The Directors have pleasure in presenting the Twenty-Second Annual
Report of ICICI Bank Limited along with the audited financial
statements for the year ended March 31, 2016.
The financial performance for fiscal 2016 is summarised in the
Rs. in billion,
except percentages Fiscal 2015 Fiscal 2016 % change
other income 312.16 365.46 17.1%
Operating expenses 114.96 126.83 10.3%
reserve) 1 39.00 80.67 106.8%
and tax 158.20 157.96 -
related reserv2 - 36.00 -
Profit before tax 158.20 121.96 (22.9)%
Prof it after tax 111.75 97.26 (13.0)%
1. Excludes provision for taxes.
2. Refer detailed note no. 39 in schedule 18 ''Notes to Accounts'' of
the financial statements.
3. in billion, except
percentages Fiscal 2015 Fiscal 2016 % change
Consolidated profit before
collective contingency and
related reserve, tax and
minority interest 183.39 179.04 (2.4)%
Collective contingency and
related reserve1 - 36.00 -
Consolidated profit before
tax and minority interest 183.39 143.04 (22.0)%
Consolidated profit aftertax
and minority interest 122.47 101.80 (16.9)%
1. Refer note no. 7 in schedule 18 ''Notes to Accounts'' of the
consolidated financial statements.
The profit after tax of the Bank for fiscal 2016 is Rs. 97.26 billion
after provisions and contingencies of Rs. 116.67 billion (including
collective contingency and related reserve amounting to Rs. 36.00
billion), provision for taxes of Rs. 24.70 billion and all expenses. The
disposable profit is Rs. 269.87 billion, taking into account the balance
of Rs. 172.61 billion brought forward from the previous year. Your Bank''s
dividend policy is based on the profitability and key financial metrics
of the Bank, the Bank''s capital position and requirements and the
regulations pertaining to the same. Your Bank has a consistent dividend
payment history. Given the financial performance for fiscal 2016 and in
line with the Bank''s dividend policy, your Directors are pleased to
recommend a dividend of Rs. 5.00 per equity share for the year ended
March 31, 2016 and have appropriated the disposable profit as follows:
Rs. in billion Fiscal 2015 Fiscal 2016
To Statutory Reserve, making
in all Rs. 187.52 billion 27.94 24.32
To Special Reserve created and
maintained in terms of Section 36(1
)(viii) of the IncomeTax Act, 1961,
making in all Rs. 79.29 billion 11.00 13.50
To Capital Reserve, making in all
Rs. 49.67 billion1 2.92 23.82
To/(from) Investment Reserve
Account, making in all Nil (1.27) -
To Revenue and other reserves,
making in all Rs. 31.48 billion2-3 0.01 5.01
Dividend for the year (proposed)
On equity shares @ Rs. 5.00 per share
of face value Rs. 2.00 each (@ Rs. 5.00
per share of face value Rs. 2.00 each
for fiscal 2015) 29.02 29.11
On prrence shares @ Rs. 100.00 per
preference share (@ Rs. 100.00 per
preference share for fiscal 2015)
(Rs.) 35,00 35,000
Corporate dividend tax 2.71 2.79
Leaving balance to be carried
forward to the next year 172.61 171.32
1.Includes transfer of Rs. 19.47 billion on account of sale of part
of equity investment in the Bank''s insurance subsidiaries during
2. Includes transfer of f. 9.3 million to Reserve Fund for fiscal 2016
(t 7.7 million for fiscal 2015) in accordance with regulations
applicable to the Sri Lanka branch.
3. During fiscal 2015, an amount of Rs. 9.29 billion was utilised with
approval of Reserve Bank of India (RBI) to provide for outstanding
Funded Interest Term Loan related to accounts restructured prior to the
issuance of RBI guidelines in 2008. Refer detailed note no. 25 in
schedule 18 ''notes to accounts'' of the financial statements.
4. Includes dividend for the prior year paid on shares issued after
the balance sheet date and prior to the record date.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The provisions of Section 186(4) of the Companies Act, 2013 requiring
disclosure in the financial statements of the full particulars of the
loans given, investment made or guarantee given or security provided
and the purpose for which the loan or guarantee or security is proposed
to be utilised by the recipient of the loan or guarantee or security is
not applicable to a banking company.
SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
3i Infotech Limited, which was considered as an associate under Section
2(6) of the Companies Act, 2013, ceased to be an associate of the Bank
effective May 13, 2015.
The particulars of subsidiary and associate companies as on March 31,
2016 have been included in Form MGT-9 which is annexed to this report
as Annexure D.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDARIES, JOINT VENTURES AND
The performance and financial position of subsidiaries and associates
of the Bank as on March 31, 2016 has been annexed to this report as
The Bank will make available separate audited financial statements of
the subsidiaries to any Member upon request. These documents/details
are available on the Bank''s website (www.icicibank.com) and will also
be available for inspection by any Member or trustee of the holder of
any debentures of the Bank at its Registered Office and Corporate
Office. 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.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS
There are no significant and/or material orders passed by the
Regulators or Courts or Tribunals impacting the going concern status of
future operations of the Bank.
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL
Changes in the composition of the Board of Directors and other Key
K. V. Kamath ceased to be a Director on the Board of the Bank effective
close of business hours on June 30, 2015. The Board placed on record
its deep appreciation of K. V. Kamath''s leadership of the ICICI Group
as the CEO of ICICI Bank till 2009, and as Chairman of the Bank''s Board
thereafter for a period of six years.
Pursuant to the approval granted by Reserve Bank of India (RBI), M. K.
Sharma was appointed as the independent non- executive (part-time)
Chairman on the Board of the Bank effective July 1, 2015 upto June 30,
2018. The appointment was approved by the Members through a postal
ballot on April 22, 2016.
The Board of Directors at their Meeting held on November 16, 2015
approved the appointment of Vishakha Mulye as
wholetime Director (designated as executive Director) for a period of
five years effective from the date of receipt of RBI approval. Pursuant
to approval granted by RBI, Vishakha Mulye was appointed as an
executive Director on the Board of the Bank effective January 19, 2016
for a period of three years. The Members through a postal ballot on
April 22, 2016 approved the appointment of Vishakha Mulye for a period
of five years effective January 19,2016 upto January 18,2021.
K. Ramkumar, executive Director stepped down from his position as an
executive Director effective close of business hours on April 29, 2016
consequent to his decision to opt for early retirement to pursue other
interests. The Board placed on record its appreciation of K. Ramkumar''s
immense contribution to the Bank.
Appointment subject to regulatory approvals
Vijay Chandok was appointed as an executive Director by the Board of
the Bank at its Meeting held on April 29, 2016 for a period of five
years subject to approval of RBI and Members and other approvals, as
may be applicable.
The appointment of Vijay Chandok as an executive Director would be
effective from the date of receipt of RBI approval. Approval of the
Members is being sought for Vijay Chandok''s appointment in the Notice
of the forthcoming Annual General Meeting vide item nos. 8 and 9.
The Board of the Bank at March 31, 2016 consisted of 13 Directors, out
of which seven are independent Directors, one is a Government Nominee
Director and five are wholetime Directors.
All independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149 of the
Companies Act, 2013 and Regulation 16 of Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 which have been relied on by the Bank and were placed at the Board
Meeting held on April 29, 2016.
Retirement by rotation
In terms of Section 152 of the Companies Act, 2013, Rajiv Sabharwal and
N. S. Kannan would retire by rotation at the forthcoming AGM and are
eligible for re-appointment. Rajiv Sabharwal and N. S. Kannan have
offered themselves for re-appointment.
At the AGM held on June 30, 2014, the Members approved the appointment
of M/s B S R & Co. LLP, Chartered Accountants as statutory auditors for
a period of four years commencing from the Twentieth AGM till the
conclusion of the Twenty-Fourth AGM subject to the annual approval of
Reserve Bank of India (RBI) and ratification by the Members every year.
As recommended by the Audit Committee, the Board has proposed the
ratification of appointment of M/s B S R & Co. LLP, Chartered
Accountants as statutory auditors for fiscal 2017. Their appointment
for fiscal 2017 has been approved by RBI. The appointment is
accordingly proposed in the Notice of the forthcoming AGM vide item no.
6 for ratification by Members.
There are no qualifications, reservation or adverse remarks made by the
statutory auditors in the audit report.
