IRFC FINAL - Indian Railway Finance Corporation Ltd.

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(iii) Interest expense in respect of interest accrued but not due on the foreign currency loans has beenconsidered at base interest / exchange rate and the difference on account of variation between baserate and the rate prevailing on the reported date has been shown as recoverable / payable to MOR.During the current year, the amount recoverable from MOR on such account works out to Rs.61 Lacs(P.Y. Payable Rs.87lacs).2. (a) Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)Directions, 2007 has been issued by the Reserve Bank of India vide notification no.DNBS.193 DG(VL)-2007 dated 22 nd February 2007. The Company, being a Government Company and not accepting / holdingpublic deposits, these Directions, except the provisions contained in Paragraph 19 of the said directions,are not applicable to the Company.(b) In terms of Reserve Bank of India Notification No.DNBC.138/CGM (VSNM)-2000 dated 13 th January2000, the provisions of Section 45 IC of the Reserve Bank of India Act, 1934 (2 of 1934) regarding creationof Reserve Fund, do not apply to the Company.3. The Finance Act, 2001 provides for levy of service tax on the finance and interest charges recovered throughlease rental instalments on the Financial Leases entered on or after 16-07-2001. The Central Government , videOrder No.1/1/2003-ST dated 30 th April 2003 and subsequent clarification dated 15-12-2006 issued by Ministryof Finance has exempted the Lease Agreements entered between the Company and Ministry of Railways fromthe levy of Service Tax thereon.4. In terms of the Companies (Accounting Standards) Amendment Rules, 2009 issued by the Government of India,Ministry of Corporate Affairs vide Notification No.F.No.17/33/2008/CL-V dated 31 st March 2009, the Companyhas opted to transfer the notional exchange rate variation loss amounting to Rs.4306.52 Lacs on revaluationof long term foreign currency items to 'Foreign Currency Monetary Item Translation Difference Account'.Further, the notional exchange rate variation gain amounting to Rs.926.51 Lacs (net of tax) recognised in theProfit and Loss Account and pertaining to the accounting periods commencing after 7 th Dec 2006 (i.e. for theFinancial Year 2007 - 08) has been reversed and transferred to Foreign Currency Monetary Item TranslationDifference Account by debiting to General Reserve. A sum of Rs.29.47 Lacs on account of notional exchangerate variation for the year ending 31.03.2008 and pertaining to the principal repayments made in 2008 - 09has been transferred to General Reserve. The amount of Rs.3409.48 Lacs outstanding in the 'Foreign CurrencyMonetary Item Translation Difference Account' as on 31 st March 2009 will be amortised over the balance tenorof the monetary items to which they pertain but not beyond 31 st March 2011. The position with regard to theamortisation in future, of the amount lying in Foreign Currency Monetary Item Translation Difference Account,is as follows:YearAmount (Rs. In Lacs)2009-10 3021.372010-11 388.115. Increase in liability due to exchange rate variation on foreign currency loans for purchase of leased assets,amounting to Rs.31819 Lacs (P.Y. decrease in liability Rs.10800 Lacs) has not been transferred to ForeignCurrency Translation Difference Account as the same is recoverable from the Ministry of Railways (lessee)separately as per lease agreements. The exchange rate variation on foreign currency loans repaid during theyear amounting to Rs.164 Lacs (P.Y. Rs.169 Lacs) has been recovered from the Lessee, leaving a balance ofRs.21951 Lacs receivable from MOR as on 31-03-2009 (P.Y. Rs.9704 Lacs payable to MOR).6. Derivative InstrumentsThe Company judiciously contracts financial derivative instruments in order to hedge currency and / or interestrate risk. All derivative transactions contracted by the company are in the nature of hedging instruments witha defined underlying liability. The company does not deploy any financial derivative for speculative or tradingpurposes.49
