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ICICI Bank Directors Report, ICICI Bank Reports by Directors
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ICICI Bank
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Download Annual Report PDF Format 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '13    Mar 12
The Directors have pleasure in presenting the Nineteenth Annual Report
 of ICICI Bank Limited along with the audited statement of accounts for
 the year ended March 31, 2013.
 
 FINANCIAL HIGHLIGHTS
 
 The financial performance for fiscal 2013 is summarised in the
 following table:
 
 Rs. billion, except percentages      Fiscal 2012  Fiscal 2013  % change
 
 Net interest income and other income      182.36       222.12     21.8%
 
 Operating expenses                         78.50        90.13     14.8%
 
 Provisions & contingencies1                15.83        18.02     13.8%
 
 Profit before tax                          88.03       113.97     29.5%
 
 Profit after tax                           64.65        83.25     28.8%
 
 1.  Excludes provision for taxes.
 
 Rs. billion, except percentages      Fiscal 2012  Fiscal 2013  % change
 
 Consolidated profit after tax            76.43        96.04      25.7%
 
 Appropriations
 
 The profit after tax of the Bank for fiscal 2013 is Rs. 83.25 billion
 after provisions and contingencies of Rs. 18.02 billion, provision for
 taxes of Rs. 30.72 billion and all expenses. The disposable profit is
 Rs. 153.79 billion, taking into account the balance of Rs. 70.54
 billion brought forward from the previous year. In accordance with the
 guidelines prescribed by Reserve Bank of India (RBI) and the dividend
 policy adopted by the Bank, your Directors have recommended a dividend
 at the rate of Rs. 20.00 per equity share of face value Rs. 10 for the
 year and have appropriated the disposable profit as follows:
 
 Rs. billion                                   Fiscal 2012  Fiscal 2013
 
 To Statutory Reserve, making in all 
 Rs. 110.74 billion                                 16.17        20.82
 
 To Special Reserve created and maintained 
 in terms of Section 36(1)(viii)                     6.50         7.60
 of the Income-tax Act, 1961, making in all 
 Rs. 45.79 billion
 
 To Capital Reserve, making in all 
 Rs. 22.17 billion                                   0.38         0.33
 
 To Revenue and other reserves, making in all 
 Rs. 49.90 billion1                                  0.02         0.03 
 Dividend for the year (proposed)
 
 - On equity shares @ Rs. 20.00 per share 
 (@ Rs. 16.50 per share for                         19.02        23.07 
 fiscal 2012)2
 
 - On preference shares (Rs.)                      35,000       35,000
 
 - Corporate dividend tax                            2.20         2.92 
 
 Leaving balance to be carried
 forward to the next year                           70.54        99.02
 
 1.  Includes transfer to Reserve Fund and Investment Fund account Rs.
 27.8 million for fiscal 2013 (Rs. 10.7 million for fiscal 2012) in
 accordance with regulations applicable to Sri Lanka branch. No amount
 was transferred to General Reserve in fiscal 2013 (Rs. 3.2 million for
 fiscal 2012).
 
 2.  Includes dividend for the prior year paid on shares issued after
 the balance sheet date and prior to the record date.
 
 SUBSIDIARY COMPANIES
 
 At March 31, 2013, ICICI Bank had 17 subsidiaries as listed in the
 following table:
 
 Domestic Subsidiaries             International Subsidiaries 
 
 ICICI Prudential Life Insurance   ICICI Bank UK PLC 
 Company Limited
 
 ICICI Lombard General Insurance   ICICI Bank Canada
 Company Limited
 
 ICICI Prudential Asset            ICICI Bank Eurasia
 Management                        Limited Liability Company 
 Company Limited
 
 ICICI Prudential Trust Limited    ICICI Securities Holdings Inc.2
 
 ICICI Securities Limited          ICICI Securities Inc.3
 
 ICICI Securities Primary          ICICI International Limited
 Dealership Limited
 
