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SENSEX NIFTY India | Notes to Account > Finance - Term Lending Institutions > Notes to Account from IFCI - BSE: 500106, NSE: IFCI


BSE: 500106|NSE: IFCI|ISIN: INE039A01010|SECTOR: Finance - Term Lending Institutions
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Mar 17
Notes to Accounts Year End : Mar '18

Foot-notes to Note No. 2:

1. Capital Reserve represents proceeds of forfeited shares.

2. Capital Redemption Reserve represents amount transferred from surplus in statement of profit and loss towards redemption of preference shares without fresh issue of capital, as was required under section 55 of the Companies Act, 2013.

3. Debenture Redemption Reserve has been created in terms of Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014 for Non-Convertible Debentures issued by IFCI Ltd. through public offer.

4. Section 36(1)(viii) of the Income Tax Act allows financial institutions to transfer 20% of profit from eligible business i.e. net income from long-term industrial financing, to this Reserve and the same is allowed as a deduction while computing taxable income. The Income Tax Act, by an amendment in Finance Act, 1998, has put a condition on maintaining the Reserve created w.e.f FY 1997-98. Any withdrawal would attract tax liability. Unto FY 1996-97, utilisation of the said Reserve created in the earlier year did not attract tax liability and accordingly Deferred Tax Liability (DTL) has been created on the reserve transferred after FY 1997-98.

5. Pusuant to increase in shareholding of Govt. of India more than 50% of the paid-up Share Capital, the Company has become Government Company u/s 2(45) of the Companies Act, 2013 and therefore in view of the exemption available to Government Companies, no transfer has been made to the statutory reseve created u/s 45IC of RBI Act, 1934.

Foot-notes to Note No. 3

1. Privately placed Bonds of ''4,988.75 crore shown at 3.1(B) above includes Rs,1,280.58 crore of bonds which were guaranteed by the Govt. of India at the time of issue. These bonds were, subsequently, rolled over for 10 years from dates of maturity in terms of the decision at meetings of stakeholders in November 24 and December 2, 2002 under the aegis of the Govt. of India, but the guarantee did not continue. However, on the behalf of investors, Govt. of India was requested to guarantee these bonds during the rolled over period and accordingly, these bonds were shown under Bonds guaranteed by Govt. of India till March 31, 2013, with suitable disclosure of the fact in Notes to Accounts. Since all such bonds have been rolled over by March, 2012 and Govt. of India has not provided guarantee during the rolled over period, such rolled over erstwhile government guaranteed bonds are clustered under Privately Bonds as on March 31, 2018 above.

2. (a) Out of the bonds of Rs,6,974.75 disclosed as non-current at 3.1(B) above, Put/ Call Option applicable on Rs,1,782.31 crore (previous year: 1927.88 crore) of Bonds.

(b) Terms of repayment of total bonds of Rs,7,287.76 crore is annexed below.

3. (a) Out of the bank borrowings disclosed at 3.1C(a) above, Put/ Call Option applicable on Rs,2,068.50 (previous year: Rs,3,670.00 crore).

(b) Include loans of Rs,300 crore (previous year: Rs,300 crore), against escrow of cash flow/ negative lien against certain identified loan assets.

(c) Terms of repayment of total Bank & FI borrowings of Rs,8,411.60 crore is annexed

4. Terms of repayment of Tax-free Bonds and Secured Redeemable NCDs annexed.

5. Terms of repayment of foreign currency liabilities annexed.

Considering the current status of the pending litigation cases, no material financial impact is expected on the financial statements as on March 31, 2018.

and principal dues without considering due dates, except in the case of one time or negotiated settlements, where the appropriation was done as per the terms of the settlement has been revised to, appropriating such amounts due date-wise in the order of other debits, interest and principal dues, starting from the earliest due date, except in the case of one time or negotiated settlements, where the appropriation is done as per the terms of the settlement.” The loss for the current year has been increased by Rs,32.17 crore because of this change in policy.

6. The company is one of the lenders in various cases which have been referred to National Company Law Tribunal (NCLT). In terms of clarifications received by the Company from RBI, vide letter dated March 6, 2018, the Company has classified these accounts and made provisions in terms of extant norms provided in the “Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016“.

