ICICI Bank Limited
Annual Report 2019

Plain-text annual report

iMobile Your bank in an app. Offers more than 250 services for banking, payments, investments and shopping Mera iMobile The multilingual mobile banking app for our rural customers. Get banking services, current mandi prices and real-time weather information in 11 languages Eazypay Designed for merchants to receive payments from customers digitally through cards, internet banking, UPI and more Pockets ICICI Bank’s e-wallet for easy recharges, bill payments, shopping and offers Money2India A convenient and secure remittances app that helps our NRI customers to quickly send money to their loved ones back home ICICI Bank Limited, ICICI Bank Towers, Bandra-Kurla Complex, Mumbai 400 051 | www.icicibank.com SS_2019_APR_ICICI BANK LIMITED_CORPORATE_11169034_ICICI BROCHURE_SIZE 8.25(W) x 10.75(H)_INCH_CLOSE SIZE A N N U A L R E P O R T 2 0 1 8 - 1 9 R A NSFER S T D N U F X P AYMENTS A T & I N SURANCE F M HO P P ING OFFE R S S INSTA LOA N S INSTA F D PAYM E N T S DIGITAL BANKING SOLUTIONS CONVENIENT SAFE FAST Our approach to reporting About this report In this Annual Report, ICICI Bank Limited has sought to adopt the principles of the International Integrated Reporting Framework as developed by the International Integrated Reporting Council (IIRC). Through this report, the Bank aims to provide its stakeholders a comprehensive view of the organisation’s financial and non-financial resources and its strategy to create long-term value. The report provides insights its strategic priorities, risks and mitigants, governance structure, and the manner in which it has leveraged the six capitals, namely Financial, Manufactured, Intellectual, Human, Social and Relationship, and Natural. Details on the various capitals are covered in the chapters: ICICI Bank's Business Model, Management's Discussion & Analysis, Strategic Focus Areas for Business, Human Capital, Social and Relationship Capital and Natural Capital. into the Bank’s primary activities, Reporting boundary The non-financial information in the integrated report largely covers data on the India operations of ICICI Bank Limited and ICICI Foundation for Inclusive Growth. Reporting period The Annual Report provides material information relating to the Bank's strategy and business model, operating context, performance and statutory disclosures covering the financial year April 1, 2018 to March 31, 2019. Safe Harbour Certain statements in this Annual Report relating to a future period of time (including inter alia concerning our future business plans or growth prospects) are forward-looking statements intended to qualify for the 'safe harbour' under Contents INTEGRATED REPORT ICICI Bank at a Glance Key Business Areas Financial Highlights Message from the Chairman Board of Directors Message from the Wholetime Directors ICICI Bank’s Business Model Strategic Focus Areas for Business ICICI Bank’s Risk Governance Framework Key Risks Impacting the Bank’s Business Human Capital Social and Relationship Capital Natural Capital STATUTORY REPORTS Directors’ Report Independent Auditor's Certificate on Corporate Governance Management’s Discussion & Analysis Key Financial Indicators: Last 10 Years 2 4 6 8 10 11 12 14 26 27 32 36 42 47 117 118 140 applicable securities laws including the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties include, but are not limited to statutory and regulatory changes, international economic and business conditions; political or economic instability in the jurisdictions where we have operations, increase in non-performing loans, unanticipated changes in interest rates, foreign exchange rates, equity prices or other rates or prices, our growth and expansion in business, the adequacy of our allowance for credit losses, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks, changes in India’s sovereign rating, as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission. Any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this release. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov Join us on the mission to reduce paper consumption and save trees. Register your email address with the Bank to receive all communication digitally, by visiting the ICICI Bank website at: www.icicibank.com/aboutus/annual.page FINANCIAL STATEMENTS Independent Auditors’ Report – Financial Statements Financial Statements of ICICI Bank Limited Independent Auditors’ Report – Consolidated Financial Statements Consolidated Financial Statements of ICICI Bank Limited and its Subsidiaries Statement Pursuant to Section 129 of Companies Act, 2013 Basel Pillar 3 Disclosures Glossary of Terms 142 152 238 252 307 309 310 Digital Banking Solutions Convenient | Fast | Safe ICICI Bank has played a pioneering role in the digital transformation of the financial services industry in India. We continuously invest in innovative products and state-of- the-art platforms leverage emerging that technologies to make banking easier, safer, more personalised, more accessible and more intuitive for our customers and also enable us to become more agile and more efficient. The customer is at the centre of all our initiatives and we believe in being ‘Fair to Customer, Fair to Bank’. At ICICI Bank, we believe that digitally-enabled banking solutions not only empower our customers to fulfil their ambitions but also create value for our stakeholders. 1 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSANNUAL REPORT 2018-19 ICICI BANK AT A GLANCE ICICI Bank is a large private sector bank in India offering a diversified portfolio of financial products and services to retail, SME and corporate customers. The Bank has an extensive network of branches and ATMs. It is at the forefront of offering state-of-the-art services through digital channels like mobile and internet banking and leveraging emerging technologies. Vision To be the trusted financial services provider of choice for our customers, thereby creating sustainable value for our stakeholders H 12.39 trillion H 220.72 billion Consolidated Total Assets Core Operating Profit* 16.89% Total Capital Adequacy Ratio 44.6% Average CASA ratio 3.42% Net Interest Margin 14,987 ATMs 4,874 Branches 2 46.9% Retail Loans as a proportion of total loans (including non-fund based outstanding) Over 86% Savings Account transactions done through digital channels* * during fiscal 2019; others at March 31, 2019 INTEGRATED REPORT STATUTORY REPORTS FINANCIAL STATEMENTS Mission To grow our risk-calibrated core operating profit by: Delivering products and services that create value for customers Bringing together all our capabilities to seamlessly meet customer needs Conducting our business within well-defined risk tolerance levels Bouquet of 'insta' products In fiscal 2019, the Bank extended its range of first-of-its-kind 'insta' offerings, enabling retail and MSME customers to avail these products in a digital manner, without visiting a branch. Best Company to Work for Business Today magazine ranked the Bank as the 'Best Company to Work for' in the BFSI sector in fiscal 2019 for the third year in a row. iPal resolved over 13 million queries The Bank's AI-powered chatbot resolved over 13 million customer queries in fiscal 2019. Skilled over 400,000 individuals ICICI Foundation for Inclusive Growth imparted vocational training to over 400,000 less-privileged individuals since inception. 3 KEY BUSINESS AREAS Providing financial solutions for every customer RETAIL, SME AND RURAL BANKING We offer deposit, credit and other financial products and services to individuals, households and small businesses across India, through our digital channels and extensive branch network spanning urban and rural areas. We also offer select products like deposits and remittances to non-resident Indians, and local market offerings in select international geographies. WHOLESALE BANKING We offer financial solutions to large and medium sized companies and their business and channel partners, and to financial and government/public sector entities. The product offerings long-term finance, working capital, trade, cash management, In transaction banking and treasury management. addition to our network in India, we leverage our international presence the cross-border requirements of our clients. include deposits, to meet TREASURY Our treasury operations comprise management of the Bank’s liquidity, government securities portfolio and interest rate risk, proprietary trading, and foreign exchange and derivative solutions for clients. 4 ANNUAL REPORT 2018-19KEY SUBSIDIARIES 5 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSFINANCIAL HIGHLIGHTS TOTAL DEPOSITS TOTAL ADVANCES 6,529.20 5,609.75 4,900.39 4,214.26 3,615.63 2,710.50 3,289.79 2,432.17 2,283.26 1,971.83 1,148.60 1,342.30 2,009.67 2,276.71 1,718.39 5,866.47 10.7% 5.2% 24.0% 5,123.95 12.5% 5.0% 25.9% 4,642.32 16.1% 4.8% 27.3% 4,352.64 21.6% 4.3% 27.5% 3,875.22 24.3% 4.4% 28.8% 42.5% 46.6% 51.8% 56.6% 60.1% 495.20 588.70 749.83 889.58 962.70 March 2015 March 2016 March 2017 March 2018 March 2019 March 2015 March 2016 March 2017 March 2018 March 2019 Current Account (` in billion) Savings Account (` in billion) Term Deposit (` in billion) Total (` in billion) Retail Domestic Corporate Small & Medium Enterprise (SME) Overseas Total (` in billion) TOTAL ASSETS CAPITAL ADEQUACY 9,644.59 8,791.89 7,717.91 7,206.95 6,461.29 17.02% 16.64% 4.24% 3.55% 12.78% 13.00% 17.39% 3.03% 13.74% 18.42% 2.50% 14.43% 16.89% 1.80% 13.63% 12.78% 13.09% 14.36% 15.92% 15.09% March 2015 March 2016 March 2017 March 2018 March 2019 March 2015 March 2016 March 2017 March 2018 March 2019 Total Assets (` in billion) Tier I Tier II CET1 Total 6 ANNUAL REPORT 2018-19NII & NIM PROVISION COVERAGE RATIO 270.15 70.6% 212.24 190.40 3.48% 3.49% 217.37 230.26 3.25% 3.23% 3.42% 58.6% 50.6% 47.7% 40.2% FY2015 FY2016 FY2017 FY2018 FY2019 March 2015 March 2016 March 2017 March 2018 March 2019 Net Interest Income (NII) (` in billion) Net Interest Margin (NIM) Provision Coverage Ratio (%) UNCONSOLIDATED NET PROFIT CORE OPERATING PROFIT 111.75 97.26 98.01 198.03 180.27 179.10 189.39 220.72 67.77 33.63 FY2015 FY2016 FY2017 FY2018 FY2019 FY2015 FY2016 FY2017 FY2018 FY2019 Unconsolidated Net Profit (` in billion) Core Operating Profit (` in billion) (Profit before provisions and tax, excluding treasury income) 7 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSMESSAGE FROM THE CHAIRMAN It has been an eventful and rewarding year as Chairman of the Board of ICICI Bank. The year was marked by improved operating profitability and further strengthening of the balance sheet of the Bank, as well as expansion of the Board and new strategic initiatives by the executive management. The ICICI brand is one of India’s oldest and strongest financial services brands and we continue to contribute to nation building, pioneer innovation, serve the growing financial needs of society and be a significant part of the financial services ecosystem. We are optimistic about the inherent medium and long-term potential of Indian economy. Key the economic parameters have been stable with inflation at comfortable levels and interest rates moderating. The priority now would be to harness investment and consumption drivers to accelerate the pace of growth. As growth gains momentum, it will lead to many more opportunities for all sectors of the economy and in turn for financial services. In the last few years, the banking system and the Bank have gone through a challenging period with an elongated credit cycle and accumulated stress in the system. Several factors including important policy initiatives such as the enactment and implementation of the Insolvency and Bankruptcy Code (IBC) are playing their part in addressing the past challenges. The changes are now visible and resolutions have gathered pace allowing banks to prepare for a new phase of growth. As the process evolves, operational inefficiencies will be resolved resulting in a more mature and better-equipped mechanism for resolution of stressed assets. During the year, liquidity challenges in the non-banking financial sector highlighted the importance of prudent risk management and judicious asset liability management. During this period, the banking system was largely unaffected by the tight liquidity conditions due to well-established practices and a stable liability profile. The banking system helped to mitigate the impact of the challenges in the non-banking finance companies and benefitted from increased lending opportunities. Over the last year, the Bank has undertaken several initiatives to secure a sustainable and profitable future. Many of these initiatives are internal and aimed at making structural changes within the Bank. They will continue to strengthen the Bank's core and improve its profitability going forward. The Bank has focussed on growing risk calibrated operating profit by leveraging its strong franchise, and building a more granular and higher rated portfolio. 8 ANNUAL REPORT 2018-19advantage. The Bank has established norms for governance, and strictly deals with cases in accordance with these norms. In keeping with the focus on governance, the Board of Directors has been expanded and has been further diversified in the past year. Our new board members include several eminent persons with a wide range of technology, corporate governance experience and regulatory bodies among others. I am sure the Board and management will immensely benefit from their expertise and support. With these changes the Bank is in a good position to be proactive in adapting to and addressing emerging opportunities and risks in the system. in Over the years, ICICI has established a number of non- banking financial services businesses that serve the spectrum of financial needs. The Bank’s non-banking businesses are among the leaders in their market segments. We are the only financial conglomerate in India with four listed companies including the Bank. Each of these businesses is focussed on maximising its share of the financial services opportunity in a profitable manner, with a focus on prudent risk management and customer centricity. I wish to thank all our stakeholders and my colleagues on the Board of Directors. Together we look forward to a bright future for this esteemed institution. With best wishes, Girish Chandra Chaturvedi Chairman large opportunity offered by The management team has worked hard to grow the business, substantially improve core operating profitability and address the stress of the past. Given India’s growth the potential, the Bank has aimed to maximise market share by leveraging its strengths as a well-recognised brand and a strong and diversified liability franchise in driving growth in key customer segments. The Bank has focussed on growing risk calibrated operating profit by leveraging its strong franchise, and building a more granular and higher rated portfolio. The balance sheet of the Bank has been strengthened substantially in the past year and risk management practices are oriented towards building a more sustainable and profitable growth profile. With continued improvement in operating profitability and normalisation of credit costs, the Bank would seek to deliver better returns to shareholders. Entities in the financial sector have transformed from standalone companies to diversified conglomerates and are now venturing into the domain of ecosystems where they are capable of fulfilling a broad spectrum of financial requirements of their customers across retail, corporate and other segments. This new perspective of business has initiated a behavioural change in entities to be on the lookout for new partnerships, customer segments and ways to better serve existing customers. The Bank has been a technology leader and has been able to leverage technology to introduce new and more convenient ways of accessing the Bank’s services. We are confident that innovation is prospering both within and outside the banking system, and the Bank will build and leverage partnerships to multiply its efforts to provide a best-in-class experience through the life cycle of its services. this new phase of expansion, For it becomes necessary to not just re-think the current way of doing business but also to establish strong governance practices. The Bank is committed to high standards of regulatory compliance and governance and views this as a key guiding force that strengthens its competitive 9 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSBOARD OF DIRECTORS Board Members Girish Chandra Chaturvedi Non-Executive (part-time) Chairman Hari L. Mundra Independent Director Lalit Kumar Chandel Government Nominee Director S. Madhavan Independent Director Neelam Dhawan Independent Director Radhakrishnan Nair Independent Director Rama Bijapurkar Independent Director B. Sriram Independent Director Uday Chitale Independent Director Anup Bagchi Executive Director Sandeep Bakhshi Managing Director & CEO Sandeep Batra Executive Director (Designate)* Vishakha Mulye Executive Director Chief Financial Officer Rakesh Jha Company Secretary Ranganath Athreya 10 Board Committees Audit Committee Uday Chitale, Chairman S. Madhavan Radhakrishnan Nair Board Governance, Remuneration & Nomination Committee Neelam Dhawan, Chairperson Girish Chandra Chaturvedi Rama Bijapurkar B. Sriram Corporate Social Responsibility Committee Radhakrishnan Nair, Chairman Rama Bijapurkar Uday Chitale Anup Bagchi Credit Committee Sandeep Bakhshi, Chairman Girish Chandra Chaturvedi Hari L. Mundra Vishakha Mulye Customer Service Committee Rama Bijapurkar, Chairperson Hari L. Mundra Anup Bagchi Sandeep Bakhshi Fraud Monitoring Committee S. Madhavan, Chairman Neelam Dhawan Radhakrishnan Nair Anup Bagchi Sandeep Bakhshi Information Technology Strategy Committee B. Sriram, Chairman Neelam Dhawan Anup Bagchi Sandeep Bakhshi Risk Committee B. Sriram , Chairman S. Madhavan Sandeep Batra* Stakeholders Relationship Committee Hari L. Mundra, Chairman Uday Chitale Anup Bagchi * Will be inducted as a member with effect from the date of RBI approval of his appointment. ANNUAL REPORT 2018-19MESSAGE FROM THE WHOLETIME DIRECTORS Over the past year, we as a team have worked towards single-mindedly strengthening ICICI Bank’s balance sheet and franchise, and increasing the Bank’s share of profitable business opportunities. We believe these efforts are reflected in the core operating profit growth, the substantial increase in provisioning coverage and the reduction in net NPAs. As India continues its march to become a USD 5 trillion economy in the next few years, we will work towards maximising our share of is the opportunity. Our objective Sandeep Bakhshi Managing Director & CEO Anup Bagchi Executive Director The customer has always been at the core of ICICI Bank’s retail strategy. In fiscal 2019, the Bank launched new initiatives in both loans and deposits segments to offer more convenience to customers. We added a few more digital lending products to our bouquet of instant loans by leveraging technology and data analytics. The list includes instant home loan approvals to instant pre-approved customers, top-up home to existing customers, instant approval for car and two-wheeler loans and instant 'PayLater'. digital credit called We have also launched an array of products to add more value to our customers’ lives with new savings accounts, innovative fixed deposit plans, and credit cards in association with various partners. loans Sandeep Batra Executive Director (Designate)* The Bank’s risk management policies of the last few years have resulted in improving incremental asset quality even as slippages from the older portfolio reduced. The Bank has improved the rating mix of the portfolio and reduced the concentration risk, along with expansion of net interest margin. We will continue to drive efficiencies by decongesting and automating our processes. We are focussed in core operating on growth profits and lower credit costs, within the guardrails of sound risk management and a commitment to regulatory compliance. We will continue to adhere to strong governance as we focus on sustainable growth and value creation. standards level, to reduce to grow our core operating profit the credit costs and to a normalised thereby delivering sustainable returns to our shareholders. ‘Fair to Customer, Fair to Bank’ is an essential element of our approach. We have made significant changes in our organisation to align ourselves to the opportunity and to ensure seamless and collaborative efforts across the Bank. We thank our stakeholders for the confidence reposed in us, and look forward to your continued support. Vishakha Mulye Executive Director In fiscal 2019, we continued with our risk calibrated growth strategy and strengthened our wholesale banking the objective of franchise with capitalising on market opportunities and growing our core operating profit. We continued to grow our credit portfolio with focus on granularity, transaction banking and in the credit rating improvement profile, with enhanced focus on pricing. We maintained our recovery and resolution efforts on the non- performing assets. We reorganised our business in line with market opportunities, put more effective cross-sell strategies for both retail and corporate products. the number We also corporate serving of branches clients and innovative introduced products and solutions such as digitised trade offerings for superior customer experience. increased in place * Will be inducted as a member with effect from the date of RBI approval of his appointment. 11 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSICICI BANK’S BUSINESS MODEL CAPITALS VALUE DRIVERS CORE BUSINESS ACTIVITIES Financial Capital Maintain a strong balance sheet and enable business continuity, sustained growth and shareholder returns • Ensure a strong capital base • Maintain robust funding profile • Continue to strengthen portfolio quality • Shareholder value creation For further details, please refer to the Management’s Discussion and Analysis section on page 118 Human Capital Our competent workforce with diverse skill-sets and valuable experience • Employee-centric culture based on the value proposition – Saath Aapka (which means ‘With You’) • Continuous skill training and For further details, please refer to the write-up on Human Capital on page 32 Intellectual Capital Our ability to stay innovative and develop products and services that provide superior experiences to our customers For further details, please refer to the write-up on Strategic Focus Areas for Business on page 14 Manufactured Capital Our network of branches, ATMs and digital channels that act as touchpoints for our customers For further details, please refer to the write-up on Strategic Focus Areas for Business on page 14 Social and Relationship Capital Our commitment towards social empowerment and a financial ecosystem accessible to all For further details, please refer to the write-up on Social and Relationship Capital on page 36 Natural Capital Impact on natural resources either through our operations or through business focus For further details, please refer to the write-up on Natural Capital on page 42 12 capability building • Employee engagement • Early adoption of emerging technologies enabling innovation • Augmenting existing digital products • Entering into mutually beneficial partnerships • Paperless and environment-friendly processes • A combination of physical and digital channels enabling seamless service delivery • Strengthening digital capabilities for cost efficiency, process efficiency and enhancing customer experience • Core and supporting IT systems that are responsive and scalable • Providing skill training through ICICI Foundation for Inclusive Growth • Increasing penetration of financial services in rural and unbanked areas • Empowering rural women entrepreneurs • Supporting environment-friendly projects, subject to appropriate risk-return assessment • Efficient energy management in the Bank’s operations • Use of renewable energy • Environment-friendly initiatives Provide savings products Wealth creation and management Provide credit to support consumption and economic activities Facilitate payments and transactions Strategic investments to enhance business capabilities for long-term value creation STRATEGIC FOCUS AREAS FOR BUSINESS A customer-centric approach with a focus on value creation and deeper relationships Risk calibrated growth in core operating profits Being 'Fair to Customer, Fair to Bank' Continuous investments in technology, exploring innovative ideas and leveraging partnerships to maintain our leadership Maintain comfortable levels of capital at all times For further details, please refer to the write-up on Strategic Focus Areas for Business on page 14 ANNUAL REPORT 2018-19GROWTH DRIVERS Emerging opportunities in the Indian economy A strong franchise and brand Continuous enhancements to products and services Strong risk management and compliance culture OUTPUTS Net Interest Income ` 270.15 billion during fiscal 2019 Fee Income of ` 119.89 billion during fiscal 2019 Total loans and advances of ` 5.87 trillion at March 31, 2019 Deposits of ` 6.53 trillion at March 31, 2019 OPERATING WITHIN THE GUARDRAILS OF RISKS Credit Market Liquidity Operational Information Technology Cyber Legal Reputation Compliance OUTCOMES • Core operating profit grew by 16.5% in fiscal 2019 • Cost of funds among the lowest across private sector banks • Net NPA ratio decreased from 4.77% at March 31, 2018 to 2.06% at March 31, 2019 • Provision coverage ratio of 70.6% at March 31, 2019 excluding prudential and technical write-offs • Capital adequacy ratio of 16.89% at March 31, 2019 • Credit cost as a percentage of average advances to be in the range of 1.2% to 1.3% in fiscal 2020 • Target of 15.0% consolidated return on equity by June 2020 • Employee base of 86,763 at March 31, 2019 • 7.84 person-days of learning per employee in fiscal 2019 • Organisation architecture de-layered at the senior level to enhance collaboration across teams and greater speed-to-execution • Empowered teams at local level to enable quick decision making • Industry first features like 'Money Coach' and 'Discover' introduced in the mobile banking app, iMobile, leading to increase in average time spent by customers on the app • Partnerships with Amazon and MakeMyTrip for credit cards, leveraging high customer traffic platforms • Increased end-to-end digital disbursement of credit through products like 'Insta Home Loan', 'Insta Auto Loan' and 'PayLater' • Launched savings products for specific customer segments - 'Advantage Women Aura Savings Account' and 'The One' • Extensive network of branches and ATMs among private sector banks • Over 86% of transactions in savings accounts were done through digital channels in fiscal 2019 • Mobile app, iMobile offers over 250 services and is rated 4.5/5.0 on the Google Play Store • Improved customer convenience • ₹ 922.0 million spent under the Bank’s corporate social responsibility initiatives in fiscal 2019 • Provided loans to 5.2 million women beneficiaries through 440,000 SHGs till March 31, 2019 • Over 400,000 individuals provided vocational training by ICICI Foundation till March 31, 2019; 54% of the trainees were women • Platinum rating to nine offices of the Bank by the Indian Green Building Council • 7.2% of total energy consumed is generated from renewable energy sources • Consistent reduction in electricity consumption • Water consumption per day in large offices is 20% lower than BIS benchmark 13 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSTRATEGIC FOCUS AREAS FOR BUSINESS ICICI Bank has focussed on being a future-ready its organisation and has consistently evolved capabilities to ensure agility and value creation in its businesses. This focus is integral to the Bank’s strategy and underscores the several pioneering initiatives taken by the Bank In fiscal 2019, the Bank continued to make progress on its strategic objectives even as the year saw significant focussed on challenges. The Bank’s businesses growing the core operating profits in a risk calibrated and granular manner. The Bank implemented a number of initiatives to expand its customer base and deepen the penetration of products and services, thus further strengthening the franchise. The digital strategy was key to driving the Bank’s reach and unlocking potential in its businesses. ICICI Bank completed 20 years of its digital banking journey in fiscal 2019, and aims to remain at the forefront in re-imagining banking through technology, digitisation and innovation. Meeting customer needs The objective of the Bank is to develop products and services that create value for customers. Technology and digitisation play an integral part in meeting this objective. The Bank focuses on providing high levels of functionality and investing in technologies to provide a secure, superior, seamless and uniform service experience to customers across all channels. RETAIL BANKING The retail business was a key driver of growth for the Bank in fiscal 2019. The retail loan portfolio grew by 21.7% year-on-year at March 31, 2019 to ` 3,528.31 billion. The retail loan portfolio as a proportion of the total loan portfolio increased from 56.6% at March 31, 2018 to 60.1% at March 31, 2019. Including non-fund loans based outstanding, the proportion of retail was 46.9% at March 31, 2019. Total savings deposits grew by 13.3% to ` 2,276.71 billion at March 31, 2019. The Bank continued to see strong growth in its retail term deposits and maintained a robust funding profile. 