ICICI Bank 2003 Annual Report Download - page 107

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F43
schedules
forming part of the Consolidated Accounts Continued
Other entities
e) In case of ICICI Venture Funds Management Company Limited, depreciation on assets, other than leased assets,
is charged on written down value method in accordance with the provisions of Schedule XIV of the Companies
Act, 1956. The gross block, accumulated depreciation and net block in respect of such fixed assets as on March
31, 2003 for these subsidiaries was Rs.76.7 million, Rs.33.5 million and Rs.43.2 million respectively.
f) In case of ICICI Securities and Finance Company Limited and its subsidiaries, depreciation on assets, other than
leased assets and improvements to leased property, is charged on written down value method in accordance with
the provisions of Schedule XIV of the Companies Act, 1956. The gross block, accumulated depreciation and net
block in respect of such fixed assets as on March 31, 2003 for these subsidiaries was Rs. 206.9 million, Rs. 94.2
million and Rs. 112.7million respectively.
g) In case of Prudential ICICI Asset Management Company Limited, fixed assets other than leasehold improvements
are depreciated at written down value method based on economic lives of the assets as estimated by the
management. The gross block, accumulated depreciation and net block in respect of such fixed assets as on
March 31, 2003 was Rs.113.3 million, Rs.83.8 million and Rs.29.5 million respectively.
8. Foreign Currency transactions
ICICI Bank Limited
a) Revenues and expenditure are translated at the exchange rates prevailing on the date of the transaction. Monetary
assets and liabilities are translated at closing exchange rates notified by the Foreign Exchange Dealers’ Association
of India (‘FEDAI’) at the balance sheet date and the resulting profits/losses are included in the Profit and Loss
Account.
b) Outstanding forward exchange contracts are stated at contracted rates and are revalued at the exchange rates
notified by FEDAI for specified maturities and at interpolated rates for contracts of in-between maturities. The
resultant gains or losses are recognised in the Profit and Loss Account.
c) Contingent Liabilities on account of guarantees, endorsements and other obligations are stated at the exchange
rates notified by FEDAI at the Balance Sheet date.
Other entities
d) Financial statements of foreign subsidiaries/associates – ICICI Securities Holding Inc., ICICI Securities Inc., ICICI
International Limited and TCW/ICICI Investment Partners LLC. have been converted at the closing rates on the
Balance Sheet date.
9. Accounting for Derivative Contracts
ICICI Bank Limited
The Bank enters into derivative contracts such as foreign currency options, interest rate and currency swaps and cross
currency interest rate swaps to hedge on-balance sheet assets and liabilities or for trading purposes. The swap
contracts entered to hedge on-balance assets and liabilities are structured such that they bear an opposite and
offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments are correlated
with the movement of underlying assets and accounted pursuant to the principles of hedge accounting.
Interest income/expense is accrued on Interest Rate Swaps (IRS) and currency swaps designated as hedges and
booked in the Profit and Loss Account. Trading IRS, trading currency swaps and foreign currency options, outstanding
at the Balance Sheet date is marked to market and the resulting loss if any, is recorded in the Profit and Loss Account.
Other entities
In case of ICICI Securities Limited and its subsidiaries :
a) The gains are recognised only on settlement/expiry of the derivative instruments.
b) All open positions are marked to market and the unrealised gains/loss are netted off on a scrip-wise basis. Mark-
to-market gains, if any, are not recognised.
c) Debit/credit balances on open positions are shown as current assets/liabilities, as the case may be.
10. Employee Stock Option Scheme (’ESOS’)
The Group has formulated an Employees Stock Option Scheme. The Scheme provides that employees are granted an
option to acquire equity shares of the Bank that vests in graded manner. The options may be exercised within a
specified period. Since the exercise price of the option is the closing market price as on the date of grant, there is
no compensation cost.