The Financial Statement have been prepared on an accrual basis and under the historical costconvention. The accounting policies adopted in the preparation of financial statement are consistent ofthose of previous year.

c) The preparation of accounts under GAAP requires management to make estimates and assumption thataffect the reported amounts of assets and liabilities and disclosures of contingent liabilities as on the dateof the financial statements and reported amount of income and expenditure during the year. Any revisionsto accounting estimates are recognized prospectively in the current and future periods.

d) The company has prepared statement of `Profit and Loss' in terms of Schedule III under the CompaniesAct, 2013. The excess / shortfall of income over expenditure is transferred to `Capital-Work-in-Progress'as `Pre-operative Expenditure during construction' and will be apportioned on the cost of the assets onceit is ready its intended use.

1.2. FIXED ASSETS :a) Fixed Assets are stated at cost of acquisition net of accumulated depreciation .The cost comprises of

purchase prices , borrowing cost ,directly attributable cost of bringing the assets to its working conditionfor the intended use.

b) Pre-operative expenses including borrowing cost for the project and other expenses incurred till the projectis ready for commercial operation will be treated as part of the project cost and hence capitalized.

c) Assets under construction as on the balance sheet date are shown as `Capital-Work-in-Progress'.d) Pursuant to the requirements under schedule II of the company act 2013, the company has identified the

cost of each component of the assets on the basis of its technical expertise and no component had a costwhich is significant to the total cost of the assets and has useful life materially different from that of theremaining asset.

1.3 IMPAIRMENT OF ASSET:An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impaired lossis charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairmentloss recognized in prior accounting periods is reversed if there is a change in the estimate of the recoverableamount.

1.4. CAPITAL WORK IN PROGRESS :Construction expenditures, fees paid to consultants and all other costs directly attributable to the Project alongwith pre-operative expenditure during construction are shown as Capital Work in Progress till capitalization.Liquidated damages recovered from vendors are accounted for settlement of final bill.Recovery from Contractors towards interest and others are adjusted against Construction Expenditure pendingCapitalization.

1.5. INTANGIBLE ASSETS AND AMORTISATION :Intangible assets will be recognized when the project is ready for commercial operation and will be dealt withas per the Accounting Standard 26 after apportionment of pre-operative expenditure and indemnifying otherintangible assets.

A N N U A L R E P O R T 2 0 1 5 - 1 6

52

1.6. DEPRECIATION:Depreciation on Fixed Assets is provided under Written down value method at the rates specified in ScheduleII of the Companies Act, 2013. Depreciation on assets purchased during the year are provided from the datethe asset have been put to use.

1.7 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETSa) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation,

ifi) the Company has a present obligation as a result of past event;ii) a probable outflow of resources embodying economic benefits is expected to settle the obligation

andiii) a reliable estimate can be made of the amount of the obligation;iv) Intimation of present obligation for past event received up to 31st May of subsequent financial year.

b) Reimbursement by any Party expected in respect of expenditure required to settle a provision, is recognizedwhen it is virtual certain that reimbursement will be received.

c) Contingent liability is disclosed in case ofi) A present obligation arising from past event, when it is not probable than an outflow of resources

will be required to settle the obligation;ii) A possible obligation unless the probability of outflow of resources is remote.

d) Contingent assets are neither disclosed nor recognized;e) Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

1.8. RETIREMENT BENEFITS :The Company does not come under the purview of Employees Provident Fund & Misc. Provision Act,1952.However, the Company has voluntarily introduced Provident Fund Scheme for its eligible employees w.e.f. 1stMarch,2012 with the approval of the Regional P.F. Commissioner, West Bengal. Contribution towards ProvidentFund has been made in respect of employees on deputation from Central / State Govt. Undertakings as perthe terms and conditions of deputation.Provisions towards Gratuity and Leave Salary in respect of the eligible employees have been made on the basisof actuarial valuation.

