ICICI Bank 2013 Annual Report Download - page 149

F71
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Actuarial valuation of the gratuity liability is determined by an appointed actuary. Actuarial valuation of gratuity liability is
determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the
projected unit credit method.
Superannuation fund
The Bank contributes 15.00% of the total annual basic salary of certain employees to a superannuation fund for its
employees. The Bank also gives an option to its employees, allowing them to receive the amount contributed by it along
with their monthly salary during their employment.
The amount so contributed/paid by the Bank to the superannuation fund or to employee during the year is recognised
in the profit and loss account.
ICICI Prudential Life Insurance Company, ICICI Prudential Asset Management Company and ICICI Venture Funds
Management Company have accrued for superannuation liability based on a percentage of basic salary payable to
eligible employees for the period of service.
Pension
The Bank provides for pension, a deferred retirement plan covering certain employees of erstwhile Bank of Madura,
erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The plan provides for pension payment including dearness relief
on a monthly basis to these employees on their retirement based on the respective employee’s years of service with the
Bank and applicable salary.
Actuarial valuation of the pension liability is determined by an actuary appointed by the Bank. Actuarial valuation of
pension liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff
attrition as per the projected unit credit method.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan.
Provident fund
The Group is statutorily required to maintain a provident fund as a part of retirement benefits to its employees. Each
employee contributes a certain percentage of his or her basic salary and the Group contributes an equal amount. The
funds are invested according to the rules prescribed by the Government of India.
Actuarial valuation for the interest rate guarantee on the provident fund balances is determined by an actuary.
The actuarial gains or losses arising during the year are recognised in the profit and loss account.
Leave encashment
The Group provides for leave encashment benefit, which is a long-term benefit scheme, based on actuarial valuation
conducted by an independent actuary.
11. Provisions, contingent liabilities and contingent assets
The Group estimates the probability of any loss that might be incurred on outcome of contingencies on the basis
of information available upto the date on which the consolidated financial statements are prepared. A provision is
recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are
determined based on management estimates of amounts required to settle the obligation at the balance sheet date,
supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted
to reflect the current management estimates. In cases where the available information indicates that the loss on the
contingency is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is
made in the consolidated financial statements. In case of remote possibility, neither provision nor disclosure is made in
the consolidated financial statements. The Group does not account for or disclose contingent assets, if any.
12. Cash and cash equivalents
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short
notice.
13. Investments
i) Investments of the Bank are accounted for in accordance with the extant RBI guidelines on investment classification
and valuation as given below.
forming part of the Consolidated Accounts (Contd.)
schedules