14 The Bank’s strategy is focussed on leveraging its branch network, digital channels, partnerships and presence in various ecosystems to expand its customer base. The Bank seeks to offer a comprehensive suite of products and services to customers. These include savings, investment, credit and protection products based on customer needs, along with convenient payment and transaction banking services. Cross-selling appropriate products to existing customers based on analytics is a key element of the Bank’s strategy. The Bank seeks to adopt a 'Fair to Customer, Fair to Bank' approach across its business. Digital initiatives have played a key role in driving growth and efficiency in the retail business. These initiatives have improved the efficiency of branches. The Bank is now able to serve more customers at its existing branches and has enabled employees to perform more value-added activities. The Bank periodically reviews branches based on customer footfalls and economic activities to ensure optimal distribution of the branch network. The Bank added 431 insta-banking kiosks during fiscal 2019 taking the total count to 1,167 at March 31, 2019. PHYSICAL CHANNELS AT MARCH 31, 2019 4,874 Branches 14,987 ATMs 391,625 POS terminals* 1,167 Insta-banking kiosks 1,451 Cash acceptance machines * ICICI Merchant Services Pvt. Ltd. ANNUAL REPORT 2018-19With a focus on convenience and value creation, a number of products and services relevant to customers were launched during the year. FD Xtra is a bouquet of fixed/recurring deposit products offering additional benefits like monthly income, life insurance cover, systematic investments and credit card. The Bank’s Seniors Club Savings Account was enhanced during the year with features like doorstep services and a special facility called Quantum Optima for earning higher returns. In another unique offering, the Bank launched ‘Advantage Woman Aura Savings Account’, an account exclusively for working women in India and ‘The One’, a premium savings account for salaried and self-employed professionals in the age group of 35-50 years. These products offer a bouquet of benefits to meet the life-stage needs of the customers. Other convenience products include digital issuance and reload of travel cards and a digital e-gift card called 'Expressions'. the The Bank believes there are significant opportunities to grow the personal loans and credit card portfolio by mining the existing customer base for cross-sell and partnerships with companies. Partnerships with platforms with large customer bases and transaction volumes offer unique opportunities for growth and enhancing service delivery and customer experience. The Bank entered into partnerships with Amazon and MakeMyTrip for issuing co-branded credit cards during fiscal 2019. technology RURAL AND INCLUSIVE BANKING The Bank believes that a key driver of India’s growth is the rural economy which has distinct financial needs. The Bank’s rural banking operation caters to the complete financial requirements of customers in rural and semi-urban locations, primarily engaged in agriculture and agro-related value chain activities. The Bank’s reach in rural areas is supported by a network of branches, on-field staff and business correspondents providing last-mile access in remote areas. Of the Bank’s network of 4,874 branches, 50.1% were in rural and semi-urban areas with 556 branches in villages that were previously unbanked. The Bank had over 5,000 customer service points enabled through the business correspondent network at March 31, 2019. financial needs of The Bank has adopted a societal approach in meeting the its rural customers and offers a bouquet of services and products covering the end-to-end requirements of rural customers. 15 The Bank’s mobile application, iMobile, is a key channel of service. It was revamped in fiscal 2019 to add an array of design-thinking led services along with intuitive widgets. These services include India’s first software robotics algorithm-led investment advisory application on mobile, ‘Money Coach’, which manages the entire investment journey of a customer. The Bank has also introduced a first-of-its-kind paperless KYC and online registration process for mutual funds at a single click and seamless peer-to-peer fund transfer to registered payees using voice commands enabled ‘Siri’. Another by Apple’s virtual voice assistant, feature that was added is an intuitive interface called ‘Discover’ which enables customers to track personal spends and deliverables. Other features on iMobile include setting card limits, checking account balances, getting instant digital credit up to ` 20,000 and saving frequently made transactions as ‘Favourites’. As a security feature, the app allows customers to manage their credit card limits and block/unblock cards as needed. iMobile now offers more than 250 services which are available across all mobile platforms. The Bank recognises the need to be relevant in its product and service offerings to meet customer expectations. Data analytics, artificial intelligence and machine learning are providing significant opportunities for making this possible. ICICI Bank leverages these technological capabilities to design products that meet specific customer needs. One such need was accessible and affordable credit which the Bank is addressing through its instant lending options. Customers are offered the facility of availing personal loans, business loans, home loans including top-up and auto loans entirely on the digital platform. The Bank has digitised the process end-to-end enabling instant disbursement to pre-approved customers. The Bank implemented various initiatives to increase the contribution of digital channels in its offering of unsecured products. INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSTRATEGIC FOCUS AREAS FOR BUSINESS SMALL AND MEDIUM ENTERPRISES factors (SMEs) require a Small and medium enterprises relationship approach depending comprehensive on various including size, supply chain linkages and leverage capability. The Bank has been providing tailored products and services for enabling wide-ranging support and has been partnering SMEs for their business growth. current efficiencies. The During fiscal 2019, several digital products were launched for SMEs to meet their business and transaction banking requirements and add better operational account opening process has been digitised with a seamless account opening experience at the client's premises. Instant digitally processed overdraft facility of up to ` 1.5 million is available to the SMEs. Additionally, the Bank launched business loans based on Goods and Services Tax returns. The transaction banking experience has been digitised with enhancements in ‘Trade Online’ and trade platform the digital ‘Corporate Internet Banking’ enabling general banking transactions and export-import transactions online without visiting the branch. The mobile application, Eazypay, a digital POS for merchants, facilitates business of SMEs. Further, the Bank is focussing on harnessing available digital data and scaling-up digital lending to SMEs. The Bank follows strong risk management practices in managing its SME portfolio to enhance the portfolio quality by reducing concentration risk and to focus on granular and collateralised-lending based growth. With a view to increasing the risk adjusted operating profit from the portfolio, reliance is also placed on harnessing opportunities across transaction banking, foreign exchange and personal banking solutions with the SMEs. in the country. The The Bank endeavours to support the ambitions of SMEs by providing innovative platforms and solutions, that go beyond banking and finance and nurture the SME ecosystem ‘Beyond Banking’ platform is a strategic tool that focuses on a slew of initiatives and forums to give the SME community exposure to sectoral insights, global best practices, and media business expansion 'SME Empower’ recognition. The digital platform (B2B) Business an is to buy and marketplace sell products online. is an online knowledge resource centre for SMEs. that enables SMEs ‘SME Toolkit’ opportunities Business online to The segments include farmers, rural salaried customers, commodity traders, seed and farm input dealers and processors. The key focus for the business is to build banking habits and to help in creating wealth for rural customers. Apart from direct lending to customers, the Bank also engages with Micro Finance Institutions (MFIs) as a crucial delivery channel for reaching out to the otherwise under-served population and for enabling financial inclusion. The Bank provides financial assistance in the form of term loans to MFIs. These funds are then further extended to individuals and members of Self Help Groups/Joint Liability Groups. Digitisation underpins the Bank's efforts in rural banking in a big way and has helped in decongesting processes and empowering teams to increase efficiencies in the delivery of services to rural customers. A unique mobile application called ‘Mera iMobile’ was launched in fiscal 2017. It allows rural customers to avail more than 135 services including non-banking information and agri- related advisory on crop prices, news and weather. The app is available in 11 languages and is used by more than half a million customers. Till March 31, 2019, the app had processed a total of 24.1 million financial and non-financial transactions. The Bank’s efforts in the rural areas are also meeting the larger goals of women empowerment and development. Some key initiatives in this direction include the support given to Self Help Groups that promote and development of solutions for dairy farmers. among women entrepreneurship For details on the Bank's initiatives in rural areas, refer to page 40 16 ANNUAL REPORT 2018-19WHOLESALE BANKING Meeting the needs of Indian corporates has been a long-standing business focus for the Bank. This is provided through solutions for credit-related needs like working capital and term loans, transaction banking solutions and market-related solutions like foreign exchange and derivatives. Following the significant challenges faced by the Bank in its corporate portfolio, the Bank put in place specific measures with a focus on lending to higher-rated, well-established corporates, enhancing the quality of the existing corporate portfolio and reducing concentration risk. The Bank made significant progress towards these objectives. The Bank continues to focus on financing opportunities in the corporate sector based on appropriate risk assessment and pricing. In fiscal 2019, the Wholesale Banking Team underwent a reorganisation with an objective to create flexibility and enable the Bank to capture all opportunities arising from existing customers’ ecosystem. A better focus on the services sector has been enabled through a dedicated team. Further, a new Portfolio Management Group has been set up to assist in construction and management of the wholesale banking portfolio based on a desired matrix of risks and returns. The Bank is focussing on meeting the transaction banking needs of corporate clients, including foreign exchange and derivatives, trade finance and payments, and collections. In fiscal 2019, the Bank actively engaged with a consortium of 10 banks for harnessing the Blockchain Distributed Ledger Technology platform in a bid to help digitise inland trade within the country. The Bank also made domestic letter of credit issuance and advising modules available to corporates for handling their inland trade requirements. Around 250 corporates have signed up on the blockchain platform for domestic and international trade finance. In fiscal 2019, the Bank launched a digital payment solution, ‘e-DOCS’, on its Trade Online platform. This application leverages information available on Export Data Processing and Monitoring System (EDPMS) portal and aids clients in managing their entire export banking life cycle digitally. In another digital initiative for corporate customers, in fiscal 2019, the Bank provided a digital financial supply chain platform with integrated payment solutions that helps in streamlining delivery systems across the entire value chain of corporates. Further to its initiatives in creating industry ecosystems, the Bank has partnered with Tea Board in implementing an online payment solution for buyers and helping other industry stakeholders including brokers, sellers and warehouses in managing their funds flow through automated settlement processes and customised Management Information System (MIS) reports. INTERNATIONAL BUSINESS ICICI Bank’s international footprint consists of branches in the United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, South Africa, China, Offshore Banking Unit (OBU) and IFSC (International Financial Services Centre) Banking Unit (IBU) and representative offices in the United Arab Emirates, Bangladesh, Malaysia and Indonesia. The Bank also has wholly-owned subsidiaries in the United Kingdom and Canada with branches across both countries. ICICI Bank UK also has an offshore branch in Germany. The Bank is repositioning its international franchise to focus on deposits and remittances from non-resident Indians. The Bank is also focussed on deepening its relationships with Indian corporates in international markets trade, transaction banking and lending opportunities, as well as select risk-calibrated local opportunities. for maximising India-linked the In The Bank has been playing a pioneering role in promoting digital initiatives in the international banking arena. The Bank has been continuously introducing and innovating the to enhance customer experience. products remittances space, the Bank introduced various initiatives like loyalty programme for Money2India offered for customers in America, customer-get-customer based 'Block-your-rate' functionality on referral programme, Money2World and 'Request money' option whereby ICICI Bank beneficiaries can request remitters to send money via Money2India. The Bank also enabled blockchain- based processing for outward remittances from India to Canada, a first-of-its-kind in the industry. The Bank aims to replicate the same across other overseas locations. 17 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSfollows a 4D The Bank the entire customer journey across products, processes and channels. framework to map THE 4D FRAMEWORK Delivery with speed and accuracy Decongestion Digitisation Delivery with empathy Some key initiatives taken during fiscal 2019 under the 4D framework include: 1. Auto verification of a significant portion of financial transactions at branches has been enabled and the cut-off time for clearance of cheques has been extended. 2. For services relating to Trade and Remittances, round-the-clock fulfillment of transactions have been enabled with a dedicated team to handle post cut-off transactions. Also, the Trade Online channel has been re-engineered to offer a best- in-class customer experience. Customers can now settle their inward remittance, request Exchange (EEFC) conversion Earners Foreign Currency STRATEGIC FOCUS AREAS FOR BUSINESS GOVERNMENT BANKING The Bank’s customers include government institutions, both central and states and local bodies. The Bank aims to facilitate the efforts of these institutions by providing integrated collections and payment solutions, IT solutions, participating in pilot projects and strengthening their efforts in enhancing e-governance. This also results in deposit balances for the Bank. For details on the Bank’s role in supporting government initiatives, refer to the write-up on Social and Relationship Capital on page 41 Enhancing customer service rapidly changing economic the Bank makes continuous efforts Customer service is an important pillar of banking and towards improving customer experience and operational efficiency. A and technological landscape has created new dimensions in customer expectations from banks. Speed and convenience are two key drivers in meeting these expectations. To keep up with evolving customer expectations, the Bank is increasing its focus on customer delight and advocacy. This is being measured through the Net Promoter Score, Transaction Experience and Customer Satisfaction metrics. 18 ANNUAL REPORT 2018-19and submit the imports bill of entry through the online channel. Also, new trade processing hubs have been introduced in Delhi and Kolkata for servicing customised trade transactions. Express trade processing zones have been opened in commercial branches of Mumbai and Delhi to deliver across-the-counter trade finance solutions. 3. of clearing cognitive Introduction technique, which extensively uses data analytics, to improve the time taken in the cheque clearing process and enhanced due diligence resulting in stronger process controls. cheque 4. Customer and channel dashboards were developed for mortgage loan for stage-wise status updates loans, enabling customers to track their application on-the-go. 5. The fund transfer user journey for retail customers using internet banking was revamped leading to significant reduction in customer effort. 6. Branch processes were reviewed and redesigned, and critical services were enabled for self-service, thereby reducing customer effort. 7. During the year, the Bank took initiatives that underscored the ethos of ‘Fair to Customer, Fair to Bank’ by enabling right selling of products to customers and enhancing the customer's trust in the Bank. CUSTOMER GRIEVANCE REDRESSAL MECHANISM The Bank believes and treats its customers fairly and seeks to provide transparency in its product and service offerings. The Bank makes continuous efforts to educate its customers to enable them to make informed choices regarding banking products and services. The Bank also ensures that the products offered are based on an assessment of the customer’s financial needs. The Bank has a well-defined grievance redressal mechanism with clear turnaround time for providing resolution to customers. All complaints received by the Bank get recorded in a Customer Relationship Management (CRM) system and tracked for end-to-end resolution. The Bank also has an escalation matrix built in the CRM system to ensure that customer requirements are appropriately addressed within the stipulated timelines. Further, as recommended by RBI, the Bank has appointed a senior retired banker as the Internal Ombudsman of the Bank. The Customer Service Committee of the Board, the Standing Committee on Customer Service (Customer Service Council) and the Branch Level Customer Service Committees monitor customer service at different levels. THE BANK HAS IN PLACE THE FOLLOWING POLICIES FOR CUSTOMERS Customer Relations Policy Customer Grievance Redressal Policy Customer Rights Policy CUSTOMER SERVICE POLICIES Cheque Collection Policy Policy on Collection of Dues and Repossession of Securities Customer Compensation Policy Deposit Policy 19 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSTRATEGIC FOCUS AREAS FOR BUSINESS The number of customer complaints of the Bank (excluding cash discrepancy at non-ICICI Bank ATMs) reduced by 27.8% in fiscal 2019 as compared to fiscal 2018. For details on customer complaints, refer to page 235 Technology at the core The Information Technology (IT) Strategy adopted by the Bank is to provide an integrated, resilient and responsive technology environment that enables it to achieve its business goals of risk calibrated granular growth, cost-effectiveness and a superior customer experience in a secure and compliant manner. In line with this strategy, the Bank has adopted the theme of Run, Transform and Re-Imagine for its digital and technology initiatives to remain at the forefront of transformation in the Indian banking industry. Growth in transaction value in fiscal 2019 Run – Focus on running systems in a reliable and secure manner and at the same time making incremental changes to bring in process efficiencies. Transform – Involve product and process innovation to become ‘Digital to the Core’ and adopt novel ways of business operations leveraging technology. Re-Imagine – Delivering business services and servicing customer needs in a dramatically different way. The Bank has a Board-level Information Technology Strategy Committee, which approves the strategy and policies for information technology and ensures that the IT strategy is aligned with the Bank’s business strategy. the is overseen by The Bank has a well-structured process for innovation which Innovation Steering Committee. Key stakeholders include business heads, product heads and representatives of the human resources function. The Committee meets regularly to provide strategic guidance and direction on new initiatives for effective implementation. The Bank has a dedicated Business Intelligence and Analytics team that works across business areas 30% Credit cards 65% Mobile banking 21% Debit cards Digital leadership 32% of industry share making the Bank a leader in Immediate Payment Service (IMPS) transactions Digital adoption Over 86% Savings Account transactions are done through digital channels 20 Leader in the electronic toll collection market in terms of value and volume First bank in India to issue more than one million RFID tags (FASTags) iPal resolved over 13 million queries The Bank's AI-powered chatbot resolved over 13 million customer queries in fiscal 2019. iPal has a smart channelling feature where the customer is redirected to a live chat agent when the bot is unable to resolve the query. ANNUAL REPORT 2018-19 on projects relating to business analytics, decision strategies, learning, forecasting models, machine rule engines and performance monitoring. The Bank maintains a comprehensive enterprise-wide data warehouse and employs best-in-class statistical and modelling tools for leading edge analytics. In driving an innovation and start-up mindset, the Bank has set up a start-up investment and partnerships team to collaborate with and invest in fintech startups and co-develop products aligned with the ICICI Group’s digital roadmap. The engagements with startups are focussed on digital lending, revenue growth, digital platforms and improving process efficiency. The Bank has set aside a corpus for investing in fintech startups. Till March 31, 2019, the Bank had made investments in five start-ups. While the Bank is focussed on growing its own digital channels, it is also creating an ecosystem through partnerships which cover all broad segments of customer and merchant payments. The Bank is offering a host of APIs (Application Programming Interfaces) and SDKs (software developer kits) which facilitate third party apps to offer payment solutions for their retail customers. The Bank has pioneered the adoption of software robotics, with more than 1,000 software robotic processes deployed that are handling 20% of the transactions, thus augmenting operational efficiency, higher accuracy and reduction in processing time for customer services. CYBER SECURITY introduced in the Bank’s mobile application, iMobile, wherein a customer can view card-related parameters and modify them based on one's requirements. These parameters include changing the card limit, temporarily blocking the card or selectively blocking the card for ATM or internet transactions. The Bank also ran an intensive campaign across different channels of the media to create customer awareness on these features. The Bank views cyber threats as a very important risk and they form part of the enterprise risk management framework. The Board level IT Strategy Committee oversees the information and cyber security related threat landscape and the Bank’s preparedness to address these from a prevention and response perspective. Clear policies have also been put in place with regard to cyber security and information security which are reviewed by the senior management on a periodic basis. The Bank also conducts and participates in cyber security drills to continuously fine tune its response mechanisms. The Bank also runs multiple awareness and internal simulation exercises to ensure high levels of employee awareness on information security. r o m e n ti o c e t t s o C u r p Prevention t n e m e g a n a M t h g i s r e v o a G n o d v e P r r n o a c n e c s e s e s and connectivity to networks Rapid digitisation of business, increasing transaction intensity and ecosystems have made cyber security increasingly important. The Bank needs to be prepared for cyber risk as we become more digital and maintain open and flexible platforms to encourage partnerships and innovation. At ICICI Bank, the triad of Confidentiality, Integrity and Availability (CIA) are at the heart of its comprehensive information security framework. With a 360-degree approach to cyber security, the Bank believes that this is a continuous journey in line with rapidly evolving digital technologies and developments in the external risk landscape. The approach covers all aspects of prevention, detection and response. The Bank also lays emphasis on customer elements like protection from phishing, adaptive authentication, awareness initiatives and protection and risk configuration ability in the hands of the customers. In fiscal 2019, a unique feature was ntiality I n t e g Data Security r i t y e nfid o C Availability Technology D e t e c t i o n Response 21 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS STRATEGIC FOCUS AREAS FOR BUSINESS Risk calibrated growth CONCENTRATION RISK MANAGEMENT (in %) The Bank is committed to ensuring long-term risk calibrated growth based on its strategic objectives. The Bank’s performance in fiscal 2019 was aligned to its focus on pursuing this strategy based on opportunities and its risk appetite. The Bank’s core operating profits (i.e. operating profits excluding treasury income) grew by 16.5% in fiscal 2019, led by broad-based growth in domestic businesses. The growth was supported by strong risk management practices leading to further reduction in concentration and improvement in the rating composition of the portfolio. The Bank’s rating mix of disbursements has changed significantly. Over 90% of the disbursements in fiscal 2019 in the domestic and international portfolio were to corporates rated A- and above. 