172@29@16@55!~!172@29@0@53!~!|commonstore|commonfiles|moneycontrol_header.php?cid=0&s_cid=0&radar_off=0&is_revamped_header=0&is_responsive=1&sec=PNC_ANNUALREPORT&priceinter=1&frommc=1!~!|commonstore|commonfiles|moneycontrol_header.php
Moneycontrol
SENSEX NIFTY
you are here:

ICICI Securities Ltd.

BSE: 541179 | NSE: ISEC |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE763G01038 | SECTOR: Miscellaneous

BSE Live

Aug 12, 16:00
483.30 -9.10 (-1.85%)
Volume
AVERAGE VOLUME
5-Day
41,485
10-Day
39,665
30-Day
40,863
8,658
  • Prev. Close

    492.40

  • Open Price

    495.00

  • Bid Price (Qty.)

    481.00 (5)

  • Offer Price (Qty.)

    483.30 (8)

NSE Live

Aug 12, 15:59
483.30 -9.10 (-1.85%)
Volume
AVERAGE VOLUME
5-Day
593,146
10-Day
716,208
30-Day
685,394
223,888
  • Prev. Close

    492.40

  • Open Price

    492.40

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    483.30 (11)

Annual Report

For Year :
2019 2018 2009

Director’s Report

Directors' Report

To the Members

The Directors are pleased to present the Twenty-Fourth Annual Report of ICICI Securities Limited ('the Company') along with the audited financial statements for the financial year ended at March 31, 2019.

PERFORMANCE

Industry overview

Equities remained volatile in FY2019 amidst geo-political risks such as trade wars and Brexit, tight financial conditions, fears of slowing global growth and liquidity crisis in NBFCs. However, the dovish stance of the US FED, expectations of interest rate cuts by the RBI and optimism of a pick-up in corporate earnings growth going ahead has resulted in renewed interest in Indian equities from foreign investors towards the end of FY2019. In the secondary market, average daily turnover grew 41% (cash + derivative combined) for the industry during the year under review. In this, the cash segment average daily turnover grew 4% and the derivative segment witnessed 43% growth. Flow from Foreign Portfolio Investors ('FPI') remained weak for majority of FY2019. However, due to strong inflows in the month of February and March of USD 8.3 billion, FPI flows for FY2019 turned positive. Domestic Institutional Investors ('DIIs') continued to remain largely positive through FY2019.

FY2019 witnessed sharp drop in primary market activity in terms of both number of transactions and capital raised as the number of Initial Public Offerings ('IPOs') including InvITs and REITs dropped to 17 as against 47 in FY2018 with fund raising dropping to Rs,227 billion from Rs,888 billion in FY2018. Similarly, there was a sharp decline in Qualified Institutional placements ('QIPs').

Mutual fund average AUM for the industry witnessed a growth of 12% YoY.

Company overview

Our Company registered consolidated revenue of Rs,17,270.2 million for FY2019 as compared to Rs,18,610.1 million for FY2018. Consolidated profit after tax ('PAT') for FY2019 was Rs,4,907.3 million compared to Rs,5,534.7 million for FY2018. We were able to maintain our costs with total cost declining marginally from Rs,10,086.2 million to ' 9,697.9 million in FY2019, a decline of 4%.

In the secondary market (broking business), your Company achieved an overall market share of 8.5%, based on total average daily turnover. Broking business reported revenues of ' 9,328.3 million in FY2019 against Rs,10,243.0 million in FY2018.

Your Company is also a leading distribution franchise, being the second largest non-bank mutual fund distributor as per the latest available industry numbers for FY2018. Apart from mutual funds, the Company was also among the leading distributors in other financial products like Life Insurance, IPOs, Portfolio Management Schemes ('PMS'), Alternate Investment Funds ('AIFs'), Sovereign Gold Bonds, Bharat 22 Exchange Traded Fund, National Pension Scheme ('NPS'), etc. The distribution business reported revenues of Rs,4,635.3 million in FY2019 against Rs,4,665.3 million in FY2018. Distribution business contributed 27% towards the Company's top line during FY2019 against 25% in FY2018.

Financial highlights

Pursuant to the notification dated February 16, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards ('Ind AS') notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2018. Financial statements for the year ended and as at March 31, 2018 have been restated to conform to Ind AS.

Note 30 to the standalone and consolidated financial statements provide further explanation on the transition to Ind AS.

APPROPRIATIONS

The table below summarizes the key financials of your Company for FY2019:

                                                                                                                           Rs,millions

Particulars

 

Standalone

Consolidated

 

FY2018

FY2019

Change %

FY2018

FY2019

Change %

Gross Income

18,584.8

17,258.0

(7.1)

18,610.1

17,270.2

(7.2)

Profit/(Loss) before Depreciation and Tax

8,632.0

7,700.3

(10.8)

8,676.9

7,721.8

(11.0)

Depreciation

152.6

149.3

(2.2)

153.0

149.5

(2.3)

Profit/(Loss) before Tax

8,479.4

7,551.0

(10.9)

8,523.9

7,572.3

(11.2)

Provision for Tax

2,988.4

2,681.8

(10.3)

2,989.2

2,665.0

(10.8)

Profit/(Loss) after Tax

5,491.0

4,869.2

(11.3)

5,534.7

4,907.3

(11.3)

Other Comprehensive Income (net of tax)

(16.1)

(25.9)

60.9

(16.1)

(25.9)

60.9

Total comprehensive income

5,474.9

4,843.3

(11.5)

5,518.6

4,881.4

(11.5)

Balance brought forward from previous year

2,299.4

5,641.8

145.4

2,296.9

5,683.0

147.4

Amount available for appropriation

7,774.3

10,485.1

34.9

7,815.5

10,564.4

35.2

Surplus carried forward

5,641.8

7,534.0

33.5

5,683.0

7,613.3

34.0

Earnings per share on equity shares of Rs,5 each

Basic (in Rs,)

17.05

15.12

(11.3)

17.18

15.23

(11.4)

Diluted (in Rs,)

17.05

15.11

(11.4)

17.18

15.23

(11.4)

 

Your Company has Rs,10,485.1 million available for appropriation, comprising total comprehensive income of Rs,4,843.3 million for FY2019 and balance of Rs,5,641.8 million brought forward from the previous financial year. An appropriation of Rs,2,951.1 million towards interim and final dividend, including dividend distribution tax has been approved by the Board resulting in profit of Rs,7,534.0 million being the surplus carried forward. Your Company does not propose any transfer to reserves.

_ _Rs,millions

Particulars

Standalone

 

FY2018

FY2019

Disposable Profit

7,774.3

10,485.1

Appropriations:

Transfer to Reserves

-

-

Equity Dividend

1,771.8

2,447.8

Tax on Equity Dividend

360.7

503.3

Surplus carried forward

5,641.8

7,534.0

DIVIDEND

The Board has recommended a final dividend of Rs,5.70 (114%) per equity share for FY2019, aggregating to Rs,2,213.7 million, including dividend distribution tax of Rs,377.4 million. The Board had also approved payment of interim dividend of Rs,3.70 (74%) per equity share for FY2019, aggregating to Rs,1,436.9 million, including dividend distribution tax of Rs,245.0 million. The payment of interim dividend along with the proposed final dividend would result in cumulative dividend payout ratio of 62% of the profits. The final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting ('AGM'). The payment of interim and final dividend is in line with the Dividend Distribution Policy of the Company.

DIVIDEND DISTRIBUTION POLICY

In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), your Company has formulated a Dividend Distribution Policy and the same is given in Annexure A to this report and is also uploaded on the website of the Company at the following link:

https://www.icicisecurities.com/CMT/UPLOAD/

ARTICLEIMAGES/ddp2017.pdf

TRANSFER OF UNCLAIMED/UNPAID AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND ('IEPF')

In terms of the provisions of Section 124 of the Companies Act, 2013 ('the Act') and the rules made there under, the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and other applicable provisions, all monies remaining unpaid or unclaimed for a period of seven years from the date of transfer to unpaid/unclaimed dividend account, are required to be transferred to IEPF.

Information relating to unclaimed dividend and the due dates by which it can be claimed by the shareholders are as under:

Financial Year

Date of

Last date for

 

Declaration

claiming unpaid

   

dividend

2017-18

August 30,

September 30,

(Final dividend)

2018

2025

2018-19

October 19,

November 18,

(Interim dividend)

2018

2025

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

At March 31, 2019, the Company has two subsidiaries (including step down subsidiary) and has no associate and joint venture companies. The subsidiaries are:

a.    ICICI Securities, Inc.; and

b.    I CICI Securities Holdings, Inc. (subsidiary of ICICI Securities, Inc.).

During FY2019, no Company has become or ceased to be Subsidiary, Joint Venture or Associate Company of the Company.

A separate statement containing the salient features of the financial statements of the subsidiaries required to be disclosed under Form AOC-1 is enclosed as Annexure B to this Report.

RISK MANAGEMENT FRAMEWORK

Our Board oversees our risk management and has constituted a Risk Management Committee, which frames and reviews risk management processes and controls. A comprehensive system for risk management and internal controls for all our businesses has been established to manage the risks we are exposed to. The objective of our risk management framework is to ensure that various risks are identified, measured and mitigated and also that policies, procedures and standards are established to address these risks and to ensure a systematic response in the case of crystallisation of such risks.

The key risks associated with our business have been classified into implied market risk, market risk, operational risk, information technology/cyber security risk, liquidity risk, credit risk and reputation risk. Policies have been framed with respect to such risks which set forth limits, mitigation strategies and internal controls. These policies include a corporate risk and investment policy, a liquidity risk management policy, an operational risk management policy, an outsourcing policy, a fraud risk management policy, an information technology risk management policy, an information security management policy, a cyber security & cyber resilience policy and a surveillance policy.

We particularly are sensitive to risks emanating from the introduction of new products and services. Before we launch a new product or service, it is reviewed and approved by our corporate risk management group, compliance and operations groups and product and process approval committee set up for this purpose. These groups and committee review the product/ service through the lenses of regulatory compliance, risk management and integration with the existing risk management systems.

