FORMAT FOR DISCLOSURE IN THE NOTES ON ACCOUNTS IN THE
ANNUAL PUBLISHED REPORTS
A. Issuer categories in respect of investments made
(As on the date of the balance sheet)
Sr.No. |
Issuer |
Amount |
Amount of |
| Investment made through Pvt.Placement |
"Below Investment" grade Securities Held |
Unrated Securities Held |
Unlisted Securities |
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
| 1 |
PSUs |
|
|
|
|
|
| 2 |
FIs |
|
|
|
|
|
| 3 |
Banks |
|
|
|
|
|
| 4 |
Private Corporates |
|
|
|
|
|
| 5 |
Subsidiaries/Joint Ventures |
|
|
|
|
|
| 6 |
Others |
|
|
|
|
|
| 7 |
# Provision held towards depreciation |
|
|
|
|
|
| |
Total* |
|
|
|
|
|
# Only aggregate amount of provision held to be disclosed in column 3.
* NOTES:
1. Total under column 3 should tally with the total of investments included under the following categories in the balance sheet:
a. Shares
b. Debentures & Bonds
c. Subsidiaries/ joint ventures
d. Others
2. Amounts reported under columns 4, 5, 6 and 7 above might not be mutually exclusive.
B. Non performing investments
| Particulars |
Amount (Rs. Crore) |
| Opening balance |
|
| Additions during the year since 1st April |
|
| Reductions during the above period |
|
| Closing balance |
|
| Total provisions held |
|
ANNEX-III
(Cf. Para 8.6)
Recommended Accounting Methodology for Uniform Accounting of
Repo / Reverse Repo transactions
a. The following accounts may be opened , viz. i) Repo Account, ii) Repo Price Adjustment Account, iii) Repo Interest Adjustment Account, iv) Repo Interest Expenditure Account, v) Repo Interest Income Account, vi) Reverse Repo Account, vii) Reverse Repo Price Adjustment Account, and viii) Reverse Repo Interest Adjustment Account.
b. The securities sold/ purchased under repo should be accounted for as an outright sale / purchase.
c. The securities should enter and exit the books at the same book value. For operational ease, the weighted average cost method, whereby the investment is carried in the books at their weighted average cost, may be adopted.
Repo
d. In a repo transaction, the securities should be sold in the first leg at market related prices and re-purchased in the second leg at the derived price. The sale and repurchase should be accounted in the Repo Account.
e. The balances in the Repo Account should be netted from the FIs Investment Account for balance sheet purposes.
f. The difference between the market price and the book value in the first leg of the repo should be booked in Repo Price Adjustment Account. Similarly the difference between the derived price and the book value in the second leg of the repo should be booked in the Repo Price Adjustment Account.
Reverse repo
g. In a reverse repo transaction, the securities should be purchased in the first leg at prevailing market prices and sold in the second leg at the derived price. The purchase and sale should be accounted for in the Reverse Repo Account.
h. The balances in the Reverse Repo Account should be part of the Investment Account for balance sheet purposes and can be reckoned for SLR purposes (only for banks) if the securities acquired under reverse repo transactions are approved securities.
i. The security purchased in a reverse repo will enter the books at the market price (excluding broken period interest). The difference between the derived price and the book value in the second leg of the reverse repo should be booked in the Reverse Repo Price Adjustment Account.
Other aspects relating to Repo / Reverse Repo
j. In case the interest payment date of the security offered under repo falls within the repo period, the coupons received by the buyer of the security should be passed on to the seller on the date of receipt as the cash consideration payable by the seller in the second leg does not include any intervening cash flows.
k. The difference between the amounts booked in the first and second legs in the Repo / Reverse Repo Price Adjustment Account should be transferred to the Repo Interest Expenditure Account or Repo Interest Income Account, as the case may be.
l. The broken period interest accrued in the first and second legs will be booked in Repo Interest Adjustment Account or Reverse Repo Interest Adjustment Account, as the case may be. Consequently the difference between the amounts booked in this account in the first and second legs should be transferred to the Repo Interest Expenditure Account or Repo Interest Income Account, as the case may be.
m. At the end of the accounting period, for outstanding repos , the balances in the Repo / Reverse Repo Price Adjustment Account and Repo / Reverse repo Interest Adjustment Account should be reflected either under item VI - 'Others' under Schedule 11 - 'Other Assets' or under item IV 'Others (including Provisions)' under Schedule 5 - 'Other Liabilities and Provisions' in the Balance Sheet of banks, as the case may be. (The FIs may reflect the balances in the corresponding Heads of accounts in their balance sheet).
