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ICICI Bank Ltd.

BSE: 532174 | NSE: ICICIBANK |

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Series: EQ | ISIN: INE090A01021 | SECTOR: Banks - Private Sector

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Annual Report

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Director’s Report

The Directors have pleasure in presenting the Fourteenth Annual Report of ICICI Bank Limited with the audited statement of accounts for the year ended March 31, 2008. Financial Highlights The financial performance for fiscal 2008 is summarised in the following table: Rs. billion, except percentages Fiscal 2007 Fiscal 2008 % change Net interest income and other income 125.65 161.15 28.3% Operating profit 58.74 79.61 35.5% Provisions & contingencies 22.26 29.05 30.5% Profit before tax 36.48 50.56 38.6% Profit after tax 31.10 41.58 33.7% Consolidated profit after tax 27.61 33.98 23.1% 1. Excludes provision for taxes. Appropriations The profit & loss account shows a profit after tax of Rs. 41.58 billion after provisions and contingencies of Rs. 29.05 billion and all expenses. The disposable profit is Rs. 51.56 billion, taking into account the balance of Rs. 9.98 billion brought forward from the previous year. Your Directors have recommended a dividend rate of 110% (Rs. 11 per equity share of face value Rs. 10) for the year and have appropriated the disposable profit as follows: Rs. billion Fiscal 2007 Fiscal 2008 To Statutory Reserve, making in all Rs. 39.391 billion 7.80 10.40 To Special Reserve created and maintained in terms of Section 36(1)(viii) 4.50 1.75 of the Income-tax Act, 1961, making in all Rs. 20.94 billion To Capital Reserve, making in all Rs. 8.01 billion 1.21 1.27 Dividend for the year (proposed) On equity shares @ 110% (@100% for fiscal 2007) 9.01 12.282 On preference shares (Rs.) 35,000 35,000 Corporate dividend tax 1.53 1.50 Balance to be carried forward to the next year 9.98 24.36 1. Includes Rs. 0.20 billion transferred on amalgamation of The Sangli Bank Limited with the Bank. 2. Includes dividend for fiscal 2007 paid on shares issued pursuant to exercise of employee stock options after the balance sheet date and prior to the record date. 3. After taking into account transfer to Reserve Fund Rs. 3.14 million for fiscal 2008, making in all Rs. 4.53 million. ISSUANCE OF EQUITY CAPITAL In fiscal 2008, ICICI Bank successfully concluded a capital raising exercise, raising a total of about Rs. 200.00 billion through a simultaneous public issue in India and issue of American Depositary Shares (ADS) in the United States. The public issue in India was subscribed 11.5 times and the ADS issue was subscribed over 5 times. The domestic issue was priced at Rs. 940, representing a premium of 3.6% to the average closing price from the announcement to the pricing date and the ADS was priced at USD 49.25, representing a premium of 6.6% over the domestic issue price. SUBSIDIARY COMPANIES At March 31, 2008, ICICI Bank had 17 subsidiaries as listed below: Domestic Subsidiaries ICICI Securities Limited ICICI Securities Primary Dealership Limited ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited ICICI Venture Funds Management Company Limited ICICI Home Finance Company Limited ICICI Investment Management Company Limited ICICI Trusteeship Services Limited International Subsidiaries ICICI Bank UK PLC ICICI Bank Canada ICICI Wealth Management Inc.1 ICICI Bank Eurasia Limited Liability Company ICICI Securities Holdings Inc.2 ICICI Securities Inc.3 ICICI International Limited As approved by the Central Government vide letter dated May 15, 2008 under Section 212(8) of the Companies Act, 1956, copies of the balance sheet, profit & loss account, report of the board of directors and report of the auditors of each of the subsidiary companies have not been attached to the accounts of the Bank for fiscal 2008. The Bank will make available these documents/details upon request by any Member of the Bank. These documents/details will be available on the Banks 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 Banks consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiaries and other entities. A summary of key financials of the Banks subsidiaries is also included in this Annual Report. DIRECTORS R. K. Joshi, former Chairman of General Insurance Corporation of India, and an independent Director of the Bank, passed away on July 4, 2007. The Board deeply mourns the untimely demise of R. K. Joshi and places on record its appreciation for the contribution made by him in enriching the deliberations of the Board during his association with the Bank. Nachiket Mor, Deputy Managing Director, opted for early retirement effective October 19, 2007, to dedicate himself to the social initiatives of the ICICI Group. He has been appointed as President of the ICICI Foundation for Inclusive Growth. The Board places on record its appreciation