ICICI Bank 2016 Annual Report Download - page 143

Annual Report 2015-2016 141
Schedules
forming part of the Accounts (Contd.)
Financial Statements of ICICI Bank Limited
Pension
The Bank provides for pension, a dened benet plan covering eligible employees of erstwhile Bank of Madura,
erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The Bank makes contribution to a trust which administers
the funds on its own account or through insurance companies. 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 prot and loss account.
Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan.
Provident Fund
The Bank is statutorily required to maintain a provident fund, a dened benet plan, as a part of retirement benets to
its employees. Each employee contributes a certain percentage of his or her basic salary and the Bank contributes an
equal amount for eligible employees. The Bank makes contribution as required by The Employees’ Provident Funds
and Miscellaneous Provisions Act, 1952 to Employees’ Pension Scheme administered by the Regional Provident Fund
Commissioner. The Bank makes balance contributions to a fund administered by trustees. 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
appointed by the Bank.
The actuarial gains or losses arising during the year are recognised in the prot and loss account.
The overseas branches of the Bank and its eligible employees contribute a certain percentage of their salary towards
respective government schemes as per local regulatory guidelines. The contribution made by the overseas branches
is recognised in prot and loss account at the time of contribution.
Leave encashment
The Bank provides for leave encashment benet based on actuarial valuation conducted by an independent actuary.
10. Income Taxes
Income tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Bank. The
current tax expense and deferred tax expense is determined in accordance with the provisions of the Income Tax Act,
1961 and as per Accounting Standard 22 - Accounting for Taxes on Income respectively. Deferred tax adjustments
comprise changes in the deferred tax assets or liabilities during the year. Deferred tax assets and liabilities are
recognised by considering the impact of timing differences between taxable income and accounting income for
the current year, and carry forward losses. Deferred tax assets and liabilities are measured using tax rates and tax
laws that have been enacted or substantively enacted at the balance sheet date. The impact of changes in deferred
tax assets and liabilities is recognised in the prot and loss account. Deferred tax assets are recognised and re-
assessed at each reporting date, based upon management’s judgement as to whether their realisation is considered
as reasonably/virtually certain.
11. Impairment of Assets
The immovable xed assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. An asset is treated as impaired when its carrying
amount exceeds its recoverable amount. The impairment is recognised by debiting the prot and loss account and
is measured as the amount by which the carrying amount of the impaired assets exceeds their recoverable value.