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

B. Notes on Accounts1.(a) Lease rental is charged on the assets leased from the first day of the month in whichthe assets have been identified and placed on line.(b) Ministry of Railways (MOR) charges interest on the value of the assets identified priorto the payments made by the company, from the first day of the month in which theassets have been identified and placed on line to the first day of the month in whichthe money is paid to the MOR. However, no interest is charged from the MOR on theamount paid by the company prior to identification of Rolling stock by them.(c) (i) Interest rate variation on the floating rate linked rupee borrowings and interestrate and exchange rate variations on interest payments in case of the foreigncurrency borrowings are adjusted against the Lease Income in terms of the variationclauses in the lease agreements executed with the Ministry of Railways. During theyear, such differential has resulted in an amount of Rs. 846 Lacs accruing tocompany (P.Y. Rs. 405 Lacs), which has been accounted for in the Lease Income.(ii) In respect of foreign currency borrowings, which have not been hedged, variationclause have been incorporated in the lease agreements specifying notional swap costadopted for working out the cost of funds on the leases executed with MOR. Swapcost in respect of these foreign currency borrowings is compared with the amountrecovered by the company on such account and accordingly, the same is adjustedagainst the lease income. During the year 2010 - 11, in respect of these foreigncurrency borrowings, the company has recovered a sum of Rs. 8920 Lacs (P.Y. Rs.5200 Lacs) on this account from MOR against the actual swap cost payments of Rs.4590 Lacs (P.Y. Rs.4670 Lacs). After adjusting swap cost, an amount of Rs. 4330Lacs has been refunded to MOR (P.Y. Rs. 530 Lacs recovered from MOR).2.(iii) Interest expense in respect of interest accrued but not due on foreign currencyloans has been considered at base interest / exchange rate and the difference onaccount of variation between base rate and the rate prevailing on the reporting datehas been shown as recoverable / payable to MOR. During the current year, theamount payable to MOR on such account works out to Rs. 637 Lacs (P.Y. Rs. 683Lacs).(a) The Reserve Bank of India has issued Non-Banking Financial (Non-Deposit Acceptingor Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 videnotification no.DNBS.193 DG(VL)-2007 dated 22 nd February 2007. The Company,being a Government Company and not accepting / holding public deposits, theseDirections, except the provisions contained in Paragraph 19 thereof, are notapplicable to the Company.(b) In terms of Reserve Bank of India Notification No.DNBC.138/CGM (VSNM) – 2000dated 13 th January 2000, provisions of Section 45 IC of the Reserve Bank of IndiaAct, 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 Government vide Order No.1/1/2003-ST dated30 th April 2003 and subsequent clarification dated 15-12-2006 issued by Ministry of