WHISTLE BLOWER POLICY

The Company has in place a Whistle Blower Policy ('the Policy') which aims to set up a mechanism that enables employees to report about potentially illegal and/ or unacceptable practices. It seeks to enable employees to report such practices without fear of victimisation and reprisal. The Policy aims to administer good governance practices in the Company and to ensure that serious concerns are properly raised and addressed.

The purpose of the Policy is to enable a person who observes an unethical practice (whether or not a violation of law) to approach Head - Compliance & Legal Group/Chairman - Audit Committee without necessarily informing his/her supervisors and without revealing his/ her identity, if he/she so chooses. The Policy governs reporting and investigation of allegations of suspected improper activities.

The employees of the Company are encouraged to use guidance provided in the Policy for reporting all allegations of suspected improper activities. In all instances, the Company retains the prerogative to determine when circumstances warrant an investigation and in conformity with the Policy and applicable laws and regulations, the appropriate investigative process is employed. The Policy complies with the requirements of vigil mechanism as stipulated under Section 177 of the Act. The details of establishment of the Whistle Blower Policy/vigil mechanism have been disclosed on the website of the Company. Excerpts of Whistle Blower policy can be viewed at

https ://www.icicisecurities.com/CMT/UPLOAD/ ARTICLEIMAGES/Whistleblower_Policy_One_Pager.pdf

INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY

The internal financial controls with reference to financial statements as designed and implemented by the Company are adequate. The internal financial controls procedure adopted by the Company is adequate for safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. Further, the statutory auditors have verified the systems and processes and confirmed that the internal financial controls over financial reporting are adequate and such controls are operating effectively.

STATUTORY AUDITORS REPORT

There were no qualifications, reservations, adverse remarks or disclaimers in the report of statutory auditors of the Company.

No frauds were reported by the auditors under Section 143 (12) of the Act.

EXTRACT OF THE ANNUAL RETURN

An extract of the annual return as provided under Section 92 (3) of the Act is given in Annexure C enclosed to this report.

The annual return filed by the Company for FY2018 with the Registrar of Companies can be viewed at https://www. icicisecurities.com/CMT/UPLOAD/ArticleAttachments/ Annual_Return_for_financial_year_2017_2018.pdf.

PUBLIC DEPOSITS

Your Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered under Section 186 of the Act are given in Annexure D to this report.

RELATED PARTY TRANSACTIONS

The Company has put in place a policy for related party transactions ('RPT policy') which has been approved by the Board of Directors. The RPT policy provides for identification of related party transactions, necessary approvals by the Audit Committee/Board of Directors/ shareholders, reporting and disclosure requirements in compliance with the Act and Listing Regulations.

The said RPT policy has been uploaded on the website of the Company and can be accessed at the following link: https ://www. icicisecurities.com/CMT/UPLOAD/ ARTICLEIMAGES/Policy_on_RPT.pdf

All transactions executed by the Company during the financial year with related parties were on arm's length basis and in ordinary course of business. All such related party transactions were placed before the Audit Committee for approval, wherever applicable.

Pursuant to the provisions of Regulation 23 (4) of Listing Regulations, approval of the Members was obtained through Postal Ballot for material related party transaction(s) with ICICI Bank Limited (Holding Company) to avail short term borrowings by way of credit facility from ICICI Bank Limited on such term(s) and condition(s) as may be agreed, subject to the maximum outstanding balance on any day not exceeding Rs,1,500 crore.

The details of related party transactions under Section 188 (1) of the Act required to be disclosed under Form AOC-2 pursuant to Section 134 (3) of the Act are given in Annexure E enclosed to this report.

DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL

The Board of the Company as at March 31, 2019 consists of eight Directors, out of which four are Independent Directors, two are Non-executive Non-independent Additional Directors and two are Whole-time Directors.

As at the end of FY2019, Shilpa Kumar (DIN: 02404667)

-    Managing Director & CEO, Ajay Saraf (DIN: 00074885)

-    Executive Director, Harvinder Jaspal - Chief Financial Officer and Raju Nanwani - Company Secretary are the key managerial personnel as per the provisions of the Act and the rules made there under.

Changes in the composition of the Board of Directors and other Key Managerial Personnel

The Board of Directors had, at its meeting held on October

19,    2018, appointed Vinod Kumar Dhall (DIN: 02591373), Independent Director of the Company as the Chairman of the Board of Directors of the Company. Pursuant to the provisions of Regulation 17 (1A) of Listing Regulations, approval of the Members was obtained through Postal Ballot for continuation of directorship of Vinod Kumar Dhall (DIN: 02591373), as an Independent Director of the Company for his present tenure upto October 27, 2019 as he attained the age of seventy-five years on February

20,    2019.

The Board of Directors in its Meeting held on April 23, 2019 have re-appointed Vinod Kumar Dhall (DIN: 02591373) as an Independent Director of the Company for a period of 5 (five) consecutive years with effect from October 28, 2019 upto October 27, 2024, subject to the approval of the Members of the Company by way of Special Resolution. Accordingly, approval of the Members is sought at the ensuing AGM for his re-appointment. Vinod Kumar Dhall (DIN: 02591373) is a person of high repute, integrity and has rich and varied experience which will be an invaluable input to the Company's strategic direction and decision making. His contributions and guidance during the deliberations at the Board and Committee meetings have been of immense help to the Company.

The Board of Directors pursuant to the provisions of Section 161 of the Act, appointed Anup Bagchi (DIN: 00105962) and Pramod Rao (DIN: 02218756) as Additional Directors (Non-executive Non-independent Directors) of the Company subject to regulatory approvals, if any, with effect from October 11, 2018 up to the date of the Twenty-Fourth AGM. The requisite approvals from the Stock Exchanges were obtained in this regard. Based on the notices received from a Member under Section 160 of the Act, and the recommendation of the Nomination & Remuneration Committee ('NRC'), the Board of Directors have approved the appointment of Anup Bagchi (DIN: 00105962) and Pramod Rao (DIN: 02218756) as the Directors of the Company (in the category of Non-executive Director) with effect from the date of the Twenty-Fourth AGM, subject to the approval of the Members at the ensuing AGM.

The Board of Directors pursuant to provisions of Section 161 of the Act, appointed Vijay Chandok (DIN: 01545262) as an Additional Director subject to regulatory approvals, if any, with effect from May 7, 2019 up to the date of the Twenty-Fourth AGM. Further, he was also appointed as the Managing Director & CEO of the Company pursuant to the provisions of Section 196 of the Act for a period of five (5) years with effect from May 7, 2019 upto May

6, 2024 subject to the approval of the Members of the Company and regulatory approvals, if any.

Based on the notice received from a Member under Section 160 of the Act and the recommendation of the NRC, the Board of Directors have approved the appointment of Vijay Chandok (DIN: 01545262) as a Director of the Company (in the category of Executive Director) with effect from the date of the Twenty-Fourth AGM subject to the approval of the Members at the ensuing AGM and regulatory approvals, if any.

During the year, Chanda Kochhar (DIN: 00043617) and Vishakha Mulye (DIN: 00203578) resigned from the Board of Directors of the Company with effect from October 5, 2018.

As Shilpa Kumar (DIN: 02404667) would be taking up a senior level position at ICICI Bank Limited, the holding company of the Company, she tendered her resignation as the Managing Director & CEO and also as a Director of the Company with effect from May 6, 2019.

Declaration of Independence

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Act and Regulation 16 of Listing Regulations which have been relied upon by the Company.

Based on the declarations received from the Independent Directors, the Board is of the opinion that the Independent Directors fulfill the criteria of independence as specified in Listing Regulations and the Act and are independent of the Management.

All Independent Directors have given declarations that they have complied with the Code for Independent Directors prescribed in Schedule IV of the Act and Code of Conduct and Business Ethics of the Company.

Retirement by rotation

In terms of Section 152 of the Act and the Articles of Association of the Company, Ajay Saraf (DIN: 00074885), Executive Director of the Company, would retire by rotation at the ensuing AGM and is eligible for re-appointment. Ajay Saraf (DIN: 00074885) has offered himself for re-appointment.

Brief details of the Directors proposed to be appointed/ re-appointed as required under Regulation 36 (3) of Listing Regulations are provided in the notice of the ensuing AGM.

BOARD AND COMMITTEES OF THE BOARD

The Company's Board is constituted in compliance with the Act and Listing Regulations. The Board of the Company at March 31, 2019 consisted of eight Directors, comprising of four Independent Directors, two Non-executive Non-independent Additional Directors and two Executive Directors. Except the Managing Director & CEO and the Executive Director, all other Directors including the Chairman of the Board are Non-executive Directors. There is a clear segregation of responsibility and authority between the Directors and the executive management. The Managing Director & CEO and the Executive Director oversee implementation of strategy, achievement of the business plans and day-to-day operations. There is an appropriate mix of Executive, Non-executive and Independent Directors. The Board has requisite number of women Directors. The Board functions either as a full Board or through various Committees constituted to oversee specific areas. The Board has, inter alia, constituted requisite mandatory Committees, viz., Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. The constitution of these Committees is in compliance with the provisions of the Act and Listing Regulations.

The Board of Directors of the Company meets at regular intervals to discuss and decide on business policy and strategy apart from other business. The Board of Directors met 6 times during FY2019 on April 14, 2018, July 23,

The names of the Directors, their attendance at Board Meetings during the financial year, attendance at the last AGM and the number of other directorships and committee memberships held by them as at the end of FY2019 are set out in the following table:

 

Number of Board

Attendance

No. of Directorships in

Number of Committee Memberships (including this Company)#

 

Meetings

at the last AGM held on

other Companies

Name of the Director

       

No. of

No. of post of

 

to

Attend

Attended

August 30, 2018

Public

Companies

Other

Companies

Memberships held in Companies#

Chairperson held in Listed entities#®

Independent Directors

Vinod Kumar Dhall,

6

5

Present

5

0

4

1

Chairman

             

(DIN: 02591373)$

             

Ashvin Parekh

6

6

Absent

2

0

3

2

(DIN: 06559989)

             

Subrata Mukherji

6

6

Present

1

0

2

0

(DIN: 00057492)

             

Vijayalakshmi Iyer

6

4

Present

9

0

8

4

(DIN: 05242960)

             

Non-executive

             

Non-Independent Directors

             

Chanda Kochhar

2

0

Absent

N.A.

