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

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The ratings reflect IRFC's following strengths:Strategic importance to, and attendant support from, Goi because of its status as thefinancing arm of IRIRFC, wholly owned by Goi thtough MoR, is strategically important to Goi because it isthe financing arm of IR; IRFC provides market funding to about 32 per cent of IR'srolling stock acquisitions. IR, which functions under MoR, constitutes a cmdal part ofIndia's infrastructure. IR' s lease payments to IRFC are part of the annual Railway.Bud.get,...ancLth:us,_get-patliaill@Rt~y.-a.ppt!wal.-GenseqtHmt-ly,lRFG-derives-s-ubs-ta:ntia:lbusinessand financial support from Go!t')IRFC has a close working relationship with IR; MoR's officials serve as directors onIRFC' s board. IRFC is governed by a board of directors, currently consisting of fivemembers: the financial commissioner (Railways) is the ex-officio non-executivechairperson. The five members also include the managing director, two independentdirectors, and one director nominated by Ministry of Finance,IRFC borrows funds at the behest of MoR; as on March 31, 2012, advances to IRconstituted around 97 per cent of IRFC' s total advances. MoR approves IRFC' s annualborrowing limits and proposed borrowings. After the Railway Budget is approved bythe Parliament, IR notifies IRFC about its funding requirements. IRFC raises therequired funds from the market for purchase of rolling stock and extends the same in theform of lease financing to IR. At the end of each financial year, IRFC enters into astandard lease agreement with MoR, wherein lease rentals are fixed at a mark-up overIRFC's average borrowing costs for the year.()The company's importance to IR is also evident from the fact that IRFC also raisesmarket borrowings required by Rail Vikas Nigam Ltd (RVNL), a company whollyowned by Gol, for execution of projects relating to upgrading railway infrastructure.The underlying risk on this exposure is, however, borne by MoR. The proportion ofIRFC' s railway infrastructure-related project financing business is likely to remain smalt.compared with its overall portfolio.Given the large capital expenditure (capex) requirements of IR, CRISIL believes thatIRFC will continue to play a critical role in mobilising funds for IR at competitive rates.IRFC, therefore, is expected to derive significant Gol support, both on an ongoing basisand in the event of distress, if ft!tY·Strong capitalisation and asset quality. IRFC has strong capitalisation. As on March 31 1 2012, its net worth was .around Rs.54billion. Go I has been infusing equity capital at t•egular intervals to support IRFC' s capitalstructure; Gol infused Rs.S.O billion in January 2012 (5.1 billion in 2010-11). The companyhas adequate gearing; however, it increased to 9.3 times as on March 31, 2012 from 8.9times as on March 31,2011.
Given IRFC's modest accruals to net worth, CRISIL believes that Gol will continue toinfuse equity capital at regular intervals to enable IRFC to maintain adequate gearing,while meeting the growing funding requirements of IR, over the medium term.IRFC also has very strong asset quality, as it lends predominantly to IR, which is asovereign entity. Till date, IRFC has had zero non-performing assets (NPAs).Furthermore, IRFC is a public financial institution under Section 4A of the Con1paniesAct of 1956, and has been exempted from Reserve Bank of India's (RBI's) guidelines forsystemically important non-deposit taking non-banking financial companies (NBFCND-SI) regarding compliance with single/ group exposure norms to the extent that the-expesures-are--tewards-IR-fGef.()Adequate resource profileIRFC's ability to raise long-term funds at competitive rates is underpinned by its accessto a diversified pool of wholesale investors, including banks, mutual funds, pension andgratuity funds, insurance companies, as well as external commercial borrowings (ECBs).Its borrowing costs at around -8.2 per cent in 2011-12 (refers to financial year, April! toMarch 31) was similar to that in 2010-11, and compares well with that of its peers. IRFChas been permitted to raise funds through tax-free bonds which also support its resourceprofile.CRISIL believes that IRFC will maintain adequate resource profile driven by its strategicimportance, and access to a diverse source of long-term investors.The above-mentioned rating strengths are parHally offset by IRFC's followingweakness:Average earnings profileIRFC' s earnings profile is marked by moderate interest spreads and low operatingexpenses. As IRFC is the funding vehicle for IR, enhancing IRFC' s profitability is not theprimary objective. IRFC' s interest spreads ate preserved by ensuring a mark-up over itscosts of borrowings. Furthermore, the lease agreements with IR protect IRFC' s netinterest margins, and transfer the interest and foreign exchange risks on its borrowingsto IR. Consequently, IRFC' s net ptofitability marginl (NPM; on a yearly average basis)has remained stable at around 0.7 per cent over the past three yeats. However, the costplus model results in a lower NPM compared to other infrastructure financingcompanies.CRISIL believes that while IRFC' s earnings profile is not expected to improvesignificantly over the medium term, IR will ensure that the company remains profitableand generates adequate returns on its assets (RoA; 0.9 per cent'in 2011-12).1 NPM is defined as (Yield on funds deployed)- (Average borrowing costs)- (Operating expense ratio)+(Fee income levels)
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Statement of Assets and Liabilities
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CASH FLOW STATEMENTAnnexure - III(
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2. Reserves and Surplus( in Lakhs)P
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3.1.1 Maturity profile and Rate of
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65th "J" Taxable Non‐Cum. Bonds 8
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starting from 27‐07‐201416th "O
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HDFC Bank Ltd. 8.44%, Fixed 1‐Apr
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Syndicated Foreign Currency Loan‐
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As at30‐09‐2012As at31‐03‐2
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Total FixedAssets 1,721.57 1,707.80
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Balance in Franking Machine 0.34 0.
