ICICI Bank 2003 Annual Report Download - page 109

F45
schedules
forming part of the Consolidated Accounts Continued
3. Subordinated debt
Subordinated debt includes Index bonds amounting to Rs.95.8million, (2002 : Rs.88.0 million) which carry a detachable
warrant entitling bondholders to a right to receive an amount linked to the BSE Sensitive Index (Sensex) per terms of
the issue. The liability of the Bank arising out of changes in the Sensex has been hedged by earmarking its investments
of an equivalent amount in the UTI Index Equity Fund whose value is based on the Sensex. The Bank has not issued
any subordinated debt during the current year.
4. Fixed Assets and Depreciation
The Bank depreciated Automatic Teller Machines (‘ATMs’) over its useful life estimated as 6 years or over the lease
period for ATMs taken on lease. Effective April 1, 2002 the Bank revised the useful life of the ATMs to 8 years based
on an evaluation done by the management.
Accordingly, the depreciation charged for the current year was lower by Rs.29.0 million.
5. Investments
Effective April1, 2002, the Bank has changed the methodology for ascertaining the carrying cost of fixed income
bearing securities from Weighted Average Method to First-In-First-Out Method. The impact due to the aforementioned
change on the Profit and Loss Account for the year ended March 31, 2003 has resulted into a profit amounting to
Rs. 132.2 million.
Investments include shares and debentures amounting to Rs. 3,781.9 million which are in the process of being
registered in the name of the Bank. For ICICI Emerging Sectors Fund and ICICI Equity Fund, such investments
amounted to Rs. 1,991.3 million and Rs. 1,683.2 million respectively.
Investments also include government securities amounting to Rs. 703.5 million (representing face value of securities)
pledged with certain banks and institutions for cheque drawal and clearing facilities.
6. Repurchase Transactions
During the current year, the Bank has changed its method of accounting repurchase transactions and reverse repurchase
transactions. These transactions have been accounted for as a sale and forward purchase or purchase and a forward
sale transactions in the current year as against a borrowing or lending transaction in the previous year. The net impact
of the same on the profit and loss account is not material.
7. Deferred Tax
On March 31, 2003, the Group has recorded net deferred tax asset of Rs. 5,053.9million, (2002 : Deferred tax liability
of Rs. 1,470.5 million) which has been included in other assets.
A composition of deferred tax assets and liabilities into major items is given below :
Rupees in million
Particulars March 31, 2003 March 31, 2002
Amortisation of premium on investments .............................................. 527.4 85.2
Provision for bad and doubtful debts...................................................... 13,164.1 7,144.8
Others ........................................................................................................ 879.3 1,430.1
14,570.8 8,660.1
Less: Deferred Tax Liability
Depreciation on fixed assets ................................................................... 9,275.0 9,938.3
Others ........................................................................................................ 241.9 192.3
9,516.9 10,130.6
Net Deferred Tax Asset/(Liability) ............................................................. 5,053.9 (1,470.5)