Notes to Accounts of ICICI Prudential Asset Management Company Ltd.

Mar 31, 2025

16. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present legal or constructive obligation as
a result of past events, it is probable that an outflow of resources will be required to settle the
obligation and the amount can be reliably estimated. Provisions are not recognised for future
operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required
in settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the
expenditure required to settle the present obligation at the end of the reporting period. The
discount rate used to determine the present value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The increase in
the provision due to the passage of time is recognised as interest expense.

Contingent liabilities are disclosed when there is a possible obligation arising from past events,
the existence of which will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Company. A present
obligation that arises from past events where it is either not probable that an outflow of
resources will be required to settle or reliable estimate of the amount cannot be made, is termed
and disclosed as contingent liability.

A contingent asset is disclosed, where an inflow of economic benefits is probable.

17. Employee benefits
Short-term obligations

Liabilities for salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees’ services up to the end of the reporting period and are
measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the balance sheet.

Other long-term employee benefit obligations (Compensated absences)

The liabilities for earned leave are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. They are therefore
measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period using the projected
unit credit method. The benefits are discounted using the appropriate market yields at the
end of the reporting period that have terms approximating to the terms of the related
obligation. Remeasurements as a result of experience adjustments and changes in actuarial
assumptions are recognised in profit or loss.

The obligations are presented as current liabilities in the balance sheet if the entity does
not have an unconditional right to defer settlement for at least twelve months after the
reporting period, regardless of when the actual settlement is expected to occur.

Post employment obligations

The Company operates the following post-employment schemes:

• defined benefit plans such as gratuity and

• defined contribution plans such as provident fund and superannuation fund.

Defined benefit plans (Gratuity)

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity
plans is the present value of the defined benefit obligation at the end of the reporting period
less the fair value of plan assets. The defined benefit obligation is calculated annually by
actuaries using the projected unit credit method.

The present value of the defined benefit obligation denominated in (?) is determined by
discounting the estimated future cash outflows by reference to market yields at the end of
the reporting period on government bonds that have terms approximating to the terms of
the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in
employee benefit expense in the Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognised in the period in which they occur, directly in other
comprehensive income. They are included in retained earnings in the statement of changes
in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan
amendments or curtailments are recognised immediately in profit or loss as past
service cost.

Defined contribution plans
Superannuation

The Company contributes to an approved superannuation fund which is a defined contribution
plan for all its eligible employees who have opted for the scheme. The Company’s contribution
to the Superannuation fund with the Life Insurance Corporation of India (LIC) is charged to the
Statement of Profit and Loss as incurred.

Provident fund

The Company pays provident fund contributions to publicly administered provident funds as
per local regulations. The Company has no further payment obligations once the contributions
have been paid. The contributions are accounted for as defined contribution plans and the

contributions are recognised as employee benefit expense when they are due. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the
future payments is available.

Long term incentive plan (‘LTIP’)

The Company’s certain eligible employees are entitled to Long term incentive benefits as per
the Company’s policy. The liabilities for LTIP are not expected to be settled wholly within 12
months after the end of the period in which the employees render the related service.

Remeasurements as a result of experience adjustments and changes in actuarial assumptions
are recognised in profit or loss.

The obligations are presented as current liabilities in the balance sheet if the entity does not
have an unconditional right to defer settlement for at least twelve months after the reporting
period, regardless of when the actual settlement is expected to occur.

Share based payments

The Company’s certain eligible employees are entitled for ICICI Bank Limited (Parent Company)
share awards. The Company recognises the fair value of the shares and expense for these plan
over the vesting period based on the management’s estimate of the vesting and forfeiture
conditions.

The cost of stock options is recognised in the profit and loss account over the vesting period.
Bonus

The Company recognises a liability and an expense for bonus. The Company recognises a
provision where contractually obliged or where there is a past practice that has created a
constructive obligation.

18. Contributed equity:

Equity shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax from the proceeds.

19. Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and
no longer at the discretion of the entity, on or before the end of the reporting period but not
distributed at the end of the reporting period.

20. Earnings per share

Basic earnings per equity share are computed by dividing the net profit attributable to the
equity holders of the Company by the weighted average number of equity shares outstanding
during the year. Diluted earnings per equity share is computed by dividing the net profit
attributable to the equity holders of the Company by the weighted average number of equity
shares considered for deriving basic earnings per equity share and also the weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares.

The dilutive potential equity shares are adjusted for the proceeds receivable had the equity
shares been actually issued at fair value (i.e. the average market value of the outstanding
equity shares). Dilutive potential equity shares are deemed converted as of the beginning of
the period, unless issued at a later date. Dilutive potential equity shares are determined
independently for each period presented.

21. New Fund Offer (‘NFO’) expenses

Expenses relating to NFO of MF scheme are charged to Statement of Profit and Loss of the
Company in the year in which the NFO is launched and the expenses are incurred.

22. Commission expenses

Commission is paid to the brokers for Alternative Investment Fund(s)(‘AIF’) and Portfolio
management services as per the terms of agreement entered into with respective brokers. In
case of certain Alternative Investment Fund(s)(‘AIF’) the commission expenses are amortised
over the tenure of the product.

23. License fees for using Trademark

The Company use, among others, the trademark “ICICI” and “I-Man” logo in the ordinary course
of business and in corporate name. These trademarks are owned by and registered in the name
of ICICI Bank Limited (“ICICI Bank”). ICICI Bank has granted the company a limited and non¬
exclusive license to use these trademarks.

24. Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the
nearest million as per the requirement of Schedule III, unless otherwise stated.

Note 2 Use of judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires that management make
judgments, estimates and assumptions that affect the application of accounting policies and the
reported amount of assets, liabilities and disclosures of contingent assets and liabilities as of the date
of the financial statements and the income and expense for the reporting period. The actual results
could differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods
affected.

Certain of the Company’s accounting policies require critical accounting estimates that involve
complex and subjective judgments and the use of assumptions, some of which may be for matters that
are inherently uncertain and susceptible to change. Such critical accounting estimates could change
from period to period and may have a material impact on the Company’s financial condition, changes
in financial condition or results of operations. Critical accounting estimates could also involve estimates
where management could have reasonably used another estimate in the current accounting period.
The critical policies that involves critical accounting estimates includes fair valuation of financial
instruments, impairment of non-financial assets, deferred tax, estimates of useful lives and residual
value of property, plant and equipment and intangible assets, discount rate for lease liabilities, defined
benefit obligations and provisions and contingencies. Management believes that the estimates used
in the preparation of the financial statements are prudent and reasonable and are based upon the
management’s best knowledge of current events and actions as on the reporting date.