for the contribution made by him towards the growth and development of the ICICI Group. At its Meeting held on October 19, 2007, the Board elevated Chanda D. Kochhar, Deputy Managing Director as Joint Managing Director & Chief Financial Officer and appointed Sonjoy Chatterjee, Managing Director & CEO, ICICI Bank UK PLC, as an additional Director of the Bank. Sonjoy Chatterjee has been appointed as a wholetime Director designated as Executive Director, for a period of five years, effective October 22, 2007. Reserve Bank of India (RBI) has vide its letter dated December 3, 2007, approved his appointment. Approval of the Members is being sought at the forthcoming Annual General Meeting (AGM). Vinod Rai, Secretary (Financial Sector), Department of Financial Services, Ministry of Finance, Government of India was nominated as a Director of the Bank by Government of India effective January 3, 2003. He resigned from the Board effective January 6, 2008, consequent to his appointment as the Comptroller & Auditor General of India (CAG). The Board places on record its appreciation of the role played by Vinod Rai during his tenure as a Director and his guidance and contribution as a Member of the Board. Arun Ramanathan, Secretary (Financial Sector), Department of Financial Services, Ministry of Finance, Government of India was nominated as a Director of the Bank by Government of India effective January 18, 2008. In terms of Article 128A of the Articles of Association, Arun Ramanathan is not liable to retire by rotation. In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Bank, Sridar Iyengar, T. S. Vijayan, L. N. Mittal and Narendra Murkumbi would retire by rotation at the forthcoming AGM and, being eligible, offer themselves for re-appointment. AUDITORS The auditors, B S R & Co., Chartered Accountants, will retire at the ensuing AGM. As recommended by the Audit Committee, the Board has proposed the appointment of B S R & Co. as stautory auditors for fiscal 2009. You are requested to consider their appointment. Their appointment has been approved by RBI vide its letter dated April 21, 2008. PERSONNEL As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure to the Directors Report. APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARD OF ASSISTED COMPANIES Erstwhile ICICI Limited (ICICI) had a policy of appointing nominee directors on the boards of certain borrower companies based on loan covenants, with a view to enable monitoring of the operations of those companies. Subsequent to the merger of ICICI with ICICI Bank, the Bank continues to nominate directors on the boards of assisted companies. Apart from the Banks employees, experienced professionals from various fields are appointed as nominee Directors. At March 31, 2008, ICICI Bank had 60 nominee Directors, of whom 39 were employees of the Bank, on the boards of 84 assisted companies. The Bank has a Nominee Director Cell for maintaining records of nominee directorships. CORPORATE GOVERNANCE ICICI Bank has established a tradition of best practices in corporate governance. The corporate governance framework in ICICI Bank is based on an effective independent Board, the separation of the Boards supervisory role from the executive management and the constitution of Board Committees, generally comprising a majority of independent Directors and chaired by an independent Director, to oversee critical areas. I. Philosophy of Corporate Governance ICICI Banks corporate governance philosophy encompasses not only regulatory and legal requirements, such as the terms of listing agreements with stock exchanges, but also several voluntary practices aimed at a high level of business ethics, effective supervision and enhancement of value for all stakeholders. Whistle Blower Policy ICICI Bank has formulated a Whistle Blower Policy for the ICICI Group. In terms of this policy, employees of ICICI Bank and its group companies are free to raise issues, if any, on breach of any law, statute or regulation by the Bank and on the accounting policies and procedures adopted for any area or item and report them to the Audit Committee through specified channels. This mechanism has been communicated and posted on the Banks intranet. Prevention of Insider Trading In accordance with the requirements of Securities and Exchange Board of India (SEBI) (Prohibition of Insider Trading) Regulations, 1992, ICICI Bank has instituted a comprehensive code of conduct for prevention of insider trading. Code of Business Conduct and Ethics The Board of Directors of the Bank adopted a new Group Code of Business Conduct and Ethics (the Group Code) primarily by strengthening and providing illustrative guidance on the existing Code of Business Conduct and Ethics approved earlier by the Board. The Group Code aims at ensuring consistent standards of conduct and business ethical practices across the constituents of the ICICI Group. Consequently, each constituent of the