7. Gratuity,leave encashment, post retirement medical benefits & Leave Fare Concession benefit scheme liabilities have been determined and accounted on the basis of actuarial valuation in accordance with Accounting Standard 15.

8. Company has made the provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts as on March 31, 2018.

9. Certain balances appearing under trade receivables and payables are subject to confirmation. Trade receivables which are overdue for more than three years or otherwise considered as doubtful for recovery has been fully provided for.

10. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2018. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent the status of such parties identified on the basis of information available with the Company.

11. There are no material prior period items, except to the extent disclosed, included in Profit & Loss A/c required to be disclosed as per Accounting Standard-5 read with RBI guidelines.

12. During the financial year 2017-18, the accounting policy of appropriating the amounts received from borrowers against “loans and advances” in the order of other debits across due dates and then, similarly of interest

13. The Company operates in India and hence it is considered to operate only in domestic segment. More than 90% of revenue for the Company comes from a single segment of Financing. Accordingly, segment reporting as required under Accounting Standard-17, is not required.

14. Disclosure of details pertaining to related party transactions in terms of Accounting Standard-18, - “Related Party Disclosures” is as under:

* There are no potential equity shares outstanding as on March 31, 2018.

The Company has allotted 3,39,55,857 equity shares of Face Value of ''10 each, at a premium of ''19.45 per share, to the Government of India on Preferential Basis, on March 31, 2018. Therefore, these shares have not been considered for computing Earning Per Share for the quarter and for the year ended March 2018.

15. The Company has 50% interests in one joint venture viz. IFCI Sycamore Capital Advisors (P) Limited (ISCAPL) incorporated in India in November 2011 which is under voluntary liquidation and official liquidator has been appointed. The investment of IFCI Ltd. in IFCI Sycamore Capital Advisors (P) Limited as on March 31, 2018 was at ''0.01 crore Class A Equity Shares against which adequate provision has been made considering the probability and quantum of share in distribution upon liquidation of the Company.

16. The following additional information is disclosed in terms of RBI Circulars applicable to Non-Banking Financial Companies:

(i) The company is registered with Securities and Exchange Board of India as debenture trustee having registration code i.e. “IND000000002”.

(ii) There are no penalties imposed by RBI and other regulator during the year ended March, 2018 except in one case where SEBI has imposed penalty of ''14 lakh for failing to make required disclosures in terms of SAST (Substantial Acquisition of Shares and Takeovers) and PIT (Prohibition of Insider Trading) Regulations. In the SEBI’s order it is mentioned that following the invocation of pledge in FY 2012-13, there was an increase in IFCI’s shareholding in Glodyne Technoserve Limited (GTL) with regard to which the term lender was required to make disclosures. IFCI had contended that it is a public financial institution and Government of India undertaking engaged in the business of lending to companies and being the pledgee it had invoked the pledge only for selling the shares to recover dues. IFCI had filed an appeal against the Order of the Adjudicating Officer (AO), by which the penalty was imposed upon IFCI, before the Honb’le Securities Appellate Tribunal (SAT). The SAT vide its Order dated April 25,2018 has set aside the Order and the penalty imposed by the Adjudicating Authority and has restored the matter in the file of the AO of SEBI for fresh decision on merits in accordance with law.

(iii) Ratings assigned by credit rating agencies and migration of ratings during the period ended March, 2018

17. Open interest in the Currency Futures as at 31/03/2018 is EUR 10 million against USD, equivalent to ''80.81 crore (Previous Year ended March 2017 : NIL)

18. Foreign Currency exposure that is not hedged by derivative instrument or otherwise is USD 2.509 million (Previous Year ended March 2017: USD 0.006 million) and EUR 0.049 million (Previous Year ended March 2017: EUR 0.053 million), equivalent to ''16.75 crore (Previous Year ended March 2017: ''0.41 crore).

19. Details of securities sold and purchased under Repos and Reverse Repos Transactions:

Maximum & average outstanding is based on face value of securities.

20. Previous year figures have been re-grouped/ re-arranged wherever necessary, to conform to current period’s presentation.

Source : Dion Global Solutions Limited
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