n. Since the debit balances in the Repo Price Adjustment Account at the end of the accounting period represent losses not provided for in respect of securities offered in outstanding repo transactions, it will be necessary to make a provision therefor in the Profit & Loss Account.
o. To reflect the accrual of interest in respect of the outstanding repo/ reverse repo transactions at the end of the accounting period, appropriate entries should be passed in the Profit and Loss account to reflect Repo Interest Income / Expenditure in the books of the buyer / seller, respectively, and the same should be debited / credited as an income / expenditure accrued but not due. Such entries passed should be reversed on the first working day of the next accounting period.
p. In respect of repos in interest bearing (coupon) instruments, the buyer would accrue interest during the period of repo. In respect of repos in discount instruments like Treasury Bills, the seller would accrue discount during the period of repo based on the original yield at the time of acquisition.
q. At the end of the accounting period the debit balances (excluding balances for repos which are still outstanding) in the Repo Interest Adjustment Account and Reverse Repo Interest Adjustment Account should be transferred to the Repo Interest Expenditure Account and the credit balances (excluding balances for repos which are still outstanding) in the Repo Interest Adjustment Account and Reverse Repo Interest Adjustment Account should be transferred to the Repo Interest Income Account.
r. Similarly, at the end of accounting period, the debit balances (excluding balances for repos which are still outstanding) in the Repo / Reverse Repo Price Adjustment Account should be transferred to the Repo Interest Expenditure Account and the credit balances (excluding balances for repos which are still outstanding) in the Repo / Reverse Repo Price Adjustment Account should be transferred to the Repo Interest Income Account.
s. Illustrative examples are given in Annex IV.
Annex-IV
(Cf. Para 8.6)
Illustrative examples for uniform accounting of Repo/Reverse repo transactions
A. Repo/ Reverse Repo of Coupon bearing security
1. Details of Repo in a coupon bearing security:
| Security offered under Repo |
11.43% 2015 |
|
| Coupon payment dates |
7 August and 7 February |
|
| Market Price of the security offered under Repo (i.e. price of the security in the first leg) |
Rs.113.00 |
(1) |
| Date of the Repo |
19 January, 2003 |
|
| Repo interest rate |
7.75% |
|
| Tenor of the repo |
3 days |
|
| Broken period interest for the first leg* |
11.43%x162/360x100=5.1435 |
(2) |
| Cash consideration for the first leg |
(1) + (2) = 118.1435 |
(3) |
| Repo interest** |
118.1435x3/365x7.75%=0.0753 |
(4) |
| Broken period interest for the second leg |
11.43% x 165/360x100=5.2388 |
(5) |
| Price for the second leg |
(3)+(4)-(5) = 118.1435 + 0.0753 - 5.2388 = 112.98 |
(6) |
| Cash consideration for the second leg |
(5)+(6) = 112.98 + 5.2388 = 118.2188 |
(7) |
* Computation of days based on 30/360 day count convention
** Computation of days based on Actual/365 day count convention applicable to money market instruments
2. Accounting for the seller of the security
We assume that the security was held by the seller at the book value (BV) of Rs.120.0000
First leg Accounting
| |
Debit |
Credit |
| Cash Repo Account |
118.1435 |
120.0000 (Book value) |
| Repo Price Adjustment account |
7.0000 (Difference between BV & repo price) |
|
| Repo Interest Adjustment account |
|
5.1435 |
Second Leg Accounting
| |
Debit |
Credit |
Repo Account
Repo Price Adjustment account |
120.0000 |
7.02
(the difference between the BV and 2nd leg price) |
| Repo Interest Adjustment account Cash account |
5.2388 |
118.2188 |
The balances in respect of the Repo Price Adjustment Account and Repo Interest Adjustment Account at the end of the second leg of repo transaction are transferred to Repo Interest Expenditure Account. In order to analyse the balances in these accounts, the ledger entries are shown below:
Repo Price Adjustment account
| Debit |
Credit |
| Difference in price for the 1st leg |
7.00 |
Difference in price for the 2nd leg |
7.02 |
| Balance carried forward to Repo Interest Expenditure account |
0.02 |
|
|
| Total |
7.02 |
Total |
7.02 |
Repo Interest Adjustment account
| Debit |
Credit |
| Broken period interest for the 2nd leg |
5.2388 |
Broken period interest for the 1st leg |
5.1435 |
| |
|
Balance carried forward to Repo Interest Expenditure account |
0.0953 |
| Total |
5.2388 |
Total |
5.2388 |
Repo Interest Expenditure Account
| Debit |
Credit |
| Balance from Repo Interest Adjustment account |
0.0953 |
Balance from Repo Price Adjustment account |
0.0200 |
| |
|
Balance carried forward to P & L a/c. |
0.0753 |
| Total |
0.0953 |
Total |
0.0953 |
3. Accounting for buyer of the security
When the security is bought, it will bring its book value with it. Hence market value is the book value of the security.
