Page 239 - KRCL ENglish

and we have fullled our other ethical responsibilities in accordance with these
requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have
obtained is sufcient and appropriate to provide a basis for our audit opinion on the
consolidated nancial statement.

Material uncertainty related to going concern
We draw attention to note 27.1 to the consolidated nancial statements which indicates
that during year, pending nancial closure, the project was on temporary hold and
Konkan Railway Corporation Limited (KRCL) unilaterally invoked the Performance Bank
Guarantee (PBG) on 16.08.2019 without any prior intimation/notice of the intent to invoke
the PBG. The matter is in discussion with various stakeholders for resolving the issues that
concern the project and getting back the PBG amount from KRCL.
Considering the temporary suspension of the project and alternative linkage project
possibilities the present nancial statements of the Associate Company is prepared on
going concern basis till nal decision about the project by the Shareholders as well as the
Railway authorities.

Emphasis of Matter
A) We draw attention to Note No. 13.2 of the consolidated nancial statements related to
amount due from Udupi Power Corporation Ltd (UPCL) of Rs. 12.08 Crores for Railway
siding work wherein the amount is outstanding since long with no development. After
entering in to contract with Corporation, the UPCL had appointed LANCO Infratech
Ltd. as their EPC Contractor / agent to deal with the holding company in relation with
this work whereby all the bills / claim are raised on and settled by them. However the
LANCO Infratech Ltd. has gone into Corporate Insolvency Resolution Proceedings
under National Company Law Tribunal, due to which recovery of amount due from
LANCO Infratech Ltd. is extremely remote. The company has led the Civil Recovery
Suit against UPCL (Principal Employer) and LANCO (its agent).

The Management of the Company are optimistic for recovery of amount due from
UPCL.

B) We draw attention to Note No. 53 of the consolidated nancial statements related to
effect of Covid- 19 on the Company's consolidated nancial statement due to
outbreak of Corona virus (COVID-19) pandemic in India which has signicantly
impacted operation of the Corporation. Passenger trains were cancelled since 22nd
March 2020 across entire Indian Railway System.

As per the Board note, the company has lost Trafc revenue to the tune of
Approximately Rs 70 crore in March'2020. Further during April'20 to July'20, the travel
restrictions continued with partial relief which also severely impacted the nancial

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