1.9 BORROWING COST :Borrowing cost after deduction of any income on temporary investment out of those borrowings, that aredirectly attributable to the acquisition, construction or production of qualifying assets which take substantialperiod of time to get ready for intended use will be capitalized as part of cost of that asset.Commitment charges on loan payable on balance of unutilsed loan will be capitalized as Pre-Operative Expenses.

1.10.FOREIGN CURRENCY TRANSACTION :Transaction in foreign currencies are recognized in reporting currencies at the exchange rate on the transactiondate. Realized gains and losses on settlement of foreign currencies transaction are recognized in the statementof Profit and Loss account.

1.11 TAXATIONa) Income tax is determined in accordance with the provisions of the Income Tax Act, 1961.b) Deferred tax expense or benefit is recognised on timing differences being the difference between taxable

income and accounting income that originate in one period and are capable of reversal in one or moresubsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws thathave been enacted or substantively enacted by the balance sheet date.

1.12.CASH FLOW STATEMENTCash Flow Statement is prepared in accordance with the indirect method prescribed in Accounting

Standard (AS) - 3 on 'Cash Flow Statements'.

Notes to the Financial Statementsas at 31st March, 2016

2 SHARE CAPITAL

Particulars As at 31st March, 2016 As at 31st March, 2016Amount in Lakhs (Rs.) Amount in Lakhs (Rs.)

Authorised

140,00,00,000 ( Previous Year 140,00,00,000)Equity shares of Rs. 10/- each 1,40,000 1,40,000

Issued, Subscribed and paid Up

88,55,00,000 (previous Year 58,55,00,000)Equity shares of Rs. 10/- each 88,550 58,550

Total issued, subscribed andfully paid-up share capital 88,550 58,550

(2A) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period :

As at 31st March, 2016 As at 31st March, 2015Particulars No. of Amount No. of Amount

Shares in Lakhs (Rs.) Shares in Lakhs (Rs.)

Equity Shares at the beginning of the period 5,855 58,550 4,805 48,050

Equity Shares issued during the year 3,000 30,000 1,050 10,500

Balance as at the end of the period 8,855 88,550 5,855 58,550

(2B) Details of shares held by each shareholder holding more than 5% shares:

Class of shares / Name of shareholder As at 31st March, 2016 As at 31st March, 2015Number of % holding in Number of % holding inshares held that class shares held that class

of shares of shares

Equity shares with voting rightsPresident Of India through Ministry of Railways (MoR) 5,465 61.72% 2,465 42.10%

President Of India through Ministry ofUrban Development (MoUD) 3,390 38.28% 3,390 57.90%

(2C) Rights, Preferences and Restrictions attached to Shares

The Company has one class of Equity Shares having face value of Rs 10/- per share . Each Shareholder is eligible for onevote per share held.

(2D) Share Application money Pending AllotmentThe Company received Share Application Money from Govt. Of India ( MoR) to the tune of `10,000 lakhs as on the dateof Balance Sheet i.e. 31st March, 2016 towards 10 Lacs Nos of Equity Shares @ Rs. 10/- eachThe Share Application Money does not have any Share Premium Money.The Share Application Money pending allotment has been alloted to the existing Shareholder within the time periodstipulated under the Companies Act 2013 on 9th April 2016The Company has an Authorised Capital of Rs 1400 Crores so Share Application Money Pending Allotment is well withinthe Coverage of Authorised Share Capital

A N N U A L A C C O U N T S 2 0 1 5 - 1 6

53

A N N U A L R E P O R T 2 0 1 5 - 1 6

54

3 LONG TERM BORROWINGS

Particulars As at 31st March, 2016 As at 31st March, 2015 Amount in Lakhs (Rs.) Amount in Lakhs (Rs.)