N.A.

N.A.

N.A.

(DIN: 00043617)*

             

Vishakha Mulye

2

2

Present

N.A.

N.A.

N.A.

N.A.

(DIN: 00203578)*

             

Anup Bagchi

4

3

N.A. (Not a

5

0

2

0

(DIN: 00105962)

   

Director as on the date of AGM)

       

Pramod Rao

4

4

N.A. (Not a

2

0

1

0

(DIN: 02218756)

   

Director as on the date of AGM)

       

Executive Directors

Shilpa Kumar

6

6

Present

2

0

1

0

(DIN: 02404667)

             

Ajay Saraf (DIN: 00074885)

6

6

Present

0

0

1

0

*    Membership/Chairmanship of only Audit Committee and Stakeholders Relationship Committee has been considered.

@ For the purpose of computation of listed entities, listed entities as per the Ministry of Corporate Affairs (MCA) Portal have been considered.

$ Participated in one meeting through video conference.

*    Chanda Kochhar and Vishakha Mulye resigned from the Board of Directors of the Company w.e.f. October 5, 2018.

*    Anup Bagchi and Pramod Rao have been appointed as Additional Directors (Non-executive Non-independent Directors) on the Board of Directors of the Company w.e.f. October 11, 2018.

 

2018, October 19, 2018, November 21, 2018, January 14, 2019 and March 30, 2019.

There were no inter-se relationships between any of the Directors of the Company. Further, except Anup Bagchi (DIN: 00105962), Additional Director (Non-executive Non-independent Director) who holds 1,932 equity shares of the Company as on March 31, 2019, none of the Non-executive Directors hold any equity shares or convertible instruments of the Company.

The number of committees (Audit Committee and Stakeholders Relationship Committee) of public limited companies in which a Director is a member/chairman were within the limits provided under Listing Regulations, for all the Directors of the Company. The number of directorships of each Independent Director is also within the limits prescribed under Listing Regulations.

Details of Directorships held in other listed entities by the Directors of the Company as at the end of FY2019 and the Category of their Directorship are set out in the following table:

Name of the Director

 

Name of the Listed Entity®

 

Category

Independent Directors

Vinod Kumar Dhall, Chairman (DIN: 02591373)

1.

Schneider Electric Infrastructure Limited

1.

Independent Director

 

2.

Advani Hotels & Resorts (India) Limited

2.

Independent Director

Ashvin Parekh (DIN: 06559989)

ICICI Lombard General Insurance Company

Independent Director

 

Limited

   

Subrata Mukherji (DIN: 00057492)

 

Nil

 

-

Vijayalakshmi Iyer (DIN: 05242960)

1.

Religare Enterprises Limited

1.

Independent Director

 

2.

Indiabulls Ventures Limited

2.

Independent Director

 

3.

Magma Fincorp Limited

3.

Independent Director

 

4.

Aditya Birla Capital Limited

4.

Independent Director

 

5.

Arihant Superstructures Limited

5.

Independent Director

Non-executive Non-Independent Directors

Anup Bagchi (DIN: 00105962)

1.

ICICI Bank Limited

1.

Executive Director

 

2.

ICICI Prudential Life Insurance

2.

Non-Executive Director

   

Company Limited

   

Pramod Rao (DIN: 02218756)

 

Nil

 

-

Executive Directors

Shilpa Kumar (DIN: 02404667)

The Ugar Sugar Works Limited

Non-Executive Director

Ajay Saraf (DIN: 00074885)

 

Nil

 

-

@ For the purpose of computation of listed entities, listed entities as per the Ministry of Corporate Affairs (MCA) Portal have been considered.

 

Core skills/expertise/competencies of the Board of Directors

The Company has distinguished individuals on its Board of Directors with each of the Directors having several years of vast experience and knowledge in various diversified functions, viz., corporate banking and treasury, planning, project finance, investment banking and institutional and retail stock broking, competition law, corporate affairs, industry, economic regulation and finance, business strategies, institutional strengthening and business transformation, Banking and Finance, Corporate Law, etc. The Board has a right blend of dynamism and experience.

The Independent Directors are members of the Board of Directors of various reputed companies and they provide their treasured inputs and guidance at the Meetings of the Board which have been of immense help to the Company in pursuing strategic goals.

The Board is suitably equipped to understand the ever changing business dynamics of the stock broking, distribution, wealth management and investment banking sectors in which the Company operates and ensures that appropriate strategies are articulated benefitting the Company in the long run.

Separate Meeting of Independent Directors

During FY2019, a separate meeting of the Independent Directors was held on April 12, 2018, which was chaired by Vinod Kumar Dhall (DIN: 02591373), Independent Director.

The terms of reference of the mandatory Committees constituted by the Board, their composition and attendance of the respective members at the various Committee Meetings held during FY2019 are set out below:

Audit Committee Terms of Reference

(a)    To oversee the financial statements, the Company's financial reporting process and disclosure of its financial information to ensure that its financial statements are correct, sufficient and credible;

(b)    To oversee the procedures and processes established to attend issues relating to maintenance of books of account, administration procedures, transactions and other matters having a bearing on the financial position of the Company, whether raised by the auditors or by any other person;

(c)    To review, with the management, the quarterly financial statements and the certificate in respect of internal controls over financial reporting as per the requirements of the Sarbanes Oxley Act, 2002, before submission to the Board for approval;

(d)    To review, with the management, the quarterly, half-yearly and annual financial statements and auditors' report thereon before submission to the Board for approval, with particular reference to:

i.    Changes in accounting policies and practices and reasons for the same;

ii.    Major accounting entries based on the exercise of prudent judgment and estimates by management;

iii.    Modified opinion(s) in the draft audit report;

iv.    Significant adjustments made in the financial statements arising out of audit;

v.    Compliance with listing and other legal requirements relating to financial statements;

vi.    To review the management discussion and analysis of financial condition and results of operations;

vii.    Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of Section 134 of the Act;

viii.    Any related party transactions i.e. transactions of the Company of material nature, with promoter or the management, their subsidiaries or relatives, etc. that may have a potential conflict with the interests of the Company at large; and

ix.    To approve any subsequent modification of transactions of the Company with related parties, provided, that the Committee may grant omnibus approval for related party transactions proposed to be entered into by the Company subject to such conditions as may be prescribed;

(e)    To recommend to the Board the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and/or branch auditor and the fixation of audit fee;

(f)    To approve the payment to statutory auditors for any other services rendered by the statutory auditors;

(g)    To review and monitoring, with the management, performance of statutory auditor's, the auditor's independence and effectiveness of audit process;

(h)    To discuss with the statutory auditors before the audit commences about the nature and scope of audit as well as post audit discussion to ascertain any area of concern;

(i)    To call for comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of the financial statements before their submission to the Board and also to discuss any related issues with the internal and statutory auditors and management of the Company;

(j) To recommend to the Board, the appointment, re-appointment and, if required, the replacement or removal of the internal auditors/concurrent auditors/special auditors and the fixation of their remuneration;

(k) To review, with the management, performance of internal auditors;

(l) To review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;

(m) To set up procedures and processes to address all concerns relating to the adequacy of checks and control mechanism;

(n) To review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure internal control systems of a material nature and reporting the matter to the Board;

(o) To review, with the management, the adequacy of internal control systems;

(p) To monitor the compliance function and the Company's risk profile in respect of compliance with external laws and regulations and internal policies;

(q) To review reports on (o) and (p) above and on proactive compliance activities aimed at increasing the Company's ability to meet its legal and ethical obligations, on identified weaknesses, lapses, breaches or violations and the controls and other measure in place to help detect and address the same;

(r) To evaluate internal financial controls and risk management systems;

(s) To report any significant findings [including Audit Issue Rectification Index (AIRI)] to the Risk Management Committee of the Company on a quarterly basis;

(t) To discuss with the internal auditors of any significant finding and follow up thereon;

(u) To review the following matters:

i.    Penal action taken against the Company under various laws and statutes;

ii.    Reports of inspection by regulatory authorities viz. SEBI, BSE, NSE, IRDA, PFRDA, AMFI;

iii.    Follow-up action on the inspection reports;

iv.    Compliance with the inspection reports of regulatory authorities;

v.    Accountability for unsatisfactory compliance with inspection reports, delay in compliance and non-rectification of deficiencies;

(v) To reviewing the following matters:

i.    Reports of the audits conducted by the statutory auditors and their periodicity and scheduling;

ii.    Compliance with the observations of the statutory auditors;

(w) To review the following matters:

i.    Reports of the different types of audits conducted by the internal auditors and their periodicity and scheduling;

ii.    Follow-up action on the audit reports, particularly concerning unsatisfactory areas of operations;

iii.    Compliance with the observations of the internal auditors;

iv.    Omissions on the part of the auditing team to detect serious irregularities;

(x) To approve compliance programmes, review their effectiveness on a regular basis and review material compliance issues or matters;

(y) To review the Anti-Money Laundering (AML)/ Counter-Financing of Terrorism (CFT) policy annually and review the implementation of the Company's AML/CFT programme;

(z) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and looking into substantial delays in the payment to creditors;

(aa)    To review the functioning of the whistle blower mechanism or other confidential mechanisms for employees to report ethical and compliance concerns with breaches or violations;

(ab)    To investigate any activity within its terms of reference;

(ac)    To seek information from any employee; to obtain outside legal or other professional advice; and to secure attendance of outsiders with relevant expertise, if it considers necessary;

(ad)    To establish procedures for:

i.    the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters; and

ii.    the confidential, anonymous submission by employees regarding questionable accounting or auditing matters;

(ae)    To engage, without seeking Board approval, independent counsel and other advisors, as it determines necessary to carry out its duties;

(af)    To formulate/amend code of ethics and governance, insider trading code and whistle blower policy;

(ag)    To scrutinize inter-corporate loans and investments;

(ah)    To review, to the extent possible, with the management, the statement of deviations, specifically, the quarterly statement of deviation submitted to the stock exchanges under Regulation

32 (1) and the annual statement of funds utilized for the purposes other than those stated in the offer documents under Regulation 32 (7) of the Listing Regulations;

(ai)    To undertake valuation of undertakings or assets of the Company, wherever it is necessary;

(aj) To investigate into any matter in relation to the terms of reference of the Audit Committee or referred to it by the Board and for this purpose, to obtain professional advice from external sources and have full access to information contained in the records of the Company;

(ak) To carry out any other function, if any, as is mentioned in the terms of reference of the Audit Committee and any other terms of reference as may be decided by the Board and/or specified/provided under the Act or the Listing Regulations and other applicable law;

(al) Approval of the appointment of the chief financial officer or any other person heading the finance function or discharging that function after assessing the qualifications, experience and background, etc. of the candidate;

(am) Reviewing of the housekeeping note; and

(an) To review the utilization of loans and/or advances from/investment by the holding company in the subsidiary exceeding Rs,10 billion or 10% of the asset size of the subsidiary, whichever is lower including existing loans/advances/investments.