ICICI Group would review their respective codes and update the same in accordance with the Group Code. This Code is also available on the website of the Bank www.icicibank.com. In terms of Clause 49 of the Listing Agreement, a confirmation from the Managing Director & CEO regarding compliance with the Code by all the Directors and senior management is given on page 32 of the Annual Report. CEO/CFO Certification In terms of Clause 49 of the Listing Agreement, the certification by the Managing Director & CEO and Joint Managing Director & Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained. Board of Directors ICICI Bank has a broad-based Board of Directors, constituted in compliance with the Banking Regulation Act, 1949, Companies Act, 1956 and listing agreements entered into with stock exchanges and in accordance with best practices in corporate governance. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. The Board has constituted nine committees, namely, Audit Committee, Board Governance & Remuneration Committee, Credit Committee, Customer Service Committee, Fraud Monitoring Committee, Risk Committee, Share Transfer & Shareholders/ Investors Grievance Committee, Strategy Committee and Committee of Directors. A majority of these Board Committees are chaired by independent Directors and mainly consist of independent Directors. At March 31, 2008, the Board of Directors consisted of 16 members. There were five meetings of the Board during fiscal 2008 on April 28, July 21, and October 19 in 2007 and January 19 and March 7-8 in 2008. The names of the Directors, their attendance at Board Meetings during the year and the number of other directorships and board committee memberships held by them at March 31, 2008 are set out in the following table: Board Attendance Meetings at last AGM Name of Director attended (July 21, during 2007) the year Independent Directors N. Vaghul, Chairman 5 Present Sridar Iyengar 5 Present R. K. Joshi (upto July 4, 2007) 1 N.A. L. N. Mittal 3 Absent Narendra Murkumbi 5 Present Anupam Puri 3 Present Arun Ramanathan - N.A. (w.e.f. January 18, 2008)(a) Vinod Rai (upto January 6, 2008)(a) 1 Absent M. K. Sharma 5 Present P. M. Sinha 4 Present Marti G. Subrahmanyam(b) 4 Present T. S. Vijayan 2 Absent V. Prem Watsa 4 Present Number of other Number directorships of other committee3 Of Indian Of other 12 memberships companies companies 11 6 3(1) 4 3 4(2) N.A. N.A. N.A. - 8 - 2 5 1 3 - 1(1) - 5 - N.A. N.A. N.A. 2 1 - 3 1 3(1) 2 4 1 7 5 1(1) - 14 - Board Meetings Name of Director attended during the year Wholetime Directors K. V. Kamath 5 Kalpana Morparia 1 (upto May 31, 2007) Chanda D. Kochhar 5 Nachiket Mor 3 (upto October 18, 2007) V. Vaidyanathan 5 Madhabi Puri Buch 4 (w.e.f. June 1, 2007) Sonjoy Chatterjee 2 (w.e.f. October 22, 2007) Number of other Attendance Number directorships at last AGM of other (July 21, committee3 Of Indian Of other 2007) memberships companies companies Present 4 4 - N.A. N.A. N.A. N.A. Present 2 4 1 Present N.A. N.A. N.A. Present 3 - 1 Present 2 - - N.A. - 3 - None of the Directors of the Bank were members in more than 10 committees nor acted as Chairperson of more than five committees across all companies in which they were Directors. II. Audit Committee Terms of Reference The Audit Committee provides direction to the audit function and monitors the quality of internal and statutory audit. The responsibilities of the Audit Committee include overseeing the financial reporting process to ensure fairness, sufficiency and credibility of financial statements, recommendation of appointment and removal of central and branch statutory auditors and chief internal auditor and fixation of their remuneration, approval of payment to statutory auditors for other services rendered by them, review of functioning of Whistle Blower Policy, review of the quarterly and annual financial statements before submission to the Board, review of the adequacy of internal control systems and the internal audit function, review of compliance with inspection and audit reports and reports of statutory auditors, review of the findings of internal investigations, review of statement of significant related party transactions, review of management letters/letters on internal control weaknesses issued by statutory auditors, reviewing with the management, the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilised for the purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency, monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the Board to take steps in this matter, discussion on the scope of audit with external auditors and examination of reasons for substantial defaults, if any, in payment to stakeholders. The Committee is also empowered to appoint/oversee the work of any registered public accounting firm, establish procedures for receipt and treatment of complaints received regarding accounting and auditing matters, engage independent