First leg Accounting:
| |
Debit |
Credit |
| Reverse Repo Account |
113.0000 |
|
| Reverse Repo Interest Adjustment account |
5.1435 |
|
| Cash account |
|
118.1435 |
Second Leg Accounting
| |
Debit |
Credit |
| Cash account |
118.2188 |
|
| Reverse Repo Price Adjustment account (Difference between the 1st and 2nd leg prices) |
0.0200 |
|
| Reverse Repo account |
|
113.0000 |
| Reverse Repo Interest Adjustment account |
|
5.2388 |
The balances in respect of the Reverse Repo Interest Adjustment Account and Reverse Repo Price adjustment account at the end of the second leg of reverse repo in these accounts are transferred to Repo Interest Income Account. In order to analyse the balances in these two accounts, the ledger entries are shown below:
Reverse Repo Price Adjustment Account
| Debit |
Credit |
| Difference in price of 1st & 2nd leg |
0.0200 |
Balance to Repo Interest Income a/c. |
0.0200 |
| Total |
0.0200 |
Total |
0.0200 |
Reverse Repo Interest Adjustment Account
| |
Debit |
|
Credit |
| Broken period interest for the 1st leg |
5.1435 |
Broken period interest for the 2nd leg |
5.2388 |
| Balance carried forward to Repo Interest Income Account |
0.0953 |
|
|
| Total |
5.2388 |
Total |
5.2388 |
Reverse Repo Interest Income Account
| Debit |
Credit |
| Difference between the 1st & 2nd leg prices |
0.0200 |
Balance from Reverse Repo Interest Adjustment account |
0.0953 |
| Balance carried forward to P & L account |
0.0753 |
|
|
| Total |
0.0953 |
Total |
0.0953 |
4. Additional accounting entries to be passed on a Repo / Reverse Repo transaction on a coupon bearing security, when the accounting period is ending on an intervening day.
Transaction Leg
|
1st leg
|
End of accounting period |
2nd leg |
| Dates |
19 Jan 03 |
21 Jan 03* |
22 Jan 03 |
The difference in the clean price of the security between the first leg and the second leg should be apportioned upto the Balance Sheet date and should be shown as Repo Interest Income / Expenditure in the books of the seller / buyer respectively and should be debited / credited as an income / expenditure accrued but not due. The balances under Income / expenditure accrued but not due should be taken to the balance sheet
The coupon accrued by the buyer should also be credited to the Repo Interest Income account. No entries need to be passed on " Repo / Reverse Repo price adjustment account and Repo / Reverse repo interest adjustment account". The illustrative accounting entries are shown below:
a) Entries in Sellers books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo Interest Income account [Balances under the account to be transferred to P & L] |
|
0.0133 ( Notional credit balance 0.0133 in the Repo Price Adjustment Account by way of apportionment of price difference for two days i.e. upto the balance sheet day) |
| Repo interest Income accrued but not due |
0.0133 |
|
*21 January, 2003 is assumed to be the balance sheet date
b) Entries in Sellers books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo interest income |
0.0133 |
|
| P & L a/c |
|
0.0133 |
c) Entries in Buyer's Books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo interest income accrued but not due |
0.0502 |
|
| Repo Interest Income account [Balances under the account to be transferred to P & L] |
|
0.0502 (Interest accrued for 3 days of Rs. 0.0635* - Apportionment of the difference in the clean price of Rs.0.0133) |
*For the sake of simplicity the interest accrual has been considered for 2 days.
d) Entries in Buyer's Books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo interest income account |
0.0502 |
|
| P& L a/c |
|
0.0502 |
The difference between the repo interest accrued by the seller and the buyer is on account of the accrued interest forgone by the seller on the security offered for repo.