Composition

During FY2019, the composition of the Audit Committee was in compliance with the provisions of Section 177 (2), other applicable provisions of the Act and Listing Regulations. The re-constitution of Audit Committee during FY2019 is as under:

-    Re-constitution by the Board of Directors vide circular resolution dated October 11, 2018 by inducting Pramod Rao (DIN: 02218756) as a Member in place of Vishakha Mulye (DIN: 00203578).

-    Re-constitution by the Board of Directors in its meeting held on October 19, 2018 by inducting

Vijayalakshmi Iyer (DIN: 05242960) as a Member in place of Vinod Kumar Dhall (DIN: 02591373) and by appointing Ashvin Parekh (DIN: 06559989) as the Chairman of the Audit Committee.

As at the end of FY2019, the Audit Committee comprised of following as it members:

-    Ashvin Parekh (DIN: 06559989), Independent Director (Chairman);

-    Subrata Mukherji (DIN: 00057492), Independent Director;

-    Vijayalakshmi Iyer (DIN: 05242960), Independent Director; and

-    Pramod Rao (DIN: 02218756), Non-executive Non-independent Additional Director.

During FY2019, six meetings of the Audit Committee were held on April 12, 2018, April 14, 2018, July 23, 2018, October 19, 2018, January 14, 2019 and March 27, 2019. The details of the attendance at the meetings are set out in the following table:

Name of the Director

Number of Meetings held during the tenure of the Director

Number

of

Meetings

attended

Ashvin Parekh (Chairman)

6

6

Vinod Kumar Dhall1

4

3

Subrata Mukherji

6

6

Vishakha Mulye1

3

2

Vijayalakshmi Iyer2

2

2

Pramod Rao2

3

3

1    Vishakha Mulye and Vinod Kumar Dhall ceased to be Members of the Committee w.e.f. October 5, 2018 and October 19, 2018 respectively.

2    Pramod Rao and Vijayalakshmi Iyer were appointed as the Members of the Committee w.e.f. October 11, 2018 and October 19, 2018 respectively.

Nomination & Remuneration Committee Terms of Reference

(a) To submit recommendations to the Board with regard to -

i. Filling up of vacancies in the Board that might occur from time to time and appointment of additional non whole-time Directors. In making these recommendations, the Committee shall take into account the provisions of the Articles of Association and the special professional skills required for efficient discharge of the Board's functions;

ii.    Directors liable to retire by rotation;

iii.    Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal;

Senior Management shall mean officers/ personnel of the listed entity who are members of its core management team excluding board of directors and normally this shall comprise all members of management one level below the Chief Executive Officer/Managing Director/ Whole Time Director/Manager (including Chief Executive Officer/Manager, in case they are not part of the board) and shall specifically include Company Secretary and the Chief Financial Officer;

(b)    To evaluate the performance of the whole-time Directors of the Company;

(c)    To evaluate the performance of the Board, the individual Members of the Board and the Committees of the Board on certain pre-determined parameters as may be laid down by the Board as part of a self-evaluation process or get such performance evaluation done by an independent external agency and review its implementation and compliance;

(d)    To determine and recommend to the Board from time to time all remuneration, in whatever form, including performance or achievement bonus, Long Term Incentives and perquisites payable to the whole-time Directors and the senior management of the Company;

(e)    i. To approve the policy for and quantum

of variable pay payable to the employees of the Company;

ii. To recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees;

(f)    To formulate code of ethics and governance;

(g)    To recommend to the Board Governance, Remuneration and Nomination Committee of ICICI Bank Limited (BGNRC of ICICI Bank) for its recommendation to the Board of ICICI Bank for the grant of Employee Stock Options of ICICI Bank to the whole-time Directors of the Company;

(h)    To formulate the criteria for determining qualifications, positive attributes and independence of a director;

(i)    To formulate the criteria for evaluation of performance of independent directors and the board of directors and to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors;

(j) To determine and recommend to the Board from time to time, the amount of commission and fees payable to the Directors within the applicable provisions of the Companies Act, 2013 and other applicable statutes, if any;

(k) To devise a policy on diversity of the Board;

(l) Performing such functions as are required to be performed by the Committee under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as amended from time to time; and

(m) Performing such other activities as may be delegated by the Board and/or specified/provided under the Companies Act, 2013 or the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, or by any other regulatory authority.

Composition

During FY2019, the composition of the Nomination &

Remuneration Committee ('NRC') was in compliance with the provisions of Section 178, other applicable provisions of the Act and Listing Regulations. The re-constitution of NRC during FY2019 is as under:

-    Re-constitution by the Board vide circular resolution dated October 11, 2018 by inducting Anup Bagchi (DIN: 00105962) as a Member in place of Chanda Kochhar (DIN: 00043617).

-    Re-constitution by the Board of Directors in its meeting held on October 19, 2018 by appointing Ashvin Parekh (DIN: 06559989) as the Chairman of the Committee in place of Vinod Kumar Dhall (DIN: 02591373).

As at the end of FY2019, NRC comprised of following as its members:

-    Ashvin Parekh (DIN: 06559989), Independent Director (Chairman);

-    Vinod Kumar Dhall (DIN: 02591373), Independent Director; and

-    Anup Bagchi (DIN: 00105962), Non-executive Non-independent Additional Director.

During FY2019, four meetings of NRC were held on April

12, 2018, July 23, 2018, October 19, 2018 and March 30, 2019. The details of the attendance at the meetings are set out in the following table:

Name of the Director

Number of Meetings held during the tenure of the Director

Number

of

Meetings

attended

Ashvin Parekh (Chairman)

4

4

Vinod Kumar Dhall$

4

4

Chanda Kochhar1

2

1

Anup Bagchi2

2

1

$ Participated in one meeting through video conference.

1 Chanda Kochhar ceased to be a Member of the Committee w.e.f.

October 5, 2018.

2Anup Bagchi was appointed as a Member of the Committee w.e.f.

October 11, 2018.

Corporate Social Responsibility Committee

Terms of Reference

a.    To formulate and recommend to the Board the corporate social responsibility policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Act;

b.    To review proposals, approve and recommend the amount of expenditure which shall be incurred on the activities indicated in the corporate social responsibility policy;

c.    To identify corporate social responsibility policy partners and corporate social responsibility policy programmes;

d.    To recommend the amount of corporate social responsibility policy expenditure for the corporate social responsibility activities and the distribution of the same to various corporate social responsibility programmes undertaken by our Company;

e.    To monitor the implementation of Corporate Social Responsibility Policy of the Company and issuing necessary directions as required for proper implementation and timely completion of corporate social responsibility programmes;

f.    To delegate responsibilities to the corporate social responsibility team and supervise proper execution of all delegated responsibilities; and

g.    Perform such other duties and functions as the Board may require the corporate social responsibility committee to undertake to promote the corporate social responsibility activities of our Company.

Composition

During FY2019, the composition of the Corporate Social Responsibility ('CSR') Committee of the Company was in compliance with Section 135 and other applicable provisions of the Act.

As at the end of FY2019, the CSR Committee of the Company comprised of following as its members:

-    Vinod Kumar Dhall (DIN: 02591373), Independent Director (Chairman);

-    Shilpa Kumar (DIN: 02404667), Managing Director & CEO; and

-    Ajay Saraf (DIN: 00074885), Executive Director.

During FY2019, there was no change in the constitution of the CSR Committee.

During FY2019, three meetings of CSR Committee were held on April 12, 2018, July 23, 2018 and October 19, 2018. The details of the attendance at the meetings are set out in the following table:

Name of the Director

Number of Meetings held during the tenure of the Director

Number

of

Meetings

attended

Vinod Kumar Dhall

3

3

(Chairman)

   

Shilpa Kumar

3

3

Ajay Saraf

3

2

Details about the policy developed and implemented by the Company on corporate social responsibility and initiatives taken during the year are given in Annexure F enclosed to this report.

Stakeholders Relationship Committee Terms of Reference

(a)    Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.;

(b)    Allotment of shares, approval of transfer or transmission of shares, debentures or any other securities;

(c)    Investigating complaints relating to allotment of shares, approval of transfer or transmission of shares, debentures or any other securities;

(d)    Issue of duplicate certificates and new certificates on split/consolidation/renewal;

(e)    Review of measures taken for effective exercise of voting rights by shareholders;

(f)    Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered by the Registrar & Share Transfer Agent;

(g)    Review of various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the company; and

(h)    Carrying out any other function as may be decided by the Board or prescribed under the Companies Act, 2013, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, or any other applicable law.