Un Secured

a) Interest bearing Loan from Japan InternationalCo-operation Agency (JICA) through Governmentof India [ Refer Notes below & Note 20.6.(ii)] 116,978.68 106,598.08

b) Interest free loan from Government of India

Subordinate Debt - Govt. of India 9,900.00 9,900.00

Subordinate Debt - Govt. of West Bengal 9,600.00 9,600.00

Subordinate Debt - MoR 2,881.00 -

Total 139,359.68 126,098.08

Notes

3.1) Interest provided @ 1.2% p.a. on 1st Tranche Loan from JICA (ID-P192) and @ 1.4% p.a. on 2nd Tranche Loan No.(ID-P207) on the respective days for which the amounts are outstanding.

3.2) Interest bearing Loan of 64,370 Lakh Japanese Yen from Japan International Co-operation Agency (JICA) throughGovernment of India for first Tranche (ID- P192) is repayable in half yearly installments begining from March, 2018.

3.3) Interest bearing Loan of 234,020 Lakh Japanese Yen from Japan International Co-operation Agency (JICA) throughGovernment of India for Second Tranche (ID- P207) is repayable in half yearly installments begining from March, 2020.

4 OTHER LONG TERM LIABILITIES


Security Deposit / Retention Money from Contractors 6,168.10 6,601.72

Total 6,168.10 6,601.72

5 LONG TERM PROVISIONS


Provision for Employee BenefitsProvision for Gratuity [Refer Note 20.8] 5.71 6.31

Provisions for Leave Benefits [Refer Note 20.9] 7.57 8.55

Total 13.28 14.86

A N N U A L A C C O U N T S 2 0 1 5 - 1 6

55

6 OTHER CURRENT LIABILITIES


Interest accrued not due on JICA Loan 4,254.61 3,022.00

Interest accrued and due on Pass throughAssistance- MoR - 3,063.91

Commitment Charges on Loan from JICA[Refer Note 6.1 below & 20.6.(i)] 490.24 432.36

Other PayablesPayable for Capital Goods & Services 2,472.81 4,554.13

Payable for Expenses 21.18 22.29

Advance from Contractors (Taxes & Cess) 33.85 29.15

Advances from Others 7.90 7.90

Earnest Money Deposit Refundable 38.75 37.18

Pass through Assistance - MoR 16,424.57 13,102.12

Reimbursement of VAT from Govt. WBpayable to Contractor 387.52 805.44

Taxes & Duties ( TDS, STDS, Service Tax etc.) 230.55 196.75

Invocation of BG 7,954.74 7,954.74

Expenses Payable 1.70 1.58

Statutory Liabilities 1.58 1.59

Employees Benefit Payable 24.31 18.92

Total 32,344.30 33,250.04

Notes:

6.1) Commitment Charges provided @ 0.10% per annum on the total Unutilised Balance of Committed Loan from JICA up to31st March, 2016. For the current Financial Year Commitment Charges of Rs.57,87,787/- has been provided on the unutilizedcommitted loan balance of Rs. 578,77,86,216/-.

6.2) On the basis of replies received by the Company in response to enquiries made, there are no dues payable as at the yearend to Micro,Small and Medium Enterprises nor are there other particulars that are required to be disclosed under theCompanies Act, 2013 or the Micro, Small and Medium Enterprises Development Act, 2006.

7 SHORT-TERM PROVISIONS


Provision for Taxation [Refer Note 20.2(i)] - 1,086.17

Total - 1,086.17

A N N U A L R E P O R T 2 0 1 5 - 1 6

56

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A N N U A L A C C O U N T S 2 0 1 5 - 1 6

57

9 CAPITAL WORK IN PROGRESS


Civil Construction Expenditure:

Elevated Viaduct 27,326.44 26,211.96

Station Building and Design 16,829.82 16,498.64

Underground Tunnelling- UG-1 22,564.15 16,143.61

Underground Tunnelling- UG-2 69,787.46 66,743.11

Central Park Depot 9,340.14 8,025.31

Track 2,272.12 2,015.03

Electrical & Power Supply 377.59 232.55

Signalling & Telecommunication 1,538.62 1,405.00

Consultancy Fees

General Consultants 23,998.46 21,973.46

Prime Consultants 1,642.74 1,570.27

Others 82.60 7.03

Expenditure Pending Capitalization 6,060.34 8,533.20

Opening Balance 8,533.20

Add:-

Net Expenditure / (Income) carried over fromProfit & Loss Statement (2,472.86)