counsel as also provide for appropriate funding for compensation to be paid to any firm/advisors. In addition, the Audit Committee also exercises oversight on the compliance of risk management framework by providing directions to the regulatory compliance function of the Bank. Composition The Audit Committee comprises three independent Directors and is chaired by Sridar Iyengar. There were six meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings are set out in the following table: Name of Member Number of meetings attended Sridar Iyengar, Chairman 6 M. K. Sharma, Alternate Chairman 5 Narendra Murkumbi 5 III. Board Governance & Remuneration Committee Terms of Reference The functions of the Committee include recommendation of appointments to the Board, evaluation of the performance of the Managing Director & CEO and wholetime Directors on pre-determined parameters, recommendation to the Board of the remuneration (including performance bonus and perquisites) to wholetime Directors, approval of the policy for and quantum of bonus payable to the members of the staff, framing of guidelines for the Employees Stock Option Scheme and recommendation of grant of ICICI Bank stock options to the employees and wholetime Directors of ICICI Bank and its subsidiary companies. Composition The Board Governance & Remuneration Committee comprises five independent Directors and is chaired by N. Vaghul. There were four meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings are set out in the following table: Name of Member Number of meetings attended N. Vaghul, Chairman 4 Anupam Puri 2 M. K. Sharma 4 P. M. Sinha 4 Marti G. Subrahmanyam 2 1. Also participated in two meetings through tele-conference. Remuneration policy The Board Governance & Remuneration Committee determines and recommends to the Board the amount of remuneration, including performance bonus and perquisites, payable to the wholetime Directors. The recommendations of the Committee are based on evaluation of the wholetime Directors on certain parameters. The following table sets out the details of remuneration (including perquisites, bonus and retiral benefits) paid to wholetime Directors for fiscal 2008 and details of stock options granted for the three years ended March 31, 2008: K. V. Kalpana Kamath Morparia Break-up of remuneration (Rupees) Basic 12,720,000 1,420,000 Performance bonus for fiscal 20085 4,324,800 482,800 Allowances and perquisites 6,140,299 4,447,950 Chanda D. Nachiket Kochhar Mor 6,600,000 3,619,355 2,244,000 1,232,361 4,475,244 3,808,666 V. Madhabi Sonjoy Vaidyanathan Puri Buch Chatterjee4 6,000,000 5,700,000 2,483,333 2,040,000 1,700,000 841,639 4,562,191 6,504,225 509,418 K. V. Kalpana Kamath Morparia Contribution to provident fund 1,526,400 170,400 Contribution to superannuation fund 1,908,000 177,485 Stock options (Numbers) Fiscal 20085 270,000 NA Fiscal 2007 300,000 200,000 Fiscal 2006 250,000 165,000 Chanda D. Nachiket Kochhar Mor 792,000 434,323 990,000 - 180,000 NA 175,000 175,000 125,000 125,000 V. Madhabi Sonjoy Vaidyanathan Puri Buch Chatterjee 720,000 684,000 298,000 - - 372,500 125,000 125,000 125,000 150,000 100,0007 75,0007 75,0007 75,0007 37,5007 1. Remuneration paid upto May 31, 2007. 2. Remuneration paid upto October 18, 2007. 3. Total remuneration paid for fiscal 2008 which includes the payment prior to her being appointed Executive Director effective June 1, 2007. Excludes performance bonus of Rs. 490,000 for the period of fiscal 2008 prior to her being appointed Executive Director, which was paid in April 2008. 4. Excludes remuneration paid by ICICI Bank UK PLC prior to his being appointed Executive Director of ICICI Bank effective October 22, 2007. 5. Pending RBI approval. 6. Includes leave travel allowance availed during the year: K.V. Kamath Rs. 2,650,000, Kalpana Morparia Rs. 295,833, Chanda D. Kochhar Rs. 2,500,000, Nachiket Mor Rs. 753,425, V. Vaidyanathan Rs. 1,250,000, Madhabi Puri Buch Rs.1,950,000, leave encashment: Kalpana Morparia Rs. 3,786,667 and Nachiket Mor Rs. 1,080,000 and superannuation allowance: Kalpana Morparia Rs. 35,515, Nachiket Mor Rs. 542,903, V. Vaidyanathan Rs. 900,000 and Madhabi Puri Buch Rs. 855,000. 7. Prior to appointment as wholetime Director. Perquisites (evaluated as per Income-tax Rules wherever applicable and otherwise at actual cost to the Bank) such as the benefit of the Banks furnished accommodation, gas, electricity, water and furnishings, club fees, personal insurance, use of car and telephone at residence or reimbursement of expenses in lieu thereof; medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity, were provided in accordance with the scheme(s) and rule(s) applicable from time to time. If accommodation owned by the Bank is not provided, the concerned wholetime Director is eligible for house rent allowance of Rs. 100,000 per month and maintenance of accommodation, including furniture, fixtures and furnishings provided by