Composition

During FY2019, the composition of the Stakeholders Relationship Committee ('SRC') of the Company was in compliance with Section 178 (5), other applicable provisions of the Act and Listing Regulations.

As at the end of FY2019, the SRC of the Company comprised of following as its members:

-    Vijayalakshmi Iyer (DIN: 05242960), Independent Director (Chairperson);

-    Shilpa Kumar (DIN: 02404667), Managing Director & CEO; and

-    Ajay Saraf (DIN: 00074885), Executive Director.

During FY2019, there was no change in the constitution of SRC.

During FY2019, three meetings of SRC were held on July

17, 2018, October 11, 2018 and January 11, 2019. The details of the attendance at the meetings are set out in the following table:

Name of the Director

Number of Meetings held during the tenure of the Director

Number

of

Meetings

attended

Vijayalakshmi Iyer

3

3

(Chairperson)

   

Shilpa Kumar

3

3

Ajay Saraf

3

3

Raju Nanwani, Senior Vice President & Company Secretary is the Compliance Officer of the Company pursuant to the requirements of Listing Regulations.

The SCORES website of SEBI for redressal of grievances of the investors is being visited at regular intervals by the officials of the Company. The Company had received 13 complaints from the shareholders during FY2019. As at the end of FY2019, no complaints were pending.

Risk Management Committee Terms of Reference

(a)    To approve risk management policies in respect of the following:

i.    Market Risk,

ii.    Credit Risk,

iii.    Operations Risk,

iv.    Fraud Risk,

v.    Information Technology Risk,

vi.    Information Security and Cyber Security Risk,

vii.    Liquidity Risk, and

viii.    Surveillance Policy.

(b)    To analyze and monitor various product limits as well as the credit and market risks associated with the different business activities of the Company;

(c)    To assess the risk of investments in securities undertaken by the proprietary desk of the Company;

(d)    To analyze and monitor various products/processes/ policies of the Company from the operational risk perspective as well and suggest risk controls to ensure that the residual risk of various business activities undertaken is within tolerable limits;

(e)    To review various risk management policies periodically;

(f)    To monitor the implementation of various risk management policies;

(g)    To review the macro economic changes, global emerging trends and regulatory changes/ requirements, trends in operational risks so that the Company is positioned to face the changes in the external environment and internal developments;

(h)    To review Internal Capital Adequacy Assessment Process (ICAAP);

(i)    Approval and review of business continuity plan and disaster recovery plan;

(j) To review the operational loss data; and

(k) To ensure that all ongoing outsourcing decisions taken by the Company and the activities undertaken by the third-party are in accordance with the Outsourcing Policy of the Company.

Composition

In compliance with the provisions of Regulation 21 of Listing Regulations which became applicable to the Company w.e.f. April 1, 2019, the Company had a duly constituted Risk Management Committee ('RMC') comprising the following as its members as at the end of FY2019:

-    Vijayalakshmi Iyer (DIN: 05242960), Independent Director (Chairperson);

-    Shilpa Kumar (DIN: 02404667), Managing Director & CEO;

-    Ajay Saraf (DIN: 00074885), Executive Director;

-    Ripujit Chaudhuri, Head - Risk; and

-    Harvinder Jaspal, Chief Financial Officer.

PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND DIRECTORS

The Company has in place an evaluation framework for evaluation of the Board, Directors and Chairman.

The Board also carries out an evaluation of the working of the Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. The evaluation of the Committees is based on the assessment of the compliance with the terms of reference of the Committees.

The evaluations for the Directors and the Board were done through circulation of questionnaires for evaluation of the performance of the Board, the Committees of the Board and the individual members of the Board, which assessed the performance of the Board on selected parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that was necessary for the Board to effectively and reasonably perform their duties. The evaluation criteria for the Directors (including Independent Directors) was based on their participation, contribution and offering guidance to and understanding of the areas that were relevant to them in their capacity as members of the Board.

With respect to the Whole-time Directors, the NRC has oversight over payment of compensation. The NRC defines key performance indicators ('KPIs') for Whole-time Directors and the organizational performance norms. The KPIs include both quantitative and qualitative aspects. The NRC assesses organizational performance as well as the individual performance of Whole-time Directors.

POLICY/CRITERIA FOR DIRECTORS' APPOINTMENT

The Company with the approval of its NRC has put in place a policy on Directors' appointment and remuneration including the criteria for determining qualifications, positive attributes and independence of a Director. The NRC would evaluate the composition of the Board and vacancies arising in the Board from time to time. The NRC, as and when required while recommending candidature of a Director, would consider the requisite special knowledge or expertise possessed by the candidate. The NRC would assess the fit and proper credentials of the candidate. The NRC would also evaluate the prospective candidate for the position of Director from the perspective of the criteria for independence prescribed under the Act. The NRC based on the above assessment will make suitable recommendations on the appointment of Directors to the Board. The NRC evaluates the performance of the Executive Directors of the Company on an annual basis.

Remuneration policy for non-Executive Directors

The remuneration payable to non-executive/independent Directors ('NEDs') of ICICI Bank Limited is governed by the provisions of Banking Regulation Act, 1949, RBI guidelines issued from time to time and the provisions of the Act and its applicable rules to the extent it is not inconsistent with the provisions of the Banking Regulation Act, 1949/RBI guidelines. The Company, being a subsidiary of ICICI Bank Limited, has adopted practices on these lines with respect to remuneration payable to non-executive/ independent Directors of the Company.

Considering the above, the permitted modes of remuneration for the NEDs, would be sitting fee for attending each meeting of the Committee/Board as approved by the Board from time to time and profit related commission, within the limits as provided under the Act and related rules there under.

All the non-executive Directors/independent Directors would be entitled to reimbursement of expenses for attending Board/Committee meetings, official visits and participation in various forums on behalf of the Company.

Profit related Commission

The NEDs would be entitled for profit related commission, in compliance with the provisions of the Act (as amended from time to time) and other applicable law.

Disclosure

The Company would make the requisite disclosure on remuneration paid to NEDs in the Annual Financial Statements.

Review

The Policy would be reviewed annually by the NRC.

COMPENSATION POLICY FOR THE WHOLE-TIME DIRECTORS AND KEY MANAGERIAL PERSONNEL AS WELL AS OTHER EMPLOYEES

Section 178 of the Act lays down requirement for the NRC to recommend to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees.

The Act prescribes that the NRC shall, while formulating the policy ensure that:

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

b)    relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c)    Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

In the above context, the Company's Compensation Policy, was approved by the NRC and subsequently by the Board, at its meeting held at April 17, 2015 and amended from time to time.

The Company has historically followed prudent compensation practices under the guidance of the NRC.

The Company's approach to compensation is intended to drive meritocracy within the framework of prudent fiscal management.

The Compensation Policy is available on the website of the Company under the link https://www.icicisecurities. com/CMT/UPLOAD/ArticleAttachments/Compensation_ Policy.pdf

Key features and objectives of Compensation Policy

The Compensation Policy of the Company is applicable for the Whole-time Directors and Key Managerial Personnel as well as other employees and covers all employees of the Company. The Nomination & Remuneration Committee ('NRC' or 'the Committee') has oversight over compensation. The Committee defines Key Performance Indicators ('KPIs') for the Organization based on the financial and strategic plan approved by the Board. The KPIs include both quantitative and qualitative aspects. The NRC assesses organizational performance as well as the individual performance of Whole-time Directors. Based on its assessment, it makes recommendations to the Board regarding fixed pay and variable pay for Whole-time Directors and bonus and long term incentive plan (LTIP) for employees, including senior management and key management personnel. Eligible employees are covered under the ICICI Bank's Employee Stock Option Scheme (ESOS) and/or under ICICI Securities Limited -Employees Stock Option Scheme - 2017 as governed by respective Scheme details.

The Company follows a philosophy of meritocracy, which is the relative differentiation of employees based on performance delivered. The design of the variable pay is linked to individual employee's performance rating which is arrived at basis assessment of performance delivered against a set of pre-defined performance objectives. These objectives are a balanced mix of financial, customer, process and compliance related objectives. To ensure effective alignment of compensation with prudent risk parameters, the Company will take into account various risk parameters along with other pre-defined performance objectives of the Company. Acts of gross negligence and integrity breach and reasonable evidence of deterioration in financial performance shall be covered under the purview of the Compensation Policy. The deferred part of the performance bonus (variable pay) will be subject to malus, under which the Company will prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence or integrity breach.

Changes in the Compensation Policy during FY2019

a)    The Board of Directors reviewed the Company's Compensation Policy for the Whole-time Directors, Key Managerial Personnel and other employees at its meeting held on April 14, 2018 and the following additions were made:

1.    Employees eligible for stock options may be granted options under ICICI Securities Limited

- Employees Stock Option Scheme - 2017 (the Scheme) as may be recommended and approved by NRC & the Board of ICICI Securities Limited.

2.    Specific criteria for employee stock option grants may include organization performance, individual performance, potential assessment, vintage and any other relevant parameters.

3.    The vesting schedule of the stock options will be governed as per the Scheme.

b)    No changes were proposed to be made in the remuneration policy for the Non-executive Directors of the Company during FY2019.

PECUNIARY RELATIONSHIP OF THE NEDS WITH THE COMPANY

Apart from receiving sitting fees for attending Board and Committee meetings and profit related commissions by the Non-executive Directors of the Company, there is no pecuniary relationship of the Non-executive Directors with the Company.

DETAILS OF REMUNERATION PAID TO WHOLE-TIME DIRECTORS DURING FY2019

Details of Remuneration (Rs,)

Particulars

Shilpa Kumar

Basic

12,698,400/-

Performance bonus1

9,976,907/-

Allowances2

16,612,404/-

Perquisites

Please refer to

 

Note below

Contribution to provident fund

1,523,808/-

Contribution to superannuation fund

-

Contribution to gratuity fund

1,057,777/-

Stock options (Numbers)

FY20193 - ICICI Bank Limited

242,500

FY201 94 - ICICI Securities Limited

122,800

FY20183 - ICICI Bank Limited##

365,750

1    In the event the quantum of bonus exceeds 50% of total fixed pay, 60% of the bonus is paid upfront and balance 40°% is deferred to be paid equally over the next three years in accordance with the compensation policy. The bonus amount paid in FY2019 includes the deferred portion of bonus approved in earlier years. The comparable bonus amount paid in FY2018 was Rs,3,194,111-.