Closing Balance

Total 181,820.47 169,359.15

Notes:

9.1) Expenditure pending Capitalization includes excess of Net Income for the Current Financial year ` 2,472.86 lakhs (previousyear Net Expenditure Rs .1,104.23 lakhs)

A N N U A L R E P O R T 2 0 1 5 - 1 6

58

10 LONG TERM LOAN & ADVANCES


Unsecured Considered Good[Refer Note 10.1 & 10.2]

Capital Advances on account of

Construction 15,373.34 12,243.82

Power Supply 3,455.70 1,758.56

Land 1,430.39 3,129.92

Signal & Communication 3,118.98 373.75

Shifting of Utility 890.59 394.68

Consultancy - 2.89

Other 0.43 -

Total 24,269.43 17,903.63

Security Deposit Given 33.27 33.76

Other Loans & Advances [ Refer Note 10.3]Income Tax 11.00 11.00

Total 24,313.71 17,948.39

Notes:

10.1) Advances paid to Contractors is secured partially by Financial Bank Guarantees received from Contractors.

10.2) Advances paid for Land represents adhoc payment to LAC, West Bengal for acquisition of Land at different locations forthe project

10.3) Income Tax payment of Rs 11,00,000/- was made pursuant to Assessment Order dated 31st July, 2012 passed by for theAssessment Year 2010-11. The company has preferred an appeal against the said order with Commissioner of Income Tax(Appeals) , which has been decided in favour of the Company. The Department has now preferred an appeal against thesaid order of the appellant authority with the next appeal forum.

11 OTHER NON CURRENT ASSETS


Unsecured, considered good

Other Receivables 19.40 19.40

Income Tax Refundable 1,068.84 481.79

Advance Tax Paid 819.96 383.39

Tax Deducted at Source 362.74 160.92

Total 2,270.94 1,045.51

A N N U A L A C C O U N T S 2 0 1 5 - 1 6

59

12 CURRENT ASSETS


Cash & Cash Equivalents

Cash in Hand (as certified by Management) - -

Balances with Bank

In Current Account

State Bank of India, Kolkata Main Branch (415.09) (40.05)[Refer Note 12.1]

Net A/c State Bank of India, Kolkata Main Branch 0.51 0.51

Union Bank of India , Dharamtalla Branch 5.42 5.65

(409.16) (33.89)

In Sweep Account

SBI Kolkata Main Branch [Refer Note 12.2] 8,116.54 32,171.17

Union Bank of India 40.00 37.00

8,156.54 32,208.17

In Deposit Account

Vijya Bank 25,000.00 15,000.00

UCO Bank - 15,000.00

Oriental Bank of Commerce 30,000.00 -

55,000.00 30,000.00

Total 62,747.38 62,174.28

Notes:

12.1) Credit balance in Current Account with SBI,Kolkata Main Branch as on 31.03.2016 was due to transfer of funds toSBI Sweep Account.

12.2) Balance of Sweep Account with SBI includes deposit of Rs. 1,00,000/- pledged with Bank towards issuance of BankGuarantee.

13 SHORT TERM LOANS & ADVANCES


Unsecured Considered GoodInterest accrued on

Term Deposit 391.91 504.07

Sweep Account 226.50 98.94

Fringe Benefit Tax Refundable [Refer Note 13.1 below] 1.81 1.67

Interest Accrued on Security Deposit 0.22 -

Rent in Advance - 0.70

Other Advances 2.29 1.10

Total 622.73 606.47

Notes: 13.1) Fringe Benefit Tax Refund Receivable of Rs. 1,81,039/- will be adjusted on receipt of the money from Income Tax

Authority

A N N U A L R E P O R T 2 0 1 5 - 1 6

60

Notes to the Financial Statements as at 31st March 2016 (contd.)