the Bank. As provided under Article 132 of the Articles of Association of the Bank, the fees payable to a Director (other than to the nominee of Government of India) for attending a Meeting of the Board or Committee thereof are decided by the Board of Directors from time to time within the limits prescribed by the Companies Act, 1956 or the Central Government. The Board of Directors has approved the payment of Rs. 20,000 as sitting fees for each meeting of Board or Committee attended. This amount is within the limits prescribed by the Ministry of Corporate Affairs vide its Notification dated July 24, 2003. Approval of the Members for payment of sitting fees to the Directors was obtained at the AGM held on August 20, 2005. Information on the total sitting fees paid to each of the independent Directors during fiscal 2008 for attending Meetings of the Board and its Committees is set out in the following table: Name of Director Amount (Rupees) N. Vaghul 740,000 Sridar Iyengar 320,000 R. K. Joshi 20,000 L. N. Mittal 60,000 Narendra Murkumbi 820,000 Anupam Puri 100,000 Name of Director Amount (Rupees) M. K. Sharma 1,180,000 P.M. Sinha 260,000 Marti G. Subrahmanyam 180,000 T. S. Vijayan 40,000 V. Prem Watsa 160,000 Total 38,80,000 The details of shares and convertible instruments of the Bank, held by the non- wholetime Directors as on March 31, 2008 are set out in the following table: V. Customer Service Committee Terms of reference The functions of this Committee include review of customer service initiatives, overseeing the functioning of the Customer Service Council and evolving innovative measures for enhancing the quality of customer service and improvement in the overall satisfaction level of customers. Composition The Customer Service Committee comprises five Directors including four independent Directors and the Managing Director & CEO. It is chaired by N. Vaghul. There were four meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings are as follows: Name of Member Number of meetings attended N. Vaghul, Chairman 4 Narendra Murkumbi 3 M. K. Sharma 4 P. M. Sinha 1 K. V. Kamath 4 VI. Fraud Monitoring Committee Terms of reference The Committee monitors and reviews all frauds involving an amount of Rs. 10.0 million and above. Composition The Fraud Monitoring Committee comprises five Directors, namely, M. K. Sharma, Narendra Murkumbi, K. V. Kamath, Chanda D. Kochhar and V. Vaidyanathan and is chaired by M. K. Sharma, an independent Director. There were nine meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings are as follows: Name of Member Number of meetings attended M. K. Sharma, Chairman 8 Narendra Murkumbi 6 K. V. Kamath 9 Kalpana Morparia (upto May 31, 2007) 3 Chanda D. Kochhar 8 V. Vaidyanathan (w.e.f. June 1, 2007) 3 N. Vaghul, Sridar Iyengar, L. N. Mittal, Anupam Puri, P. M. Sinha and Marti G. Subrahmanyam attended one Meeting as invitees. VII. Risk Committee Terms of reference The Committee reviews ICICI Banks risk management policies in relation to various risks (portfolio, liquidity, interest rate, off-balance sheet and operational risks), investment policies and strategy and regulatory and compliance issues in relation thereto. The Committee also reviews key risk indicators covering areas such as credit risk, interest rate risk, liquidity risk, foreign exchange risk and internal audit. Composition The Risk Committee comprises five Directors including four independent Directors and the Managing Director & CEO. It is chaired by N. Vaghul. There were five meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings are set out in the following table: Name of Member Number of meetings attended N. Vaghul, Chairman 5 Sridar Iyengar 5 Marti G. Subrahmanyam 3 V. Prem Watsa 3 K. V. Kamath 3 1. Also participated in one meeting through tele-conference. Narendra Murkumbi, M. K. Sharma and P. M. Sinha attended one Meeting as invitees. VIII. Share Transfer & Shareholders/Investors Grievance Committee Terms of reference The functions and powers of the Committee include approval and rejection of transfer or transmission of equity and preference shares, bonds, debentures and securities, issue of duplicate certificates, allotment of shares and securities issued from time to time, including those under stock options, review and redressal of shareholders and investors complaints, delegation of authority for opening and operation of bank accounts for payment of interest, dividend and redemption of securities and the listing of securities on stock exchanges. Composition The Share Transfer & Shareholders/Investors Grievance Committee comprises four Directors and is chaired by M. K. Sharma, an independent Director. There were 12 meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings are given below: Name of Member Number of meetings attended M. K. Sharma, Chairman 12 Narendra Murkumbi 7 Kalpana Morparia (upto May 31, 2007) 1 Chanda D. Kochhar 12 Madhabi Puri Buch (w.e.f. June 1, 2007) 6 Sandeep Batra, Senior General Manager & Company Secretary is the Group Compliance Officer. 