Pursuanttothe provisions of Section 204 of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Bank with the approval of its Board, appointed M/s.
Parikh Parekh & Associates, a firm of Company Secretaries in Practice
to undertake the Secretarial Audit of the Bank for the financial year
ended March 31, 2016. The Secretarial Audit Report is annexed herewith
as Annexure B. There are no qualifications, reservation or adverse
remark or disclaimer made by the auditor in the report save and except
disclaimer made by them in discharge of their professional obligation.
The statement containing particulars of employees as required under
Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is given in an Annexure and forms part of this report. In terms of
Section 136(1) of the Companies Act, 2013, the Report and the Accounts
are being sent to the Members excluding the aforesaid Annexure. Any
Member interested in obtaining a copy of the Annexure may write to the
Company Secretary at the Registered Office of the Bank.
INTERNAL CONTROL AND ITS ADEQUACY
The Bank has adequate internal controls and processes in place with
respect to its financial statements which provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements. These controls and processes are driven through
various policies, procedures and certifications. The processes and
controls are reviewed periodically. The Bank has a mechanism of testing
the controls at regular intervals for their design and operating
effectiveness to ascertain the reliability and authenticity of
DISCLOSURE UNDER FOREIGN EXCHANGE MANAGEMENT ACT, 1999
The Bank has obtained a certificate from its statutory auditors that it
is in compliance with the Foreign Exchange Management Act, 1999
provisions with respect to investments made in its consolidated
subsidiaries during fiscal 2016.
RELATED PARTY TRANSACTIONS
The Bank undertakes various transactions with related parties in the
ordinary course of business. The Bank has a Board approved policy on
Related Party Transactions, which has been disclosed on the website of
the Bank and can be viewed at
The Bank also has a Board approved Group Arms'' Length Policy which
requires transactions with the group companies to be at arm''s length.
The transactions between the Bank and its related parties, during the
year ended March 31, 2016, were in the ordinary course of business and
based on the principles of arm''s length. The details of material
related party transactions at an aggregate level for year ended March
31, 2016 is annexed as Annexure C.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form
MGT-9 is annexed herewith as Annexure D.
BUSINESS RESPONSIBILITY REPORTING
Business Responsibility Report as stipulated under Regulation 34 of the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 has been hosted on the
website of the Bank (http://www.icicibank.com/aboutus/annual.html). Any
Member 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 framework 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
- The Risk Committee of the Board reviews risk management policies of
the Bank pertaining to credit, market, liquidity, operational,
outsourcing risks and business continuity management. The Committee
also reviews the Risk Appetite Et Enterprise Risk Management
frameworks, Internal Capital Adequacy Assessment Process (ICAAP) and
stress testing. The stress testing framework includes a wide range of
Bank-specific and market (systemic) scenarios. 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,
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, technology, compliance, group, management and capital at
risk as part of risk dashboard. 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 for the Bank and the threshold limits.
The Bank is in compliance with requirements specified in Regulations 17
to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of
the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The Bank has also complied with the discretionary requirements such as
maintaining a separate office for the Chairman at the Bank''s expense,
ensuring financial statements with unmodified audit opinion, separation
of posts of Chairman and Chief Executive Officer and reporting of
internal auditor directly to the Audit Committee.
COMPLIANCE CERTIFICATE OF THE AUDITORS
ICICI Bank has annexed to this report, a certificate obtained from the
statutory auditors, M/s B S R & Co. LLP, Chartered Accountants,
regarding compliance of conditions of Corporate Governance as
stipulated in Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
EMPLOYEE STOCK OPTION SCHEME
The Bank has an Employee Stock Option Scheme (ESOS/Scheme) which was
instituted in fiscal 2000 to enable the employees and wholetime
Directors of ICICI Bank and its subsidiaries to participate in future
growth and financial success of the Bank. The ESOS aims at achieving
the twin objectives of (i) aligning employee interest to that of the
shareholders; and (ii) retention of talent. Through employee stock
option grants, the Bank seeks to foster a culture of long-term
sustainable value creation. The Scheme is in compliance with the SEBI
(Share Based Employee Benefits) Regulations, 2014 and the below
disclosures are available at www.icicibank.com/aboutus/annual.page.
Pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014,
options are granted by the Board Governance, Remuneration & Nomination
Committee (BGRNC) and noted by the Board.
