ICICI Bank 2003 Annual Report Download - page 81

Download and view the complete annual report

Please find page 81 of the 2003 ICICI Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

F17
forming part of the Accounts Continued
schedules
2. Preference Shares
Certain Government Securities amounting to Rs. 1,244.8 million (2002 : Rs. 1,304.6 million) have been earmarked
against redemption of preference share capital, which falls due for redemption on April 20, 2018 as per the original
issue terms.
3. Employee Stock Option Scheme
In terms of Employee Stock Option Scheme, the maximum number of options granted to any Eligible Employee in a
financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and
aggregate of all such options granted to the Eligible Employees shall not exceed 5% of the aggregate number of the
issued equity shares of the Bank subsequent to the amalgamation of ICICI, I CAPS and I PFS with the Bank and the
issuance of equity shares by the Bank pursuant to the amalgamation of ICICI, I CAPS and I PFS with the Bank.
In terms of the Scheme, 12,610,275 options (2002 : 13,343,625 options) granted to eligible employees were outstanding
as at March 31, 2003.
Stock option activity
A summary of the status of the Bank’s option plan is presented below:
Year ended Year ended
March 31, 2003 March 31, 2002
Option shares Option shares
outstanding outstanding
Outstanding at the beginning of the year .............................................. 13,343,625 1,636,125
Add: Granted during the year .................................................................. —4,735,200
Options taken over on Amalgamation ..................................................... —*7,015,800
Less: Forfeited during the year ................................................................ 730,350 43,500
Exercised during the year ........................................................................ 3,000 —
Outstanding at the end of the year ........................................................ 12,610,275 13,343,625
* Represents options granted to option holders of erstwhile ICICI Limited in the share swap ratio.
4. 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.
5. 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.
6. 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.
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.
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.