B. Repo/ Reverse Repo of Treasury Bill
1. Details of Repo on a Treasury Bill
| Security offered under Repo |
GOI 91 day Treasury Bill maturing on 28 February, 2003 |
|
| Price of the security offered under Repo |
Rs.96.0000 |
(1) |
| Date of the Repo |
19 January, 2003
| |
| Repo interest rate |
7.75%
| |
| Tenor of the repo |
3 days
| |
| Total cash consideration for the first leg |
96.0000 |
(2) |
| Repo interest |
0.0612 |
(3) |
| Price for the second leg |
(2)+(3) = 96.0000 + 0.0612 = 96.0612 |
| Cash consideration for the 2nd leg |
96.0612 |
2. Accounting for seller of the security
We assume that the security was held by the seller at the book value (BV) of Rs.95.0000
First leg Accounting:
| |
Debit |
Credit |
Cash
Repo Account |
96.0000 |
95.0000 (Book value) |
| Repo Price adjustment account |
|
1.0000
(Difference between BV & repo price ) |
Second Leg Accounting
Repo Account
Repo Price adjustment account |
95.0000
1.0612
(the difference between the BV and 2nd leg price) |
|
| Cash account |
|
96.0612 |
The balances in respect of the Repo Price Adjustment Account at the end of the second leg of repo transaction are transferred to Repo Interest Expenditure Account.
In order to analyse the balances in this account, the ledger entries are shown:
Repo Price Adjustment account
| Debit |
Credit |
| Difference in price for the 2nd leg |
1.0612 |
Difference in price for the 1st leg |
1.0000 |
| |
|
Balance carried forward to Repo Interest Expenditure account |
0.0612 |
| Total |
1.0612 |
Total |
1.0612 |
Repo Interest Expenditure Account
| Debit |
Credit |
| Balance from Repo Price Adjustment account |
0.0612 |
Balance carried forward to P & L a/c. |
0.0612 |
| Total |
0.0612 |
Total |
0.0612 |
The Seller will continue to accrue the discount at the original discount rate during the period of the repo.
3. Accounting for buyer of the security
When the security is bought, it will bring its book value with it. Hence market value is the book value of the security.
First leg Accounting:
| |
Debit |
Credit |
| Reverse Repo Account |
96.0000 |
|
| Cash account |
|
96.0000 |
Second Leg Accounting
| |
Debit |
Credit |
| Cash account |
96.0612 |
|
Repo Interest Income account
(Difference between the 1st and 2nd leg prices) |
|
0.0612 |
| Reverse Repo account |
|
96.0000 |
The Buyer will not accrue for the discount during the period of the repo.
4. Additional accounting entries to be passed on a Repo / Reverse Repo transaction on a Treasury Bill, when the accounting period is ending on an intervening day.
| Transaction Leg |
1st leg |
B/S date |
2nd leg |
| Date |
19 Jan.03 |
21 Jan.03* |
22 Jan.03 |
*21 January, 2003 is assumed to be the balance sheet date
a. Entries in Sellers books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo Interest Expenditure account (after apportionment of repo interest for two days) [Balances under the account to be transferred to P & L] |
0.0408 |
|
| Repo interest expenditure accrued but not due |
|
0.0408 |
b. Entries in Sellers books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo interest expenditure account |
|
0.0408 |
| P & L a/c |
0.0408 |
|
c. Entries in Buyer's Books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo interest income accrued but not due |
0.0408 |
|
| Repo Interest Income account [ Balances under the account to be transferred to P & L] |
|
0.0408 |
d. Entries in Buyer's Books on January 21, 2003
| Account Head |
Debit |
Credit |
| Repo interest income account |
0.0408 |
|
| P & L a/c
| |
0.0408 |
APPENDIX
Part A: List of circulars consolidated by the Master Circular
