REC- 1-51.p65 - Rural Electrification Corporation Ltd.
REC- 1-51.p65 - Rural Electrification Corporation Ltd.
REC- 1-51.p65 - Rural Electrification Corporation Ltd.
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
20.<br />
The impact of difference between the indicative rate and<br />
period considered at the time of drawl and the actual can be<br />
ascertained only after the end of the respective schemes.<br />
Disclosure in respect of Intangible Assets as required in AS-<br />
26 “Intangible Assets”:a.<br />
Amortisation Rate 20%;<br />
100% in case of cost of<br />
asset is Rs 5,000 or less<br />
b. Amortisation Method Straight Line<br />
Reconciliation Statement<br />
S. Particulars As at<br />
(Rs. in Lacs)<br />
As at<br />
No. 31.03.2010 31.03.2009<br />
i) Gross Carrying Amount 432.90 4.86<br />
ii) Accumulated depreciation 39.00 2.59<br />
iii) Gross carrying amount-<br />
Opening Balance 4.85 3.54<br />
iv) Less: - Accumulated Depreciation 2.58 1.98<br />
v) Carrying amount 2.27 1.56<br />
vi) Additions during the period 428.05 1.31<br />
vii) Less: Amortization during the year 36.42 0.60<br />
viii) Carrying amount as on<br />
Balance sheet Date 393.90 2.27<br />
21. The <strong>Corporation</strong> has been providing for deferred tax assets /<br />
liabilities in terms of Accounting Standard No. 22 on<br />
Accounting for Taxes on Income.<br />
(A) Components of deferred tax liability/ (assets) as on<br />
31.03.2010 are given as under:-<br />
Particulars As at<br />
(Rs. In lacs)<br />
As at<br />
31/03/2010 31/03/2009<br />
Deferred Tax Assets (+)<br />
Provision for Earn Leave Encashment 623.54 482.37<br />
Provision for Sick Leave 251.12 198.29<br />
Provision for Post Retirement Medical<br />
Benefits (deduction not claimed<br />
pertaining to period prior to 2006-07) 263.28 263.28<br />
Provision for fall in investments 8.21 44.76<br />
Provision for Others 0.00 144.68<br />
Total 1146.15 1133.38<br />
Deferred Tax Liabilities (-)<br />
Depreciation -409.39 -345.15<br />
Reserve under section36(i)(viii) of I.T Act - -96456.74<br />
Total -409.39 -96801.89<br />
Net Deferred Tax Asset /(Liabilities) 736.76 -95668.51<br />
(B) The Company has started creating deferred tax liability (DTL)<br />
on special reserve created and maintained under Section<br />
36(1)(viii) of Income tax act, 1961, from financial year 2006-<br />
07 onwards. DTL for the special Reserve created till financial<br />
year 2005-06 was also created in FY 2006-07 by transferring<br />
the amount from General Reserve.<br />
22.<br />
The Company has passed a Board Resolution that it has no<br />
intention to make withdrawal from the Special Reserve<br />
created and maintained under section 36(1)(viii) of the<br />
Income Tax Act 1961. Hence, the special reserve created and<br />
maintained is not capable of being reversed and thus it<br />
becomes a permanent difference as per AS 22 issued by the<br />
Institute of Chartered Accountants of India (ICAI).<br />
Accordingly, the Company is not creating any deferred tax<br />
liability on the said reserve.<br />
Now, considering the opinions given by the various<br />
concerned authorities and also the practice followed by the<br />
other similarly placed institutions of not creating deferred<br />
tax liability (DTL) on account of special reserve created and<br />
maintained under Section 36(1)(viii) of Income Tax Act,<br />
1961, the <strong>Corporation</strong> is of the view that there is no<br />
requirement of DTL as per AS22 of ICAI. Accordingly, the<br />
<strong>Corporation</strong> has not created deferred tax liability (DTL) of<br />
Rs. 15,564.67 lacs on account of special reserve created and<br />
maintained under Section 36(1)(viii) of Income Tax Act,<br />
1961, for the year ended on 31st March, 2010 and has also<br />
reversed the DTL of Rs. 96,456.74 lacs created in earlier years<br />
on this account. The reversal of DTL is done by crediting<br />
General reserve by Rs. 63,879.87 lacs for the FYs up-to 2005-<br />
06 and through Profit and Loss Appropriation by<br />
Rs.32,576.87 lacs for the FY 2006-07 to FY 2008-09.<br />
Had the Company followed the same Accounting treatment<br />
as in the earlier years, the Profit after Tax for the year ended<br />
31.03.2010 would have been Rs. 184,576.91 lacs against<br />
reported profit of Rs. 200,141.58 lacs and the Reserve and<br />
Surplus would have been Rs. 8,97,266.18 lacs as against<br />
reported reserve and surplus of Rs. 10,09,287.59 lacs as on<br />
31.03.2010.<br />
In line with the decisions of Authority for Advance Ruling<br />
and Income Tax Appellate Tribunal for different assessment<br />
years, the <strong>Corporation</strong> has accounted for Rs. 5,690.16 lacs<br />
towards refund of Income Tax and interest thereon due from<br />
the Income Tax Department out of which Rs. 2,562.12 lacs<br />
has been received during this year.<br />
23. In terms of Accounting Standard No. 20 issued by the<br />
Institute of Chartered Accountants, Earning per share (Basic<br />
and Diluted) is worked out as under: -<br />
(Rs In Lacs)<br />
Particulars As at As at<br />
Numerator<br />
Profit after Tax as per Profit and<br />
31/03/2010 31/03/2009<br />
Loss Account 200,141.58 127,207.76<br />
Denominator<br />
Weighted average number of<br />
equity shares 86,78,34,723 85,86,60,000<br />
Basic & Diluted Earning per<br />
share (Rs./per share) 23.06 14.81<br />
24. Some of the erstwhile State Electricity Boards (SEBs) against<br />
whom loans were outstanding or on whose behalf guarantees<br />
were given, were restructured by the respective State<br />
Governments and new entities were formed in the past.<br />
Consequently, the liabilities of the erstwhile SEBs stand<br />
transferred to new entities and transfer agreements in most<br />
of the cases are to be executed amongst the <strong>Corporation</strong>,<br />
new entities and the State Governments.<br />
67