20.2 15.0 18.5 13.3 16.8 12.4 12.5 14.3 13.6 10.8 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018 March 31, 2019 Exposure to top 20 borrowers (excluding banks) as a % of total exposure Exposure to top 10 borrower groups as a % of total exposure PORTFOLIO RATING MIX RATING CATEGORY1,2 AA- and above A+, A, A- A- and above BBB+, BBB, BBB- BB and below3 Unrated Total MARCH 31, 2017 MARCH 31, 2018 MARCH 31, 2019 37.2% 19.0% 56.2% 28.7% 14.6% 0.5% 42.4% 20.1% 62.5% 27.5% 9.4% 0.6% 100.0% 100.0% 45.1% 22.0% 67.1% 28.2% 4.5% 0.2% 100% Total net advances (D billion) 4,642.32 5,123.95 5,866.47 1. Based on internal ratings 2. For retail loans, ratings have been undertaken at product level 3. Includes net non-performing loans For details on the Bank’s financial performance and medium and long-term strategy, refer to the Management’s Discussion and Analysis on page 118 22 ANNUAL REPORT 2018-19Key product launches during fiscal 2019 Bouquet of Insta products In fiscal 2019, ICICI Bank extended its range of instant products by introducing a slew of offerings across segments. They are: Insta Home Loan This facility enables lakhs of pre-approved salaried customers of the Bank to avail final sanction letter digitally and instantly for loans up to ₹ 10 million for a tenure of up to 30 years using the Bank’s internet banking facility. Insta Top Up on Home Loan Through this first-of-its-kind initiative, the Bank helps its existing home loan customers to get instant top-up of up to ₹ 2 million for a tenure of up to 10 years. Insta Auto Loan The Bank provides its pre-approved customers with a facility to avail the final sanction letter of a car loan instantly and digitally upto ₹ 2 million for a tenure of up to seven years. This facility offers loan for 100% of the on-road price of the vehicle. Insta Two-Wheeler Loan The Bank offers a facility to millions of its pre-approved customers instant sanctions of loans up to ₹ 0.2 million for a tenure of up to three years for buying a two wheeler. Like the Insta Auto Loan, this loan also covers 100% of the on-road price of the two-wheeler. to avail PayLater instant digital credit facility enables This pre-approved customers to buy small ticket items immediately in a completely digital and paperless manner through their mobile phones. An invite-only facility, PayLater also instant allows eligible customers to avail credit up to ₹ 20,000. Insta Top Up on Travel Cards Through this facility, customers can reload foreign currency to ‘ICICI Bank Travel Card’ instantly. They can also reload the travel cards of their close relatives including their parents, children or spouse after linking them to his/ her savings account. Expressions Gift Card This card allows customers of the Bank to create their own e-gift card and send it on WhatsApp, SMS or email to anyone including non-ICICI Bank customers in an instant and seamless manner. Customers can load any amount ranging from ₹ 500 - ₹ 9,500 onto their ‘Expressions Gift Card’ through iMobile, the Bank’s mobile banking application, and internet banking. 23 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSTRATEGIC FOCUS AREAS FOR BUSINESS Accounts: Savings and Current Advantage Woman Aura Savings Account This is the first ever account exclusively for working women in India that offers a host of benefits across categories like banking, lifestyle, convenience, tax investment & planning, child education and protection. Credit Cards In fiscal 2019, ICICI Bank introduced a range of credit that offer best-in-the-industry rewards and cards benefits for customers. They are: Emeralde Credit Card for our premium customers This card has been curated with experiences and features and lifestyle for senior professionals and self- employed entrepreneurs. travel, wellness across Amazon Pay ICICI Bank Credit Card Launched in partnership with ‘Amazon Pay’, the online payment platform of the global e-commerce company Amazon, this is the first card in the country to enable Amazon Prime members to earn 5% reward points on shopping on www.amazon.in. Each reward point is equivalent to a rupee which customers can redeem on www.amazon.in from a catalogue of more than 160 million items available on the website or by paying merchants who accept Amazon Pay. The reward points are uncapped and do not expire. Manchester United Credit Card into a multi-year ICICI Bank entered the partnership with Manchester United, iconic English Premier League football club, to 24 The One This for is a premium savings account upwardly-mobile salaried and self-employed professionals. This account offers a slew of benefits for meeting the long-term financial needs of the customers and their families, namely asset creation, wealth management, life-protection and investment. First-of-its-kind digital application to open Current Accounts ICICI Bank launched a first-of-its-kind digital application facility on smartphones and tablets enabling bank officials to open current accounts of self-employed individuals and businesses in just a few hours. introduce a range of competitive co-branded credit cards. The Bank also launched co- branded debit cards in association with Manchester United. launched the Bank MakeMyTrip ICICI Bank Credit Card In partnership with MakeMyTrip, an online travel company, two co-branded credit cards that are tailor made to suit the aspirations of travel enthusiasts in these cards, customers can accumulate unlimited reward points and redeem them across their travel bookings and various partner merchants on the travel portal. the country. Through ANNUAL REPORT 2018-19Corporate and MSME Trade Online Platform ICICI Bank revamped its Trade Online platform by introducing an array of new digital services which enable large, medium and small sized corporates, as well as MSMEs, to undertake almost all their export-import transactions online. Additionally, is the first digital banking platform to offer quick and convenient credit of inward remittances within minutes. ‘Trade Online’ Eazypay ICICI Bank added an array of industry-first features to ‘Eazypay’, the country’s first digital Point-of-Sale (PoS) application. The all new Eazypay offers a host of services with many industry-first features including instant and paperless application for card-swipe machine and bar code scanning for instant invoicing. International Banking GST Business Loan ICICI Bank launched ‘GST Business Loan’, a new working capital facility that enables MSMEs to get overdraft based on the turnover reported in their Goods and Services Tax (GST) returns. The facility is available to any MSME including non-customers of ICICI Bank for loans upto ₹ 10 million. Digital Financial Supply Chain for corporates Digital Financial Supply Chain (DFSC) platform is a real-time digital platform that extends functionalities of ERP across dealers and suppliers and provides integrated payments and channel financing to corporates. First Bank in India to go live on Swift gpi ICICI Bank became the first bank in India to go live on SWIFT global payments innovation (SWIFT gpi) platform faster significantly cross-border payments by improving efficiency for all category of remitters. The service enables real-time payments tracking across correspondent banks. transparency facilitate and to Better money transfer options for NRIs ICICI Bank became the first Bank in the country to allow NRIs to remit money to India through social media, including WhatsApp and by email, through Money2India. FD Xtra The Bank launched FD Xtra, an innovative range of fixed and recurring deposits, specially designed to meet life-stage needs and goals of customers such as term-insurance, saving for down-payment of home and car, retirement planning, child education and fulfilling travel aspirations among others. the (Westpac), one of Online payment solution for Indian students studying in Australia ICICI Bank partnered with ‘Westpac Banking Corporation’ top banks in Australia, to offer Indian students a completely online payment solution through its for outward remittances. With this, Indian residents, who are customers of any bank in India, can initiate an online remittance to make fee payments to an Australian university at a fixed exchange rate from the comfort of their homes anytime. ‘Money2World’ platform 25 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSICICI BANK’S RISK GOVERNANCE FRAMEWORK Risk is an integral part of the banking business and the Bank aims at achieving an appropriate trade-off between risk and returns As a financial intermediary, the Bank is exposed to various risks, primarily credit risk, market risk, liquidity risk, operational risk, information technology risk, cyber risk, compliance risk, legal risk and reputation risk. The Board of Directors of the Bank has oversight of all risks assumed by the Bank with specific Committees of the Board constituted to facilitate focussed risk management. There is adequate representation of independent directors on each of these Committees. The Board has framed specific mandates for each of these Committees. The proceedings and the decisions taken by these Committees are reported to the Board. The policies approved by the Board of Directors or Committees of the Board from time to time constitute the governing framework within which business activities are undertaken. The Bank has put in place an Enterprise Risk Management and Risk Appetite Framework that articulates the risk appetite and drills down the same into a limit framework for various risk categories. The trends in the portfolio and risks are reported to the Board Committees periodically. INDEPENDENT GROUPS FOR MONITORING RISKS IN THE BANK Several independent groups and sub-groups have been constituted to facilitate evaluation, monitoring and reporting of risks. These groups function independently of the business groups. Risk Management Group Compliance Group Corporate Legal Group Internal Audit Group Financial Crime Prevention and Reputation Risk Management Group No business targets Unbiased inputs Independent reporting relationship The Risk Management Group is further organised into the Credit Risk Management Group, Market Risk Management Group, Operational Risk Management Group and Information Security Group. The Risk Management Group reports to the Risk Committee of the Board of Directors. The Compliance Group and the Internal Audit Group report to the Audit Committee of the Board of Directors. The Risk Management, Compliance and Internal Audit Groups have administrative reporting to the Executive Director, Corporate Centre. 26 ANNUAL REPORT 2018-19KEY RISKS IMPACTING THE BANK'S BUSINESS Macroeconomic uncertainties RISKS MITIGANTS in the Indian economy could have Developments impact on growth and value creation a material in in the Bank’s business. The Bank’s presence international markets also exposes it to risks from global developments. Uncertainties exist due to India’s high dependence on global crude oil and capital requirements, evolving policy environment and need for sustainable job creation. in the The Bank closely monitors developments It has a dedicated Indian economy. global and team for monitoring and evaluating the impact of macroeconomic trends. The Bank has an established Country Risk Management Policy which addresses the identification, measurement, monitoring and reporting of country risk. The Bank’s risk team continuously monitors all sectors as well as corporates within the sectors and country risks. Credit RISKS The Bank’s core business is lending which exposes it to various types of credit risks, especially failure in repayments and increase in non-performing loans. The Bank’s loan portfolio includes retail loans, loans to rural and semi-urban customers, to small and medium enterprises and wholesale loans which are vulnerable to economic risks. Banks in India are subject to directed lending requirements that yield low returns. Further legal and regulatory changes and increasingly stringent loans and requirements regarding non-performing other weak borrowers and provisioning for such loans could also be a risk. MITIGANTS The credit related aspects in the Bank are primarily governed by the Credit and Recovery Policy approved by the Board of Directors. The Bank measures, monitors and manages credit risks at an individual borrower level and at the portfolio level. In the last few years, the Bank has strengthened its Enterprise Risk Management and Risk Appetite framework for managing concentration risk, including limits/thresholds with respect to single borrower and group exposure. Limits have been set up for borrower group based on turnover, track record and rating of borrowers. The Bank has pursued a strategy of building a granular and diversified portfolio and lending to better rated corporates. Introduction of Insolvency and Bankruptcy Code and Credit Bureaus act as a deterrent for borrowers to default. 27 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSKEY RISKS IMPACTING THE BANK'S BUSINESS Market and liquidity RISKS MITIGANTS Movement in interest rates, foreign exchange rates, credit spreads and equity prices could impact the Bank’s net interest margin, the value of the trading portfolio, income from treasury operations and the quality of the loan portfolio. Banks in India are subject to statutory liquidity ratio requirement, capital and liquidity requirements that structurally exposes them to interest rate risks and liquidity risks. Regulatory changes relating to interest rates or markets could create risks. Further, deposits are an important source of funding which are primarily short-term in nature and banks face the risk of asset-liability mismatches if deposits are not rolled over by depositors. The Investment Policy, Asset Liability Management Policy and Derivatives Policy, approved by the Board of Directors, govern the treasury activities and the associated risks and contain the limits structure. The Asset Liability Management Committee which includes the MD & CEO, wholetime directors and the Bank’s senior executives periodically reviews business profile and liability management. Periodic monitoring is done by the Market Risk Management Group which recommends changes in policies, processes and methodologies. Building a strong liability franchise is a core strategic focus for the Bank. impact on asset its Operational RISKS There is a risk of loss resulting from inadequate or failed internal processes, people or systems or from external events. This could include fraud or other misconduct by employees or outsiders, unauthorised transactions by employees and third parties, mis- reporting or non-reporting with respect to statutory, legal or regulatory reporting and disclosure obligations, operational errors including clerical and record keeping and system failures. MITIGANTS The Bank has put in place a system of internal controls, systems and procedures to monitor transactions, key back-up procedures and undertakes regular contingency planning. The governance and framework for managing operational risks in the Operational Risk Management Policy. is defined 28 ANNUAL REPORT 2018-19Technology RISKS technology, combined with Rapid technological developments and the increasing the dependence on continuous digitisation in banking activities have exposed banks to a host of new risks like obsolescence of IT systems, IT resiliency and business continuity, technology vendor/third party risk, incorrect/inadequate inadequate change management data backups, practices, ineffective identity and access management leading to unauthorised access to IT systems, budget over-runs in IT projects, regulatory non-compliance and other relevant matters. Misalignment between business and IT strategies is also a formidable risk. Cyber RISKS Increasing reliance on technology and digitisation increases the risks of cyber attacks including computer viruses, malicious or destructive code, phishing attacks, denial of service or information, ransomware, unauthorised data access, attacks on personal emails of employees, application vulnerability and other security breaches. This could negatively impact the confidentiality, integrity or availability of data pertaining to the Bank and its customers. Given the nature of the new digital economy, the Bank has business and operational relationships with third parties and these could also be sources of information security risk. MITIGANTS that information technology strategy The Bank’s Information Technology Strategy Committee is ensures aligned with the business strategy. The Committee meets periodically to review ongoing IT projects and their schedules, major IT incidents, technology risk indicators and status of regulatory compliance. The Bank has established policies and control frameworks on change management, logical access management, IT outsourcing and Data Centre processes to ensure that the risks are identified and appropriate mitigating this, controls are put independent assessments of IT processes are carried out by the Internal Audit Group periodically to provide assurance on the effectiveness and efficiency of IT systems and processes. In addition in place. to MITIGANTS threat Information Technology Strategy Committee The oversees cyber security related landscape and the Bank’s preparedness to address these from a prevention, detection and response perspective. The Chief Information Security Officer is responsible for tracking the risks. Confidentiality, Integrity, and Availability form part of a comprehensive information security framework that the Bank has put in place. The Bank also lays emphasis on customer elements and has invested in the areas of phishing protection, adaptive authentication, awareness initiatives and has also taken industry-leading in providing customers with an easy and immediate ability to configure their risks and limits. initiatives 29 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSKEY RISKS IMPACTING THE BANK'S BUSINESS Compliance RISKS MITIGANTS The environment for financial institutions is seeing laws, regulations and in unprecedented changes regulatory policies. This could increase the risks of compliance and regulatory action in the form of fines, restrictions or other sanctions for instances of regulatory failures. The failure to comply with applicable regulations by employees, representatives, agents, third-party service providers either in or outside the course of their services, may result in regulatory and investigations by enforcement authorities either against the Bank, or such employees, its representatives, agents and third-party service providers. inquiries or The Bank has a dedicated compliance team that and continuously monitors new developments updates the senior management on their implications. All relevant groups in the Bank build capabilities on an ongoing basis to be able to respond to regulatory changes in a time-bound manner. The Bank also actively participates in forums and advisory groups for the development of policies in the financial sector. The Bank seeks to have a strong compliance culture driven by the leadership team. There are well-articulated policies with regard to code of conduct, whistleblower complaints, redressal mechanism for complaints and engagement with agents and third-party vendors. Reputation RISKS MITIGANTS including Any negative publicity arising due to actual or lending practices and alleged conduct credit exposures, the level of non-performing loans, corporate governance, regulatory compliance, sharing or inadequate protection of customer information and actions taken by the government, regulatory bodies and investigative agencies could impact the Bank’s reputation. It can also impact the Bank’s ability to attract or retain customers and expose it to litigation and regulatory action. The Bank has a Reputation Risk Management Group which identifies, assesses and monitors the risk in accordance with defined policies and procedures. Further, the Bank has well-articulated policies on various aspects including business conduct, employee conduct, compliance, IT and other relevant identified areas that could potentially create reputation risks for the Bank. 30 ANNUAL REPORT 2018-19Employee RISKS MITIGANTS The ability to attract, motivate and retain talented professionals and the availability of skilled management is critical for successfully implementing the Bank’s strategy and competing effectively. The loss of key senior executives or qualified young professionals and failure to replace them in a time-bound manner could impact the business. The Bank has an employee centric value proposition of Saath Aapka (which means ‘With You’) that focuses on learning, meritocracy and care for its employees. The Bank has put in place robust programmes and policies that provide opportunities for employees to build leadership capabilities. International RISKS The Bank has a presence in multiple overseas jurisdictions, through its branches and subsidiaries, which can expose it to a variety of regulatory, legal and business challenges and increase the complexity of risks. Enhanced regulations in these countries could lead to additional scrutiny. There could also be risks arising from political changes in these jurisdictions. MITIGANTS for international business The Bank’s strategy is largely focussed on India-linked opportunities. There is a dedicated team overseeing the risks associated with its branches within the Bank’s Risk Management Group. Further, specific teams have been set up at local jurisdictions to get a ground-level understanding of country specific regulatory and business requirements. The Compliance Group oversees regulatory compliance at the overseas branches and banking units. 