 ICICI Venture Funds Management
 Company Limited
 
 ICICI Home Finance Company
 Limited
 
 ICICI Investment Management
 Company Limited
 
 ICICI Trusteeship Services 
 Limited
 
 ICICI Prudential Pension Funds 
 Management Company Limited1
 
 1.  Subsidiary of ICICI Prudential Life Insurance Company Limited.
 
 2.  Subsidiary of ICICI Securities Limited.
 
 3.  Subsidiary of ICICI Securities Holdings Inc.
 
 The Ministry of Corporate Affairs (MCA) vide its Circular
 No.51/12/2007- CL-III dated February 8, 2011 has granted general
 exemption under Section 212(8) of the Companies Act, 1956 to companies
 from attaching the accounts of their subsidiaries in their annual
 reports subject to fulfilment of certain conditions prescribed.
 Pursuant to the requirements of the above Circular, the Board of
 Directors of the Bank at its Meeting held on April 26, 2013 passed the
 necessary resolution granting the requisite approvals for not attaching
 the balance sheet, profit & loss account, report of the board of
 directors and report of the auditors of each of the subsidiary
 companies to the accounts of the Bank. The Bank will make available
 these documents/details upon request by any Member of the Bank. These
 documents/details will be available on the Bank''s website
 (www.icicibank.com) and will also be available for inspection by any
 Member of the Bank at its Registered Office and Corporate Office and
 also at the registered offices of the concerned subsidiaries. As
 required by Accounting Standard-21 (AS- 21) issued by the Institute of
 Chartered Accountants of India, the Bank''s consolidated financial
 statements included in this Annual Report incorporate the accounts of
 its subsidiaries and other consolidating entities. A summary of key
 financials of the Bank''s subsidiaries is also included in this Annual
 Report.
 
 During fiscal 2013, ICICI Bank formed a joint venture with Bank of
 Baroda, Citicorp Finance and Life Insurance Corporation of India, to
 incorporate India Infradebt Limited, India''s first infrastructure debt
 fund structured as a non-banking finance company.
 
 DIRECTORS
 
 Pursuant to the provisions of the Banking Regulation Act, 1949, Sridar
 Iyengar retired from the Board effective April 30, 2013 on completion
 of eight years as a non-executive Director. The Board placed on record
 its deep appreciation and gratitude for his guidance and contribution
 to the Bank.
 
 The Board, at its Meeting held on April 26, 2013, appointed Dileep
 Choksi, a chartered accountant and former Joint Managing Partner of
 Deloitte in India as an additional Director effective April 26, 2013.
 Dileep Choksi holds office upto the date of the forthcoming Annual
 General Meeting (AGM) and is eligible for appointment.
 
 In terms of the provisions of the Companies Act, 1956 and the Articles
 of Association of the Bank, K. V Kamath, Tushaar Shah and Rajiv
 Sabharwal would retire by rotation at the forthcoming AGM and are
 eligible for re-appointment. K. V Kamath, Tushaar Shah and Rajiv
 Sabharwal have offered themselves for re-appointment.
 
 The Members of the Company previously by way of postal ballot in
 February 2009, approved the appointment of K. V Kamath as non-
 executive Chairman of the Bank effective May 1, 2009 upto April 30,
 2014 and the re-appointment of Chanda Kochhar as Joint Managing
 Director & CFO effective April 1, 2009 upto April 30, 2009 and her
 appointment as Managing Director & CEO effective May 1, 2009 upto March
 31, 2014.
 
 The Members at the Annual General Meeting (AGM) held on June 29, 2009
 approved the appointment of N. S. Kannan as Executive Director
 (designated as Executive Director & CFO) for a period of five years
 effective May 1, 2009 upto April 30, 2014 and K. Ramkumar as Executive
 Director for a period of five years effective February 1, 2009 upto
 January 31, 2014.
 
 The requisite approvals have been received from RBI for all the
 aforesaid appointments.
 
 The Board at its Meeting held on April 26, 2013 (based on the
 recommendations of the Board Governance, Remuneration & Nomination
 Committee) approved the re-appointment of the following Directors of
 the Bank subject to the approval of Members and RBI for a further
 period of five years as given below:
 
 I.  K. V Kamath as non-executive Chairman of the Bank for a period of
 five years effective May 1, 2014 upto April 30, 2019,
 
 II.  Chanda Kochhar as Managing Director & CEO of the Bank for a period
 of five years effective April 1, 2014 upto March 31, 2019,
 
 III. N. S. Kannan as Executive Director (designated as Executive
 Director & CFO) of the Bank for a period of five years effective May 1,
 2014 upto April 30, 2019 and
 
 IV K. Ramkumar as Executive Director of the Bank for a period of five
 years effective February 1, 2014 upto January 31, 2019.
 
 The resolution for the re-appointments are proposed to the Members in
 the Notice of the current AGM vide item nos. 10-13 and the explanatory
 statements for these items include the duration and terms of re-
 appointment as well as remuneration. You are requested to consider the
 re-appointment of the above Directors.
 