19,248 shareholder complaints received in fiscal 2008 were processed. At March 31, 2008, 7 complaints were pending. IX. Strategy Committee Terms of reference The functions of the Committee are to evaluate various strategic opportunities, including acquisitions/ divestitures, restructuring and other strategic initiatives for the Bank and its subsidiaries and recommend the same to the Board. Composition The Strategy Committee comprises five Directors N. Vaghul, M. K. Sharma, Narendra Murkumbi, K. V. Kamath and Chanda D. Kochhar. The Committee is chaired by N. Vaghul. The Strategy Committee was constituted by the Board at its Meeting held on March 7-8, 2008 and no meetings of the Committee were held during fiscal 2008. X. Committee of Directors Terms of reference The powers of the Committee include approval of credit proposals as per authorisation approved by the Board, approvals in respect of borrowings and treasury operations and premises and property related matters. Composition The Committee of Directors comprises of all five wholetime Directors and is chaired by K. V. Kamath, Managing Director & CEO. XI. Other Committees In addition to the above, the Board has from time to time constituted various committees namely, Asset- Liability Management Committee, Committee for Identification of Wilful Defaulters, Grievance Redressal Committee for borrowers identified as Wilful Defaulters (all comprising certain wholetime Directors and executives) and Committee of Executives, Compliance Committee, Product & Process Approval Committee, Regional Committees for India and overseas operations, Outsourcing Committee, Operational Risk Management Committee and other Committees (all comprising executives). These committees are responsible for specific operational areas like asset-liability management, approval of credit proposals, approval of products and processes and management of operational risk, under authorisation/ supervision of the Board and its Committees. XII. General Body Meetings The details of General Body Meetings held in the last three years are given below: General Body Meeting Day, Date Eleventh AGM Saturday, August 20, 2005 Twelfth AGM Saturday July 22, 2006 Extraordinary General Meeting (EGM) Saturday, January 20, 2007 Thirteenth AGM Saturday July 21, 2007 Time Venue 1.30 p.m. Professor Chandravadan 1.30 p.m. Mehta Auditorium, General Education Centre, 2.00 p.m. Opposite D. N. Hall Ground, The Maharaja Sayajirao University, Pratapgunj, Vadodara 390 002. 1.30 p.m. Special Resolution The details of Special Resolutions passed at the General Body Meeting of shareholders in the last three years are given below: General Body Meeting Day Eleventh AGM August 20, 2005 Twelfth AGM July 22, 2006 EGM January 20, 2007 Thirteenth AGM July 21, 2007 Resolution * Amendment to the Articles of Association of the Company for re-classification of the authorised share capital. * Approval for issue of preference shares subject to applicable laws and regulations. * Merger of The Sangli Bank Limited with ICICI Bank Limited (passed by the requisite majority as provided under Section 44A of the Banking Regulation Act, 1949). * Approval for issue of preference shares subject to applicable laws and regulations. * Amendment to the Articles of Association of the Company for deleting the reference to the definition of group Postal Ballot Though not mandatorily required, to facilitate wider participation in the approval process, approval of shareholders was sought through postal ballot for the following Resolutions: 1. Ordinary Resolution for alteration in the authorised share capital and consequent alteration in the Memorandum of Association. 2. Special Resolution for alteration in the Articles of Association. 3. Special Resolution for raising capital. N. L. Bhatia, Practicing Company Secretary, NL Bhatia & Associates was appointed as the Scrutinizer for conducting the postal ballot process. The notice dated April 28, 2007 was sent to the Members and the last date for receipt of postal ballot forms by the Scrutinizer was June 7, 2007. Till that date, 16,589 forms were received. According to the Scrutinizers report the first two Resolutions were passed by majority of 99.9% and the third Resolution was passed by majority of 82.9%. The result of the postal ballot was declared on June 8, 2007 and published on June 9, 2007 in the Financial Express (Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi and Pune editions) and in Vadodara Samachar (Vadodara) for the information of Members. The Bank has followed the procedure as prescribed under Companies (Passing of the Resolution by Postal Ballot), Rules, 2001. At present, no special resolution is proposed to be passed through postal ballot. XIII. Disclosures 1. There are no materially significant transactions with related parties i.e., directors, management, subsidiaries, or relatives conflicting with the Banks interests. The Bank has no promoter. 