| No |
Circular No. |
Date |
Subject |
Para No. |
| 1. |
FIC No. 984-994/ 01.02.00 / 91-92 |
June 23,1992 |
Investment Portfolio- Transactions in Securities |
Entire Circular |
| 2. |
FIC No. 493-503/ 01.02.00 / 92-93 |
January 4,1993 |
Investment Portfolio- Transactions in Securities |
Entire Circular |
| 3. |
FIC.No. 937-947/01.02.00/93-94 |
April 22,1994 |
Monitoring the Activities of Subsidiaries / Mutual Funds |
Entire Circular |
| 4. |
FIC. No. 551 /01.08.00/ 95-96 |
January 24, 1996 |
Investment Portfolio- Transactions in Securities- Role of Brokers |
Entire Circular |
| 5. |
FIC. No. 198 /01.08.00/ 96-97 |
September 2, 1996 |
Investment Portfolio- Transactions in Securities |
Entire Circular |
| 6. |
FIC. No. 7 /01.08.00/ 96-97 |
February 19, 1997 |
Investment Portfolio- Transactions in Securities |
Entire Circular |
| 7. |
DBS.FID.No.23 /01.08.00/ 97-98 |
January 20, 1998 |
Investment Portfolio- Transactions in Securities- Role of Brokers |
Entire Circular |
| 8. |
DBS.FID.No.40 /01.08.00/ 98-99 |
April 28, 1999 |
Issue of Sub-Ordinated Debt for Raising Tier II Capital |
Entire Circular |
| 9. |
DBS.FID.No.C-9 /01.02.00/ 2000-01 |
November 9,2000 |
Guidelines for Classification and Valuation of Investments |
Entire Circular |
| 10. |
DBS.FID.No. C-10 /01.02.00/ 2000-01 |
November 22, 2000 |
Investment Portfolio- Transactions in Securities- Role of Brokers |
Entire Circular |
| 11. |
DBS.FID.No. C-6 /01.02.00/ 2001-02 |
October 16, 2001 |
Guidelines for Classification and Valuation of Investments-Clarifications/ Modifications |
Entire Circular |
| 12. |
DBS.FID.No. C-10 /01.02.00/ 2001-02 |
February 1, 2002 |
Treatment of Restructured accounts- Clarifications |
Para 8 of Annex |
| 13. |
DBS.FID.No. C-2 /01.02.00/ 2002-03 |
July 18,2002 |
Transactions in Government Securities |
Entire Circular |
| 14. |
DBS.FID No. C-3 /01.02.00/2002-03 |
July 22,2002 |
Guidelines for classification and valuation of investments - Clarifications |
Entire Circular |
| 15. |
IDMC/PDRS/ 3432 / 10.02.01/2002-03 |
February 21, 2003 |
Ready Forward Contracts |
Entire Circular |
| 16. |
IDMC.3810 /11.08.10 / 2002-03 |
March 24, 2003 |
Guidelines for uniform accounting for Repo / Reverse repo transactions |
Entire Circular |
| 17. |
IDMC. MSRD. 4801/ 06.01.03/2002-03 |
June 3, 2003 |
Guidelines on Exchange Traded Interest Rate Derivatives |
Entire Circular |
| 18. |
DBS.FID No.C-16 /01.02.00/2002-03 |
June 20, 2003 |
Investment Portfolio - Transactions in Securities - Audit Review and Reporting System - Modifications |
Entire Circular |
| 19. |
DBS.FID.No.C-1/01.02.00/2003-04 |
July 1, 2003 |
Trading in Government of India Securities on Stock exchanges |
Entire Circular |
| 20. |
DBS.FID.No.C-11 /01.02.00 /2003-04 |
January 8,2004 |
Final guidelines on investment by the FIs in debt securities |
Entire Circular |
Part B: List of other circulars containing instructions related / relevant to Investments now superceded
| No. |
Circular No. |
Date |
Subject |
| 1. |
FIC. No. 338 /01.08.00/ 95-96 |
November 3, 1995 |
Investment Portfolio- Classification of Investments Under ' Permanent and Current' Category |
| 2. |
DBS.FID. No. 22 /01.02.00/ 97-98 |
January 15, 1998 |
Settlement of Institutional Transactions in the Depository |
| 3. |
DBS.FID. No. 3 /01.02.00/ 99-00 |
August 10, 1999 |
Permission to Undertake Ready Forward Transactions |
| 4. |
DBS.FID. No. C-15 /01.02.00/ 99-00 |
April 8, 2000 |
Ready Forward Transactions |
| 5. |
DBS.FID.No. C-16 /01.02.00/ 2001-02 |
May 14,2002 |
Ready Forward Contracts- through CCI Ltd. |
|