(a) In respect of certain foreign currency borrowings, the company has executed currency swaps to hedge theexchange rate variation risk on the principal outstanding. The outstanding position of such currency swapsas at 31 st March 2009 is as follows:No. ofContractsAs on 31.03.2009 As on 31.03.2008Borrowing Notional INR No. of Borrowing Notionaloutstanding in Equivalent Contracts outstanding in INRforeign currencyforeign currency Equivalent45964.45 3 USD 187.14 81858.23Million LacsMillion Lacs2 USD 105.101 JPY 13.00 Billion 53728.49Lacs1 JPY 13.00 Billion 53728.49LacsRemarks--Swap costrecoverablefrom MOR.In respect of some of its External Commercial Borrowings, the Company has executed cross currencyswaps to hedge the principal outstanding and converted its underlying liability from one foreign currencyto another. The outstanding position of such cross currency swaps as at 31 st March 2009 is as follows:No. ofContractsAs on 31.03.2009 As on 31.03.2008Borrowingoutstanding inForeign CurrencyNotional USDEquivalentNo. ofContractsBorrowingoutstanding inForeign CurrencyNotional USDEquivalent1 JPY 2.65 Billion USD 25 Million 1 JPY 2.65 Billion USD 25 Million1 JPY 14.71875 USD 125 Million 1 JPY 14.71875 USD 125 MillionBillionBillionIn respect of the following External Commercial Borrowings, the Company has executed currency swap tohedge the foreign exchange exposure in respect of both principal outstanding and interest payments:No. ofContractsAs on 31.03.2009 As on 31.03.2008Borrowingoutstanding inForeign CurrencyNotional INREquivalentNo. ofContractsBorrowingoutstanding inForeign CurrencyNotional INREquivalent1 JPY 15 Billion 54911.79 Lacs 1 JPY 15 Billion 54911.79 LacsThe foreign currency borrowings outstanding as on 31.03.2009, which have not been hedged are asfollows:As on 31.03.2009 As on 31.03.2008No. of Borrowing No. of Borrowing RemarksLoans outstanding inForeign CurrencyLoans outstanding inForeign Currency1 USD 39 Million 1 USD 42 Million Back to Back recovery of exchange ratevariation from MOR.2 USD 13.45 Million 2 USD 19.68 Million --2 USD 225 Million 1 USD 125 Million Back to Back recovery of exchange ratevariation from MOR.1 Euro 4.88 Million 1 Euro 5.86 Million --0 Nil 1 JPY 442.702 Million Back to Back recovery of exchange ratevariation from MOF.50
Page 20 and 21: Report on Corporate GovernanceIndia
Page 22 and 23: NOTE : Salary, in the following sca
Page 24 and 25: General Body MeetingsDetails of loc
Page 26 and 27: Chief Executive Officer and Chief F
Page 28 and 29: ANNUALACCOUNTS2008-09Indian Railway
Page 30 and 31: PROFIT AND LOSS ACCOUNTFOR THE YEAR
Page 32 and 33: SCHEDULE-3LOANS(Rs. in Lacs)DESCRIP
Page 34 and 35: SCHEDULE-3 Contd...LOANS(Rs. in Lac
Page 42 and 43: SCHEDULE-7CURRENT ASSETS, LOANS & A
Page 44 and 45: SCHEDULE-8CURRENT LIABILITIES AND P
Page 46 and 47: SCHEDULE-12ADMINISTRATIVE & OTHER E
Page 48 and 49: SCHEDULE-15PRIOR PERIOD ADJUSTMENTS
Page 50 and 51: monetary assets and liabilities at
Page 54 and 55: (b) The Company has one (P.Y one) I
Page 56 and 57: (b) The Company is required to tran
Page 58 and 59: As a result of adopting AS - 15 (Re
Page 60 and 61: 21. As per Accounting Standard (AS)
Page 62 and 63: 34. BALANCE SHEET ABSTRACT AND COMP
Page 64 and 65: Auditor's ReportTo,THE MEMBERS,INDI
Page 66 and 67: (xii) The company has not granted a

IRFC FINAL - Indian Railway Finance Corporation Ltd.

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