2. Penalties or strictures imposed on the Bank by any of the stock exchanges, Securities & Exchange Board of India (SEBI) or any other statutory authority, for any non-compliance on any matter relating to capital markets, during the last three years are detailed below: * On April 10, 2007, the Eastern Magistrates Court, Hong Kong fined the Bank a sum of HKD 40,000, details of which are given in Note 35 of the Notes to Accounts. * During fiscal 2006, RBI had imposed a penalty of Rs. 0.5 million on the Bank citing contravention of RBI instructions relating to opening of accounts, monitoring of transactions for adherence of know your customer/anti money laundering norms, and non-adherence to normal banking practices under section 47A(1)(b) of the Banking Regulation Act, 1949. Other than the aforementioned, no penalties or strictures were imposed on the Bank by any of the stock exchanges, SEBI or any other statutory authority, for any non-compliance on any matter relating to capital markets during the last three years. XIV. Means of Communication It is ICICI Banks belief that all stakeholders should have access to complete information regarding its position to enable them to accurately assess its future potential. ICICI Bank disseminates information on its operations and initiatives on a regular basis. ICICI Banks website (www.icicibank.com) serves as a key awareness facility for all its stakeholders, allowing them to access information at their convenience. It provides comprehensive information on ICICI Banks strategy, business segments, financial performance, operational performance, share price movements and the latest press releases. ICICI Banks dedicated investor relations personnel respond to specific queries and play a proactive role in disseminating information to both analysts and investors. In accordance with SEBI and Securities Exchange Commission (SEC) guidelines, all information which could have a material bearing on ICICI Banks share price is released through leading domestic and global wire agencies. The information is also disseminated to the National Stock Exchange of India (NSE), the Bombay Stock Exchange Limited (BSE), New York Stock Exchange (NYSE), Luxembourg Stock Exchange, Singapore Stock Exchange and Japan Securities Dealers Association from time to time. ICICI Bank also circulates its half-yearly results to all its shareholders. As required by SEBI and the listing agreements, ICICI Bank files its financial and other information on the Electronic Data Information Filing and Retrieval (EDIFAR) website maintained by the National Informatics Centre (NIC). ICICI Banks quarterly financial results are published in the Financial Express (Ahmedabad, Bangalore, Chandigarh, Chennai, Kochi, Kolkata, Mumbai and New Delhi editions) and in Vadodara Samachar (Vadodara). The financial results, official news releases and presentations are also available on the website of ICICI Bank. The Managements Discussion & Analysis forms part of the Annual Report. General Shareholder Information Fourteenth AGM Day, Date Time Saturday, 1.30 p.m. July 26, 2008 Venue Professor Chandravadan Mehta Auditorium, General Education Centre, Opposite D. N. Hall Ground, The Maharaja Sayajirao University, Pratapgunj, Vadodara 390 002. Financial Calendar : April 1 to March 31 Book Closure : July 12, 2008 to July 26, 2008 Dividend Payment Date : July 28, 2008 Listing of equity shares/ADSs on Stock Exchanges (with stock code) Stock Exchange Code for ICICI Bank Bombay Stock Exchange Limited (BSE) 532174 Phiroze Jeejeebhoy Towers & Dalal Street, Mumbai 400 001 6321741 National Stock Exchange of India Limited (NSE) ICICIBANK Exchange Plaza, Bandra-Kurla Complex Bandra (East), Mumbai 400 051 New York Stock Exchange (ADSs)2 IBN 11, Wall Street, New York, NY 10005, United States of America 1. FII segment of BSE. 2. Each ADS of ICICI Bank represents two underlying equity shares. ICICI Bank has paid annual listing fees for the relevant periods on its capital to BSE, NSE and NYSE where its equity shares and ADSs are listed. Share Transfer System ICICI Banks investor services are handled by 3i Infotech Limited (3i Infotech). 3i Infotech operates in the following main areas of business: software consultancy and development, IT-enabled services, IT infrastructure and network and facilities management services. 