ICICI Bank 2010 Annual Report Download - page 117

F37
24. Provisions and contingencies
The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in profit and
loss account.
Rupees in million
Year ended
March 31, 2010 Year ended March 31, 2009
Provisions for depreciation of investments ........................................................ (26.5) 977.3
Provision towards non-performing assets .......................................................... 43,621.6 37,690.3
Provision towards standard assets ..................................................................... — (190.0)
Provision towards income tax1 ........................................................................... 13,173.4 13,558.4
Provision towards wealth tax .............................................................................. 30.0 30.0
Other provision and contingencies ..................................................................... 273.5 (395.0)
1. Includes fringe benefit tax amounting to Nil for the year ended March 31, 2010 (March 31, 2009: Rs. 342.0 million) and creation of
net deferred tax asset amounting to Rs. (2,804.4) million for the year ended March 31, 2010 (March 31, 2009: Rs. (4,716.7) million).
25. Movement in provision for credit card/debit card reward points
The following table sets forth, for the periods indicated, movement in provision for credit card/debit card reward points.
Rupees in million
Year ended
March 31, 2010 Year ended March 31, 2009
Opening provision for reward points .................................................................. 232.0 576.3
Provision for reward points made during the year ............................................. 476.0 599.4
Utilisation/write-back of provision for reward points .......................................... 438.3 943.7
Closing provision for reward points1 ................................................................... 269.7 232.0
1. The closing provision is based on the actuarial valuation of accumulated credit/debit card reward points. This amount will be utilised
towards redemption of the credit/debit card reward points.
26. Description of contingent liabilities
The following table sets forth description of contingent liabilities.
Sr.
no. Contingent liability Brief Description
1. Claims against the Bank
not acknowledged as
debts
This item represents demands made in certain tax and legal matters against the Bank
in the normal course of business. The Bank does not consider these matters to have a
material adverse financial impact in excess of provisions already made in the financial
statements.
2. Liability for partly paid
investments These represent amounts remaining unpaid towards purchase of investments. These payment obligations of the Bank do not have any profit/loss impact.
3. Liability on account of
outstanding forward
exchange contracts
The Bank enters into foreign exchange forward contracts in its normal course of business,
to exchange currencies at a pre-fixed price at a future date. This item represents the
notional principal amount of such contracts, which are derivative instruments. With
respect to the transactions entered into with its customers, the Bank generally enters
into off-setting transactions in the inter-bank market. This results in generation of a
higher number of outstanding transactions, and hence a large value of gross notional
principal of the portfolio, while the net market risk is lower.
4. Guarantees given on
behalf of constituents,
acceptances,
endorsements and other
obligations
These items represent the guarantees and documentary credits issued by the Bank
as part of its trade finance banking activities, on behalf of its customers in favour of
third parties, with a view to augment the customers’ credit standing. Through these
instruments, the Bank undertakes to make payments for its customers’ obligations,
either directly or in case of failure of the customers to fulfil their financial or performance
obligations.
schedules
forming part of the Accounts (Contd.)