Statement of Assets and Liabilities for last Five Years and Latest ...

(ii) In respect of foreign currency borrowings, which have not been hedged, avariation clause has been incorporated in the lease agreements specifying thenotional swap cost adopted for working out the cost of funds on the leases executedwith MOR. Swap Cost in respect of these foreign currency borrowings is comparedwith the amount recovered by the company on such account and accordingly, thesame is adjusted against the lease income. During the year 2008 - 09, in respect ofthese foreign currency borrowings, the company has recovered a sum of Rs.3125Lacs (P.Y. Rs.2980 Lacs) on this account from MOR against the actual swap costpayments of Rs.4737 Lacs (P.Y. Rs.3788 Lacs). After adjusting swap cost, an amountof Rs.1612 Lacs has been recovered from MOR (P.Y. Rs.808 Lacs).2.(iii) Interest expense in respect of interest accrued but not due on the foreigncurrency loans has been considered at base interest / exchange rate and thedifference on account of variation between base rate and the rate prevailing on thereported date has been shown as recoverable / payable to MOR. During the currentyear, the amount recoverable from MOR on such account works out to Rs.61 Lacs(P.Y. Payable Rs.87lacs).(a) Non-Banking Financial (Non-Deposit Accepting or Holding) Companies PrudentialNorms (Reserve Bank) Directions, 2007 has been issued by the Reserve Bank ofIndia vide notification no.DNBS.193 DG(VL)-2007 dated 22 nd February 2007. TheCompany, being a Govt. Company and not accepting / holding public deposits, theseDirections, 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) – 2000dated 13 th January 2000, the provisions of Section 45 IC of the Reserve Bank ofIndia Act, 1934 (2 of 1934) regarding creation of Reserve Fund, do not apply to theCompany.3. The Finance Act, 2001 provides for levy of service tax on the finance and interestcharges recovered through lease rental instalments on the Financial Leases enteredon or after 16-07-2001. The Central Govt., vide Order No.1/1/2003-ST dated 30 thApril 2003 and subsequent clarification dated 15-12-2006 issued by Ministry ofFinance has exempted the Lease Agreements entered between the Company andMinistry of Railways from the levy of Service Tax thereon.4. In terms of the Companies (Accounting Standards) Amendment Rules, 2009 issuedby the Govt. of India, Ministry of Corporate Affairs vide NotificationNo.F.No.17/33/2008/CL-V dated 31 st March 2009, the Company has opted to transferthe notional exchange rate variation loss amounting to Rs.4306.52 Lacs onrevaluation of long term foreign currency items to ‘Foreign Currency Monetary ItemTranslation Difference Account’. Further, the notional exchange rate variation gainamounting to Rs.926.51 Lacs (net of tax) recognised in the Profit and Loss Accountand 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 CurrencyMonetary Item Translation Difference Account by debiting to General Reserve. Asum of Rs.29.47 Lacs on account of notional exchange rate variation for the yearending 31.03.2008 and pertaining to the principal repayments made in 2008 - 09 hasbeen transferred to General Reserve. The amount of Rs.3409.48 Lacs outstanding inthe ‘Foreign Currency Monetary Item Translation Difference Account’ as on 31 stMarch 2009 will be amortised over the balance tenor of the monetary items to whichthey pertain but not beyond 31 st March 2011. The position with regard to the