3i Infotech has received the ISO-9001 certification for its transaction processing activities. ICICI Banks equity shares are traded only in dematerialised form. During the year, 2,343,651 equity shares of ICICI Bank involving 16,872 certificates were transferred into electronic mode. At March 31, 2008, 99.02% of ICICI Banks paid-up equity share capital (including equity shares represented by ADS constituting 28.58% of the paid-up equity share capital) comprising 1,101,827,673 equity shares had been dematerialised. Physical share transfers are registered and returned generally within a period of seven days from the date of receipt, if the documents are correct and valid in all respects. The number of equity shares of ICICI Bank transferred during the last three years (excluding electronic transfer of shares in dematerialised form) is given below: Fiscal 2006 Fiscal 2007 Fiscal 2008 Number of transfer deeds 7,994 4,804 4,430 Number of shares transferred 437,044 256,196 257,167 As required under Clause 47(c) of the listing agreements entered into by ICICI Bank with stock exchanges, a certificate is obtained every six months from a practising Company Secretary, with regard to, inter alia, effecting transfer, transmission, sub-division, consolidation, renewal and exchange of equity shares and bonds in the nature of debentures within one month of their lodgement. The certificates are forwarded to BSE and NSE, where the equity shares are listed, within 24 hours of issuance and also placed before the Share Transfer and Shareholders/Investors Grievance Committee. In terms of SEBIs circular no. D&CC/FITTC/CIR-16 dated December 31, 2002, a Secretarial Audit is conducted on a quarterly basis by a firm of Chartered Accountants, for the purpose of, inter alia, reconciliation of the total admitted equity share capital with the depositaries and in the physical form with the total issued/paid up equity capital of ICICI Bank. Certificates issued in this regard are placed before the Share Transfer and Shareholders/Investors Grievance Committee and forwarded to BSE and NSE, where the equity shares of ICICI Bank are listed. Registrar and Transfer Agents The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited. Investor services related queries may be directed to Jayendra Pai at either of the addresses below: * Infotech Limited Infotech Limited International Infotech Park Maratha Mandir Annex Tower 5, 3rd Floor Dr. A. R. Nair Road Navi Mumbai 400 703 Mumbai Central Tel No.: +91-22-6792 8000 Mumbai 400 008 Fax : +91-22-6792 8099 E-mail : investor@icicibank.com Queries relating to the operational and financial performance of ICICI Bank may be addressed to: Rakesh Jha/ Pankaj Jain ICICI Bank Limited ICICI Bank Towers Bandra-Kurla Complex Mumbai 400 051 Tel No. : +91-22-2653 1414 Fax No. : +91-22-2653 1175 E-mail : ir@icicibank.com Information on Shareholding COMPLIANCE CERTIFICATE OF THE AUDITORS ICICI Bank has annexed to this report, a certificate obtained from the statutory auditors, B S R & Co., Chartered Accountants, regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the listing agreement. EMPLOYEE STOCK OPTION SCHEME In fiscal 2000, ICICI Bank instituted an Employee Stock Option Scheme (ESOS) to enable the employees and Directors of ICICI Bank and its subsidiaries to participate in the future growth and financial success of the Bank. 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 Banks issued equity shares at the time of the grant, and the aggregate of all such options is limited to 5% of ICICI Banks issued equity shares on the date of the grant (equivalent to 55.6 million shares at April 26, 2008). Options granted for fiscal 2003 and earlier years vest in a graded manner over a three-year period, with 20%, 30% and 50% of the grants vesting in each year, commencing not earlier than 12 months from the date of grant. Options granted for fiscal 2004 onwards vest in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the grants vesting in each year, commencing not earlier than 12 months from the date of grant. Options can be exercised within 10 years from the date of grant or five years from the date of vesting, whichever is later. The price of the options granted prior to June 30, 2003 is the closing market price on the stock exchange, which recorded the highest trading volume on the date of grant. The price for options granted on or after June 30, 2003 till July 21, 2004 is equal to the average of the high and low market price of the equity shares in the two week period preceding the date of grant of the options, on the stock exchange which recorded the highest trading volume during the two week period. The price for options granted on or after July 22, 2004 is equal to the closing price on the stock exchange which recorded the highest trading volume preceding the date of grant of options. The above pricing is in line with the SEBI guidelines, as amended from time to time. 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 or loss 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 and overseas regulators for their continued co-operation, support and advice. ICICI Bank wishes to thank its investors, the domestic and international banking community, investment bankers, 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 organisations 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 Place : Mumbai N. VAGHUL Date : May 27, 2008 Chairman

Director’s Report