31 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSHUMAN CAPITAL Our competent workforce with diverse skill-sets and valuable experience Creating a future ready workforce ICICI Bank’s people practices are designed to cater to the rapidly evolving business environment. Aligning organisation structure to emerging ecosystems, re-imagining processes, building capabilities and innovation are at the centre of the Bank’s people strategy. Ensuring that every employee upholds the principles of being 'Fair to Customer, Fair to Bank' underpins the ethos of the Bank. INDUSTRY-ACADEMIA INITIATIVES PURSUED BY ICICI BANK is moving away to an organisation network aligned The current economic environment is characterised by abundant micro-market opportunities to serve the diverse needs of the customers. The Bank has reorganised itself to serve these opportunities. The from defined organisation Bank structure to ecosystems. This will bring all capabilities of the Bank in unison, devoid of any functional boundaries which work together seamlessly. The Bank has transformed itself from grade-based structure to a role-based structure at the leadership level to augment nimbleness and agility. The Bank has also rationalised visible symbols of hierarchy such as work spaces, access to facilities and compensation related benefits. The frontline has been empowered to take decisions in the best interest of the customers. The Bank’s strategic focus of growing risk calibrated core operating profit and market share is bolstered by re-calibrating the performance architecture. The individual performance indicators are aligned to the organisation objective of serving the customer with the most relevant products and services. ICICI Business Leadership-NISM Post Graduate Programme in Securities Market ICICI Young Leaders Programme Programme for Entry-Level Managerial Roles ICICI-Manipal PO Programme Post Graduate Diploma in Banking IFBI-PGDBO Programme Post Graduate Programme in Banking Operations ICICI Sales Academy Certificate Course in Sales Management The Bank has always believed in the philosophy of 'Building Talent' and has created industry-academia partnerships future ready workforce. focussed creating on a 32 ANNUAL REPORT 2018-19ICICI Bank's Innovation Lab in Mumbai ICICI Bank launched a marquee campus engagement initiative, 'Beat the Curve', across premier management institutes to engage with the young minds and facilitate an exchange of ideas. The competition brought together the best minds of India to solve the challenges of rural India. The winners got the opportunity to participate in an International Fintech and Innovation workshop. At ICICI Bank, learning is integral to work, and various enabling systems have been institutionalised to provide opportunities for capability building. These initiatives span across the employee life cycle, starting from the time they join the Bank, and at various stages during the career. The Bank follows a two-pronged approach wherein classroom training is augmented with digital delivery of training. The Bank launched a programme, 'ICICI Bank Ascend’, the country. to attract young graduates across The programme aims at moulding these young professionals to take on leadership responsibilities. To develop capabilities in contemporary fields like data sciences, design thinking and artificial intelligence, various academies including functional academies, have been created. Branch Banking Academy Wealth Management Academy Mortgage Academy Self Employed Segment Academy Technology & Digital Group CAPABILITY BUILDING ACADEMIES Rural & Inclusive Banking Academy Design Thinking Data Sciences Small & Medium Enterprise and AgriGroup Academy Commercial Banking Academy Corporate Banking Academy Classroom and technology based learning 676,839 No. of person-days of learning 7.84 Average person-days 1,500 No. of certified internal trainers 33 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSHUMAN CAPITAL leadership development Comprehensive initiatives have been curated to groom leaders for the future. Leadership Development Programmes and Leadership Engagement Sessions are conducted on regular basis for all critical roles in the Bank. ICICI Bank also partners with thought-leaders across the globe to co-design and build leadership perspectives. The Bank has a robust succession planning process which measures the depth of leadership bench at the Senior Leadership levels. The Bank has a deep bench for all key positions. The Bank has leveraged technology and digitally enabled its people processes. Digitisation has enhanced employee experience by automating the Move transactional processes. Universe on (UOTM) is a mobile application designed to serve various needs of employees and has various business applications integrated. The app is also enriched with learning content to enable learning as well as Zeno, the chatbot, capable of answering dynamic employee queries. UNIVERSE-ON-THE-MOVE MOBILE APPLICATION Apply for leave/view muster update View your insurance policy details under My Wellness Check salary details Access 'The Learning Matrix' Talk to Zeno and get answers Mark training attendance via the QR code At ICICI Bank, we believe in creating a culture of free and open conversations. Forums of engagement have been created where the employees can connect with the senior leadership of the Bank. 'Engage your Leader' is a digitally facilitated interaction where employees can engage and interact with them. These sessions are conducted over i Studio, an in-house application which two-way communication platform capable of connecting all employees across different Leadership periodically share their business perspective in form of short videos through 'Huddle'. To establish a deep locations. Senior is a personal, connect with the employees, a dedicated team of Employee Relations (ER) managers are based at various locations throughout the country. The Bank is committed to creating and nurturing a mutually beneficial and respectful relationship with its employees. This is governed by the value proposition of Saath Aapka (which means ‘With You’), that is based on five key parameters. The Saath Aapka propositions are at the heart of every policy decision, and serve as an anchor for every employee initiative of the Bank. 34 ANNUAL REPORT 2018-19THE SAATH AAPKA PROPOSITION Growth & learning opportunities for enhancing personal capabilities and career advancement Creating an enabling work culture that facilitates achievement of aspirational goals Meritocracy by setting high performance standards and working in a non-discriminatory environment Care for employees and standing by them in their hour of need Creating a winning organisation that is conscious of its larger role in society and nation building The Bank expects all its employees to act in accordance with the highest professional and ethical standards upholding the principles of integrity and compliance at all times. The Bank’s Group Code of Business Conduct and Ethics lays down the values and principles and the standards of professional conduct and desired behaviour from its employees. The Bank expectations around compliance are communicated to its employees through multiple channels. The Bank is an equal opportunity employer and seeks to ensure that the workplace is free of any kind of harassment or inappropriate behaviour. Comprehensive policies and procedures have been laid down to create an environment where there is respect and dignity in every engagement. Sexual harassment cases are handled as per the guidelines set under the Prevention of Sexual Harassment at Workplace (Prevention, Prohibition & Redressal) Act. This is imbibed in the Bank’s culture by creating awareness through mandatory e-learning on the subject at the time of induction. The Bank has a mechanism for dealing with complaints of harassment or discrimination. The policy ensures that all such complaints are handled promptly and effectively with utmost sensitivity and confidentiality, and are resolved within defined timelines. For other workplace issues, the Bank has a robust mechanism to resolve them. 'Call@I-Care' provides employees with a platform to raise any issues or concerns that they may have. In the area of health, wellbeing and safety, the Bank has a comprehensive suite of benefits. '#BeFit' is an umbrella programme that offers multiple health related options for employees including wearable fitness devices at discounted rates and participation in activities such as Yoga and Zumba at work. To support the life stage needs and safety of women employees, a range of benefits and policies is available to them. The Bank provides fertility leave to employees seeking to undergo treatment. It also provides child care leave of 36 days annually till the child is two years old. The Bank is also associated with various day care facilities across the country. 'iWork@home' is an initiative that enables women employees to work from home, if required. The Bank has a Travel Accompaniment Policy which allows women with young children to be accompanied by their child and a caregiver during official travel with the cost borne by the Bank. 'iTravelSafe', an app developed by the Bank, provides easy access to register an SOS distress signal. To support employees during emergencies, the Bank has set up a Quick Response Team (QRT) to respond to calls of distress by employees. Each QRT is a GPS enabled vehicle and carries medical equipment and a team of trained professions to deal with medical and safety emergencies. 35 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSOCIAL AND RELATIONSHIP CAPITAL Our commitment towards social empowerment and a financial ecosystem accessible to all Stakeholder relationships ICICI Bank recognises the importance of effective engagement with its key stakeholders for a mutually beneficial relationship and value creation the long run. These relationships are indispensable for fulfilling business objectives. The Bank aims to have in a transparent and ethical relationship with all its stakeholders and engages with them through multiple mediums. These engagements have enabled the Bank to derive insights into the needs of stakeholders and develop appropriate responses. ICICI BANK’S KEY STAKEHOLDERS Mode of engagement Areas of importance Bank’s response • Interaction with employees • Convenience • Responsive, skilled and • Structured surveys for considerate staff • Availability of relevant products and services • Quick response to issues raised through grievance redressal mechanisms • Being 'Fair to Customer, Fair to Bank' is a core element of the Bank’s approach • Ensure right-selling of products • Dedicated customer service team focussed on improving process efficiencies and leveraging technology to improve response time to customers • Continuous upskilling and knowledge building of staff • Policy of zero tolerance to unethical conduct by employees seeking feedback • Meets organised at branches • Communication through print, digital and social media • Multiple channels available for raising queries and grievances • Annual General Meeting • Periodic meetings • Conference calls • Investor conferences Customers Shareholders/ Investors 36 • Shareholder value creation • Medium and • Increased interaction with investors during the year long-term strategy • Governance and ethical practices • Compliance • Transparency • Disclosure of non-financial metrics pertaining to sustainability • Non-financial disclosures included in the Annual Report by adopting the Integrated Reporting framework • Communicating on strategic objectives during the quarterly results call with investors and increased disclosures ANNUAL REPORT 2018-19Participants attending the 'Dress Designing for Women' course conducted by ICICI Foundation at Kharmpur village in Madhya Pradesh Mode of engagement Areas of importance Bank’s response • Continuous engagement • Periodic communication meetings anchored by senior leaders • Initiatives like 'Huddle', 'Engage your Leader' and field visits and e-visits, by managers and senior leaders • 'iCare', an online portal for employees to raise queries • Enabling work culture with opportunities for growth and learning • Meritocracy • Employee alignment to common organisation goals • Saath Aapka (which means 'With You') value proposition for employees • Responsibilities given early on in career • Focussed leadership and career mobility programmes • Responsive grievance • Care for employees through leave handling process policies and work from home options catering to their different needs including life-stage needs. • Periodic meetings with • Compliance with rules • Compliance culture driven by regulatory bodies • Participation in policy forums • Other forms of communication like emails, letters, etc. • Supervisory meeting and regulations • Fair treatment of customers • Role in development of the financial system • Banks acting as first line of defence against financial crimes senior leadership • A dedicated team for communicating with regulators and responding to them in a time-bound manner • Well-defined processes and leveraging technology to improve response to regulators • ICICI Foundation for Inclusive Growth (ICICI Foundation) • Corporate social responsibility projects of the Bank • Rural development initiatives • Supporting government initiatives • Contributing to • Skill training programmes and social development • Financial literacy and improving access to financial services especially in rural areas efforts at providing sustainable livelihood opportunities through ICICI Foundation • Industry-academia partnerships for developing skills for the banking sector • Awareness drives and disseminating information through products like 'Mera iMobile' for rural customers Employees Regulators Society Note: The listing of areas of importance are not as per the order of importance to the stakeholder 37 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSOCIAL AND RELATIONSHIP CAPITAL Social initiatives of ICICI Bank The Bank has a rich legacy of partnering in India’s socio-economic development. Its focus has been to create a positive impact on society by undertaking meaningful interventions to bring significant benefits to large sections of the society. This has been enabled through ICICI Foundation for Inclusive Growth (ICICI Foundation) that has focussed on addressing critical gaps in the availability of workforce possessing the right skills. The training also includes modules on financial literacy and life skills. ICICI Academy for Skills opened two new centres – one each in Dehradun and Gorakhpur – during fiscal 2019. A significant achievement of this programme is that 100% of the trainees who had opted for job placement had found suitable employment with various organisations. RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETIs) Promoting Inclusive Growth Promoting inclusive growth has been an overarching focus of the Bank for many years. The Bank has made significant contributions especially in the areas of skill development training and rural development. The Bank strongly believes that skill training is an important factor towards securing India’s economic growth. The skill development training efforts of ICICI Bank largely target less-privileged youth in rural and urban areas, helping them to gain employable skills and improve livelihoods, into mainstream economic activities. This initiative is being driven through ICICI Foundation. thus bringing them ICICI FOUNDATION FOR INCLUSIVE GROWTH ICICI Foundation was established in 2008 for further strengthening the efforts of ICICI Group towards meeting its corporate social responsibility. ICICI Foundation’s efforts are managed by an in-house team with direct project implementation capabilities. The focus on enabling sustainable livelihoods through skill development training gained momentum with the setting up of the ICICI Academy for Skills in October 2013. Currently, ICICI Foundation works on various programmes on vocational skill development with the objective of developing the capabilities of individuals so that they can earn a sustainable livelihood for their families. Apart from skill development, these programmes support the trainees by facilitating job opportunities or providing market linkages. ICICI ACADEMY FOR SKILLS ICICI Foundation operates 26 skill development training centres under ICICI Academy for Skills in 19 states. These centres provide industry-relevant, job-oriented training on a pro bono basis in 12 technical disciplines and office skills. With a comprehensive approach which ensures employment opportunities for all successful trainees, these centres are equipped with state-of- the-art practical labs to support and enhance learning. 38 ICICI Foundation manages two RSETIs at Udaipur and Jodhpur with 16 satellite centres in Rajasthan. These centres train on skills based on the local requirements. market significantly livelihood opportunities for the trainees improved ICICI RSETIs have through self-employment. The been recognised as the top performing RSETIs in India for six consecutive years by the Ministry of Rural Development and for Excellence of RSETIs. the National Centre This has RURAL INITIATIVES Apart from providing skill development for youth focussing on wage employment opportunities, there is a significant need to improve livelihood opportunities for rural population so that they can earn a sustainable OFFICE-IN-CHARGE AT HYDERABAD Shirdisha, a resident of Madasuvaripalem in Andhra Pradesh, was only 24 years old when her husband passed away. She was devastated. A homemaker from a less-privileged background, she had no skills or money to fend for her two young sons and herself. When Shirdisha joined the 'Office Administration' course for free at ICICI Academy for Skills, Vijaywada, she was a shy and reticent person. She had never operated a computer in her life. Over the next three months, she became proficient at operating computers, polished her communication skills and transformed into a skilled professional. Today, Shirdisha works as an Office-In-Charge at Hyderabad and draws a decent monthly salary. She is confident of giving her sons access to opportunities that she never had. Young women in her village look up to her as a role model. ANNUAL REPORT 2018-19livelihood in their ecosystem and do not need to migrate to cities. The rural initiative was specifically designed for improving the local village economy. Till March 31, 2019, ICICI Foundation had provided skill training to local residents in over 1,200 villages. in training that are the village. Initiatives of ICICI Foundation in involve The Rural providing short-duration skill locally relevant trades and facilitating market linkages so that the trainees are able to sell their produce on a sustainable basis. The aim is to make efforts in these villages that can lead to a meaningful increase in the livelihood of the villagers. An initial study of the local economy is made in order to understand the economic strengths and critical gaps impacting the productivity ICICI Foundation then designs critical interventions with a focus on improving the productivity and marketability of the produce in the villages. This is done by providing practical training on best practices in the local trade to the villagers. As the trainees get organised and there is a marketable quantity of a product available locally, facilitates market linkages for the trainees. Through these efforts, it is seen that better sharing of market information and direct access to market has resulted in better price realisation for the villagers. It has also promoted local entrepreneurship among women. ICICI Foundation then DAIRY FARMER IN LUDHIANA Dilbagh Singh and his family are residents of a small village Kular in Ludhiana district. His only source of income were two cows. With a meagre income of ` 150 per day, Dilbagh was struggling to support his family of four. A depressed Dilbagh enrolled in the free 'Dairy Farming and Vermicomposting' course run by ICICI Foundation. He has not looked back since then. Today, Dilbagh runs a sprawling dairy farm with over 25 milch animals. His earnings have grown by leaps and bounds and his farm stands out as a model in Kular. Dilbagh has lofty ambitions for the future. • Winner at Indian Chamber of Commerce Social Impact Awards • Business Excellence and Innovative Best Practices Academia Award – 2019 by the New Delhi Institute of Management • Winner of Gold Category in Foundation Sector by GreenTech Foundation The cumulative number of people trained through these three initiatives crossed 400,000 by March 31, 2019. Total number of individuals trained till date Other activities of ICICI Foundation include organising blood donation camps and 'Daan Utsav' which provides a platform to employees and customers to donate towards charitable causes. ICICI Foundation like also undertakes other community organising awareness drives on hygiene and energy conservation. During fiscal 2019, ICICI Foundation planted over 35,000 native trees across the country with community ownership. initiatives ICICI Foundation was awarded the first prize at the Green Kaizen Competition conducted by the Confederation of Indian Industry – Zonal Council Pune for innovative and frugal inventions by the trainees of ICICI Academy for Skills. ICICI Foundation was also awarded the CSR Leadership Award at the Corporate Social Responsibility Summit and Awards 2018 for innovative implementation of CSR project at Girwar village in Rajasthan. Other awards won by the ICICI Foundation include: • Winner of Innovative Best Practices Award: Gender Equality Summit 2019 • Silver Award at the Quality Council of India-DL Shah Quality Award 2018 400,000 % of women trainees 54 No. of villages covered 1,200 No. of states covered 29 Individuals trained in fiscal 2019 135,000 39 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSOCIAL AND RELATIONSHIP CAPITAL Rural development Supporting the rural economy has been a critical focus of the Bank to create significant dividends for the Indian economy. With a large population engaged in agricultural activities in the rural areas, the Bank has been providing financial solutions for the rural customers. In addition, there are specific initiatives that are addressing key segments of the population. The Self Help Group (SHG) programme is one such initiative through which the Bank provides a comprehensive suite of banking products, including zero-balance savings account and term loans for meeting business requirements of the women of these SHGs. This has promoted entrepreneurship among women. The Bank offers services at their doorstep, thus saving their time and money on visits to the branch. ICICI Bank is also organising financial literacy camps and has set up dedicated service desks at select branches to guide SHGs on banking procedures. There has been a gradual rise in entrepreneurial ventures by women in the areas where the Bank has been providing services to SHGs. Till March 31, 2019, the Bank has provided loans to over 5.2 million women beneficiaries through 440,000 SHGs. Of these, over 2.5 million women were ‘first time borrowers’, who had not taken a loan from any formal financial institution. In addition to direct customers, the Bank reaches out to about 0.6 million customers by lending to Micro Finance Institutions. SUPPORTING THE DAIRY VALUE CHAIN s n Ter m L o a Deposits & In Dairy Ecosystem v e s t m e n t s Farmer Village Level Cooperative Societies Dairy Farm Transporter l a t i p a C g n i k r o W Marketing Federation s n a o Cattle L Distributor Consumer Payment Sol u t i o n s 40 ICICI Bank also provides lending to Joint Liability Groups (JLGs) which are semi-formal groups from the weaker sections of society. In addition to direct efforts, the Bank has tied up with over 500 non-government organisations called Self Help Promoting Institutions (SHPIs). These SHPIs are empanelled as business correspondents and work towards delivering credit and other banking products. The Bank also offers credit related services to microfinance companies that are providing financial services to the rural population. As part of the financial inclusion efforts of the Bank, over 21 million Basic Savings Bank Deposit Accounts (BSBDA) were opened at March 31, 2019. Of these, around 4.0 million accounts were opened under Pradhan Mantri Jan Dhan Yojana. The Bank encourages and enables these account holders to transact digitally. ICICI Bank is also promoting government schemes like the Pradhan Mantri Jeevan Jyoti Bima Yojana for providing life insurance, Pradhan Mantri Suraksha Bima Yojana for providing accident insurance and Atal Pension Yojana for providing pension benefits. As at March 31, 2019, a total of 4.8 million customers had been enrolled under these three Jan Suraksha Yojana (JSY) schemes. Meeting the complete financial requirements of customers and their ecosystem is a strategic focus in the Bank’s rural business. An example of this approach is the financial solution provided to farmers and other participants of the dairy ecosystem. This includes providing a suite of financial solutions including term loans and working capital loans to dairy unions, payment solutions and promoting investments into animal husbandry. These solutions are supplemented by providing skill training through ICICI Foundation. The Bank has reached over 21,000 farmers to invest into animal husbandry valued at ` 1,290.0 million and tied-up with 1,243 number of Village Level Cooperative Societies (VLCS) with about 0.13 million members. ICICI Bank has introduced a comprehensive suite of financial services to promote investments into animal husbandry, digitise dairy units and provide payment solutions to enable milk societies to transfer payments directly into the milk suppliers’ accounts. This has helped dairy farmers to manage their working capital needs. ICICI Foundation supplemented these solutions by providing skill development training in dairy farming and vermicomposting. The programme has successfully powered the dairy ecosystem of some villages in India. ANNUAL REPORT 2018-19 SMART CITIES MISSION initiative of is an urban development This the Government of India. ICICI Bank is closely associated with this programme and is working closely with various 'Smart Cities' for providing digital collection and payment platforms. ICICI Bank is one the leading banks for developing Common City Payments Solution (CCPS), a citizen-centric solution for promoting cashless and digital transactions of tax payments, parking, utilising transit services across city buses, metros, supermarket or retail purchases, toll payment, etc. ICICI Bank has successfully implemented CCPS at three smart cities. Other efforts in the Smart Cities Mission are oriented towards easing the complexities of the Smart City administration across bill collection of various utilities, reconciliation and effective monitoring of various