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

70
Changes in the Fair value of Plan Assets:-
Particulars Gratuity PRMF
Rs. In Lacs
ODRB
(31.03.10) (31.03.09) (31.03.10) (31.03.09) (31.03.10) (31.03.09)
a) Fair value of Plan Assets as at the
beginning of the period *(of the gratuity trust) 2640.04 1577.53* NIL NIL NIL NIL
b) Expected return on Plan Assets 243.68 135.03 NIL NIL NIL NIL
c) Actual Company Contribution 8.17 7.54 NIL NIL NIL NIL
d) Benefit Paid (105.42) (41.29) NIL NIL NIL NIL
e) Acturial gain (Loss) on Plan Assets (6.63) (6.19) NIL NIL NIL NIL
f) Fair value of Plan Assets as at the end of
the period *(of gratuity trust) 2779.84 1672.62* NIL NIL NIL NIL
During the year, the corporation has provided Liability
towards Contribution to the Gratuity Trust of Rs.464.72 lacs
(Previous Year Rs.974.69 lacs), PRMF of Rs.497.27lacs
(Previous Year Rs. 409.34lacs) and ODRB of Rs.1.67 lacs
(Previous Year Rs.2.19lacs)
OTHER EMPLOYEE BENEFITS :-
During the year, Provision for Earned Leave Encashment
amounting to Rs.209.69 lacs (Rs.182.20lacs as per actuarial
valuation and Rs.27.49 lacs on account of employees exited
from service from 01.01.2007 to 31.03.2009) (Previous Year
Rs.160.09 lacs) and for sick leave Rs.155.44 lacs (Previous
year Rs. 583.36 lacs) have been made on the basis of Actuarial
Valuation and charged to P&L A/c.
In terms of AS-15 (revised 2005) on ‘Employees benefits’,
LTC has been accounted for on the basis of Actuarial
valuation. Accordingly, an amount of Rs.19.77 lacs (Previous
year Rs.21.22 lacs) for the year has been made on the basis
of Actuarial Valuation and charged to P&L A/c.
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.Year22.64) (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)
The Expected Rate on Return on Assets over the accounting
period is assumed rate of return.
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.
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