2    Allowances include house rent allowance, running and maintenance expenses of car (including fuel, repairs and maintenance, insurance, driver's salary), leave travel allowance, personal pay, medical reimbursement of Rs,15,000/- per annum.

3    Stock Options granted by ICICI Bank Limited under ICICI Bank Employee Stock Option Scheme, 2000, vesting over three years, in proportions of 30%, 30% and 40%. These grants pertain to FY2018 and FY2011 made during FY2019 and FY2018 respectively.

4    Stock Options granted by ICICI Securities Limited under ICICI Securities Limited - Employees Stock Option Scheme - 2011, vesting over three years, in proportions of 30%o, 30%o and 40%o. This grant pertains to FY2018 made during FY2019.

** Pursuant to the issuance of bonus shares by ICICI Bank Limited on June 24, 2011, the share-linked instruments have been adjusted with increase of one option for every 10 outstanding options. Consequently, the post adjustment figure for 332,500 share-linked instruments of ICICI Bank Limited which were granted by ICICI Bank Limited during FY2018 is 365,150.

Note: Perquisites include car provided by Company in line with group benefits policy one time so furnishing allowance of up to Rs,1.8 million for a period of five years, telephone and internet usage at residence or reimbursement of expenses in lieu thereof, membership of one club, group llfe insurance cover of Rs,12.5 million, personal accident insurance cover of Rs,45.0 million, medical insurance for hospitalization coverage for self and dependents of Rs,0.4 million per annum and domiciliary medical expenses for self and dependents of Rs,0.015 million, of which Rs,0.015 million is included in the allowances, leave as per Company policy and children's scholarship as per employees children scholarship scheme of the Company and interest subsidy at 5% per annum for housing loan.

Details of Remuneration (Rs,)

Particulars

Ajay Saraf

Basic

9,860,400/-

Performance bonus1

9,362,399/-

Allowances2

12,068,952/-

Perquisites

Please refer to

 

Note below

Contribution to provident fund

1,183,248/-

Contribution to superannuation fund

-

Contribution to gratuity fund

821,376/-

Stock options (Numbers)

FY20193 - ICICI Bank Limited

106,400

FY201 94 - ICICI Securities Limited

53,900

FY20 1 83 - ICICI Bank Limited##

160,380

FY20173 - ICICI Bank Limited##

177,650

1    In the event the quantum of bonus exceeds 50% of total fixed pay, 60% of the bonus is paid upfront and balance 40% is deferred to be paid equally over the next three years in accordance with the compensation policy. The bonus amount paid in FY2019 includes the deferred portion of bonus approved in earlier years. The comparable bonus amount paid in FY2018 was Rs,6,915,300/-.

2    Allowances include house rent allowance, running and maintenance expenses of car (including fuel, repairs and maintenance, insurance, driver's salary), leave travel allowance, personal pay, medical reimbursement of Rs,75,000/- per annum.

3    Stock Options granted by ICICI Bank Limited under ICICI Bank Employee Stock Option Scheme, 2000, vesting over three years, in proportions of 30%, 30% and 40%. These grants pertain to FY2018, FY2011 and FY2016 made during FY2019, FY2018 and FY2011 respectively.

4    Stock Options granted by ICICI Securities Limited under ICICI Securities Limited - Employees Stock Option Scheme - 20H, vesting over three years, in proportions of 30%, 30% and 40%. This grant pertains to FY2018 made during FY2019.

## Pursuant to the issuance of bonus shares by ICICI Bank Limited on June 24, 20H, the share-linked instruments have been adjusted with increase of one option for every 10 outstanding options. Consequently, the post adjustment figures of 145,800 and 161,500 share-linked instruments of ICICI Bank Limited granted by ICICI Bank Limited during FY2018 and FY2011 respectively are 160,380 and 111,650.

Note: Perquisites include car provided by Company in line with group benefits policy, membership of one club, group life insurance cover of Rs,12.5 million, personal accident insurance cover of Rs,36 million, medical insurance for hospitalization coverage for self and dependents of Rs,0.4 million per annum and domiciliary medical expenses for self and dependents of Rs,0.015 million, of which Rs,0.015 million is included in the allowances, leave as per Company policy and children's scholarship as per employees children scholarship scheme of the Company.

DETAILS OF REMUNERATION PAID TO NON-EXECUTIVE DIRECTORS

As per the provisions of Section 197 of the Act, the fees payable to a Non-executive Director 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 Act and the rules there under.

The Board of Directors have approved the payment of Rs,1,00,000/- as sitting fees for each Meeting attended of the Board, Rs, 50,000/- as sitting fees for each Meeting attended of the Audit Committee and Rs, 30,000/- as sitting fees for each Meeting attended of other Committees of the Board.

Information on the total sitting fees paid to each Non-executive Director during FY2019 for attending meetings of the Board and its Committees is set out in the following table:

Name of the Director

Amount (Rs,)

Vinod Kumar Dhall (DIN: 02591373)

860,000/-

Ashvin Parekh (DIN: 06559989)

1,110,000/-

Subrata Mukherji (DIN: 00057492)

900,000/-

Vijayalakshmi Iyer (DIN: 05242960)

620,000/-

As per the remuneration framework of the Company for the Non-executive Directors, the Board approved the payment of profit related commission to the Independent Directors.

Accordingly, the profit related commission paid to the Independent Directors during FY2019 for their tenure during FY2018 is as under:

Name of the Director

Amount (Rs,)

Vinod Kumar Dhall (DIN: 02591373)

750,000/-

Ashvin Parekh (DIN: 06559989)

750,000/-

Subrata Mukherji (DIN: 00057492)

252,740/-

Vijayalakshmi Iyer (DIN: 05242960)

252,740/-

Disclosures required with respect to Section 197 (12) of the Act

The ratio of remuneration of each Director to the median employee's remuneration and such other details in terms of Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided below:

(i) The ratio of the remuneration of each director to the median fixed pay of the employees of the Company for the financial year:

The ratio of remuneration for the Whole-time directors is as under:

Shilpa Kumar, Managing Director & CEO = 71:1 Ajay Saraf, Executive Director = 53:1

The ratio of remuneration for the Independent Directors is as under:

Vinod Kumar Dhall, Chairman and Independent Director = 3.6:1

Ashvin Parekh, Independent Director = 4.1:1 Subrata Mukherji, Independent Director = 2.6:1 Vijayalakshmi Iyer, Independent Director = 1.9:1

Non-executive Non-independent Directors do not draw any remuneration from the Company.

(ii)    The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

The percentage increase in remuneration of Whole-time Directors, Chief Financial Officer and Company Secretary ranged between 8% and 18%.

(iii)    The percentage increase in the median remuneration of employees, who are part of the annual review plan in the financial year:

The percentage increase in the median remuneration of employees, who were part of the annual review plan, in the financial year was around 8%.

(iv)    The number of permanent employees on the rolls of company:

Employee headcount at March 31, 2019 was 4,051.

(v)    Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

GENERAL BODY MEETINGS

a) Annual General Meetings:

The details of General Body Meetings held in the last three years and the special resolutions passed thereat are given below:

General Body Meeting

Day, Date and Time

Venue

Special Resolution(s) passed

Twenty-Third AGM

Thursday,

Rama & Sundri Watumull -

Ratification and approval of the

 

August 30, 2018

Auditorium, Kishinchand

Employees Stock Option Scheme -

 

at 02.30 p.m.

Chellaram College, Vidyasagar Principal K.

2017 for eligible employees of the Company and grant of options.

   

M. Kundnani Chowk,

-

124, Dinshaw Wachha Road, Churchgate, Mumbai - 400 020

Ratification and approval of the

   

Employees Stock Option Scheme -2017 for eligible employees of the Subsidiaries of the Company and grant of options.

   

-

Ratification and approval of the Employees Stock Option Scheme -2017 for eligible employees of the Holding Company of the Company and grant of options.

 

The average percentage increase in the salaries of total employees other than the Key Managerial Personnel for FY2019 was around 9%, while the increase in the remuneration of the Key Managerial Personnel was in the range of 8% to 18%.

(vi)    Affirmation that the remuneration is as per the remuneration policy of the company:

Yes

(vii)    Details of Top 10 Employees as per Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

The statement containing the particulars of employees as required under Section 197 (12) of the Act, read with Rule 5 (2) of the Companies (Appointment and Remuneration) Rules, 2014 is set out in an Annexure and forms part of this report. In terms of Section 136 (1) of the Act, 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 address of the Company.

b) Special Resolution passed through Postal Ballot during the year under review:

General Body Meeting

Day, Date and Time

Venue

Special Resolution(s) passed

Twenty-Second AGM

Friday,

June 9, 2017 at 11.30 a.m.

ICICI Centre,

H. T. Parekh Marg, Churchgate, Mumbai - 400 020

No Special Resolution was passed.

Twenty-First AGM

Thursday, August 25, 2016 at 4.00 p.m.

ICICI Centre,

H. T. Parekh Marg, Churchgate, Mumbai - 400 020

No Special Resolution was passed.

 

During FY2019, special resolution was passed through postal ballot (including electronic voting) process on December 26, 2018 for continuation of directorship of Vinod Kumar Dhall (DIN: 02591373) as an Independent Director of the Company.

