ICICI Bank 2009 Annual Report Download - page 149

F75
Particulars Gratuity
Year ended March 31, 2009 Year ended March 31, 2008
Defined benefit obligation liability
Opening obligations ..................................................................... 2,287.2 1,352.2
Add: Addition due to amalgamation ............................................ 0.9 506.6
Service cost .................................................................................. 480.6 384.9
Interest cost ................................................................................. 231.8 153.6
Actuarial (gain)/loss ...................................................................... 96.7 (32.9)
Past service cost .......................................................................... 13.2 115.5
Liability extinguished on settlement ............................................ 28.8 —
Transitional obligation/(asset) ...................................................... —(0.2)
Liability assumed on acquisition/(settled on divestiture) ............ (10.7) —
Exchange difference on foreign plans ......................................... 6.4 —
Benefits paid ................................................................................ (321.1) (191.2)
Obligations at the end of the year ............................................ 2,813.8 2,288.5
Opening plan assets at fair value .............................................. 1,712.6 1,011.3
Add: Addition due to amalgamation ............................................ —73.1
Expected return on plan assets ................................................... 146.1 84.2
Actuarial gain/(loss) ...................................................................... (149.3) (4.0)
Contributions ................................................................................ 1,115.3 739.2
Asset acquired on acquisition/(distributed on divestiture) .......... 18.1 —
Benefits paid ................................................................................ (321.1) (191.2)
Closing plan assets at fair value ................................................ 2,521.7 1,712.6
Fair value of plan assets at the end of the year ........................... 2,521.7 1,712.6
Present value of the defined benefit obligations at the end of the year 2,813.8 2,288.5
Unrecognised past service cost .................................................. 7.4 15.7
Asset/(liability) ........................................................................... (284.7) (560.2)
Cost for the year
Service cost .................................................................................. 480.6 384.9
Interest cost ................................................................................. 231.8 153.6
Expected return on plan assets ................................................... (146.1) (84.2)
Actuarial (gain)/loss ...................................................................... 246.0 (28.9)
Past service cost .......................................................................... 13.6 99.9
Exchange fluctuation loss/(gain) .................................................. 6.4 —
Effect of the limit in para 59(b) of
Accounting Standard (AS) 15 –“Employee Benefits” .................. 7.9 —
Transitional obligation/(asset) ...................................................... — (0.2)
Net cost ....................................................................................... 840.2 525.1
Investment details of plan assets
Majority of the plan assets are invested in insurer managed funds and special deposit schemes.
Assumptions
Interest rate .................................................................................. 5.50% – 7.55% 7.50% – 8.57%
Estimated rate of return on plan assets ...................................... 7.50% – 8.00% 7.50% – 8.50%
Salary escalation rate ................................................................... 6.00% – 20.00% 7.00% – 20.00%
The estimates of future salary increases considered in actuarial valuation takes into consideration inflation, seniority,
promotion and other relevant factors.
The guidance on implementing Accounting Standard 15, Employee Benefits (revised 2005) issued by the Accounting
Standards Board (ASB) provides that exempt provident funds, which require employers to meet the interest shortfall, are in
effect defined benefit plans. The Bank’s actuary has informed that it is not practicable to actuarially determine the interest
shortfall obligation.
9. Provision for income tax
The provision for income tax (including deferred tax and fringe benefit tax) for the year ended March 31, 2009 amounted
to Rs. 15,859.3 million (March 31, 2008: Rs. 11,066.8 million).
The Group has a comprehensive system of maintenance of information and documents required by transfer pricing legislation
under section 92-92F of the Income Tax Act, 1961. The management is of the opinion that all international transactions are
at arm’s length and hence the above legislation does not have material impact on the financial statements.
10. Deferred tax
As on March 31, 2009 the group has recorded net deferred tax asset of Rs. 25,184.0 million (March 31, 2008: Rs. 17,280.5
million), which has been included in other assets.
forming part of the Consolidated Accounts (Contd.)
schedules