ICICI Bank 2011 Annual Report Download - page 116

F38
37. Transfer of merchant acquiring operations
During the year ended March 31, 2010, the Bank and First Data, a global company engaged in electronic commerce and
payment services, formed a merchant acquiring alliance and a new entity, 81.0% owned by First Data, was formed, which
has acquired ICICI Bank’s merchant acquiring operations through transfer of assets, primarily comprising fixed assets
and receivables, and assumption of liabilities, for a total consideration of ` 3,744.0 million. This transfer of assets and
liabilities to the new entity would be considered a ‘slump sale’ for tax purposes. The Bank realised a profit of ` 2,029.0
million from this transaction, which is included in Schedule 14 - “Other income” for the year ended March 31, 2010.
38. Staff retirement benefits
Pension
The following tables set forth, for the periods indicated, reconciliation of opening and closing balance of the present
value of the defined benefit obligation for pension benefits.
` in million
Particulars Year ended
March 31, 2011
Year ended
March 31, 2010
Opening obligations ............................................................................................ 1,748.7 1,932.2
Service cost .......................................................................................................... 170.8 51.8
Interest cost .......................................................................................................... 457.8 134.5
Actuarial (gain)/loss .............................................................................................. 607.0 (32.1)
Liabilities extinguished on settlement ................................................................. (460.0) (287.7)
Addition due to amalgamation ............................................................................ 6,479.0 —
Benefits paid ......................................................................................................... (160.4) (50.0)
Obligations at the end of year ............................................................................ 8,842.9 1,748.7
Opening plan assets, at fair value ...................................................................... 1,839.9 2,145.3
Expected return on plan assets ........................................................................... 156.5 169.9
Actuarial gain/(loss) .............................................................................................. 69.1 (130.7)
Assets distributed on settlement ......................................................................... (511.1) (322.6)
Contributions ........................................................................................................ 6,094.6 28.0
Addition due to amalgamation ............................................................................ 978.8 —
Benefits paid ......................................................................................................... (160.4) (50.0)
Closing plan assets, at fair value ........................................................................ 8,467.4 1,839.9
Fair value of plan assets at the end of the year .................................................. 8,467.4 1,839.9
Present value of the defined benefit obligations at the end of the year ............ 8,842.9 1,748.7
Amount not recognised as an asset (limit in Para 59(b)) .................................... —7.7
Asset/(liability)..................................................................................................... (375.5) 83.5
Cost for the year
Service cost .......................................................................................................... 170.8 51.8
Interest cost .......................................................................................................... 457.8 134.5
Expected return on plan assets ........................................................................... (156.5) (169.9)
Actuarial (gain)/loss .............................................................................................. 537.9 98.6
Curtailments & settlements (gain)/loss ................................................................ 51.1 34.9
Effect of the limit in para 59(b) ............................................................................. (7.7) (43.5)
Net cost ................................................................................................................ 1,053.4 106.4
Investment details of plan assets
Majority of the plan assets are invested in Government securities and corporate bonds
Assumptions
Interest rate ........................................................................................................... 8.10% 7.75%
Salary escalation rate: ..........................................................................................
On Basic Pay ......................................................................................................... 1.50% 7.00%
On Dearness Relief ............................................................................................... 7.00% 7.00%
Estimated rate of return on plan assets .............................................................. 8.00% 8.00%
forming part of the Accounts (Contd.)
schedules