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18. Other IncomeTotal 268780.41 464
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Office Maintenance Expenses 20.25 3
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Significant Accounting policies and
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y the Reserve Bank of India vide th
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(f) (i) Interest rate variation on
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1 JPY 3 Billion 37.04 Million 1 JPY
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11.a. The Company has not taken on
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Gross Investment in Lease and Prese
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the year plan assetsTotal Gain / (L
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*The above provisions are liabiliti
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A. Significant Accounting PoliciesF
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Further, in terms of Draft Guidelin
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(P.Y. Rs. 4590 Lakhs). After adjust
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No. ofContractsAs at 31-03-2012 As
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10. Expenditure in Foreign Currency
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E. Less Capital Recovery provided u
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Changes in the Fair Value of Plan A
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Actuarial Assumptions:AssumptionsGr
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amortised over the balance tenor of
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) Recognition at the end of Account
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Deferred tax expense or benefit is
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Finance has exempted the Lease Agre
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The foreign currency borrowings out
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10. Expenditure in Foreign Currency
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15. Major components of net deferre
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Current Service Cost 3.05 1.63 1.02
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Actuarial Assumptions:As on 31-03-2
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portion of the future savings in th
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) Recognition at the end of Account
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10) Employee BenefitsEmployee Benef
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5. Decrease in liability due to exc
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Page 87 and 88: 12. The balances under some items o
Page 89 and 90: Unearned Finance Income 2009322 171
Page 91 and 92: the yearActualReturn onplan assets1
Page 93 and 94: Statementof Profit &LossActuarial A
Page 95 and 96: amortised over the balance tenor of
Page 97 and 98: ) Recognition at the end of Account
Page 99 and 100: 10) Employee BenefitsEmployee Benef
Page 101 and 102: amortisation in future, of the amou
Page 103 and 104: As part of hedging strategy, the Co
Page 105 and 106: Since the entire future lease renta
Page 107 and 108: assets assigned during the yearF. C
Page 109 and 110: Benefits Paid - -Fair Value of Plan
Page 111 and 112: value Rs. 1,000/- eachc) Earning Pe
Page 113 and 114: Financial Year 2007-08A. Significan
Page 115 and 116: and are capable of reversal in one
Page 117 and 118: ForeignCurrency1 JPY 2.65 Billion U
Page 119 and 120: Govt. may from time to time specify
Page 121 and 122: previous Financial YearB. Less valu
Page 123 and 124: 22. Payment to auditors include Rs.
Page 125 and 126: Annexure - VIIStatement of Dividend
Page 127 and 128: Annexure - IXRelated Party Transact
Page 129 and 130: Annexure - XICapitalisation Stateme
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Page 133 and 134: '-. ,,, I__ , __ , _____ ~-~---..
Page 135: Credit Rating Report 1Indian Railwa
Page 139 and 140: Credit Strengths.. Strong ownership
Page 141 and 142: CREDIT PERSPECTIVEDependence on MOR
Page 143 and 144: Asset quality profile favourableGiv
Page 145 and 146: ANNEXURE 1: RATING DETAILSInstrumen
Page 147 and 148: ICRA Credit PerspectiveIndian Railw
Page 149 and 150: ·PROFIT: & .LOSS ACCOUNT_t'lo of O
Page 151 and 152: This is a system generated report a
Page 155 and 156: Sub : Trade statistics of IRFC N1 f
Page 161 and 162: Sub : Trade statistics of IRFC N2 f
Page 163 and 164: SCRIP CODE TRADE DATE ABBREVIATEDNA
Page 171 and 172: Ref. No. :NSE/LIST/2012Date :Decemb
Page 173 and 174: Sub : Trade Statistics Report from
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Sub : Trade Statistics Report from
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ANNXEUREIVCONSENT OF DEBENTURE TRUS
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