ICICI Bank 2006 Annual Report Download - page 90

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F31
forming part of the Accounts (Contd.)
schedules
25.3 The maturity profile of present value of lease payments is given below.
The details of maturity profile of present value of finance lease payments are given below.
Rupees in million
As on As on
Period March 31, 2006 March 31, 2005
Not later than one year ...................................................................... 176.7 222.8
Later than one year and not later than five years .............................. 518.4 683.3
Later than five years .......................................................................... —7.5
Total 695.1 913.6
26. Early Retirement Option (“ERO”)
The Bank had implemented an Early Retirement Option Scheme 2003 for its employees in July 2003. All employees who
had completed 40 years of age and seven years of service with the Bank (including period of service with entities amalgamated
with the Bank) were eligible for the ERO.
The ex-gratia payments under ERO and termination benefits and leave encashment in excess of the provision made (net of
tax benefits), aggregating to Rs. 1,910.0 million is being amortised over a period of five years commencing August 1, 2003
(the date of retirement of employees exercising the Option being July 31, 2003).
On account of the above ERO scheme, an amount of Rs. 384.0 million (March 31, 2005: Rs. 384.0 million) has been charged
to revenue being the proportionate amount amortised for the year ended March 31, 2006.
27. Provisions for income tax
The provision for income tax (including deferred tax and fringe benefit tax) for the year ended March 31, 2006 and March 31,
2005 amounted to Rs. 5,535.3 million and Rs. 5,190.0 million respectively.
28. Deferred Tax
As on March 31, 2006, the Bank has recorded net deferred tax asset of Rs. 1,642.8 million (March 31, 2005: Rs. 148.7
million), which has been included in Other Assets. The break-up of deferred tax assets and liabilities into major items is
given below.
Rupees in million
As on As on
Particulars March 31, 2006 March 31, 2005
Deferred tax asset
Provision for bad and doubtful debts ........................................................ 6,501.5 6,990.8
Capital loss ................................................................................................ 950.0 —
Others ........................................................................................................ 880.7 917.2
8,332.2 7,908.0
Less: Deferred tax liability
Depreciation on fixed assets.......................................................... 6,697.2 7,537.7
Others ............................................................................................. —221.6
6,697.2 7,759.3
Add: Deferred tax asset pertaining to foreign branches ........................ 7.8 —
Total net deferred tax asset/ (liability) ............................................ 1,642.8 148.7
During the year ended March 31, 2006, the Bank has created a deferred tax asset on carry forward capital losses as based
on its firm plans it is virtually certain that sufficient future taxable capital gains will be available against which the loss can be
set off.
29. Other Assets
29.1 Exchange fluctuation
Exchange fluctuation aggregating Rs. 25.0 million (March 31, 2005: Rs. 244.7 million), which arises on account of
rupee-tying agreements with the Government of India, is held in “Rupee Determine Exchange Fluctuation Account”
pending adjustment at maturity on receipt of payments from the Government for repayments to foreign lenders.
29.2 Swap suspense (net)
Swap suspense (net) aggregating Rs. 71.6 million (debit) (March 31, 2005: Rs. 794.7 million (debit)), which arises out
of conversion of foreign currency swaps, is held in “Swap suspense account” and will be reversed at conclusion of
swap transactions with swap counter-parties.
30. Derivatives
ICICI Bank is a major participant in the financial derivatives market. The Bank deals in derivatives for balance sheet management
and market making purposes whereby the Bank offers derivative products to its customers, enabling them to hedge their risks.