The Scheme was initially approved by the Members at their meeting held
on February 21, 2000 and thereafter further amended through resolutions
at the General Meetings held on September 20, 2004 and June 25, 2012
and vide a postal ballot resolution passed on April 22, 2016. The Bank
has upto April 28, 2016 granted 423.62 million stock options from time
to time aggregating to 7.28% of the issued equity capital of the Bank
at April 28, 2016. As per the ESOS, as amended from time to time, the
maximum number of options granted to any employee/Director in a year is
limited to 0.05% of ICICI Bank''s issued equity shares at the time of
the grant, and the aggregate of all such options is limited to 10% of
ICICI Bank''s issued equity shares on the date of the grant (equivalent
to 581.52 million shares of face valueRs. 2 each at April 28, 2016).
Options granted after April 1, 2014 vest in a graded manner over a
three year period, with 30%, 30% and 40% of the grant vesting in each
year, commencing from the end of 12 months from the date of the grant,
other than the following:
- 250,000 options granted in April 2014 would vest in equal proportions
on April 30, 2017 and April 30, 2018.
- Options granted in September 2015 would vest in equal proportions on
April 30, 2018 and April 30, 2019. The unvested options would lapse
upon termination of employment due to retirement (including pursuant to
early/ voluntary retirement scheme).
Options granted prior to April 1, 2014 vest in a graded manner over a
four-year period, with 20%, 20%, 30% and 30% of the grants vesting in
each year commencing from the end of 12 months from the date of grant,
other than the following:
- Options granted in April 2009 vested in a graded manner over a five
year period with 20%, 20%, 30% and 30% of the grant vesting in each
year, commencing from the end of 24 months from the date of the grant.
- The grant approved by the Board at its Meeting held on October 29,
2010 (for which RBI approval for grant to wholetime Directors was
received in January 2011), vested 50% on April 30, 2014 and the balance
50% vested on April 30, 2015.
- Options granted in September 2011 vest in a graded manner over a five
year period with 15%, 20%, 20% and 45% of the grant vesting in each
year, commencing from end of 24 months from the date of grant.
The price for options granted (except for grants approved on October
29, 2010 where the grant price was the average closing price of the
ICICI Bank stock on the stock exchange during the six months upto
October 28, 2010) is equal to the closing price on the stock exchange
which recorded the highest trading volume preceding the date of grant
of options in line with the SEBI regulations.
Pursuant to the postal ballot resolution dated April 22, 2016 approved
by the Members, the definition of exercise period has been modified
from the period commencing from the date of vesting of Options and
ending on the later of (i) the tenth anniversary of the date of grant
of Options or (ii) the fifth anniversary of the date of vesting of
Options to the period commencing from the date of vesting of Options
and ending on the tenth anniversary of the date of vesting of Options.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The Bank has undertaken various initiatives for energy conservation at
its premises, further details are given under Principle 6 of Section E
of the Business Responsibility Report. The Bank has used information
technology extensively in its operations, for more details please refer
the section on Information Technology under Business Overview.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
In line with the ''Green Initiative'' since the last five years, the Bank
has effected electronic delivery of Notice of Annual General Meeting
and Annual Report to those Members whose e-mail IDs were registered
with the respective Depository Participants and downloaded from the
depositories viz. National Securities Depository Limited/Central
Depository Services (India) Limited. The Companies Act, 2013 and the
underlying rules as well as Regulation 36 of Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, permit the dissemination of financial statements and
annual report in electronic mode to the Members. Your Directors are
thankful to the Members for actively participating in the Green
Initiative and seek your continued support for implementation of the
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors confirm:
1. that in the preparation of the annual accounts, the applicable
accounting standards had 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, 2013 for
safeguarding the assets of the Bank and for preventing and detecting
fraud and other irregularities;
4. that they have prepared the annual accounts on a going concern
5. that they have laid down internal financial controls to be followed
by the Bank and that such internal financial controls are adequate and
were operating effectively; and
6. that they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
ICICI Bank is grateful to the Government of India, Reserve Bank of
India, Securities and Exchange Board of India, Insurance Regulatory and
Development Authority of India 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 to
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
M. K. Sharma
May 26, 2016 Chairman