 The Members approved the appointment of Rajiv Sabharwal as Executive
 Director for a period of five years effective June 24, 2010 upto June
 23, 2015 at the AGM held on June 28, 2010. RBI has approved the
 appointment of Rajiv Sabharwal as an Executive Director for a period of
 three years effective June 24, 2010 upto June 23, 2013. An application
 has been made to RBI seeking approval for re-appointment of Rajiv
 Sabharwal as an Executive Director for a further period of two years
 effective June 24, 2013 upto June 23, 2015.
 
 AUDITORS
 
 The Members are informed that while the registration number of the
 statutory auditors continues to remain the same, the name of the
 statutory auditors which was formerly S. R. Batliboi & Co., Chartered
 Accountants has been changed to S. R. Batliboi & Co. LLP Chartered
 Accountants with effect from April 1, 2013 consequent to their
 conversion into a limited liability partnership.
 
 The auditors, S. R. Batliboi & Co. LLP Chartered Accountants will
 retire at the ensuing AGM. As recommended by the Audit Committee, the
 Board has proposed the appointment of S. R. Batliboi & Co. LLP
 Chartered Accountants as statutory auditors for fiscal 2014. Their
 appointment is subject to the approval of RBI. The appointment of the
 auditors is proposed to the Members in the Notice of the current AGM
 vide item no.7. The explanatory statement to the notice sets out the
 facts with respect to the change in name. You are requested to consider
 their appointment.
 
 PERSONNEL
 
 The statement containing particulars of employees as required under
 Section 217(2A) of the Companies Act, 1956 and the rules hereunder is
 given in an Annexure and forms part of this report. In terms of Section
 219(1)(iv) of the Act, the Report and Accounts are being sent to the
 shareholders excluding the aforesaid Annexure. Any shareholder
 interested in obtaining a copy of the Annexure may write to the Company
 Secretary at the Registered Office of the Bank.
 
 BUSINESS RESPONSIBILITY REPORTING
 
 Securities and Exchange Board of India (SEBI) through a circular dated
 August 13, 2012 has mandated the inclusion of Business Responsibility
 (BR) Report as part of the Annual Report for the top 100 listed
 entities based on their market capitalisation on Bombay Stock Exchange
 and National Stock Exchange at March 31, 2012. The SEBI circular is
 effective from financial year ending on or after December 31, 2012. In
 line with the press release and FAQ''s dated May 10, 2013 issued by
 SEBI, the BR Report has been hosted on the website of the Bank
 http://www.icicibank.com/aboutus/annual.html. Any shareholder
 interested in obtaining a physical copy of the same may write to the
 Company Secretary at the Registered Office of the Bank.
 
 RISK MANAGEMENT FRAMEWORK
 
 The Bank''s risk management strategy is based on a clear understanding
 of various risks, disciplined risk assessment and measurement
 procedures and continuous monitoring. The policies and procedures
 established for this purpose are continuously benchmarked with
 international best practices. The Board of Directors has oversight on
 all the risks assumed by the Bank. Specific Committees have been
 constituted to facilitate focused oversight of various risks, as
 follows:
 
 - The Risk Committee of the Board reviews risk management policies of
 the Bank pertaining to credit, market, liquidity, operational,
 outsourcing and reputation risks, business continuity plan and disaster
 recovery plan. The Committee also reviews the risk management framework
 with respect to Enterprise Risk Management and risk appetite, Internal
 Capital Adequacy Assessment Process (ICAAP) and stress testing. The
 stress testing framework includes a wide range of Bank-specific and
 market (systemic) scenarios. Linkage of macroeconomic factors to stress
 test scenarios is also documented as a part of the ICAAP The ICAAP
 exercise covers the domestic and overseas operations of the Bank,
 banking subsidiaries and material non-banking subsidiaries. The
 Committee reviews migration to the advanced approaches under Basel II
 and implementation of Basel III, risk return profile of the Bank,
 outsourcing activities, compliance with RBI guidelines pertaining to
 credit, market and operational risk management systems and the
 activities of the Asset Liability Management Committee.  The Committee
 reviews the level and direction of major risks pertaining to credit,
 market, liquidity, operational, compliance, group, management and
 capital at risk as part of risk profile templates. In addition, the
 Committee has oversight on risks of subsidiaries covered under the
 Group Risk Management Framework. The Risk Committee also reviews the
 Liquidity Contingency Plan (LCP) for the Bank and the threshold limits.
 
 - Apart from sanctioning credit proposals, the Credit Committee of
 the Board reviews developments in key industrial sectors and the Bank''s
 exposure to these sectors as well as to large borrower accounts and
 borrower groups. The Credit Committee also reviews the major credit
 portfolios, non-performing loans, accounts under watch, overdues and
 incremental sanctions.
 
