REC- 1-51.p65 - Rural Electrification Corporation Ltd.

The effect of an increase/ decrease of one percent point on
PRMF :-
Rs. in lacs
Particulars 1% (+) 1% (-)
a) Service & interest Cost 24.71 (20.69)
(P.year 22.64) (P.year (19.10))
b) PBO (Closing) 369.61 (309.62)
(P.year 174.70) (P. year (152.05))
Actuarial Assumptions :-
Particulars Gratuity PRMF ODRB
a) Method used Projected Unit Projected Projected Unit
Credit (PUC) Unit Credit
(PUC)
Credit (PUC)
b) Discount rate 7.50 7.50 7.50
((P.Year 7.00) (P.Year 7.00) (P.Year 7.00)
c) Expected Rate 9.23 NIL NIL
of Return
on Assets
((P.Year 8.56) (P.Year Nil) (P.Year Nil)
d) Future salary/ 5.50 5.50 5.50
cost increase ((P.Year 5.50) (P.Year 5.50) (P.Year 5.50)
a. The Expected Rate on Return on Assets over the accounting
period is assumed rate of return.
b. The Principle assumptions are the discount rate and salary
growth rate. The discount rate is generally based on the
market yields available on govt. bonds at the accounting date
with a term that matches of the liabilities and the salary
Growth rate takes account of inflation, seniority, promotions
and other relevant factors as long term basis. The above
information is certified by the Actuary.
30. (A) Government of India has appointed REC as a nodal
agency for implementation of RGGVY. The funds received
for disbursement to various agencies under such schemes
are kept in a separate bank account. The undisbursed funds
and interest earned thereto are classified as current liabilities.
(B) During current year interest earned of Rs.880.73 lacs
(previous year Rs.2,933.95lacs) including TDS of Rs.154.34
lacs (previous year Rs.658.95 lacs) has been taken to RGGVY
grant account and such TDS credits are being taken by REC
for ultimately passing off the benefit of same to the credit of
Govt. Funds.
(C) During the year the company has started recognizing the
Income of Agency Charges ( i.e.1% of project cost (inclusive
of Service Tax) on RGGVY Schemes on the basis of the
amount sanctioned by the Ministry of Power as per
Accounting Policy 2.1.b. as against the earlier policy of
recognition on the basis of disbursement of subsidy/loan.
The change in the Accounting Policy has resulted in decrease
of profit of current year by Rs. 118.36 lacs (net of service
tax).
31. During the year, Corporation has invested its surplus funds
with the Public Mutual Funds in Liquid Scheme and Liquid
Plus Scheme. The same have been disinvested during the
year itself.
32. The Corporation has come up in February 2010 with Further
Public Offering (FPO) of 17,17,32,000 Equity shares of Rs.
33.
10 each at prices determined through the Alternate Book
Building method. The issue comprised a fresh issue of upto
12,87,99,000 Equity shares and an offer for sale of 4,29,33,000
Equity shares by the President of India acting through
Ministry of Power, Govt. of India. The fresh Equity shares
were allotted in March 2010. Accordingly, Issued and Paid
up Share Capital has increased from Rs.85,866 lacs to
Rs.98,745.90 lacs and an amount of Rs.249,918.17 lacs (net
of Issue expenses of Rs.1,955.19 lacs) has been taken to
Securities Premium Account. Proceeds of the fresh issue of
Equity shares have been utilized for the purposes mentioned
in the Offer Document.
The Expenditure amounting to Rs.912.77 lacs incurred on
ERP system has been capitalized during the year w.e.f. 24th
October 2009. The life of the Software has been considered
as five years taking into consideration the fast technological
developments for amortization. The residual value is
considered as Nil.
34. For Segment Reporting as per Accounting Standard 17 issued
by the Institute of Chartered Accountants of India (ICAI),
the Corporation’s operations are classified into three business
segments viz. Generation Loans, transmission & Distribution
Loans and Others. The corporation does not have any
geographical segments. The Corporation operates only in
domestic geographical segments. Segment report for the year
ended 31st March 2010 is as under :
(Rs. in Lacs)
Sl. Particulars Year ended Year ended
No. 31.03.2010 31.03.2009
a. Segment Revenue
1. Generation Loans 2,51,383.31 1,50,698.45
2. T & D Loans 3,43,912.46 2,72,254.16
3. Others 79,466.73 70,702.28
Total 6,74,762.50 4,93,654.89
b. Segment Results
1. Generation Loans 1,13,813.79 49,575.77
2. T & D Loans 1,33,831.77 1,17,806.92
3. Others 35,156.69 36,253.56
Total 2,82,802.25 2,03,636.25
c. Unallocated Expenses 14,726.06 11,400.12
d. Profit Before Tax. 2,68,076.19 1,92,236.13
e Provision for Tax 65,850.85 64,883.58
f. Profit After Tax 2,02,225.34 1,27,352.55
g. Segment Assets
1. Generation Loans 23,84,757.07 18,59,147.42
2. T & D Loans 36,41,732.67 28,39,523.12
3. Others 7,53,455.13 6,27,749.60
Total 67,79,944.87 53,26,420.14
h. Segment Liabilities
CONSOLIDATED
1. Generation Loans 20,37,496.54 16,53,888.88
2. T & D Loans 31,11,435.46 25,26,026.53
3. Others 6,43,739.47 5,58,443.12
Total 57,92,671.47 47,38,358.53
101