14 OTHER INCOME


Amount in Lakhs (Rs.) Amount in Lakhs (Rs.)

Income During Construction PeriodInterest Income on Term Deposits 2,908.02 1,469.82Interest Income on Sweep Account 562.29 335.36Interest Income on Security Deposit 1.44 0.44Interest on Invocation of BG - 2.77Sale of Tender Forms 4.52 4.18Provision for Gratuity written back 0.60 -Miscellaneous Income 0.07 0.43

Total 3,476.93 1,812.99

15 EMPLOYEE BENEFITS EXPENSE


Amount in Lakhs (Rs.) Amount in Lakhs (Rs.)Salaries (including Leave Salary & Gratuity) 293.44 275.87Contribution to Provident Fund and others fund 5.48 5.93Staff Welfare 1.64 1.04

Total 300.56 282.84

16 FINANCE COST


Amount in Lakhs (Rs.) Amount in Lakhs (Rs.)Interest on

JICA Loan 1,232.61 1,065.56Pass Through Assistance 172.95 676.18

Commitment Charges on JICA Loan[Refer Note 16.1 & Note 20.6.(i)] 57.88 50.24Interest on Others 0.60 -

Total 1,464.04 1,791.97

Notes:

16.1 During the current Financial Year Commitment Charges of Rs.57,87,787/- has been provided on the Unutilized CommittedLoan Balance of Rs.

17 DEPRECIATION


Amount in Lakhs (Rs.) Amount in Lakhs (Rs.)Depreciation on Fixed Assets 56.19 56.84Depreciation on transition to schedule IIof the Companies Act, 2013 - 7.62

56.19 64.47

A N N U A L A C C O U N T S 2 0 1 5 - 1 6

61


18 OTHER EXPENSES



Advertisement Expenses 26.96 6.17

Bank Charges 4.47 5.72

Car Hire Charges 33.40 30.31

Consultancy & Professional Fees 2.67 2.33

Car Insurance Premium 0.12 0.13

Electricity Charges 25.48 19.93

Exchange Fluctuation (Net) 1.17 3.55

Legal Expenses 3.04 8.25

Printing & Stationary 6.30 5.11

Rent 1.87 4.20

Repair & Maintenance- Others 9.23 5.13

Security Charges 41.14 40.77

Service Tax 0.02 0.52

Telephone Charges 7.70 6.76

Travelling Expenses (including Foreign Travel) 56.01 40.20

Payments to Auditors (Refer Note 18.1) 2.78 2.65

Other Administrative & Misc. Expenses 26.20 10.71

Total 248.57 192.41

Notes:

18.1 Payments to the Auditors comprises [Includes Service Tax paid / payable]

For the year ended For the year ended31st March, 2016 31st March, 2015


For Statutory Audit 0.85 0.75

For Internal Audit 1.83 1.80

For Tax Audit 0.10 0.10

Total 2.78 2.65

19 PRIOR PEIROD ADJUSTMENTS



Other Prior Period Adjustments 0.11 0.15

Depreciation for Earlier Years (Refer Note 8.1) -20.99 -

Provision for Income Tax written back(Refer Note 20.2.ii) 1,086.17 -

Total 1,065.29 0.15

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20.1 Related Party Disclosure (as Identified by the Management)

