ICICI Bank 2009 Annual Report Download - page 154

F80
13. Small and Micro Industries
Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force from October 2, 2006,
certain disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported
cases of delays in payments to micro and small enterprises or of interest payments due to delays in such payments.
14. Farm loan waiver
The Ministry of Finance, Government of India has issued guidelines for the implementation of the Agriculture debt waiver
and relief scheme for farmers on May 23, 2008. The Bank has implemented the scheme as per guidelines issued by RBI
vide circular no. DBOD No. BP.BC.26/21.04.048/2008-09 dated July 30, 2008 on “Agricultural Debt Waiver and Debt Relief
Scheme, 2008 - Prudential norms on income recognition, asset classification and provisioning and Capital Adequacy”.
Pursuant to the scheme an aggregate amount of Rs. 2,666.7 million has been waived which is recoverable from Government
of India. Out of the above, an amount of Rs. 773.0 million has been received by March 31, 2009 and balance of Rs. 1,893.7
million is receivable in future.
15. Credit derivative instruments
The Group deals in credit derivative instruments including credit default swaps, credit linked notes, collateralised debt
obligations and principal protected structures. The notional principal amount of these credit derivatives outstanding at
March 31, 2009 was Rs. 33,703.4 million (March 31, 2008: Rs. 27,067.6 million) in funded instruments and Rs. 38,712.6
million (March 31, 2008: Rs. 58,597.9 million) in non-funded instruments which includes Rs. 253.6 million (March 31, 2008:
Rs. 200.6 million) of protection bought by the Group. As on March 31, 2009, the total outstanding mark-to-market position
of the above portfolio was a loss of Rs. 6,327.3 million (March 31, 2008: Rs. 7,914.2 million). The profit and loss impact on
the above portfolio on account of mark-to-market and realised losses during the year ended March 31, 2009 was a loss of
Rs. 3,640.5 million (March 31, 2008: Rs. 8,879.8 million).
16. Reclassification of investments in ICICI Bank UK PLC
In October 2008, the UK Accounting Standards Board amended FRS 26 on ‘Financial Instruments: Recognition and
Measurement’ and permitted reclassification of financial assets in certain circumstances from the ‘held for trading (HFT)’
category to the ‘available for sale (AFS)’ category, ‘held for trading (HFT)’ category to the ‘loans and receivables‘ category
and from the AFS category to the ‘loans and receivables’ category.
Pursuant to these amendments, during the year ended March 31, 2009, ICICI Bank UK PLC has transferred certain assets
with fair value of Rs. 34,028.0 million (US$ 670.9 million) from the HFT category to the AFS category, certain assets of fair
value Rs. 116.7 million (US$ 2.3 million) from HFT category to loans and receivables category and certain assets with fair
value of Rs. 20,394.5 million (US$ 402.1 million) from the AFS category to the loans and receivables category.
If these reclassifications had not been made, the Bank’s pre-tax profit would have reduced by Rs. 2,448.8 million
(US$ 53.3 million) [expense on financial instruments fair value through profit and loss would have increased by Rs. 2,687.7
million (US$ 58.5 million), offset by change in net interest income by Rs. 238.9 million (US$ 5.2 million)] and the Bank’s
pre-tax losses in available for sale reserve would have increased by Rs. 532.6 million (US$ 10.5 million).
17. Scheme support expenses of ICICI Prudential Asset Management Company Limited
Other expenditure in Schedule 16 – “Operating expenses” of the financial statements includes scheme support expense of
Rs. 920.2 million of ICICI Prudential Asset Management Company Limited. The Scheme support expense consists of
support given to Fixed Maturity Plans of Rs. 26.8 million towards yield shortfall, money market scheme of Rs. 55.2 million
towards liquidity crisis management and equity funds of Rs. 838.2 million as a compensation against diminution in value
of certain investments.
18. Liquidity options to employees of ICICI Prudential Life Insurance Company Limited and to employees of ICICI Lombard
General Insurance Company Limited
ICICI Bank and Prudential Plc have approved a scheme of liquidity to be provided to the employee stock option holders of
ICICI Prudential Life Insurance Company to the extent of shares exercised against options vested on or before March 31,
2007, aggregating to a maximum of 2.5 million shares. The shares would be bought at a price determined by an independent
external valuation of the shares and would be in line with the grant price for new stock options being granted. The shares
would be bought by the joint venture partners from the employee stock option holders in the proportion of their share
holding. During the year ended March 31, 2009, ICICI Bank has purchased 1,704,062 shares (March 31, 2008 : Nil) of ICICI
Prudential Life Insurance Company pursuant to this scheme.
Similarly, ICICI Bank and Fairfax Financials Holdings Limited, Canada have approved a scheme of liquidity to be provided to
the employee stock option holders of ICICI Lombard General Insurance Company to the extent of shares exercised against
options vested on or before March 31, 2007, aggregating to a maximum of 1.1 million shares. The shares would be bought
at a price determined by an independent external valuation of the shares and would be in line with the grant price for new
stock options being granted. The shares would be bought by the joint venture partners from the employee stock option
forming part of the Consolidated Accounts (Contd.)
schedules