ICICI Bank 2005 Annual Report Download - page 110

F50
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) quoted investments are valued on the valuation
date at the closing market price. Quoted investments that are not traded on the valuation date but are traded during
the two months prior to the valuation date are valued at the latest known closing price. An appropriate discount is
applied where the Asset Management Company considers it necessary to reflect restrictions on disposal. Quoted
investments not traded during the two months' prior to the valuation date are treated as unquoted. Unquoted
investments are valued in good faith at their estimated fair values by applying appropriate valuation methods.
Unrealised gains and temporary losses on investments are recognised as components of investors' equity and are
dealt with under Unrealised Investment Reserve. Where there is a decline, other than temporary in the carrying
amounts of investments, the resultant reduction in the carrying amount is charged to the revenue account during
the period in which such decline is identified.
ICICI Venture Funds Management Company Limited values its long-term investments at cost. Provision for diminution,
if any, in the value of long-term investments is made to recognise a decline, which is not temporary. The said
diminution is determined for each investment individually. Units and securities held for trading purposes are classified
as stock in trade. Stock in trade is stated at lower of cost or market value.
In case of ICICI Home Finance Company Limited, investments that are readily realisable and intended to be held for
not more than a year are classified as current investments which are carried at lower of cost or market value. All
other investments are classified as long-term investments, which are carried at cost. However, provision for diminution
in value is made to recognise a decline other than temporary in the value of the investments. Cost such as brokerage,
commission etc. paid at the time of acquisition of investments are included in investments cost.
ICICI International Limited values its investments in accordance with International Accounting Standard (IAS) 39
(Financial Instruments: Recognition and Measurement). Accordingly, the investment in the joint venture entity
TCW/ICICI Investment Partners LLC is viewed as a strategic investment and has been recorded at cost. Available for
sale investments are valued at fair value and the resulting temporary unrealised (gains)/losses (including unrealised
foreign exchange (gains)/losses on retranslation at the closing rate, if any) are reported as a separate component of
equity as "Investment Revaluation Reserve" till the underlying investment is sold or permanently written off, when
the total realised (gains)/losses are included in the Income Statement.
ICICI Securities Limited, ICICI Brokerage Services Limited, ICICI Securities Inc., and ICICI Securities Holdings Inc.,
value the securities held as stock in trade at cost or market value whichever is lower and the securities acquired with
the intention of holding till maturity or for a longer period are classified as investments. Investments are carried at
cost arrived at on a weighted average basis. Appropriate provision is made for other than temporary diminution in
the value of investments. Commission earned in respect of securities acquired upon devolvement is reduced from
the cost of acquisition. ICICI Securities Limited values discounted instruments like commercial paper/ treasury bills/
zero coupon instruments at carrying cost. The difference between the acquisition cost and the redemption value of
discounted instruments is apportioned on a straight line basis for the period of holding and recognised as interest
income. Units of mutual fund are valued at lower of cost and net asset value.
In ICICI Bank UK Limited, debt securities are held for investment purposes and are stated at cost (as adjusted for
discounts and premiums) less provision for impairment.
ICICI Bank Canada classifies investments into investment account securities or trading account securities.
Investment account securities comprise debt and equity securities, originally purchased with the intention of
holding to maturity or for a pre-determined period of time, which may be sold in response to changes in investment
objectives arising from changing market conditions or to meet liquidity requirements. Debt securities are carried
at amortised cost and equity securities are carried at cost. Straight-line method is used for the amortisation of
premiums and discounts on debt securities. The fair values of securities are based on quoted market prices
wherever applicable; otherwise, fair values are estimated using quoted market values for similar securities or
third party evidence, as available.
In case of Prudential ICICI Asset Management Company Limited, investments are classified as long term or current
based on intention of the management at the time of purchase. Long-term investments are carried at carrying cost less
any other than temporary diminution in value, determined separately for each individual investment. Current
investments are valued at the lower of cost or net realisable value. Purchase and sale of investments are recorded on
trade date. The gains/ losses on sale of investments are recognised in the profit and loss account on the trade day.
Other entities value their investments as per AS 13 "Accounting for Investments" issued by ICAI.
Insurance joint ventures
ICICI Prudential Life Insurance Company Limited and ICICI Lombard General Insurance Company Limited record
their investments at cost on the date of purchase, which includes brokerage, transfer charges, stamps and taxes, if
schedules
forming part of the Consolidated Accounts (Contd.)