ICICI Bank 2011 Annual Report Download - page 95

F17
forming part of the Accounts (Contd.)
SCHEDULE 18
NOTES FORMING PART OF THE ACCOUNTS
The following additional disclosures have been made taking into account the requirements of Accounting Standards (ASs)
and Reserve Bank of India (RBI) guidelines in this regard.
1. Amalgamation of The Bank of Rajasthan Limited
The Bank of Rajasthan Limited (Bank of Rajasthan), a banking company incorporated under the Companies Act, 1956
and licensed by RBI under the Banking Regulation Act, 1949 was amalgamated with ICICI Bank Limited (ICICI Bank) with
effect from close of business of August 12, 2010 in terms of the Scheme of Amalgamation (the Scheme) approved by
the RBI vide its order DBOD No. PSBD 2603/16.01.128/2010-11 dated August 12, 2010 under sub section (4) of section
44A of the Banking Regulation Act, 1949. The consideration for the amalgamation was 25 equity shares of ICICI Bank of
the face value of ` 10 each fully paid-up for every 118 equity shares of ` 10 each of Bank of Rajasthan. Accordingly, ICICI
Bank allotted 31,323,951 equity shares to the shareholders of Bank of Rajasthan on August 26, 2010 and 2,860,170 equity
shares which were earlier kept in abeyance pending civil appeal, on November 25, 2010.
ICICI Bank is also a banking company incorporated under the Companies Act, 1956 and licensed by RBI under the
Banking Regulation Act, 1949.
As per the Scheme, the undertaking of Bank of Rajasthan including all its assets and liabilities stood transferred/deemed
to be transferred to and vested in ICICI Bank as a going concern.
The amalgamation has been accounted for as per the Scheme. Accordingly, the assets and liabilities of Bank of Rajasthan
have been accounted at the values at which they were appearing in the books of Bank of Rajasthan at August 12, 2010
and provisions were made for the difference between the book values appearing in the books of Bank of Rajasthan and
the fair value as determined by ICICI Bank.
In the books of ICICI Bank, an amalgamation expenses provision account was credited by an amount determined for the
expenses and costs of the Scheme arising as a direct consequence on account of any changes in the business or operations
of Bank of Rajasthan proposed or considered necessary by the Board of Directors of ICICI Bank (including but not limited
to rationalisation, upgradation and enhancement of human resources and expenses relating to modifying signage,
modifying stationery, branding, changing systems and network, communication including media costs, impairment of
technology and fixed assets, conducting general meetings, payment of listing fees and other statutory and regulatory
charges, travel in relation to the consolidation contemplated in the Scheme, valuation, due diligence, investment banking
expenses and charges relating to preparation of the Scheme, consultations in relation to the consolidation contemplated
in the Scheme and training), and other extraordinary expenses on integration and consolidation under the Scheme, to
be incurred by ICICI Bank and the balance in such account has been debited to the securities premium account.
Accordingly, the excess of the paid up value of shares issued over the fair value of the net asset acquired (including
Statutory Reserves) of ` 1,440.1 million and amalgamation expenses of ` 657.8 million have been debited to the securities
premium account. The computation of this amount is detailed in the table below:
` in million
Particulars Amount Amount
34,184,121 equity shares of face value of ` 10 each issued to the shareholders
of Bank of Rajasthan
341.8
Less:
Net assets of Bank of Rajasthan at August 12, 201013,608.0
Fair value adjustments (2,703.6)
Reserves taken over on amalgamation (2,002.7)
Total fair value of the net assets acquired (including Statutory Reserves) of
Bank of Rajasthan at August 12, 2010
(1,098.3)
Excess of paid-up value of equity shares issued over the fair value of the net
assets acquired
1,440.1
Amalgamation expenses2657.8
1. Includes ` 50.8 million received subsequent to August 12, 2010 against shares kept in abeyance pending civil appeal.
2. Net of provision for amalgamation expenses amounting to ` 32.2 million no longer required.
As per the accounting done for amalgamation in terms of the Scheme, the identity of reserves of Bank of Rajasthan is
not required to be preserved in the books of ICICI Bank. However, the balance in Statutory Reserve Account of Bank of
Rajasthan at August 12, 2010 has been added to the Statutory Reserves of ICICI Bank. As a result, the balance in Statutory
Reserves is higher to the extent of ` 2,002.7 million. The excess of the paid up value of shares issued over the fair value
of the net asset acquired (including Statutory Reserves) and amalgamation expenses has been debited to the Securities
Premium account of ICICI Bank. As a result, the balance in Securities Premium is lower to the extent of ` 2,097.9 million.
schedules