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 a notionalswap cost adopted for working out the cost of funds on the leases executed withMOR. Swap Cost in respect of these foreign currency borrowings is compared withthe amount recovered by the company on such account and accordingly, the same isadjusted against the lease income. During the year 2009 - 10, in respect of theseforeign currency borrowings, the company has recovered a sum of Rs.5200 Lacs (P.Y.Rs.3125 Lacs) on this account from MOR against the actual swap cost payments ofRs.4670 Lacs (P.Y. Rs.4737 Lacs). After adjusting swap cost, an amount of Rs.530Lacs has been paid to MOR (P.Y. Rs.1612 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.683 Lacs (P.Y. recoverableRs.61 lacs).(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, 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 Government vide Order No.1/1/2003-ST dated30 th April 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 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, during the financialyear 2008 – 09, had transferred a net sum of Rs. 3409.48 Lacs to ‘Foreign CurrencyMonetary Item Translation Difference Account’ being the net notional exchange ratevariation loss on revaluation of long term foreign currency items.The company, during the financial year 2009 - 10, has transferred a sum of Rs.643.98 Lacs on account of notional exchange rate variation gain on revaluation oflong term foreign currency items, thus bringing the balance in ‘Foreign CurrencyMonetary Item Translation Difference Account’ down to Rs. 2765.50 Lacs. Further,the company, in accordance with the aforesaid notification, has amortised a net sumof Rs. 3455.15 Lacs to Profit & Loss Account and has credited a sum of Rs. 807.92Lacs to General Reserve, leaving a balance of Rs. 118.27 Lacs for amortisation in thefollowing year.