ICICI Bank 2003 Annual Report Download - page 105

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F41
schedules
forming part of the Consolidated Accounts Continued
5. Investments
ICICI Bank Limited
Investments are valued in accordance with the extant RBI guidelines on investment classification and valuation as
under :
a) All investments are categorised into ‘Held to Maturity‘, ’Available for Sale’ and ‘Trading‘. Reclassifications, if any,
in any category are accounted for as per the RBI guidelines. Under each category the investments are further
classified under (a) Government Securities (b) other approved securities (c)shares (d) bonds and debentures (e)
subsidiaries and joint ventures and (f)others.
b) ‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost if acquired at a premium over
the face value. A provision is made for other than temporary diminution.
c) ‘Available for Sale’ and ‘Trading’ securities are valued periodically as per RBI guidelines.
The market/fair value for the purpose of periodical valuation of quoted investments included in the ‘Available for
Sale’ and ‘Held for Trading’ categories would be the market price of the scrip as available from the trades/quotes
on the stock exchanges, SGL account transactions, price list of RBI, prices declared by Primary Dealers’ Association
of India jointly with Fixed Income Money Market and Derivatives Association (‘FIMMDA’) periodically.
The market/fair value of other than quoted SLR securities for the purpose of periodical valuation of investments
included in the ‘Available for Sale’ and ‘Trading’ categories is as per the rates put out by FIMMDA.
The valuation of non-SLR securities, other than those quoted on the stock exchanges, wherever linked to the YTM
rates, is with a mark-up (reflecting associated credit risk) over the YTM rates for government securities put out
by FIMMDA.
Securities shall be valued scripwise and depreciation/appreciation aggregated for each category. Net appreciation
in each basket if any, being unrealised, is ignored, while net depreciation is provided for.
d) Costs such as brokerage, commission etc., pertaining to investments, paid at the time of acquisition, are charged
to revenue.
e) Broken period interest on debt instruments is treated as a revenue item.
f) Profit on sale of investment in the ‘Held to Maturity’ category is credited to the revenue account and thereafter
is appropriated, (net of applicable taxes and statutory reserve requirements) to Capital Reserve. Such appropriation
is carried out at the year end.
Other entities
In case of investments by ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund, ICICI Emerging Sectors Fund
and ICICI Strategic Investments Fund, brokerage, commission and stamp duty are included in the cost of acquisition
while underwriting commission and fees earned are netted off from cost of investments.
ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund and ICICI Emerging Sectors Fund (schemes of ICICI
Venture Capital Fund) value their investments as per Securities and Exchange Board of India (‘SEBI’) guidelines issued
from time to time. Total investments of these funds amount to Rs.7,716.9 million. Unrealised gains and temporary
losses on investments are recognised as components of investors’ equity and are dealt with under Unrealised Investment
Reserve.
ICICI International Limited values their investments in accordance with International Accounting Standard (IAS) 39
(Financial Instruments: Recognition and Measurement). Value of the same is Rs.14.2 million.
Other subsidiaries value their investments as per AS 13 “Accounting for Investments“ issued by ICAI. Total investments
of such subsidiaries amount to Rs.22,673.7 million.
In case of ICICI Securities and Finance Company Limited and its subsidiaries, the repurchase and reverse repurchase
transactions are treated as secured borrowing/lending transactions. The amount outstanding under these contracts as
on March 31, 2003 was Rs. Nil.
Insurance Associates
ICICI Prudential Life Insurance Company Limited and ICICI Lombard General Insurance Company Limited are governed
by Insurance Act, 1938 which value their investments in accordance with the provisions of Insurance Regulatory and
Development Authority Regulation, 2002. Total investments of these two subsidiaries amount to Rs.6,460.2million.