The Company followed the procedure as prescribed under the Companies (Management and Administration), Rules, 2014, as amended, the Secretarial Standard 2 issued by the Institute of Company Secretaries of India and Regulation 44 of Listing Regulations and other applicable laws and regulations. The Members were provided the facility to cast their votes through electronic voting (e-voting) or through postal ballot. The Board of Directors of the Company, appointed Dholakia & Associates LLP, Practising Company Secretaries as the Scrutiniser for conducting the postal ballot voting process. Bhumitra V. Dholakia, Designated Partner of Dholakia & Associates LLP acted as the Scrutiniser and submitted his report after completion of the scrutiny of the postal ballots (including e-voting). Considering the combined results of the Postal Ballot via postal ballot forms and e-voting facility, the resolution was approved on December 26, 2018. The results were declared on December 28, 2018 and communicated to the Stock Exchanges and displayed on the Company's website at https://www.icicisecurities.com/CMT/UPLOAD/ ArticleAttachments/Submissionofvotingresults.pdf. The details of the voting pattern are as under:

Total No. of Equity Shares (1)

322,141,400

No. of Votes polled (2)

285,273,182

% of Votes polled on Outstanding shares (3) = [(2)/(1)]*100

88.5553

No. of Votes in Favour (4)

285,252,288

No. of Votes Against (5)

20,894

% of Votes in favour on Votes polled (6) = [(4)/(2)]*100

99.9927

% of Votes Against on Votes polled (7) = [(5)/(2)]*100

0.0073

Whether any Special Resolution is proposed to be conducted through Postal Ballot:

Till the date of this report, the Company does not intend or propose to pass any Special Resolution through Postal ballot.

STATUTORY AUDITORS

At the AGM held at June 9, 2017, the Members approved the appointment of B S R & Co. LLP, Chartered Accountants as the Statutory Auditors for a period of five years, to hold office from the conclusion of the Twenty-Second AGM till the conclusion of the Twenty-Seventh AGM subject to the ratification by the Members at every AGM. Pursuant to the amendment in Section 139 of the Act vide Companies (Amendment) Act, 2017 effective from May 7, 2018, the requirement relating to ratification of appointment of Statutory Auditors by the Members of the Company at every AGM has been dispensed with.

Accordingly, on recommendation of the Audit Committee, the Board has proposed to dispense with the requirement of annual ratification of appointment of B S R & Co. LLP as the Statutory Auditors of the Company, subject to approval of the Members at the ensuing AGM. The said proposal is accordingly proposed in the Notice of the ensuing AGM of the Company.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Makarand M. Joshi & Co., Practicing Company Secretaries as the Secretarial Auditor of the Company, to undertake the Secretarial Audit of the Company for FY2019. The Secretarial Audit Report is given in Annexure G enclosed to this report.

There are no adverse observations in the secretarial audit report. The auditors have only commented about non-updation of certain KYC details on CKYC Registry. The Company had reported the challenges in uploading the KYC details of existing clients on-boarded prior to CKYC requirements came into effect to the Board and SEBI from time to time.

DISCLOSURE ABOUT MAINTENANCE OF COST RECORDS

The Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Act for the services rendered by the Company.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Details of foreign exchange earnings and outgo required under Section 134 (3) (m) of the Act read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are as under:

                     _ _ Rs,millions

 

FY2018

FY2019

Earnings

279.7

131.8

Outgo

464.9

621.5

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

In view of the nature of business activities of the Company, the information relating to conservation of energy and technology absorption, as required under Section 134 (3) (m) of the Act, read with Rule 8 of the Companies (Accounts) Rules 2014, is not required to be given. The Company has, however, used information technology extensively in its operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments between the end of the year under review and the date of this report, which could have an impact on the Company's operation in the future or its status as a 'going concern'.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS

During the year, there were no such orders passed by the Court or Tribunals which will have material impact on the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors of the Company confirm:

i.    that the applicable accounting standards have been followed in the preparation of the annual accounts and that there are no material departures;

ii.    that such accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at March 31, 2019 and of the profit of the Company for the year ended on that date;

iii.    that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act to safeguard the assets of the Company and to prevent and detect fraud and other irregularities;

iv.    that the annual accounts have been prepared on a 'going concern' basis;

v.    that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi.    that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE PHILOSOPHY AND COMPLIANCE

The Company firmly believes that strong corporate governance and compliance practices are of paramount importance to maintain the trust and confidence of its stakeholders and the reputation of the Company. To ensure transparency, fairness and objectivity in the organization’s functioning and unquestioned integrity of all personnel involved, the Company has proactively adopted best practices with regard to corporate governance and compliance. The Company's policy on compliance with external regulatory requirements is backed by stringent internal policies and principles to ensure, inter alia, maintenance of confidentiality of client information and prevention of insider trading.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has a policy against sexual harassment and has a formal process for dealing with complaints of harassment or discrimination. The said policy is in line with relevant Act passed by the Parliament in 2013. The Company, through the policy ensures that all such complaints are resolved within defined timelines. The number of cases reported under Prevention of Sexual

Harassment at Workplace during the year was three. All the complaints were disposed off during the year and no complaints were pending as at March 31, 2019.

EMPLOYEE STOCK OPTION SCHEME ESOS 2017

Pursuant to the recommendation of the Board of Directors in their Meeting held on December 6, 2017, the Shareholders at the Extra-ordinary General Meeting held on December 8, 2017 have approved the ICICI Securities Limited - Employees Stock Option Scheme - 2017. Subsequently, ICICI Securities Limited - Employees Stock Option Scheme - 2017 along-with amendments therein ('the Scheme') was approved by the Board of Directors of the Company in their meeting held on July 23, 2018 and by the Shareholders at the Annual General Meeting held on August 30, 2018.

The Scheme aims at achieving the twin objectives of

(i) enabling employees to participate in the long term growth of the Company; and (ii) retention of key talent. Through employee stock option grants, the Company seeks to foster a culture of long-term sustainable value creation. The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

The Scheme provides that the maximum number of options granted to any Eligible Employee in a financial year shall not, except with the approval of the Board of Directors of the Company, exceed 0.10% of the issued shares of the Company at the time of grant of options and the aggregate of all such options granted to the eligible employees shall not exceed 5% of the aggregate of the number of issued shares of the Company, from time to time, on the date(s) of grant of option(s). The eligible employees include employees as defined in the Scheme. Grants will be made by the NRC based on determination of eligibility criteria prescribed under the Scheme and vesting period will be indicated in the grant letter with minimum period of one year between the date of granting and vesting of options or such other period as may be required under applicable laws. The options may be exercised at any time after vesting but not exceeding five years from the date of vesting of the options or as may be determined by the NRC.

The Board of Directors at its Meeting held on October

19, 2018 approved a grant of 176,700 options for FY2018 to Whole-time Directors of the Company. Each option confers on the employee a right to apply for one equity share of face value of Rs,5/- each of ICICI Securities Limited at Rs,256.55, being closing price on a recognized Stock Exchange having higher trading volume on the date immediately prior to the date of meeting of the Committee.

Particulars of options granted by the Company up to March 31, 2019 are given below:

Options granted till March 31, 2019

176,700

Options forfeited/lapsed

Nil

Options vested

Nil

Options exercised

Nil

Total number of options in force

176,700

Number of shares allotted pursuant to exercise of options

Nil

Extinguishment or modifications of options

Nil

Amount realized by exercise of options INR

Nil

-    The above mentioned stock option grant will have a vesting schedule of three years, in the ratio of 30%-30%-40% starting one year from the date of the grant of the options.

-    Exercise Period would commence from the date of vesting and expire on completion of five years from the date of vesting of Options.

-    The fair value of the underlying shares has been determined by an independent valuer. The calculation of fair value of grants is in accordance with the Black-Scholes options pricing model. The fair value of the options granted in FY2019 is ' 90.08.

The key assumptions used to estimate the fair value of options granted during FY2019 are given below:

Risk-free interest rate

7.74% to 7.89%

Expected life

3.51 to 5.51 years

Expected volatility

41.94% to 43.71%

Expected dividend yield

3.66%

The relevant disclosures as per Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and Circular no. CIR/CFD/POLICY CELL/2/2015 dated June

16, 2015 have been uploaded on our website and can be accessed at https://www.icicisecurities.com/ CMT/Upload/ArticleAttachments/Disclosure_with_ respect_to_Employees_Stock_Option_Scheme_as_on_ March_31_2019.pdf.

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report as stipulated under Regulation 34 of Listing Regulations has been hosted on the website of the Company at https://www.icicisecurities. com/CMT/UPLOAD/ArticleAttachments/Business_ Responsibility_Report_FY_2018_2019.pdf. Any Member interested in obtaining a physical copy of the same may write to the Company Secretary at the Registered Office of the Company.

CHANGE IN NATURE OF BUSINESS, IF ANY

None

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has been in compliance with the applicable Secretarial Standards during FY2019.

CODE OF CONDUCT AS PRESCRIBED UNDER THE SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015

In accordance with the requirements of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has instituted a comprehensive code of conduct to regulate, monitor and report trading activities of its directors, employees and other connected persons in the securities of the Company as a listed entity and in the securities of all the listed companies as SEBI registered intermediary.

COMPLIANCE WITH THE CODE OF CONDUCT AND BUSINESS ETHICS

The Code of Conduct and Business Ethics of the Company aims at ensuring consistent standards of conduct and ethical business practices across the Company. This Code is reviewed on an annual basis and the latest Code is available on the website of the Company (www.icicisecurities.com). Pursuant to Listing Regulations, a confirmation from the Managing Director & CEO regarding compliance with the Code by all the Directors and senior management of the Company forms part of the Annual Report.

CORPORATE GOVERNANCE

Philosophy on Corporate Governance

The Company's corporate governance philosophy encompasses regulatory and legal requirements, which aims at a high level of business ethics, effective supervision and enhancement of value for all stakeholders.

The Company considers its stakeholders as partners in success, and the Company remains committed to maximising stakeholders' value. The Company believes that sound corporate governance mechanism is critical to retain and enhance stakeholders' trust. The Company is committed to exercise overall responsibilities rigorously and diligently throughout the organisation, managing its affairs in a manner consistent with corporate governance requirements. The Company's corporate governance philosophy is based on an effective independent Board, the separation of Board's supervisory role from the executive management and the Board Committees, generally comprising a majority of Independent/ Non-executive Directors and chaired by Independent Directors, to oversee critical areas.

