Page 247 - KRCL ENglish

Sr. The Key Audit matters How our audit addressed the key
No. audit matter / Auditor's Response

Ÿ Tested the accuracy of aging of trade payable at
year end on a sample basis.

Ÿ Obtained the details of outstanding payable and
identied the claim wherever there is substantial
delay in payment.

Ÿ Assessed the liability of the old overdue unpaid
claims on a sample basis through our evaluation
of management's assessment with reference to
the credit policy of other railways, historical
payment pattern to customers and latest
correspondence / reconciliation with the
customers and to consider if any extra provision
need to be reversed; and

Ÿ Tested subsequent settlement of trade payables
after the balance sheet date on a sample basis, if
any.
5. Disputed Statutory Dues
The Corporation has received a Our audit procedures included and were not
Demand of Rs.704.40 crore and limited to the following:
applicable interest thereon, from the Our audit procedures include the following
Service Tax department for the period substantive procedures:
2009-10 to 2013-14.
Ÿ Obtained understanding of Service Tax Demand
on providing Business Support Services and
The corporation is engaged in updated status of the dispute;
providing services of Transportation of
passenger and goods by Rail but the Ÿ We along with our internal tax experts –
service tax department has identied it a) Read and analysed select key correspondences,
as another business transaction external legal opinions / consultations by
between KRCL and Indian Railways management in this regards;
stating that KRCL is providing
business support services to Indian b) Discussed with appropriate senior management
railways by making available its rail and evaluated management's underlying key
infrastructure and manpower to Indian assumptions of not creating provisions in this
Railways. regards;

KRCL has challenged the order as c) Assessed management's estimate of the possible
unconstitutional and against service outcome of the disputed cases.
tax law and a matter of double taxation.

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