 - The Audit Committee of the Board provides direction to and monitors
 the quality of the internal audit function and also monitors compliance
 with inspection and audit reports of Reserve Bank of India, other
 regulators and statutory auditors.
 
 - The Asset Liability Management Committee is responsible for
 managing liquidity and interest rate risk and reviewing the
 asset-liability position of the Bank.
 
 Summaries of reviews conducted by these Committees are reported to the
 Board on a regular basis.
 
 Policies approved from time to time by the Board of
 Directors/Committees of the Board form the governing framework for each
 type of risk. The business activities are undertaken within this policy
 framework. Independent groups and sub-groups have been constituted
 across the Bank to facilitate independent evaluation, monitoring and
 reporting of various risks. These groups function independently of the
 business groups/sub-groups.
 
 The Bank has dedicated groups, namely, the Risk Management Group,
 Compliance Group, Corporate Legal Group, Internal Audit Group and the
 Financial Crime Prevention & Reputation Risk Management Group, with a
 mandate to identify, assess and monitor all of the Bank''s principal
 risks in accordance with well-defined policies and procedures. The Risk
 Management Group is further organised into the Credit Risk Management
 Group, Market Risk Management Group and Operational Risk Management
 Group.  These groups are completely independent of all business
 operations and coordinate with representatives of the business units to
 implement ICICI Bank''s risk management policies and methodologies. The
 internal audit and compliance groups are responsible to the Audit
 Committee of the Board.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO, UNDER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956.
 
 The provisions of Section 217(1)(e) of the Companies Act, 1956 relating
 to conservation of energy and technology absorption do not apply to the
 Bank. The Bank has, however, used information technology extensively in
 its operations.
 
 IMPLEMENTATION OF CIRCULAR ISSUED BY MINISTRY OF CORPORATE AFFAIRS ON
 GREEN INITIATIVES IN CORPORATE GOVERNANCE
 
 The Bank has implemented the ''Green Initiative'' as per Circular No.
 17/2011 dated April 21, 2011 and Circular No. 18/2011 dated April 29,
 2011 issued by the Ministry of Corporate Affairs (MCA) to enable
 electronic delivery of notices/documents and annual reports to
 shareholders and effected electronic delivery of Notice of Annual
 General Meeting (AGM) and Annual Reports for the years ended March 31,
 2011 and March 31, 2012 to those shareholders whose email addresses
 were registered with the respective Depository Participants (DPs) and
 downloaded from the depositories, namely, National Securities
 Depository Limited (NSDL)/Central Depository Services (India) Limited
 (CDSL). Securities and Exchange Board of India (SEBI) have also in line
 with the MCA circulars and as provided in Clause 32 of the Listing
 Agreement executed with the stock exchanges, permitted listed entities
 to supply soft copies of full annual reports to all those shareholders
 who have registered their email addresses for the purpose.  Your
 Directors are thankful to the shareholders for actively participating
 in the green initiative and seek your continued support for
 implementation of the green initiative.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 The Directors confirm:
 
 1.  that in the preparation of the annual accounts, the applicable
 accounting standards have been followed, along with proper explanation
 relating to material departures;
 
 2.  that they have selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent, so as to give a true and fair view of the state of affairs of
 the Bank at the end of the financial year and of the profit of the Bank
 for that period;
 
 3.  that they have taken proper and sufficient care for the maintenance
 of adequate accounting records, in accordance with the provisions of
 the Banking Regulation Act, 1949 and the Companies Act, 1956 for
 safeguarding the assets of the Bank and for preventing and detecting
 fraud and other irregularities; and
 
 4.  that they have prepared the annual accounts on a going concern
 basis.
 
 ACKNOWLEDGEMENTS
 
 ICICI Bank is grateful to the Government of India, RBI, SEBI, IRDA and
 overseas regulators for their continued co-operation, support and
 guidance. ICICI Bank wishes to thank its investors, the domestic and
 international banking community, rating agencies and stock exchanges
 for their support.
 
 ICICI Bank would like to take this opportunity to express sincere
 thanks to its valued clients and customers for their continued
 patronage. The Directors express their deep sense of appreciation of
 all the employees, whose outstanding professionalism, commitment and
 initiative has made the organisation''s growth and success possible and
 continues to drive its progress. Finally, the Directors wish to express
 their gratitude to the Members for their trust and support.
 
                               For and on behalf of the Board
 
                                                  K. V Kamath
 
 May 13, 2013                                        Chairman
Source : Dion Global Solutions Limited
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