In terms of Accounting Standard 18 pertaining to ' Related Party Disclosure ' issued by ICAI , Related Party Transaction aregiven below:

i) Key Managerial Personnel

Name of the Key Managerial Personnel Relationship

Shri Ashwani Kumar Kapoor Chairman

Shri Satish Kumar Managing Director

Dr. Samaresh Kanti Panday Director

Shri Parshuram Singh Director

Shri Kailash Kumar Agarwal Director

Shri Mukund Kumar Sinha Director

Shri Anup Kumar Kundu Director

Smt. Jhanja Tripathy Director

Shri Nagesen Moreshwar Dhoke Director

Shri Alapan Bandyopadhyay, IAS Director

ii) Transaction during the Year with Related Parties

Current Year Previous YearAmount in Rs. (lakhs) Amount in Rs. (lakhs)

a) Director's Remuneration - -

b) Key Managerial Person's Remuneration 29.63 28.11

20.2 Tax Expenses

i) Current Tax

The Company is currently under project implementation stage and hence there is no Income from Operations. InterestIncome is earned by the Company on temporary parking of surplus funds. The income so earned is treated as CapitalReceipts and adjusted with Pre Operative Expenditure incurred by the Company. As a conservative policy, based onexpert opinion the company is paying Advance Tax on the Income so earned. Since, the Income earned is CapitalReceipt and adjusted with Pre Operative Expenditure, the company is not required to make provision for taxation.

ii) Company has amended its policy on Taxation Accounting from earlier years. Consequently the provision for tax madein earlier years amounting Rs. 10,86.17 Lakhs has been written back in the books of accounts and shown as PriorPeriod Adjustments.

iii) Deferred Tax

In absence of timing difference, deferred tax assets/liabilities pursuant to Accounting Standard-22 "Accounting forTaxes on Income" issued by the ICAI has not been provided.

Notes to the Financial Statements as at 31st March 2016. (contd.)

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20.3 Contingent Liabilities and Capital Commitments (to the extent not provided for) :

Contingent Liabilities Current Year Previous YearAmount in Rs. (lakhs) Amount in Rs. (lakhs)

i) Claim against the company not acknowledgedas Debt 5,885.39 5,885.39

ii) Demand on Service tax matter under the appealfor F.Y. 2009-10 to 2012-13 18.55 9.27

iii) Income tax matters under the appeal forA.Y. 2010-11 10.16 -

iv) Income tax matters under the appealfor A.Y. 2011-12 36.25 -

v) Claims by Hooghly River Bridge Commissionertowards various expenses 133.01 -

vi) Estimated amount of Unexecuted CapitalContracts (Net of Advances) 245,681.26 167,808.22

20.4 Expenditure in Foreign Currency :


i) Advance to Contractors 3,887.28 -

ii) Construction Expenditure 6,493.32 17,999.21

iii) Bank Charges - BOI, Tokyo 4.46 5.71

iv) Travelling Expenses 11.10 5.23

20.5 Loss on Foreign Currency Transaction:


Exchange Difference on Loan 1.17 3.55

20.6 (i) Company as a prudent policy has provided for Commitment Charges @ 0.10% on Unutilised balance ofRs. 47,62,14,521/- against 1st Tranche of Loan (ID- P192) given by JICA. The 1st Tranche of Loan had expired onSeptember 2013, and no disbursement against the said Loan made by JICA since September 2013.

20.6 (ii) Loan disbursed by JICA to the tune od Rs 116978 lakhs is subject to Loan Confirmation.

20.7 There are instances of delay in payment released to General Consultants appointed by the Company in violation of terms& conditions with them. The Company has not provided for any penal interest on such delay in payment as the Companyfeels that such claims would not be made.

20.8 Gratuity

The Company provides for liability towards gratuity of its employees in terms of payment of Gratuity Act, 1972 as peractuarial valuation.


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20.9 Leave Salary

Liability for leave salary of eligible employees of the company has been provided in the accounts as per actuarial valuation.

20.10 Segment Reporting

There is no Segment Reporting activities

20.11 The amount has been rounded off to Rupees in Lakhs.

20.12 Previous years figures have been regrouped/re- classified as the case may be.

20.13 Notes 1 to 20 form an integral part of the Balance Sheet and Statement of Profit & Loss and have been dulyauthenticated.

SIGNATURE TO NOTES 1 TO 20







Place : KolkataDate : 19/8/16

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