MATERIAL SUBSIDIARIES

According to Regulation 16 (1) (c) of Listing Regulations a 'Material subsidiary' shall mean a subsidiary, whose income or net worth (i.e. paid up capital and free reserves) exceeds 10% of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. There are no material subsidiaries of the Company as per the said provision.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Independent Directors are familiarized with their roles, rights and responsibilities in the Company as well as with the nature of industry and business model of the Company through induction programmes at the time of their appointment as Directors and through presentations on economy and industry overview, key regulatory developments, strategy and performance which are made to the Directors from time to time. The details of the familiarization programmes have been hosted on the website of the Company and can be accessed on the link

https://www.icicisecurities.com/ResearchAttachments/

Familiarisation_Programme_for_Independent_Directors.pdf.

CEO/CFO CERTIFICATION

In terms of Listing Regulations, the certification by the Managing Director & CEO and the Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained.

MEANS OF COMMUNICATION

It is the Company's belief that all stakeholders should have access to complete information regarding its position to enable them to accurately assess its future potential. The Company disseminates information on its operations and initiatives on a regular basis. The Company's website (www.icicisecurities.com) serves as a key awareness facility for all its stakeholders, allowing them to access information at their convenience. It provides comprehensive information on the Company's strategy, financial performance, operational performance and the latest press releases.

The Company's investor relations personnel respond to specific queries and play a proactive role in disseminating information to both analysts and investors. All information which could have a material bearing on the Company's share price is released as per regulatory requirements. The information is also disseminated to National Stock Exchange of India Limited ('NSE') and BSE Limited ('BSE') from time to time.

The financial results, presentations made to the institutional investors or to the analysts, other information and various compliances as required/prescribed under Listing Regulations are filed electronically with NSE through NSE Electronic Application Processing System (NEAPS) and BSE through BSE Listing Centre and are also available on their respective websites in addition to the Company's website. Additionally, the information is also disseminated to NSE/BSE, by e-mail or fax, as and when required.

The Company's quarterly financial results are published in English language national daily newspaper circulating in the whole or substantially the whole of India, inter alia, Economic Times/Business Standard/Mint and in one daily newspaper published in the Marathi language inter alia, Maharashtra Times/Navshakti.

The Management's Discussion & Analysis forms part of the Annual Report.

General Shareholder Information

Annual    Day, Date & Venue

General    Time

Meeting_ _ _

Twenty-Fourth Friday,    Rama & Sundri

AGM    August 2, 2019 Watumull Auditorium,

at 2.30 p.m. Kishinchand Chellaram College, Vidyasagar Principal K. M.

Kundnani Chowk,

124, Dinshaw Wachha Road, Churchgate, _ _ Mumbai - 400 020_

Financial Year: April 1, 2018 to March 31, 2019

Share Transfer System

Pursuant to the NCLT Order, the operations of Karvy Computershare Private Limited, the Registrar & Share Transfer Agent of the Company were transferred to Karvy Fintech Private Limited with effect from November 17, 2018 and accordingly, all the existing agreements to which Karvy Computershare Private Limited is a party including the agreements entered into by the Company will be in full force and vest with Karvy Fintech Private Limited, the Registrar & Share Transfer Agent of the Company.

Post listing of shares on the Stock Exchanges w.e.f. April 4, 2018, the Company's shares are compulsorily traded in demat mode on NSE and BSE.

The entire Promoters' holding is in dematerialized form and the same is in line with the directives issued by the Securities and Exchange Board of India. During the year, the Company had received requests from two Shareholders holding 105 equity shares of face value Rs,5/- each for re-materialization of shares. As at March 31, 2019, the entire paid-up equity share capital of the Company (except 105 equity shares) is held in dematerialized form.

Registrar and Transfer Agents

The address of Karvy Fintech Private Limited ('Karvy'), the Company's Registrar and Transfer Agent is as follows:

Karvy Fintech Private Limited

Karvy Selenium, Tower - B, Plot No. 31 & 32,

Financial District, Nanakramguda, Serilingampally Mandal,

Hyderabad - 500 032 E-mail id: einward.ris@karvy.com Tel No.: +91-40-6716 2222 Fax No.: +91-40-2300 1153 Toll Free No.: 1-800-3454-001

Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impact on equity

Not applicable

Commodity price risk or foreign exchange risk and hedging activities and disclosures as per the format prescribed, if applicable

The Company neither trades in commodity segment nor offers trading facility in commodity segment to its client. However, the Company may be exposed to foreign exchange risk on account of its proprietary positions as well as its customers' positions in the capacity of trading/ clearing member. Foreign exchange risk of proprietary positions is managed by applying the overall open position limit and various other risk limits approved by the Risk Management Committee. Foreign exchange risk on customers' positions is mitigated by collecting upfront margins from customers and monitoring of customers' positions by marking them to market at regular interval.

Plant Locations

Not applicable

Address for Correspondence

For share transfer/dematerialization of shares/other queries relating to the securities:

Karvy Fintech Private Limited Unit: ICICI Securities Limited Karvy Selenium, Tower - B

Plot No. 31 & 32, Financial District, Nanakramguda,

Serilingampally Mandal, Hyderabad - 500032

E-mail id: einward.ris@karvy.com

Tel No.: +91-40-6716 2222

Fax No.: +91-40-2300 1153

Toll Free No.: 1-800-3454-001

For queries on Annual Report or investors' assistance: Raju Nanwani,

Company Secretary & Compliance Officer,

ICICI Securities Limited ICICI Centre, H. T. Parekh Marg,

Churchgate, Mumbai 400 020 Tel No.: +91 22 6637 7100 Fax No.: +91 22 2288 2455

Investors can register their complaints/grievances at the Company's e-mail ids:

investors@icicisecurities.com, IR@icicisecurities.com

The aforesaid e-mail ids and other relevant details have been displayed on the website of the Company.

DISCLOSURES

a)    There are no materially significant transactions that may have potential conflict with the interests of the Company.

b)    No penalties or strictures have been imposed on the Company by any of the Stock Exchanges, the Securities and Exchange Board of India or any other statutory authority, for any non-compliance on any matter relating to capital markets, during the last three years.

c)    In terms of the Whistle Blower Policy of the Company, no employee of the Company has been denied access to the Audit Committee.

d)    The Company has a policy for determining 'material' subsidiaries which can be viewed on the web-link: https://www.icicisecurities.com/CMT/UPLOAD/ ARTICLEIMAGES/Policy_for_Determining_Material_ Subsidiaries.pdf

e)    The Company has a policy on dealing with related party transactions which can be viewed on the web-link: http://www.icicisecurities.com/CMT/UPLOAD/ ARTICLEIMAGES/Policy_on_RPT.pdf

NON-COMPLIANCE OF ANY REQUIREMENT OF CORPORATE GOVERNANCE REPORT AS PER SCHEDULE V (C) (2) TO (10) OF LISTING REGULATIONS

Nil

COMPLIANCE CERTIFICATE FROM THE AUDITORS

The certificate obtained from a practicing company secretary regarding compliance of conditions of Corporate Governance as stipulated in Listing Regulations is given in Annexure H.

A certificate from a company secretary in practice that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of Companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs or any such statutory authority as stipulated in Listing Regulations is given in Annexure I.

ADOPTION OF MANDATORY AND NON-MANDATORY REQUIREMENTS

The Company has complied with all mandatory requirements specified in Regulations 17 to 27 and clauses

(b) to (i) of sub-regulation 2 of Regulation 46 and some of the non-mandatory requirements pertaining to Corporate Governance stipulated under Listing Regulations.

The Company has adopted following non-mandatory requirements:

1.    Financial Statements with unmodified audit opinion;

2.    Separate posts of Chairman and Managing Director & CEO; and

3.    Reporting of internal auditor directly to the Audit Committee.

GREEN INITIATIVES IN CORPORATE GOVERNANCE

In line with the 'Green Initiative', the Company has effected electronic delivery of Notice of AGM, Annual Report and Postal Ballot Notices to those Members whose e-mail IDs are registered with the respective Depository Participants and downloaded from the depositories, viz. NSDL/CDSL. The Act and the underlying rules as well as Regulation 36 of Listing Regulations, 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 Green Initiative. In order to support the cause, we will continue to request members to register/update their e-mail ids with their Depository Participants so as to enable the Company to send various communications through electronic mode. We believe and endorse the 'Green Initiative' as it would not only rationalize the use of paper but also ensure prompt communication, avoid loss in transit and have reference value of the communication.

ACKNOWLEDGEMENTS

The Company is grateful to the Securities and Exchange Board of India, National Stock Exchange of India Limited, BSE Limited, National Securities Depository Limited, Central Depository Services (India) Limited,

The Insurance Regulatory and Development Authority of India, The Pension Fund Regulatory and Development Authority, other statutory authorities, its bankers and lenders for their continued co-operation, support and guidance. The Company wishes to thank its investors for their support.

The Directors express their gratitude for the support and guidance received from the Company's Holding Company viz., ICICI Bank Limited and other group companies and also express their warm appreciation to all the employees of the Company for their commendable teamwork, professionalism and contribution during the year. The Directors extend their sincere thanks to the clients of the Company for their support.

AWARDS & RECOGNITION

-    Outlook Money Retail Broker of the Year - 2018

-    TOP 100 franchise opportunity for 2019 - Franchising World magazine

-    UTI MF and CNBC TV18 Financial Advisor Awards 2017-18 - Best performing National Financial Advisor Equity Broker

-    ABP News Banking Financial Services Insurance Awards - Best Equity Broker of the Year 2018

-    ABP News Banking Financial Services Insurance Awards - Innovation In Customer Education Award for Investor Conference Calls 2018

                                                                   For and on behalf of the Board

                                                                  Sd/-

                                                                   Vinod Kumar Dhall

                                                                   DIN: 02591373

                                                                   Chairman

Date: April 23, 2019

Place: Mumbai

 

Director’s Report