ICICI Bank 2005 Annual Report Download - page 109

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F49
f) In case of Prudential ICICI Asset Management Company Limited, Investment Management and Portfolio
Management Fees (inclusive of service tax) are recognised on an accrual basis in accordance with the respective
terms of contract between the Company and Prudential ICICI Trust Limited and Portfolio Management Scheme
('PMS') Clients and Securities Exchange Board of India ("SEBI") regulations. Income on Asset Shield products
under PMS is accrued over the term. The unaccrued portion of income is carried forward as a current liability. In
the previous year such income for six month and one year Asset Shield products was recognised as income
upfront.
2. 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 "Trading"
categories is the market price of the scrip as available from the trades/quotes on the stock exchanges, SGL
account transactions, price list of RBI or prices declared by Primary Dealers Association of India jointly with
Fixed Income Money Market and Derivatives Association ("FIMMDA") periodically.
The market/fair value of unquoted SLR securities included in the 'Available for Sale' and 'Trading' categories is
as per the rates published by FIMMDA.
The valuation of non-SLR securities, other than those quoted on the stock exchanges, wherever linked to the
Yield-to-Maturity ("YTM") rates, is with a mark-up (reflecting associated credit risk) over the YTM rates for
government securities published by FIMMDA.
Unquoted equity shares are valued at the book value, if the latest balance sheet is available or at Re. 1.
Securities are valued scrip-wise 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) Investments in subsidiaries/joint ventures are categorised as Held to Maturity in accordance with RBI guidelines.
g) Profit on sale of investments in the 'Held to Maturity' category is credited to the revenue account and is
thereafter appropriated (net of applicable taxes and statutory reserve requirements) to Capital Reserve.
h) At the end of each reporting period, security receipts issued by the asset reconstruction company are valued in
accordance with the guidelines applicable to non-SLR instruments prescribed by RBI from time to time.
Accordingly, in case where the security receipts issued by the asset reconstruction company are limited to the
actual realisation of the financial assets assigned to the instruments in the concerned scheme, the Bank
reckons the Net Asset Value ("NAV"), obtained from the asset reconstruction company from time to time, for
valuation of such investments at each reporting year end.
Other entities
In case of ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund, ICICI Emerging Sectors Fund and ICICI
Strategic Investments Fund (schemes of ICICI Venture Capital Fund) purchase and sale of investments are accounted
on the date the relevant contracts are executed. Subscriptions to / purchase of investments are accounted at the
cost of acquisition inclusive of brokerage, commission and stamp duty. Front end fee, if any received from portfolio
companies on equity investment is recorded as a recovery of a part of the cost of investment. Front end fee, if any
received on loan investments is recorded through the Revenue Account. Bonus shares and right entitlements are
recorded when such benefits are known.
schedules
forming part of the Consolidated Accounts (Contd.)