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

and are capable of reversal in one or more subsequent periods. Deferred tax assets andliabilities are measured using the tax rates and tax laws that have been enacted orsubstantively enacted by balance sheet date.10) Staff Benefitsa) Provision for gratuity is determined on the basis of 15 days last drawn salary for eachcompleted year of service or part thereof in excess of six months, taking month of 26days for all employees.b) Provision for Leave encashment (including half pay leave) is determined on the basisof leave accrued to the respective employees at the close of the year on last drawnsalary taking month of 30 days.11) Miscellaneous ExpenditureMiscellaneous expenditure is amortised over a period of 5 years.B. Notes on Accounts1.(a) Lease rental has been charged on the assets leased from the first day of the month inwhich the assets have been identified and placed on line.(b) Ministry of Railways (MOR) has charged interest on the value of the assets identifiedprior to the payments made by the company, from the first day of the month in whichthe assets have been identified and placed on line to the first day of the month inwhich the money is paid to the MOR. However, no interest is charged from the MORon the amount paid by the company prior to the identification of Rolling stock bythem.(c) (i) Interest rate variation on the floating rate linked rupee borrowings, Interest rate andexchange rate variation on interest payments in case of the foreign currencyborrowings are adjusted against the Lease Income in terms of the variation clauses inthe lease agreements executed with the Ministry of Railways. During the year, suchdifferential has resulted in an amount of Rs. 7773 Lacs accruing to Company, (P.Y.Rs. 44 Lacs benefit to MOR) which has been accounted for in the Lease Income.(ii) In respect of foreign currency borrowings which have not been hedged, avariation clause has been incorporated in the lease agreements specifying the notionalswap cost which has been taken into consideration for working out the cost of fundson the leases executed with MOR. Swap Cost in respect of these foreign currencyborrowings is compared with the amount recovered by the company on such accountand accordingly, the same is adjusted against the lease income. During the year 2007-08, in respect of these foreign currency borrowings, the company has recovered a sumof Rs. 2980 Lacs (P.Y. Rs.2168 Lacs) on this account from MOR against the actualswap cost payments of Rs. 3788 Lacs (P.Y. Rs. 1153 Lacs). After adjusting SwapCost, an amount of Rs. 808 Lacs has been recovered from MOR (P.Y. Rs. 1015 Lacsbenefit passed on to MOR).(iii) Interest expense in respect of interest accrued but not due on the foreign currencyloans has been considered at base interest / exchange rate and the difference onaccount of variation between base rate and rate prevailing on the reported date hasbeen shown as recoverable / payable to MOR. During the current year the amountpayable to MOR on such account works out to Rs. 87 Lacs (P.Y. Rs.89 lacsrecoverable from MOR).