ongoing development projects for live project updates and just-in-time payments for vendors or contractors, e-challan collections, smart toll collections on highways, smart cash less parking collection solution, besides other offerings like government to government, government to citizen and government to business fund transfer solutions, e-governance solutions and many more smart solutions leveraging the Bank’s digital capabilities and expertise. ICICI Bank’s efforts at some of the Smart Cities Mission are helping scale up digital transactions and fostering competitiveness and benchmarking across smart cities. PUBLIC FINANCIAL MANAGEMENT SYSTEM (PFMS) ICICI Bank is one of the leading banks integrated with the PFMS platform set up by the Office of Controller General of Accounts (CGA), Department of Expenditure and Ministry of Finance. The system enables efficient flow of funds for central government projects. ICICI Bank supports all three channels of payments, i.e., Print Payment Advice, Corporate Internet Banking and Digital Signature Certificate for account-based and Aadhaar-based transaction processing. In its capacity as a sponsor bank to government departments and implementing agencies, is processing payments for more than 40 schemes in 25 states. In fiscal 2019, the Bank had processed more than 50 million transactions. As a partner bank, ICICI Bank has also been conducting workshops and providing training to government departments and agencies for seamless and quick migration to the PFMS platform. The Bank has also created a mobile application and setup a dedicated PFMS helpdesk with e-mail and call support to handle day-to-day, transaction-related queries. ICICI Bank 41 Engaging with the government for delivering value The Bank has been complementing the efforts of the central government and the state governments, in bringing about sustainable changes and supporting social development. The efforts of the Bank range from enabling end-to-end digital payment solutions for critical projects, participating in pilot projects as a financial service provider, creating IT solutions for strengthening e-governance and supporting initiatives for promoting health and education. Some important engagements are as follows: CUSTOMISABLE DIGITAL PAYMENTS SYSTEM This is a customisable digital platform created by the Bank for State Government departments and Institutions to enable just-in-time payments to beneficiaries, associated agencies, contractors or vendors, etc. The solution provides a wide range of e-Governance modules ranging from project management, progress tracking & control, budget management, dashboard, reports/analytics and online payments and reconciliation of transactions. Currently, we are associated with five state departments across India. ELECTRONIC NATIONAL AGRICULTURAL MARKET (e-NAM) trading platform is a unified online e-NAM for agricultural commodities enabling direct engagement between buyers and sellers. The platform allows real- time price discovery across 585 agricultural market centres and is likely to benefit over 15.5 million farmers and 120,000 registered traders. ICICI Bank has been actively involved since the inception of e-NAM and has provided digital payment and settlement solutions. INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSNATURAL CAPITAL Impact on natural resources either through our operations or business focus As a large financial services provider operating in a developing economy, ensuring prudent use of natural resources and creating a positive environmental impact have been important priorities for sustainable value creation at ICICI Bank. The Bank’s commitment in this direction spans several years. The impact of our efforts is visible in the steady reduction in energy consumption and waste generation, the savings in paper and water consumption, and the practices adopted by the Bank as our business and geographical reach grew. The Bank’s impact on the environment can be gauged from three standpoints – as a provider of banking services impact of its own operations and the relationship with its stakeholders including customers and suppliers. the environment, impacting the Sustainable financing friendly sectors. This The Bank has financed projects for capacity creation in environment includes renewable energy sectors like solar, wind and small/ mini hydro power and other sustainable sectors like waste processing. The Bank’s outstanding to the renewable energy sectors was about ` 36.00 billion at March 31, 2019. The Bank has also financed projects that promote pollution reduction and recycling. Some of these projects include conversion of molasses to ethanol, waste heat recovery in cement production and fly ash recycling. Over and above, the Bank has availed lines of credit from select multilateral agencies towards financing green/sustainable assets. The assets financed under these lines include financing for wind, solar, biomass plants and energy efficiency projects and at March 31, 2019, the outstanding lending by the Bank for such specific purposes was USD 139.8 million. 42 The Bank is committed to supporting environment friendly projects subject to appropriate risk-return assessment. While the Bank remains cautious in lending to greenfield projects, it will continue to participate in opportunities where funding structures are robust and risks are well assessed. In evaluating projects, the Bank follows a process which ensures compliance with national environmental laws. Projects are required to obtain requisite clearances from relevant agencies. The evaluation is carried out at the time of sanction of the project loan. The Bank also engages external consultants and engineers depending on the size and complexity of the project. sanitation is dedicated to education, health, An internal team within the Bank, the Technology Finance Group, identifying and supporting in the areas of energy and environment projects conservation, and livelihoods. The team’s mandate is to manage funding lines received from bilateral/multilateral/government Its efforts agencies specifically for such projects. include identifying relevant projects, ensuring financial assistance either directly or through collaboration and knowledge sharing. In the past, the team has supported energy initiatives like the Kasturba Solar Khadi Mahila Samiti to meet the operating expenses of a solar charkha (spinning wheel) cluster and construction of a green building for the Rural Self Employment Training Institute in Jodhpur. Key projects in fiscal 2019 included planting of more than 50,000 trees by 500 tribal farmers in Palghar, Bhiwandi and Shahapur districts in Maharasthra, construction of 20 farm ponds in Shirur taluka of Beed district in Maharashtra, implementation of a natural resources conservation and livelihood generation project in 10 villages of Washim district in Maharashtra, and implementation of a watershed development and management programme along with agriculture interventions in three villages of Dharani taluka of Amaravati district in Maharashtra resulting in sustainable livelihoods. ANNUAL REPORT 2018-19Efficient energy management The Bank’s business operations are conducted keeping in mind the environmental limits and ensuring ongoing efficiency gains. The environment conservation measures by the Bank are focussed on improving efficiencies, investing in design and technology and adopting renewable energy. IMPROVING EFFICIENCIES Integrated preventive maintenance (IPM) 24oC temperature policy • Capacity optimisation • • • Energy audits • Heat load calculations • Power factor corrections • Performance-based contracts INVESTING IN DESIGN & TECHNOLOGY • Energy efficient equipment • Master switch concept • Equipment based monitoring & control (NOC) • Indian Green Building Council (IGBC) defined green features in new facilities Internet of Things (IOT) enabled Central Monitoring System (CMS) • ADOPTING RENEWABLE ENERGY • Solar capacities installed at branches, offices and ATMs • Offsite power purchase agreements • Solar water heating system The roof-top solar panels at ICICI Bank in Bommanahalli, Bengaluru At March 31, 2019, the Bank had nine offices that were awarded the Platinum rating by IGBC. These offices house over 14,500 employees. ICICI Bank’s data centre is the first IGBC Platinum rated data centre in India. In fiscal 2014, the Bank undertook a detailed energy audit in its 15 large offices and in branches where than specific energy consumption was higher standards. A number of areas were identified for energy savings which included using energy-efficient lighting and cooling mechanisms and increasing use of renewable energy. The energy conservation journey of the last five years has led to a skilled pool of individuals including facility managers of branches and offices, who are now directly implementing energy saving initiatives. At March 31, 2019, 156 employees of the Bank were certified Indian Green Building Council (IGBC) Accredited Professionals. Since fiscal 2018, the Bank has been ensuring IGBC green building features in all its new offices and branches at the time of set up. At March 31, 2019, the Bank had nine offices that were awarded the Platinum rating by IGBC, the highest rating given based on an assessment of energy efficiency, use of renewable energy, water conservation, waste management, indoor air quality and sustainable sourcing of material. ICICI Bank’s data centre is the first IGBC Platinum rated data centre in India and the first Uptime Tier-3 certified data centre in the Indian banking industry. 43 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSNATURAL CAPITAL The four main pillars of the Bank’s energy conservation journey are: I. PROCESS CONTROLS AND COMMUNICATION INITIATIVES It in operations. This aims to put in place control systems to ensure includes policy of efficiency temperature control in occupied workplaces, setting up control systems at specific locations for operating at optimal energy efficiency, promoting communication practices (like video conferencing and i Studio) to reduce employee travel and spreading awareness through emails and rewards among employees. II. RETROFIT OF VARIOUS EQUIPMENT WHICH HAS REDUCED POWER CONSUMPTION AND ENHANCED EFFICIENCY The Bank’s offices and branches were refurbished to include energy-efficient fittings. This included energy efficient water/air cooled AC chillers, energy-efficient motors/pumps in hydro pneumatic systems, variable frequency drives for Air Handling Units (AHU) & pumps, energy-efficient UPS, stabilisers, laptops, desktops and diesel generator sets, lux/occupancy sensors and timer based controls and spectrally reflective films for glazing in windows. In fiscal 2014, the Bank converted all conventional fluorescent lights into LED lights at all its offices and branches which has resulted in a 50.0% reduction in energy consumption of lighting load. In fiscal 2019, the Bank began implementation of installing LED in signages at its branches. III. INVESTING IN NEW TECHNOLOGIES WHICH ARE ENERGY EFFICIENT The Bank's two large offices - the corporate office at Bandra-Kurla Complex, Mumbai and Gachibowli Tower in Hyderabad use Cooling Technology Institute (CTI) approved cooling towers which have led to 30% more energy-efficient cooling in these buildings. The Bank continuously invests in new energy efficient technologies; for example, new technologies in air-conditioning systems like Variable Refrigerant Flow (VRF), variable speed drive chillers, Electronically Commutated (EC) blower in air handling units and demand controlled ventilation systems have been installed across the Bank’s offices and branches. The Bank has deployed an equipment-based monitoring and control system for Heating, Ventilation and Air Conditioning (HVAC) systems with centralised Network Operating Centre (NOC) for seven large offices and two data centres. This is a first of its kind initiative in the banking sector, which has helped the Bank to measure and benchmark energy performance effectively. 44 IV. USE OF RENEWABLE ENERGY The Bank ensures use of renewable energy at its premises wherever feasible. At March 31, 2019, the total solar power capacity installed by the Bank at its premises was 1.1 MWp (Mega Watt peak). The Bank has installed smaller capacity solar power at 510 Gramin branches and 200 ATMs. Under the open access mechanism for power sourcing, the Bank has signed Power Purchase Agreements (PPA) for solar and wind energy purchase for three of its large offices. The total contracted capacity is 9.0 MWp. These offices have been using renewable energy since fiscal 2016 and 60% of the energy requirement at these offices is met through renewable energy. The Bank is in the process of installing a 1MWp on-site RENEWABLE ENERGY USED 1.1 MWp Total onsite renewable energy capacity at March 31, 2019 9 MWp Total off-site renewable energy capacity through power purchase mechanism 12.07 million kWh Total renewable energy consumed in fiscal 2019 CO2 EMISSIONS SAVED 9,895 tonnes CO2 emissions avoided due to clean energy usage in fiscal 2019 4,900 tonnes CO2 emissions saved through energy conservation projects in fiscal 2019 14,795 tonnes Total CO2 emissions saved in fiscal 2019 ANNUAL REPORT 2018-19 The total renewable energy utilisation by the Bank in fiscal 2019 was 12.07 million kWh, 7.2% of overall energy consumption 2.25 million square feet of the Bank's premises are green certified by IGBC solar power capacity at the Bank’s Disaster Recovery Centre in Jaipur. These initiatives have led to an overall reduction in energy consumption and Green House Gas (GHG) Emissions. The Bank’s electricity consumption has decreased and electricity expenses have remained stable in the last five financial years despite an increase in branches, offices and employee strength, and rise in electricity tariffs and diesel prices. fiscal 2015 The Bank’s per unit energy consumption has seen a significant decrease between to fiscal 2019. EPI (i.e. Energy Performance Index = annual energy consumption at facility in kWh/area large offices of facility reduced by 23% and EPM (Energy Performance Metric = monthly energy consumption in kWh/area in square feet) for branches reduced by 34% over the last four financial years. in square meter) for the ELECTRICITY CONSUMPTION (in million kWh) TOTAL SCOPE 1 & 2 GHG EMISSIONS (in tonnes CO2 equivalent) Fiscal 2015 Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 192.13 181.28 180.80 173.22 166.50 Fiscal 2017 1,330 41,983 Fiscal 2019 1,303 41,266 43,313 42,569 Scope 1 GHG emissions Scope 2 GHG emissions 45 INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSNATURAL CAPITAL The Bank’s Scope 1 and Scope 2 GHG emissions for 16 large offices and two data centres are given below. Waste management Water conservation Water consumption per day in the 16 large offices of the Bank was 20.0% lower than the benchmark of 45 litres per person per day as per the Bureau of Indian Standards for large offices. The Bank has undertaken various initiatives to conserve water. The Bank recycles and reuses waste water at three large offices including the head office at Bandra Kurla Complex, Mumbai. Water-efficient plumbing fixtures have been installed in all large offices and new branches of the Bank. Rain water harvesting is undertaken at three large offices. Paper: from savings to paperless Adoption of sustainable banking practices has been an ongoing effort for the Bank. This is achieved by encouraging customers to go digital in their banking activities and offering financial products and services that are digitally processed end-to-end. Most of the Bank’s ATMs are today paperless. Credit decisioning is now done on the basis of e-dedupes and several letters and advices have been made paperless. Loans, including large-ticket loans like home loans, are being processed on digital platform, thus reducing the need for paper. The Bank pioneered the use of tablets for account opening in India. In another pioneering initiative, the Bank harnessed blockchain technology to enable automation of inter-bank processes for trade finance and remittances which has not only reduced transaction costs and processing time, but also resulted in paper savings at an industry level. In fiscal 2019, the Bank’s consumption of A4 paper declined by about 24 million sheets. The Bank’s consumption of A4 paper was 14.9% lower compared to fiscal 2018 and 34.5% lower compared to fiscal 2017. This was made possible through restrictions on usage and rationalisation of various application forms as part of the green banking initiatives. The total savings in paper in fiscal 2019 was equivalent to 3,400 trees saved. The Bank procures environment-friendly copier paper which is manufactured from wheat straw, which is an agricultural residue. 46 The Bank has been focussing on waste reduction and its management in every aspect of its operations. As a financial services company, waste generation is primarily classified as wet waste, dry waste which is mostly paper and e-waste arising from discarded electrical and electronic devices. Recycling of organic waste using composting technique is being undertaken at the Bank’s offices in Mumbai at Bandra-Kurla Complex and Chandivali, and at the learning centre in Khandala. E-waste is disposed by handing over to certified recyclers. Reuse of electronic devices is also an important focus area. The Bank uses re-manufactured toners in printers which are recycled at least 2-3 times. The Bank also recycles its IT assets which are subsequently donated. In fiscal 2019, a total of 1,002 assets were donated. A large number of these donations were made to educational institutes. Certifications The Bank has adopted corporate objectives for environment-conservation activities in conformity with the ISO-14001 standard 'International Organisation for Standardisation' for environmental management systems. This enables the Bank in developing policies the objectives of environmental for addressing the sustainability and assessment of impact of Bank’s activities, products and services on the environment. Health and safety systems at 13 large offices of the Bank have been OHSAS 18001:2007 certified. The environment management systems of the corporate headquarters at Bandra-Kurla Complex in Mumbai are both OHSAS 18001:2007 and ISO 14001:2004 certified. The corporate headquarters has been successfully re-audited for ISO 14001:2015 compliance in April 2018. As a recognition of the Bank's contribution towards maintaining ecological balance, ICICI Bank’s Corporate office in Bandra-Kurla Complex, its registered office in Vadodara, its state-of-the-art data centre as well as one of its branches in Hyderabad have been awarded a 'Platinum' rating by IGBC. The data centre was the country’s first data centre to be awarded ‘Platinum’ by IGBC. Gachibowli Tower in Hyderabad has been awarded ‘Gold’ rating in Core & Shell category. The office in Bandra-Kurla Complex has been declared as a ‘National Energy Leader’ in the office building category by CII in fiscal 2019. ANNUAL REPORT 2018-19 DIRECTORS’ REPORT Your Directors have pleasure in presenting the Twenty-Fifth Annual Report of ICICI Bank Limited (ICICI Bank/the Bank) along with the audited financial statements for the year ended March 31, 2019. FINANCIAL HIGHLIGHTS The financial performance for fiscal 2019 is summarised in the following table: ` in billion, except percentages Net interest income and other income Operating expenses Core operating profit Treasury income Operating profit Provisions & contingencies (excluding tax) Profit before tax Profit after tax ` in billion, except percentages Consolidated profit before tax and minority interest Consolidated profit after tax and minority interest Fiscal 2018 Fiscal 2019 % change 2.7% 15.2% 16.5% (76.5)% (5.3)% 13.6% (49.2)% (50.4)% 415.27 180.89 220.72 13.66 234.38 196.61 37.77 33.63 404.45 157.04 189.39 58.02 247.41 173.07 74.34 67.77 Fiscal 2018 Fiscal 2019 % change (32.5)% (44.8)% 109.78 77.12 74.08 42.54 APPROPRIATIONS The profit after tax of the Bank for fiscal 2019 is ` 33.63 billion after provisions and contingencies of ` 196.61 billion, provision for taxes of ` 4.14 billion and all expenses. The accumulated profit is ` 218.58 billion, taking into account the balance of ` 179.70 billion brought forward from the previous year and credit of ` 5.25 billion in balance in profit and loss account towards reversal of provision for frauds on non-retail accounts created in earlier years through accumulated profits. Your Bank has a consistent dividend payment history. Your Bank’s dividend policy is based on the profitability and key financial metrics, capital position and requirements and the regulations pertaining to the payment of dividend. In line with the above, your Directors have recommended a dividend of ` 1.00 per equity share for the year ended March 31, 2019 and have appropriated the disposable profit as follows: ` in billion To Statutory Reserve, making in all ` 237.38 billion To Special Reserve created and maintained in terms of Section 36(1) (viii) of the Income Tax Act, 1961, making in all ` 95.04 billion To Capital Reserve, making in all ` 128.54 billion1 To Capital Redemption Reserve, making in all ` 3.50 billion2 (amount appropriated from surplus profit available for previous years) To Investment Fluctuation Reserve, making in all ` 12.69 billion3 To Revenue and other reserves, making in all ` 40.28 billion4 Dividend paid during the year – On equity shares, during fiscal 2019 @ ` 1.50 per share of face value ` 2.00 each (during fiscal 2018 @ ` 2.50 per share) – On preference shares2, during fiscal 2019 @ 100.00 per preference shares (`) (during fiscal 2018 @ ` 100.00 per share) Fiscal 2018 Fiscal 2019 8.41 16.94 6.00 25.66 - - 7.01 5.25 0.28 3.50 12.69 0.01 14.57 9.65 35,000 35,000 – Corporate dividend tax Leaving balance to be carried forward to the next year 1 Fiscal 2018 includes transfer of ` 24.90 billion on account of sale of part of equity investment in the Bank’s insurance subsidiary. 2 Redeemable Non-Cumulative Preference Shares (350 RNCPS) of ` 10.0 million each were redeemed at par on April 20, 2018. Accordingly, an equivalent amount was transferred to Capital Redemption Reserve from surplus profit available for previous years. Represents an amount transferred to Investment Fluctuation Reserve (IFR) from disposable profit. As per the RBI guidelines, from the year ended March 31, 2019, an amount not less than the lower of net profit on sale of available-for-sale (AFS) and held-to-maturity (HFT) category investments during the year or net profit for the year less mandatory appropriations is required to be transferred to IFR, until the amount of IFR is at least 2% of the HFT and AFS portfolio. Includes transfer of ` 7.6 million to Reserve Fund for fiscal 2019 (` 10.6 million for fiscal 2018) in accordance with regulations applicable to the Sri Lanka branch. - 178.79 0.09 179.70 3 4 47 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSits financial statements The Bank prepares in accordance with the applicable accounting standards, RBI guidelines and other applicable laws/regulations. RBI, under its risk-based supervision exercise, carries out the risk assessment of the Bank on an annual basis. This assessment initiated subsequent to is the finalisation, completion of audit and publication of audited financial statements for a financial year and typically occurs a few months after the financial year-end. As a part of this assessment, RBI separately reviews asset classification and provisioning of credit facilities given by the Bank to its borrowers. The divergences, if any, in classification or provisioning arising out of the supervisory process are given effect to in the financial statements in subsequent periods after conclusion of the exercise. terms of //DBR.BP.BC.No. the RBI circular no. In 32/21.04.018/ 2018-19 dated April 1, 2019, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI’s annual supervisory process in their notes to accounts to the financial statements, wherever either (a) the additional provisioning requirements assessed by RBI exceed 10% of the reported net profits before provisions and contingencies or (b) the additional gross non-performing assets (NPAs) identified by RBI exceed 15% of the published incremental gross NPAs for the reference period, or both. Based on the condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI’s supervisory process for fiscal 2018. SHARE CAPITAL During the year under review, the Bank allotted 18,248,877 equity shares of ` 2.00 each pursuant to exercise of stock options under the Employee Stock Option Scheme. For details refer to Schedule 1 of the financial statements. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Pursuant to Section 186(11) of the Companies Act, 2013, the provisions of Section 186 of the Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee given or security provided by a banking company in the ordinary course of business. The particulars of investments made by the Bank are disclosed in Schedule 8 of the financial statements as per the applicable provisions of the Banking Regulation Act, 1949. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES There is no change in the subsidiaries of the Bank during fiscal 2019. The definition of the subsidiary company and associate company under the Companies Act, 2013 was changed during fiscal 2019. One of the 48 criterion for identification of a subsidiary company or an associate company was changed from percentage holding in total share capital of the investee company to percentage voting power in the investee company. Pursuant to the changes in the definition of subsidiary company and associate company, Shree Renuka Sugars Limited and National Investment and Infrastructure Fund Limited ceased to be associate companies of the Bank. Further, Arteria Technologies Private Limited became an associate company of the Bank during fiscal 2019. The particulars of subsidiary and associate companies as on March 31, 2019 have been included in Form MGT-9 which is annexed to this Report. HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY The performance of subsidiaries and associates and their contribution to the overall performance of the Bank as on March 31, 2019 is given in “Consolidated Financial Statements of ICICI Bank Limited – Schedule 18 - Note 13 – Additional information to consolidated accounts” of this Annual Report. A summary of key financials of the Bank’s subsidiaries is also given in “Statement Pursuant to Section 129 of Companies Act, 2013” of this Annual Report. The highlights of the performance of key subsidiaries are given as a part of Management’s Discussion & Analysis under the section “Consolidated financials as per Indian GAAP”. available on the Bank’s website The Bank will make available separate audited financial statements of to any the subsidiaries request. These documents/details Member upon at will be https://www.icicibank.com/aboutus/annual.html and will also be available for inspection by any Member or trustee of the holder of any debentures of the Bank at its Registered Office and Corporate Office. As required by Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India, the Bank’s consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiaries and other consolidating entities. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS There are no significant and/or material orders passed by the regulators or courts or tribunals impacting the going concern status or future operations of the Bank. DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSMATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE BANK There are no material changes and commitments, affecting the financial position of the Bank which have occurred between the end of the financial year of the Bank to which the financial statements relate and the date of this Report. DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL Changes in the composition of the Board of Directors and other Key Managerial Personnel Since the date of the last Directors’ Report, the Board approved the appointments of Hari L. Mundra, Rama Bijapurkar, B. Sriram and Subramanian Madhavan as additional Directors for a period of five years from the date of their appointment. All the above four Directors hold office upto the date of the forthcoming Annual General Meeting (AGM) and are eligible for appointment. Their appointments are being proposed in the Notice of the forthcoming AGM through item nos. 6, 7, 8 and 9. The Members at the last AGM held on September 12, 2018 approved the appointments of Radhakrishnan Nair and M. D. Mallya as independent Directors. the the Members at Further, last AGM held on September 12, 2018 approved the appointment of Sandeep Bakhshi as a Wholetime Director and Chief Operating Officer. The Board at its Meeting held on October 4, 2018 appointed Sandeep Bakhshi as Managing Director & Chief Executive Officer for a period of five years until October 3, 2023, subject to regulatory approvals. Reserve Bank of India (RBI) has vide its letter dated October 15, 2018, approved the appointment for a period of three years effective October 15, 2018. Approval of the Members is being sought for Sandeep Bakhshi’s appointment as Managing Director and Chief Executive Officer for five years in the Notice of the forthcoming AGM through item no.10. The Board of Directors at its Meeting held on October 4, 2018 accepted the request of Chanda Kochhar to seek early retirement from the Bank with immediate effect. However, the Board at its meeting held on January 30, 2019 reconsidered her separation from the Bank and regarded the same as ‘Termination for Cause’, having effect from the close of business hours of the Board i.e. January 30, 2019 after considering Meeting the Enquiry Report of Hon’ble Mr. Justice (Retd.) B.N. Srikrishna. Lok Ranjan, Joint Secretary, Department of Financial Services, Ministry of Finance was nominated by Government of India as a Government Nominee Director on the Board of the Bank in place of Amit Agrawal, with effect from April 5, 2018. Lalit Kumar Chandel, Economic Adviser, Department of Financial Services, Ministry of Finance has been nominated by Government of India as a Government Nominee Director on the Board of the Bank in place of Lok Ranjan, with effect from December 4, 2018. The Board of Directors on May 6, 2019 approved the appointment of Sandeep Batra as an Additional Director and Wholetime Director (designated as Executive Director) for a period of five years effective May 7, 2019 or the date of approval of his appointment by RBI, whichever is later. The said appointment is also subject to the approval of Members. Approval of the Members is being sought for Sandeep Batra’s appointment for five years in the Notice of the forthcoming Annual General Meeting through item nos. 11 and 12. Vijay Chandok ceased to be a Director of the Bank at the end of day on May 6, 2019 and assumes office as Managing Director & CEO of ICICI Securities Limited with effect from May 7, 2019. Pursuant to completion of maximum permissible tenure of eight years as per the provisions of the Banking Regulation Act, 1949, Tushaar Shah, independent Director, ceased to be a Director on the Board of the Bank effective close of business hours on May 2, 2018. Pursuant to the internal movement, N. S. Kannan ceased to be a Director of the Bank effective close of business hours on June 18, 2018. M. K. Sharma ceased to be a non-executive Director and part-time Chairman of the Bank effective close of business hours on June 30, 2018 consequent to the completion of his tenure of three years as approved by the RBI. M. D. Mallya, Independent Director, tendered his resignation due to health reasons and ceased to be a Director effective October 4, 2018 and the same was accepted by the Board. Pursuant to completion of their primary tenure under the Companies Act, 2013, Dileep Choksi and V. K. Sharma, independent Directors ceased to be Directors on the Board of the Bank effective April 1, 2019. The Board acknowledges the valuable contribution and guidance provided by the above Directors. The Board of Directors at its Meeting held on July 27, 2018 appointed Ranganath Athreya as the Company Secretary and Compliance Officer of the Bank effective July 28, 2018. The Board in the same Meeting noted the cessation of P. Sanker, as the Company Secretary and Compliance Officer of the Bank effective close of business hours on July 27, 2018. 49 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSDeclaration of Independence All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 as amended (the Act) and Regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations) which have been relied on by the Bank and were placed at the Board Meeting held on May 6, 2019. In the opinion of the Board, the independent Directors fulfil the conditions specified in the Act and the SEBI Listing Regulations and are independent of the Management. Retirement by rotation In terms of Section 152 of the Companies Act, 2013, Anup Bagchi would retire by rotation at the forthcoming AGM and is eligible for re-appointment. Anup Bagchi has offered himself for re-appointment. the Members approved the Annual General Meeting AUDITORS Statutory Auditors At (AGM) held on the September 12, 2018, appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants, as statutory auditors to hold office from the conclusion of the Twenty-Fourth AGM till the conclusion of the Twenty-Fifth AGM. As per the Reserve Bank of India (RBI) guidelines, the statutory auditors of the banking companies are allowed to continue for a period of four years, subject to fulfilling the prescribed eligibility norms. Accordingly, M/s Walker Chandiok & Co LLP, Chartered Accountants, would be eligible for re-appointment at the conclusion of the forthcoming AGM. As recommended by the Audit Committee, the Board has proposed the re-appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants, as statutory auditors for the year ending March 31, 2020 (fiscal 2020). M/s Walker Chandiok & Co LLP, Chartered Accountants, will hold office from the conclusion of the forthcoming AGM till the conclusion of the Twenty-Sixth AGM, subject to the approval of Members of the Bank, RBI and other regulatory approvals as may be necessary or required. The re-appointment of the statutory auditors is proposed to the Members in the Notice of the forthcoming AGM through item no. 4. There are no qualifications, reservation or adverse remarks made by the statutory auditors in the audit report. Secretarial Auditors The Board appointed M/s. Parikh Parekh & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Bank for fiscal 2019. The Secretarial Audit Report is annexed herewith as Annexure A. There are no qualifications, reservation or adverse remark or disclaimer made by the auditor in 50 the report save and except disclaimer made by them in discharge of their professional obligation. Maintenance of Cost Records Being a Banking Company, the Bank is not required the to maintain cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013. Reporting of Frauds by Auditors During the year under review, there were no instances of fraud reported by the statutory auditors, branch auditors and secretarial auditor under Section 143(12) of the Companies Act, 2013 to the Audit Committee or the Board of Directors. PERSONNEL The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in an Annexure and forms part of this report. In terms of Section 136(1) of the Companies Act, 2013, the annual report and the financial statements are being sent to the Members excluding the aforesaid Annexure. The Annexure is available for inspection at the Registered office of the Bank. Any Member interested in obtaining a copy of the Annexure may write to the Company Secretary of the Bank. INTERNAL CONTROL AND ITS ADEQUACY The Bank has adequate internal controls and processes in place with respect to its financial statements which provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. These controls and processes are driven through various policies, procedures and certifications. The processes and controls are reviewed periodically. The Bank has a mechanism of testing the controls at regular intervals for their design and operating effectiveness to ascertain the reliability and authenticity of financial information. DISCLOSURE UNDER FOREIGN EXCHANGE MANAGEMENT ACT, 1999 The Bank has obtained a certificate from its statutory in compliance with the Foreign auditors that Exchange Management Act, 1999 provisions with respect to investments made in its consolidated subsidiaries and associates during fiscal 2019. is it RELATED PARTY TRANSACTIONS The Bank undertakes various transactions with related parties in the ordinary course of business. The Bank has a Board approved policy on Related Party Transactions, which has been disclosed on the website DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSthe Bank at of (https://www.icicibank.com/aboutus/ other-policies.page?#toptitle). The Bank also has a Board approved Group Arm’s Length Policy which requires transactions with the group companies to be at arm’s length. The transactions between the Bank and its related parties, during the year ended March 31, 2019, were in the ordinary course of business and based on the principles of arm’s length. The details of material related party transactions at an aggregate level for the year ended March 31, 2019 are given in Annexure B. ANNUAL RETURN The extract of Annual Return in Form No. MGT 9 is annexed herewith as Annexure C. The Annual Return in Form No. MGT 7 will be hosted on the website of the Bank at https://www.icicibank.com/aboutus/annual.html. BUSINESS RESPONSIBILITY REPORTING The Business Responsibility Report as stipulated under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 will be hosted on the website of the Bank at https://www.icicibank.com/aboutus/annual.html. Any Member interested in obtaining a physical copy of the same may write to the Company Secretary of the Bank. Integrated Reporting Framework INTEGRATED REPORTING The Bank has sought to adopt the principles of the International as developed by the International Integrated Reporting Council (IIRC) in its Annual Report for fiscal 2019. For accessing the Integrated Report, please refer to the Annual Report 2018-2019 hosted on the website of the Bank at https://www.icicibank.com/aboutus/annual.html. RISK MANAGEMENT FRAMEWORK The Bank’s risk management framework is based on a clear understanding of various risks, disciplined risk assessment and measurement procedures and continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with international best practices. The Board of Directors has oversight on all the risks assumed by the Bank. Specific Committees have been constituted to facilitate focussed oversight of various risks, as follows: • and business The Risk Committee of the Board reviews risk management policies of the Bank pertaining to credit, market, liquidity, operational and outsourcing continuity management. risks The Committee also reviews the Risk Appetite and Enterprise Risk Management frameworks, Internal Capital Adequacy Assessment Process (ICAAP) and stress testing. The stress testing framework includes a range of Bank-specific, market (systemic) and II and combined scenarios. The ICAAP exercise covers the domestic and overseas operations of the Bank, banking subsidiaries and non-banking subsidiaries. The Committee reviews migration to the advanced approaches under Basel implementation of Basel III, risk return profile of the Bank and the activities of the Asset Liability Management Committee. The Committee reviews the level and direction of major risks pertaining to credit, market, liquidity, operational, technology, compliance, group, management and capital at risk as a part of the risk dashboard. In addition, the Committee has oversight on risks of subsidiaries covered under the Group Risk Management Framework. The Risk Committee also reviews the Liquidity Contingency Plan for the Bank and the various thresholds set out in the Plan. in key The Credit Committee of the Board, apart from sanctioning credit proposals based on the Bank’s credit approval authorisation framework, reviews developments industrial sectors and the Bank’s exposure to these sectors as well as to large borrower accounts and borrower groups. The Credit Committee also reviews major credit portfolios, non-performing loans, accounts under watch, overdues and incremental sanctions. The Audit Committee of the Board provides direction to and monitors the quality of the internal audit function, oversees the financial reporting process and also monitors compliance with inspection and audit reports of RBI, other regulators and statutory auditors. The Asset Liability Management Committee provides guidance for management of liquidity of the overall Bank and management of interest rate risk in the banking book within the broad parameters laid down by the Board of Directors/Risk Committee. • • • Summaries of reviews conducted by these Committees are reported to the Board on a regular basis. for each Policies approved from time to time by the Board of Directors/Committees of the Board form the governing framework risk. The business type of activities are undertaken within this policy framework. Independent groups and subgroups have been constituted across the Bank to facilitate independent evaluation, monitoring and reporting of various risks. These groups function independently of the business groups/subgroups. the Risk The Bank has dedicated groups, namely, Management Group, Compliance Group, Corporate Legal Group, Internal Audit Group and the Financial Crime Prevention & Reputation Risk Management Group, with a mandate to identify, assess and monitor all of the Bank’s principal risks in accordance with well-defined policies and procedures. The Risk Management Group 51 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSis further organised into the Credit Risk Management Group, Market Risk Management Group, Operational Risk Management Group and Information Security Group. The Chief Risk Officer (CRO) reports to the Risk Committee constituted by the Board which reviews risk management policies of the Bank. The CRO, for administrative purpose reports to President. The above mentioned groups are independent of all business operations and coordinate with representatives of the business units to implement the Bank’s risk management policies and methodologies. The Internal Audit and Compliance groups are responsible to the Audit Committee of the Board. INFORMATION REQUIRED UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013 The Bank has a policy against sexual harassment and a formal process for dealing with complaints of harassment or discrimination. The said policy is in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Bank has complied with provisions relating to the constitution of Internal Complaints Committee under the said Act. Pursuant to the amendment to the Securities and (Listing Obligations and Exchange Board of Disclosure Requirements) Regulations, 2015, the details pertaining to number of complaints during the year has been provided below: India which aims at a high level of business ethics, effective supervision and enhancement of value for all stakeholders. Whistle-Blower Policy The Bank has formulated a Whistle-Blower Policy, which is periodically reviewed. The policy comprehensively provides an opportunity for any employee or director of the Bank to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channels. The policy has been periodically communicated to the employees and also posted on the Bank’s intranet. The Whistle-Blower Policy complies with the requirements of Vigil mechanism as stipulated under Section 177 of the Companies Act, 2013 and other applicable laws, rules and regulations. The details of establishment of the Whistle-Blower Policy/Vigil mechanism have been disclosed on the website of the Bank. Code of Conduct as prescribed under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Bank has adopted the revised ICICI Bank Code on Prohibition of Insider Trading. the amendments to a) b) c) 1 number financial year: 59 of complaints filed during the number of complaints disposed off during the financial year: 59 number of complaints pending1 at end of the financial year: Nil Complaints that are open beyond the applicable turnaround time (90 days). All complaints received during FY2019 have been closed within the applicable turnaround time. CORPORATE GOVERNANCE The corporate governance framework at ICICI Bank is based on an effective independent Board, the separation of the Board’s supervisory role from the executive management and the constitution of Board Committees to oversee critical areas. At March 31, 2019, independent Directors constituted a majority on most of the Committees and most of the Committees were chaired by independent Directors. PHILOSOPHY OF CORPORATE GOVERNANCE ICICI Bank’s corporate governance philosophy encompasses regulatory and legal requirements, I. 52 Group Code of Business Conduct and Ethics The Group Code of Business Conduct and Ethics for Directors and employees of the ICICI Group aims at ensuring consistent standards of conduct and ethical business practices across the constituents of the ICICI Group. This Code is reviewed on an annual basis and the latest Code is available on the website of the Bank (www.icicibank.com). Pursuant to the Securities and Exchange Board of India (Listing Requirements) Obligations Regulations, 2015, a confirmation from the Managing Director & CEO regarding compliance with the Code by all the Directors and senior management forms part of the Annual Report. Disclosure and the requirements of Material Subsidiaries the In accordance with India (Listing Securities and Exchange Board of Requirements) and Obligations formulated a Regulations, 2015, Policy for determining Material Subsidiaries and the same has been hosted on the website of the Bank (https://www.icicibank.com/aboutus/other- policies.page?#toptitle). At March 31, 2019, no subsidiary Disclosure the Bank has at DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS of the Bank qualifies as a material unlisted subsidiary as per the criteria stipulated in the regulations. Familiarisation Programme for independent Directors Independent Directors are familiarised with their roles, rights and responsibilities in the Bank as well as with the nature of the industry and the induction business model of the Bank through programmes at the time of their appointment as Directors and through presentations on economy & industry overview, key regulatory developments, strategy and performance which are made to the Directors from time to time. The details of the familiarisation programmes have been hosted on the website of the Bank and can be accessed on the link: (https://www.icicibank.com/aboutus/bod-1.page?). CEO/CFO Certification In terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the certification by the Managing Director & CEO and Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained. Fees to statutory auditors The details of fees pertaining to services provided by the statutory auditors and entities in the network firm/network entity of which the statutory auditors is a part, to ICICI Bank Limited and its subsidiaries during the year ended March 31, 2019 are given in the following table: Nature of service Audit Certification and other audit related services Total Amount in `1 72,218,686 6,800,000 79,018,686 1 Excludes taxes and out of pocket expenses. Details of utilisation of funds During the year under review, the Bank has not raised any funds through Preferential Allotment or Qualified Institutions Placement as specified under Regulation 32(7A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Recommendations of mandatory committees All the recommendations made by the committees of the Board mandatorily required to be constituted by the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 were accepted by the Board. the Bank under Skills/expertise/competence of the Board of Directors The Bank has identified the core skills/expertise/ competence of the Board of Directors as required under Section 10A(2)(a) of the Banking Regulation Act, 1949 in the context of its business(es) and the sectors(s) for it to function effectively and has been in compliance with the same. The details of the core skills/expertise/competence possessed by the existing directors of the Bank is detailed as under: Name of Directors Girish Chandra Chaturvedi Rama Bijapurkar Uday Chitale Neelam Dhawan S. Madhavan Hari L. Mundra Radhakrishnan Nair B. Sriram Lalit Kumar Chandel Sandeep Bakhshi Vishakha Mulye Anup Bagchi Areas of expertise Banking, Economics, Business Management and Agriculture Sector Business Management and Marketing Accounts, Finance and Alternate Dispute Resolution (ADR) Specialist Information Technology Accountancy, Economics, Finance, Law, Information Technology, Human Resources, Risk Management, Business Management Credit and Consumer Finance Accountancy, Agriculture and Rural Economy, Banking, Law, Co-operation, Risk Management, Business Management Economics & Finance Banking and Finance Banking, Insurance, Capital Markets, External Assistance, Agriculture and Rural Development, Power, Irrigation and Health Finance, Banking and Insurance Finance and Banking Retail & Rural and Inclusive Banking 53 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Credit Rating as on March 31, 2019 Foreign currency denominated instrument ratings Instrument type Senior unsecured medium term notes Senior unsecured medium term notes issued under Tokyo pro-bond Certificate of Deposits Rupee denominated instrument ratings Instrument type Tier II bonds (Basel III) Additional Tier 1 bonds (Basel III) Unsecured redeemable bonds Upper Tier II bonds Lower Tier II bonds1 Long-term bonds issued by erstwhile ICICI Limited Certificate of Deposits Fixed deposits 1 Includes Lower Tier II bonds issued by erstwhile The Bank of Rajasthan Limited. Moody's Baa3 - P-3 S&P BBB- - - JCRA - BBB+ - CARE ICRA CRISIL CARE AAA [ICRA]AAA CARE AA+ [ICRA]AA+ CRISIL AA+ - CARE AAA [ICRA]AAA - CARE AAA - CRISIL AAA CARE AAA [ICRA]AAA CARE AAA [ICRA]AAA CRISIL AAA - CARE A1+ [ICRA]A1+ CARE AAA MAAA - - Moody's: Moody's Investors Services S&P: S&P Global Ratings JCRA: Japan Credit Rating Agency, Limited CARE: CARE Ratings Limited, India ICRA: ICRA Limited, India CRISIL: CRISIL Limited, India During the year under review, there were no revisions in the credit ratings obtained by the Bank. During the year, the Bank sought a rating from CRISIL Limited for its Additional Tier 1 bonds which were rated CRISIL AA+. India DIVIDEND DISTRIBUTION POLICY In accordance with Regulation 43A of the Securities and Exchange Board of (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure D. The Policy is hosted on the website of the Bank and can be viewed at (https://www.icicibank.com/aboutus /other-policies.page?#toptitle). CERTIFICATE FROM A COMPANY SECRETARY IN PRACTICE In terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Bank has obtained a Certificate from a Company Secretary in practice that none of the directors on the Board of the Bank have been debarred or disqualified from being appointed or 54 continuing as directors of companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs or any such statutory authority. The Certificate of Company Secretary is annexed herewith as Annexure E. in practice India BOARD OF DIRECTORS ICICI Bank has a broad-based Board of Directors, constituted in compliance with the Banking Regulation Act, 1949, the Companies Act, 2013 and the Securities and Exchange Board of (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with good corporate governance practices. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. The Board has constituted various committees, namely, Audit Committee, Board Governance, Remuneration & Nomination Committee, Corporate Social Responsibility Committee, Credit Committee, Customer Service Committee, Fraud Monitoring Committee, Information Technology Strategy Committee, Risk Committee, Stakeholders Relationship Committee and Review Committee for Identification of Wilful Defaulters/Non Co-operative Borrowers. There were eighteen meetings of the Board during the year – April 2, May 2, May 7, May 8, May 15, May 17, May 29, June 13, June 18, June 27, June 29, July 27, September 18, October 4 and October 26 in 2018 and January 14, January 30 and February 22 in 2019. DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS There were no inter se relationships between any of the Directors. The names of the Directors, their attendance at Board Meetings during the year, attendance at the last AGM and details of other directorships and board committee memberships held by them at March 31, 2019 are set out in the following table: Board Meetings attended during the year Attendance at last AGM (September 12, 2018) Number of directorships of other Indian public limited companies of other Indian companies Names of the other listed entity where a person is a director and category of directorship Number of other committee1 memberships 7/7 Present 2 - 1) 2) 1(1) Infrastructure Leasing and Financial Services Limited (NED) IL & FS Energy Development Company Limited (Chairman, NED) 11/11 N.A. N.A. N.A. N.A. N.A. Name of Director Independent Directors G. C. Chaturvedi (Director w.e.f. July 1, 2018, Chairman w.e.f. July 17, 2018) (DIN: 00110996) M. K. Sharma (Chairman upto close of business hours on June 30, 2018) (DIN: 00327684) Dileep Choksi (upto March 31, 2019) (DIN: 00016322) Hari L. Mundra (w.e.f. October 26, 2018) (DIN: 00287029) M. D. Mallya (w.e.f. May 29, 2018 and upto October 4, 2018) (DIN: 01804955) Neelam Dhawan2 (DIN: 00871445) Radhakrishnan Nair (w.e.f. May 2, 2018) (DIN: 07225354) 17/18 Present N.A. N.A. N.A. 2/3 N.A. 2 - 1) Allcargo Logistics Limited (ID) 0/7 Absent N.A. N.A. N.A. 14/18 Present 16/16 Present - 7 3 - 1 2 - 1) 2) 3) 1) 2) ICICI Prudential Life Insurance Company Limited (ID) Geojit Financial Services Limited (ID) ICICI Securities Primary Dealership Limited (ID) Nestle India Limited (ID) Mahindra & Mahindra Financial Services Limited (ID) 3) Emami Limited (ID) Rama Bijapurkar (w.e.f. January 14, 2019) (DIN: 00001835) 2/2 N.A. N.A. 3(1) N.A. - 2 3(2) 55 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSBoard Meetings attended during the year Attendance at last AGM (September 12, 2018) 2/2 N.A. Number of directorships of other Indian public limited companies - of other Indian companies - 1/2 N.A. N.A. N.A. 18/18 Present 4 1 1) 2) Names of the other listed entity where a person is a director and category of directorship Number of other committee1 memberships - N.A. 4(1) - N.A ICICI Lombard General Insurance Company Limited (ID) India Infradebt Limited (ID) 8/18 Absent N.A. N.A. N.A N.A. Name of Director B. Sriram (w.e.f. January 14, 2019) (DIN: 02993708) Tushaar Shah (upto close of business hours on May 2, 2018) (DIN: 03055738) Uday Chitale (DIN: 00043268) V. K. Sharma (upto March 31, 2019) (DIN : 02449088) Government Nominee Directors Amit Agrawal (upto April 5, 2018) (DIN: 07117013) Lalit Kumar Chandel (w.e.f. December 4, 2018) (DIN: 00182667) 0/1 0/3 N.A. N.A. N.A. N.A. N.A. 1 - 1) National Insurance Company Limited (Government Nominee Director) N.A. - Lok Ranjan (w.e.f. April 5, 2018 and upto December 4, 2018) (DIN: 07791967) Managing Director & CEO / Wholetime Directors 0/14 Absent N.A. N.A. N.A. N.A. Anup Bagchi (DIN: 00105962) 17/18 Present 5 - 1) 2) 3) 1 ICICI Prudential Life Insurance Company Limited (NED) ICICI Securities Limited (NED) ICICI Home Finance Company Limited (Chairman, NED) 8/14 Absent N.A. N.A. N.A. N.A. 8/9 N.A. N.A. N.A. N.A. N.A. 6/6 Present - - - - Chanda Kochhar (upto close of business hours on October 4, 2018) (DIN: 00043617) N. S. Kannan (upto close of business hours on June 18, 2018) (DIN: 00066009) Sandeep Bakhshi (Wholetime Director w.e.f. July 31, 2018, Managing Director & CEO w.e.f. October 15, 2018) (DIN: 00109206) 56 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSName of Director Vijay Chandok (upto May 6, 2019) (DIN: 01545262) Vishakha Mulye (DIN: 00203578) Number of directorships Board Meetings attended during the year Attendance at last AGM (September 12, 2018) 17/18 Present of other Indian public limited companies 1 15/18 Present 1 of other Indian companies - - Names of the other listed entity where a person is a director and category of directorship Number of other committee1 memberships - 1) ICICI Lombard General Insurance Company Limited (NED) - - Independent Director (ID) Non-Executive Director (NED) 1 Includes only chairpersonship/membership of Audit Committee and Stakeholders’ Relationship Committee of other Indian public limited companies. Figures in parentheses indicate committee chairpersonships. 2 Participated in three Meetings through video-conference and one Meeting through tele-conference. The terms of reference of the Board Committees as mentioned earlier, their composition and attendance of the respective Members at the various Committee Meetings held during fiscal 2019 are set out below: to appointment, the quarterly and annual II. AUDIT COMMITTEE Terms of Reference The Audit Committee provides direction to the audit function and monitors the quality of internal and statutory audit. The responsibilities of the Audit Committee include examining the financial statements and auditors’ report and overseeing the financial reporting process to ensure fairness, sufficiency and credibility of financial statements, review of financial statements before submission the Board, review of management’s discussion & analysis, recommendation of terms of appointment, remuneration and removal of central and branch statutory auditors and chief internal auditor, approval of payment to statutory auditors for other permitted services rendered by them, reviewing and monitoring with the management the auditor’s independence and the performance and effectiveness of the audit process, approval of transactions with related parties or any subsequent modifications, review of statement of significant loans related party and/or advances from/investment by the Bank in its subsidiaries, review of functioning of the Whistle-Blower Policy, review of the adequacy of internal control systems and the internal audit function, review of compliance with inspection and audit reports and reports of statutory auditors, transactions, utilisation of the and rights issue, (public review of the findings of internal investigations, review of management letters/letters on internal control weaknesses issued by statutory auditors, reviewing with the management the statement of uses/application of funds raised through an issue issue, preferential issue, etc.), the statement of funds utilised for the purposes other than those stated in the offer document/prospectus/notice report submitted by the monitoring agency, monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the Board to take steps in this matter, discussion on the scope of audit with external auditors, examination of reasons for substantial defaults, if any, in payment to stakeholders, valuation of undertakings or assets, evaluation of risk management systems and scrutiny of inter-corporate loans and investments. The Audit Committee is also empowered to appoint/oversee the work of any registered public accounting firm, establish procedures for receipt and treatment regarding accounting of complaints independent and auditing matters and engage counsel as also provide for appropriate funding for compensation to be paid to any firm/advisors. In addition, the Audit Committee also exercises oversight on the regulatory compliance function of the Bank. The Audit Committee is also empowered to approve the appointment of the Chief Financial Officer (i.e., the wholetime Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate. received 57 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Composition There were seventeen Meetings of the Committee during the year – April 20, April 26, May 7, June 6, June 28, July 12, July 18, July 26, July 27, July 30, October 22 and October 26 in 2018 and January 28, January 29, January 30, February 22 and March 7 in 2019. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Uday Chitale, Chairman Dileep Choksi*, Alternate Chairman Radhakrishnan Nair (w.e.f. May 3, 2018) Tushaar Shah (upto May 2, 2018) Number of meetings attended 17/17 15/17 15/15 0/2 * Participated in one Meeting through tele-conference. Upon completion of his tenure as a Director, Dileep Choksi ceased to be a Member of the Committee with effect from April 1, 2019. reconstituted The Board on April 14, 2019 the which to S. Madhavan, independent Director, was inducted a Member of the Committee with immediate effect. Committee pursuant III. BOARD GOVERNANCE, REMUNERATION of functions the Committee & NOMINATION COMMITTEE Terms of Reference The include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the Wholetime/Independent Directors and the Board and to extend or continue the term of appointment of independent Directors on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, key managerial personnel and other employees, recommending to (including performance bonus and perquisites) to wholetime Directors and senior management personnel. Recommending commission and fee payable to non-executive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to the members of the staff including senior management and key managerial remuneration the Board the 58 personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employees Stock Option Scheme (ESOS) and decide on the grant of stock options to employees and wholetime Directors of the Bank and its subsidiary companies. Composition There were twelve Meetings of the Committee during the year – May 7, May 29, June 18, June 27, June 29, July 27, September 18, October 4 and October 26 in 2018 and January 14, January 30 and March 20 in 2019. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Neelam Dhawan, Chairperson (Chairperson w.e.f. July 1, 2018) Dileep Choksi (Chairman w.e.f. May 3, 2018 and upto June 30, 2018, Member upto January 14, 2019) Tushaar Shah1 (Chairman and Member upto May 2, 2018) G. C. Chaturvedi2 (w.e.f. July 27, 2018) M. K. Sharma (upto June 30, 2018) Rama Bijapurkar (w.e.f. January 14, 2019) B. Sriram (w.e.f. January 14, 2019) V. K. Sharma (upto January 14, 2019) Number of meetings attended 7/7 10/10 - 6/6 5/5 2/2 2/2 6/10 1 No Meetings were held during his tenure. 2 Participated in one Meeting through video-conference. Policy/Criteria for Directors’ Appointment The Bank with the approval of its Board Governance, Remuneration & Nomination Committee (Committee) has put in place a policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a Director as well as a policy on Board diversity. The policy has been framed based on the broad principles as outlined hereinafter. The Committee would evaluate the composition of the Board and vacancies arising in the Board from time to time. The Committee while recommending candidature of a Director would consider the special knowledge or expertise possessed by the candidate as required under Banking Regulation Act, 1949. The Committee would assess the fit and proper credentials of the candidate and the companies/entities with which the candidate is associated either as a director or DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS otherwise and as to whether such association is permissible under RBI guidelines and the internal norms adopted by the above assessment, the Committee would be guided by the guidelines issued by RBI in this regard. the Bank. For The Committee will also evaluate the prospective candidate for the position of a Director from the perspective of the criteria for independence prescribed under Companies Act, 2013 as well as the listing regulations. For a non-executive Director to be classified as independent he/she must satisfy the criteria of independence as prescribed and independence. The Committee will review the same and determine the independence of a Director. a declaration of sign The Committee based on the above assessments will make suitable recommendations on the appointment of Directors to the Board. Remuneration policy The Compensation Policy of the Bank is in line with the RBI circular dated January 13, 2012 and is in compliance with the requirements for the Remuneration Policy as prescribed under the Companies Act, 2013. The Policy is divided into the segments, Part A, Part B and Part C where Part A covers the requirements for wholetime Directors & employees pursuant to RBI guidelines, Part B relates to compensation to non-executive Directors (except part-time non-executive Chairman) and Part C relates to compensation to part-time non-executive Chairman. The Compensation/Remuneration Policy is available on the Bank under the (https://www.icicibank.com/aboutus/ other-policies.page?#toptitle). Further details with respect to the Compensation Policy are provided under titled “Compensation Policy and Practices”. the website of the section link remuneration payable to non-executive/ The independent Directors is governed by the provisions of the Banking Regulation Act, 1949, RBI guidelines issued from time to time and the provisions of the Companies Act, 2013 and related rules to the extent it is not inconsistent with the provisions of the Banking Regulation Act, 1949/RBI guidelines. The remuneration for the non-executive/independent Directors (other than Government Nominee Director) would be sitting fee for attending each Meeting of the Committee/Board as approved by the Board. The Members at their Meeting held on July 11, 2016 approved the payment of profit related commission upto ` 1,000,000 per annum to each non-executive Director of the Bank (other than part-time Chairman and the Government Nominee Director). For the non-executive Chairman, the remuneration, in addition to sitting fee includes such fixed payments as may be recommended by the Board and approved by the Members and RBI, maintaining a Chairman’s office at the Bank’s expense, bearing expenses for travel on official visits and participation in various forums (both in India and abroad) as Chairman of the Bank and bearing travel/halting/other expenses and allowances for attending to duties as Chairman of the Bank and any other modes of remuneration as may be permitted by RBI through any circulars/guidelines as may be issued from time to time. the All non-executive/independent Directors would be entitled to reimbursement of expenses for attending Board/Committee Meetings, official visits and participation forums on behalf of the Bank. in various Performance evaluation of the Board, Committees and Directors The Bank with the approval of its Board Governance, Remuneration & Nomination Committee has put in place an evaluation framework for evaluation of the Board, Directors, Chairperson and Committees. for the Directors, The evaluations the Board, Chairman of the Board and the Committees is carried out through circulation of four different questionnaires, for the Directors, for the Board, for the Chairperson of the Board and the Committees respectively. The performance of the Board is assessed on select parameters related to roles, responsibilities and obligations of the Board, relevance of Board discussions, attention to strategic issues, performance on key areas, providing feedback to executive management and assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The evaluation criteria for the Directors is based on their participation, contribution and offering guidance to and understanding of the areas which were relevant to them in their capacity as members of the Board. The evaluation criteria for the Chairperson of the Board besides the general criteria adopted for assessment of all Directors, focuses incrementally leadership abilities, effective management on of meetings and preservation of interest of stakeholders. The evaluation of the Committees is based on assessment of the clarity with which the mandate of the Committee is defined, effective 59 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS discharge of terms and reference of the Committees and assessment of effectiveness of contribution of the Committee’s deliberation/recommendations to the functioning/decisions of the Board. The overall performance evaluation process for fiscal 2019 was completed to the satisfaction of the Board. The Board of Directors also identified specific action points arising out of the overall evaluation which would be executed as directed by the Board. The evaluation process for wholetime Directors is titled “Compensation Policy and Practices”. further detailed under the section Details of Remuneration paid to Executive Directors The Board Governance, Remuneration & Nomination Committee determines and recommends to the Board including performance bonus and perquisites, payable to the wholetime Directors. the amount of remuneration, The following table sets out the details of remuneration (including perquisites and retiral benefits) paid to Directors in fiscal 2019: Basic Allowances and perquisites 2 Contribution to provident fund Contribution to superannuation fund Contribution to gratuity fund 1 Sandeep Bakhshi1 Vishakha Mulye 2018-19 2,33,01,960 2,06,13,574 27,96,237 34,95,300 19,41,053 2018-19 2,21,20,038 2,24,38,936 26,54,403 0 18,42,599 Anup Bagchi 2018-19 2,10,67,440 2,05,42,265 25,28,094 0 17,54,918 Amount (`) Vijay Chandok 2018-19 2,10,67,440 1,87,75,761 25,28,094 31,60,120 17,54,918 Sandeep Bakhshi assumed office as Chief Operating Officer (Designate) effective June 19, 2018. RBI approved his appointment as Wholetime Director designated as Chief Operating Officer effective July 31, 2018. He was subsequently appointed as Managing Director & CEO as per RBI approval effective October 15, 2018. The above is his part year salary. 2 Allowances and perquisites exclude stock options exercised during fiscal 2019 which does not constitute remuneration paid to the wholetime Directors for fiscal 2019. 3 The performance bonus and ESOPs payable in fiscal 2019 (pertaining to fiscal 2018) is pending RBI approvals. 4 Remuneration paid to following Directors not included above (a) Chanda Kochhar was with the Bank till October 4, 2018. Basic, allowances & perquisites and retirals paid during the year are ` 15,665,561, ` 56,576,012 and ` 3,184,807 respectively. These include amount pertaining to full and final settlement given to Kochhar in October 2018. (b) N.S. Kannan was with the Bank till June 18, 2018. Basic, allowances & perquisites and retirals paid during the year are ` 5,048,758, ` 5,711,859 and ` 1,783,728 respectively. (evaluated as per Income-tax rules Perquisites wherever applicable and otherwise at actual cost to the Bank) such as the benefit of the Bank’s furnished accommodation, gas, electricity, water and furnishings, club fees, group insurance, use of car and telephone at residence or reimbursement of expenses in lieu thereof, medical reimbursement, leave and leave travel concession, education benefits, provident fund, superannuation fund and gratuity, were provided in accordance with the scheme(s) and rule(s) applicable from time to time. In line with the staff loan policy applicable to specified grades of employees who fulfill prescribed eligibility criteria to avail loans for purchase of residential property, the wholetime Directors are also eligible for housing loans subject to approval of RBI. The stock options for fiscal 2018 are awaiting approvals from the RBI. The options shall vest in a graded manner over a three year period, with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 12 months from the date of the grant. The options so vested are to be exercised within 5 years from the date of vesting. Sandeep Bakhshi was appointed as Managing Director & CEO with effect from October 15, 2018 as per the RBI approval. The Bank does not pay any severance fees to its Managing Director & CEO or to its wholetime Directors. The tenure of the office of Managing Director & CEO and the wholetime Directors of the Bank is 5 years, subject to approval of RBI and the Members. The notice period for each of them, as specified in their respective terms of appointments is 2 months in addition to gardening leave. Details of Remuneration paid to non-executive Directors The Board of Directors have approved the payment of ` 1,00,000 as sitting fee for each Meeting of the Board and Audit Committee and ` 50,000 as sitting fee for 60 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS each Meeting of the Committee attended other than the Audit Committee. RBI has approved the appointment of G. C. Chaturvedi as Non-Executive (part-time) Chairman of the Bank for a period from July 17, 2018 till June 30, 2021 on a fixed remuneration of ` 3,500,000 per annum. Information on the total sitting fees and commission paid to each non-executive Director during fiscal 2019 is set out in the following table: Name of Director G.C. Chaturvedi2, 8 M. K. Sharma3 Rama Bijapurkar4 Uday Chitale8 Dileep C. Choksi8 Neelam Dhawan8 Radhakrishnan Nair8 Hari L. Mundra5 V. K. Sharma B. Sriram4 Tushaar Shah6 M. D. Mallya7 Amount (`) Sitting Fees Commission1 11,00,000 18,50,000 3,50,000 - - - 44,50,000 202,740 46,50,000 10,00,000 26,50,000 48,00,000 7,00,000 216,438 - - 13,00,000 10,00,000 4,50,000 - 2,00,000 10,00,000 - - 1 Commission pertaining to fiscal 2018, paid in fiscal 2019. 2 w.e.f. July 1, 2018 3 upto June 30, 2018 4 w.e.f. January 14, 2019 5 w.e.f. October 26, 2018 6 upto May 2, 2018 7 w.e.f. May 29, 2018 and upto October 4, 2018 8 The independent Directors were paid sitting fees for its meeting held on September 12, 2018. In fiscal 2019, a gross amount of ` 24,74,465 was paid as remuneration for the period July 17, 2018 to March 31, 2019 to G. C. Chaturvedi and a gross amount of ` 40,83,334 was paid as remuneration for the period May 1, 2017 to June 30, 2018 to M. K. Sharma. Government Nominee Director reimbursement of Committee Meetings. expenses is only entitled to attending Board/ for Details of shares/convertible instruments held by existing Non-Executive Directors: As on March 31, 2019, Rama Bijapurkar and Lalit Kumar Chandel held 2,600 and 6 equity shares of ` 2 each respectively. Further, S. Madhavan held 1,600 equity shares of ` 2 each as on the date of his appointment i.e. April 14, 2019. Remuneration disclosures as required under RBI guidelines The RBI circular DBOD No. BC. 72/29.67.001/2011-12 on “Compensation of wholetime Directors/Chief Executive Officers/Risk takers and Control function staff etc.” requires the Bank to make following disclosures on remuneration on an annual basis in their Annual Report: COMPENSATION POLICY AND PRACTICES (A) Qualitative Disclosures a) Information relating to the bodies that oversee remuneration. • Name, composition and mandate of the main body overseeing remuneration to the Board recommending The Board Governance, Remuneration and Nomination Committee (BGRNC/Committee) is the body which oversees the remuneration aspects. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and their appointment and removal; formulate a criteria for the evaluation of the performance of the whole time/ independent Directors and the Board and to extend or continue the term of appointment of independent Director on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel to and other employees, recommending (including the Board performance bonus and perquisites) to wholetime Directors (WTDs) and senior management, commission and fee payable to non- executive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employee Stock Option Scheme (ESOS) and decide on the grant of the Bank’s stock options to employees and WTDs of the Bank and its subsidiary companies. remuneration the 61 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS • External consultants whose advice has been sought, the body by which they were commissioned, and in what areas of the remuneration process The Bank employed the services of a reputed consulting firm for market benchmarking in including executive compensation. the area of compensation, • Scope of the Bank’s remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches The Compensation Policy of the Bank, as last reviewed by the BGRNC and the Board at their meeting held on May 7, 2018, pursuant to the guidelines issued by RBI, covers all employees of the Bank, including those in overseas branches of the Bank. In addition to the Bank’s Compensation Policy guidelines, the overseas branches also adhere to relevant local regulations. • Type of employees covered and number of such employees All employees of the Bank are governed by the Compensation Policy. The total number of permanent employees of the Bank at March 31, 2019 was 84,922. • to the Board regarding compensation for WTDs, senior management and equivalent positions and bonus for employees, including senior management and key management personnel. o Alignment of compensation philosophy with prudent risk taking: The Bank seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and no guaranteed bonuses. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and customer service. In addition, the Bank has an employee stock option scheme aimed at aligning compensation to Long-term performance through stock option grants that vest over a period of time. Compensation of staff in financial and risk control functions is independent of the business areas they oversee and depends on their performance assessment. Whether the remuneration committee remuneration reviewed policy during the past year, and if so, an overview of any changes that were made firm’s the Information relating to the design and structure of remuneration processes. • Key features and objectives of remuneration policy The Bank has under the guidance of the Board and the BGRNC, followed compensation practices intended to drive meritocracy within the framework of prudent risk management. This approach has been incorporated in the Compensation Policy, the key elements of which are given below. the and o Effective governance of compensation: The BGRNC has oversight over compensation. The Committee defines Key Performance Indicators (KPIs) for WTDs and equivalent positions organisational performance norms for bonus based on the financial and strategic plan approved by the Board. The KPIs include both quantitative and qualitative aspects. The BGRNC assesses organisational performance as well as the for WTDs and equivalent positions. Based on its assessment, it makes recommendations individual performance b) 62 During the year ended March 31, 2019, the Bank’s Compensation Policy was reviewed by the BGRNC and the Board at their meeting held on May 7, 2018. No changes were proposed in the compensation policy. • Discussion of how the Bank ensures that risk and compliance employees are remunerated independently of the businesses they oversee The compensation of staff engaged in control functions like Risk and Compliance depends on their performance, which is based on achievement of the key results of their respective functions. Their goal sheets do not include any business targets. c) Description of the ways in which current and future risks are taken into account in the remuneration processes. • Overview of the key risks that the Bank implementing into account when takes remuneration measures The Board approves the risk framework for the Bank and the business activities DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS of the Bank are undertaken within this framework to achieve the financial plan. The risk framework includes the Bank’s risk appetite, limits framework and policies and procedures governing various types of risk. KPIs of WTDs & equivalent positions, as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas risk calibrated core operating such as profit tax, excluding income), performance indicators include aspects such as asset quality. The BGRNC takes into consideration all the above aspects while assessing organisational and individual performance compensation-related and recommendations to the Board. (profit before provisions and treasury making • Overview of the nature and type of key measures used to take account of these risks, including risk difficult to measure annual performance targets and The performance evaluation incorporate both qualitative and quantitative aspects including asset quality, refinement/improvement of the risk management framework, effective management of stakeholder relationships and mentoring key members of the top and senior management. • Discussion of the ways in which these measures affect remuneration risk in conjunction with a Every year, the financial plan/targets are formulated risk framework with limit structures for various areas of risk/lines of business, within which the Bank operates to achieve the financial plan. To ensure effective alignment of taking, compensation with prudent the BGRNC takes into account adherence to the risk framework in conjunction with which the financial plan/targets have been formulated. KPIs of WTDs and equivalent positions, as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas such as risk calibrated core indicators operating profit, performance include aspects such as asset quality. The BGRNC consideration all the above aspects while assessing organisational and individual performance compensation-related and recommendations to the Board. making takes into • Discussion of how the nature and type of these measures have changed over the past year and reasons for the changes, as well as the impact of changes on remuneration. The nature and type of these measures have not changed over the past year and hence, there is no impact on remuneration. d) Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration • Overview of main performance metrics for Bank, lines and individuals level business top The main performance metrics include risk calibrated core operating profit (profit before provisions and tax, excluding treasury income) asset quality metrics (such as additions to non-performing loans and recoveries & upgrades), compliance with regulatory norms, refinement of risk management processes and customer service. and weightages for various metrics vary with the role and level of the individual. specific metrics The • Discussion of how amounts of individual remuneration are linked to the Bank-wide and individual performance into aspects performance takes mentioned consideration The BGRNC while above and making assessing compensation-related recommendations to the Board regarding the performance assessment of WTDs equivalent positions. The performance assessment of individual employees is undertaken based on achievements compared to their goal sheets, incorporate various aspects/metrics which described earlier. and • Discussion of the measures the Bank will in general implement to adjust remuneration in the event that performance metrics are weak, including the Bank's criteria for determining 'weak' performance metrics the Bank will The Bank’s Compensation Policy outlines implement the measures in the event of a reasonable evidence of deterioration financial performance. Should such an event occur in the manner outlined in the policy, the BGRNC may decide to apply malus on none, part or all of the unvested deferred variable compensation. in 63 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS e) Description of the ways in which the Bank seeks to adjust remuneration to take account of the longer term performance • Discussion of the Bank’s policy on deferral and vesting of variable remuneration and, if the fraction of variable remuneration that is deferred differs across employees or groups of employees, a description of the factors that determine the fraction and their relative importance f) The quantum of bonus for an employee does not exceed a certain percentage (as stipulated in the compensation policy) of the total fixed pay in a year. Within this percentage, if the quantum of bonus exceeds a predefined threshold percentage of the total fixed pay, a part of the bonus is deferred and paid over a period. These thresholds for deferrals are same across employees. • Discussion of the Bank’s policy and criteria remuneration adjusting for before vesting and (if permitted by national law) after vesting through claw back arrangements deferred The deferred portion of variable pay is subject to malus, under which the Bank would prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence, breach of integrity or in the event of a reasonable financial evidence of deterioration in performance. In such cases, variable pay already paid out may also be subjected to clawback arrangements, as applicable. the Description of the different forms of variable remuneration that the Bank utilises and the rationale for using these different forms • Overview of forms of variable remuneration offered. A discussion of the use of different forms of variable remuneration and, if the mix of different forms of variable remuneration differs across employees or group of employees, a description of the factors that determine the mix and their relative importance The Bank pays performance linked retention pay (PLRP) to its front-line staff and junior management and performance bonus to its middle and senior management. PLRP aims to reward front line and junior managers, mainly on the basis of skill maturity attained through experience and continuity in role which is a key differentiator for customer service. The Bank also pays variable pay to sales officers and relationship managers in wealth management roles while ensuring that such pay-outs are in accordance with applicable regulatory requirements. The Bank ensures higher proportion of variable pay at senior levels and lower variable pay for front-line staff and junior management levels. (B) Quantitative disclosures The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of WTDs (including MD & CEO) and equivalent positions. Particulars Number of meetings held by the BGRNC Remuneration paid to its members during the financial year (sitting fees) Number of employees who received a variable remuneration award Number and total amount of sign-on awards made Number and total amount of guaranteed bonuses awarded Details of severance pay, in addition to accrued benefits Breakdown of amount of remuneration awards for the financial year Fixed1 Variable2 - Deferred - Non-deferred 64 ` in million, except numbers Year ended March 31, 2019 Year ended March 31, 2018 12 1.9 - - - - 7 0.3 4 - - - 274.7 222.7 - - - - - - DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Particulars Share-linked instruments Total amount of deferred remuneration paid out during the year Total amount of outstanding deferred remuneration Cash Shares (nos.) Shares-linked instruments3 Other forms Total amount of outstanding deferred remuneration and retained remuneration exposed to ex-post explicit and/or implicit adjustments Total amount of reductions during the year due to ex-post explicit adjustments4 Total amount of reductions during the year due to ex-post implicit adjustments Year ended March 31, 2019 - - - N.A. - Year ended March 31, 2018 4,526,500 6.1 - N.A. - 6,260,597 14,825,250 - - - - - - - - 1 Fixed pay includes basic salary, supplementary allowances, superannuation, contribution to provident fund and gratuity fund by the Bank. The amounts mentioned in the above table corresponds to the period of employment of WTDs/ President in the Bank during the year ended March 31, 2019. For the years ended March 31, 2019 and March 31, 2018, variable and share-linked instruments represent amounts paid/options awarded for the years ended March 31, 2018 and March 31, 2017 respectively, as per RBI approvals. Includes stock options granted to MD & CEO and President during their employment with the group company. 3 4 Excludes ` 74.1 million variable pay to the former MD & CEO for past years which has been directed for claw-back. 2 Disclosures required with respect to Section 197(12) of the Companies Act, 2013 The ratio of the remuneration of each Director to the median employee’s remuneration and such other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the (Appointment and Remuneration of Companies Managerial Personnel) Rules, 2014 and as amended from time to time. (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 done with effect from April 1, 2018 in the remuneration of each Director, Chief Financial Officer, Chief Executive Officer and Company Secretary is provided below: (i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year; Sandeep Bakhshi, Managing Director & CEO1 Vishakha Mulye 118:1 97:1 Vijay Chandok 89:1 Anup Bagchi 89:1 1 Sandeep Bakhshi was appointed as MD & CEO effective October 15, 2018 as per the RBI approval. Annualised remuneration has been used for computation of ratios. Sandeep Bakhshi, Managing Director & CEO1 Vishakha Mulye, Executive Director Vijay Chandok, Executive Director Anup Bagchi, Executive Director NA 15% 15% 15% 15% Rakesh Jha, Chief Financial Officer Ranganath Athreya, Company Secretary 11% 1 Sandeep Bakhshi was appointed as MD & CEO effective October 15, 2018 as per the RBI approval. 65 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS (iii) The percentage increase in the median remuneration of employees in the financial year; the median increase The percentage remuneration of employees in the financial year was around 9%. in (iv) The number of permanent employees on the (v) rolls of company; The number of employees, as mentioned in the section on ‘Management’s Discussion & Analysis’ is 86,763. Out of this, the employees on permanent rolls of the Company is 84,922, including employees in overseas locations. 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; The average percentage in the salaries of total employees other than the Key Managerial Personnel for FY2019 was around 9%, while the average increase in the remuneration of the Key Managerial Personnel was in the range of 11% to 15%. increase made (vi) Affirmation that the remuneration is as per the remuneration policy of the Company. Yes Note: The independent Directors of the Bank, other than Chairman receive remuneration in the form of sitting fees and profit related commission. The Chairman receives sitting fees and remuneration as approved by the shareholders and RBI. IV. CORPORATE SOCIAL RESPONSIBILITY the the ICICI Group and COMMITTEE Terms of Reference The functions of the Committee include review of corporate social responsibility (CSR) initiatives undertaken by ICICI Foundation for Inclusive Growth, formulation and recommendation to the Board of a CSR Policy indicating the activities to be undertaken by the Company and recommendation of the amount of expenditure to be incurred on such activities, reviewing and recommending the annual CSR plan to the Board, making recommendations to the Board with respect to the CSR initiatives, policies and practices of the ICICI Group, monitoring the CSR activities, implementation and compliance with the CSR Policy and reviewing and implementing, if 66 required, any other matter related to CSR initiatives as recommended/suggested by RBI or any other body. Composition There were three Meetings of the Committee during the year – April 12, 2018, September 7, 2018 and January 16, 2019. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Radhakrishnan Nair, Chairman (Member w.e.f. May 3, 2018 and Chairman w.e.f. July 1, 2018) Dileep Choksi (Chairman w.e.f. May 3, 2018 and upto June 30, 2018) Tushaar Shah (Chairman and Member upto May 2, 2018) Amit Agrawal (upto April 5, 2018)1 Anup Bagchi (w.e.f. July 1, 2018) Chanda Kochhar (upto October 4, 2018) 1 No meetings were held during his tenure. Number of meetings attended 2/2 1/3 1/1 - 2/2 1/2 Upon completion of his tenure as a Director, Dileep Choksi ceased to be a Member of the Committee with effect from April 1, 2019. The Board at its Meeting on May 6, 2019 reconstituted the Committee pursuant to which Rama Bijapurkar and Uday Chitale, independent Directors has been inducted as the Members of the Committee with effect from June 30, 2019. about the policy developed and Details implemented by the Company on Corporate Social Responsibility (CSR) initiatives taken during the year. ICICI Bank has a long-standing commitment towards socio-economic development. The Bank’s Corporate Social Responsibility (CSR) activities are focussed in the areas of education, health, skill development rural development for sustainable inclusion and related activities and financial literacy, and other activities as may be required towards fulfilling the CSR objectives. The activities are largely implemented either directly or through the ICICI Foundation for Inclusive Growth. The CSR policy has been hosted on the website of the Bank at https://www.icicibank.com/managed- assets/docs/about-us/ICICI-Bank-CSR-Policy.pdf. The Annual Report on the Bank’s CSR activities is annexed herewith as Annexure F. including financial livelihoods, DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS V. CREDIT COMMITTEE Terms of Reference The functions of the Committee include review of developments in key industrial sectors, major credit portfolios and approval of credit proposals as per the authorisation approved by the Board. Composition There were thirty one Meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Sandeep Bakhshi, Chairman1 (Member w.e.f. July 31, 2018 and Chairman w.e.f. October 26, 2018) M. K. Sharma (Chairman upto June 30, 2018) Chanda Kochhar (upto October 4, 2018) Hari L. Mundra2 (w.e.f. October 26, 2018) M. D. Mallya (w.e.f. May 29, 2018 and upto October 4, 2018) Radhakrishnan Nair3 (w.e.f. May 3, 2018) Tushaar Shah (upto May 2, 2018) Number of meetings attended 17/20 7/7 4/17 9/11 0/13 29/29 1/2 21/24 Vishakha Mulye4 (w.e.f. July 1, 2018) 1 Attended one meeting through video-conferencing 2 Attended one meeting through tele-conference 3 Attended three meetings through video-conferencing 4 Attended two meetings through video-conferencing and one through tele-conference. The Chairperson was decided at each Meeting held during July 1, 2018 till October 25, 2018. The Board at its Meeting on May 6, 2019 reconstituted the Committee pursuant to which Radhakrishnan Nair, independent Director ceases to be a Member of the Committee with effect from June 30, 2019, G. C. Chaturvedi, independent Director has been inducted as a Member with effect from June 30, 2019 and upto September 30, 2019, B. Sriram, independent Director has been inducted as a Member of the Committee with effect from October 1, 2019. VI. CUSTOMER SERVICE COMMITTEE Terms of Reference The functions of this Committee include review of customer service the functioning of the Customer Service Council and evolving innovative measures for enhancing the initiatives, overseeing quality of customer service and improvement in the overall satisfaction level of customers. Composition There were five Meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Rama Bijapurkar, Chairperson (Chairperson w.e.f. January 14, 2019) M. D. Mallya, (Chairman w.e.f. July 1, 2018 and upto October 4, 2018) Tushaar Shah (Chairman and Member upto May 2, 2018)1 Uday Chitale (Chairman w.e.f. May 3, 2018 and upto June 30, 2018)2 Anup Bagchi Chanda Kochhar (upto October 4, 2018) Neelam Dhawan (w.e.f. May 3, 2018) Sandeep Bakhshi (w.e.f. July 31, 2018) 1 No meetings were held during his tenure. Number of meetings attended 1/1 0/2 - 5/5 3/5 1/3 5/5 3/3 2 Also chaired the meeting held in November 2018. The Board at its Meeting on May 6, 2019 reconstituted the Committee pursuant to which Uday Chitale, Neelam Dhawan, independent Directors ceases to be the Members of the Committee with effect from June 30, 2019 and Hari L. Mundra, independent Director has been inducted as a Member of the Committee with effect from June 30, 2019. VII. FRAUD MONITORING COMMITTEE Terms of Reference The Committee monitors and reviews all the frauds involving an amount of ` 10.0 million and above identifying the systemic with the objective of lacunae, if any, that facilitated perpetration of the fraud and put in place measures to rectify the same. The functions of this Committee include identifying the reasons for delay in detection, if any, and reporting to top management of the Bank and RBI on the same. The progress of investigation and recovery position is also monitored by the Committee. The Committee also ensures that staff accountability is examined at all levels in all the cases of frauds and action, if required, is completed quickly without loss of time. The role of the Committee is also to review the efficacy of the remedial action taken to prevent recurrence internal of frauds, such as strengthening of 67 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS controls and put in place other measures as may be considered relevant to strengthen preventive measures against frauds. Composition There were six Meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Dileep Choksi, Chairman Anup Bagchi Chanda Kochhar (upto October 4, 2018) Neelam Dhawan Sandeep Bakhshi (w.e.f. July 31, 2018) Uday Chitale Number of meetings attended 6/6 6/6 1/3 6/6 3/3 6/6 Upon completion of his tenure as Director, Dileep Choksi ceased to be the Chairman and Member of the Committee with effect from April 1, 2019. independent Director ceases The Board at its Meeting on May 6, 2019 reconstituted the Committee pursuant to which Uday Chitale, to be a Member of the Committee with effect from June 30, 2019 and S. Madhavan, independent Director has been inducted as a Member as well as appointed as Chairman of the Committee and Radhakrishnan Nair, independent Director has been inducted as a Member of the Committee with effect from June 30, 2019. VIII. INFORMATION TECHNOLOGY STRATEGY COMMITTEE Terms of Reference The functions of the Committee are to approve strategy for Information Technology (IT) and policy documents, ensure that is aligned with business strategy, review IT risks, ensure proper balance of IT investments for sustaining the Bank’s growth, oversee the aggregate funding of IT at Bank-level, ascertain if the management has resources to ensure the proper management of IT risks, review contribution of IT to business and oversee the activities of Digital Council. IT strategy Composition There were four Meetings of the Committee during the year. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Name of Member Neelam Dhawan, Chairperson Anup Bagchi (w.e.f. July 1, 2018) Chanda Kochhar (upto October 4, 2018) Dileep Choksi Sandeep Bakhshi (w.e.f. July 31, 2018) Number of meetings attended 4/4 2/3 1/2 4/4 3/3 Upon completion of his tenure as a Director, Dileep Choksi ceased to be a Member of the Committee with effect from April 1, 2019. its Meeting on May 6, 2019 The Board at reconstituted the Committee pursuant to which B. Sriram, independent Director has been inducted as a Member as well as appointed as the Chairman of the Committee with effect from June 30, 2019. IX. RISK COMMITTEE Terms of Reference The functions of the Committee are to review ICICI Bank’s risk management policies pertaining to credit, market, liquidity, operational, outsourcing, reputation risks, business continuity plan and disaster recovery plan. The functions of the Committee also include review of the Enterprise Risk Management (ERM) framework, Risk Appetite Framework (RAF), stress testing Internal Capital Adequacy Assessment Process (ICAAP) and framework for capital allocation; review of the status of Basel II and Basel III implementation, risk return profile of the Bank, risk dashboard covering various risks, outsourcing activities and the activities of the Asset Liability Management Committee. The Committee also has oversight on risks of subsidiaries covered under the Group Risk Management Framework. The Committee also carries out Cyber Security risk assessment. framework, Composition There were eight Meetings of the Committee during the year – April 27, 2018, June 11, 2018, June 20, 2018, July 25, 2018, October 22, 2018, January 29, 2019, February 18, 2019 and March 20, 2019. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: 68 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Number of meetings attended Name of Member Number of meetings attended Name of Member B. Sriram, Chairman (Chairman w.e.f. January 14, 2019) Dileep Choksi (Chairman w.e.f. July 1, 2018 and upto January 14, 2019) M. K. Sharma (Chairman upto June 30, 2018) Chanda Kochhar (upto October 4, 2018) M. D. Mallya (w.e.f. July 1, 2018 and upto October 4, 2018) Sandeep Bakhshi (w.e.f. July 31, 2018) V. K. Sharma 3/3 6/8 3/3 1/4 0/1 4/4 4/8 Upon completion of their tenure as Directors, Dileep Choksi and V. K. Sharma ceased to be the Members of the Committee with effect from April 1, 2019. The Board on April 14, 2019 reconstituted the Committee pursuant to which S. Madhavan, independent Director, was inducted as a Member of the Committee with immediate effect. The Board at its Meeting on May 6, 2019 reconstituted the Committee pursuant to which Sandeep Bakhshi, Managing Director & CEO, ceases to be a Member of the Committee with effect from June 30, 2019, B. Sriram, independent Director ceases to be a Member and Chairman of Risk Committee with effect from September 30, 2019 and G. C. Chaturvedi has been inducted as a Member as well as the Chairman of the Committee with effect from October 1, 2019. X. STAKEHOLDERS RELATIONSHIP COMMITTEE Terms of Reference The functions of the Committee include approval and rejection of transfer or transmission of shares, bonds, debentures, issue of duplicate certificates, allotment of securities from time to time, redressal and resolution of grievances of security holders, delegation of authority for opening and operation of bank accounts for payment of interest/dividend. Composition There were four Meetings of the Committee during the year – April 26, 2018, July 26, 2018, October 26, 2018 and January 29, 2019. The details of the composition of the Committee and attendance at its Meetings held during the year are set out in the following table: Hari L. Mundra, Chairman (Chairman w.e.f. January 14, 2019) M. D. Mallya, (Chairman w.e.f. July 1, 2018 and upto October 4, 2018) Uday Chitale (Chairman upto June 30, 2018), (Chairman w.e.f. October 26, 2018 and upto January 14, 2019) Anup Bagchi N.S. Kannan (upto June 18, 2018) Vijay Chandok (w.e.f. October 26, 2018 and upto January 14, 2019) 1/1 0/1 4/4 4/4 1/1 1/1 The Company Secretary of the Bank acts as the Compliance Officer in accordance with the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. 173 investor complaints received in fiscal 2019 were processed. At March 31, 2019, no complaints were pending. XI. REVIEW COMMITTEE FOR IDENTIFICATION OF WILFUL DEFAULTERS/NON CO-OPERATIVE BORROWERS Terms of Reference The function of the Committee is to review the order of Identification of Wilful Defaulters/Non Co-operative Borrowers (a Committee comprising wholetime Directors and senior executives of the Bank to examine the facts and record the fact of the borrower being a wilful defaulter/non co-operative borrower) and confirm the same for the order to be considered final. the Committee for Composition The Managing Director & CEO is the Chairman independent of this Committee and any two Directors comprise remaining members. the Two Meetings of the Committee were held during the year. The Meeting held on January 30, 2019 was attended by Sandeep Bakhshi, Uday Chitale and Radhakrishnan Nair and the Meeting held on March 19, 2019 was attended by Sandeep Bakhshi, Uday Chitale and Neelam Dhawan. 69 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS XII. SEPARATE MEETING OF INDEPENDENT DIRECTORS During the year, the independent Directors met on May 7/8/11, 2018 and September 12, 2018 inter alia to review the matters statutorily prescribed under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. XIII.OTHER COMMITTEES In addition to the above, the Board has from time to time constituted various committees, namely, Committee of Executive Directors, Executive Investment Committee, Asset Liability Management Committee, Committee for Identification of Wilful (comprising Operational Vigilance Defaulters/Non Co-operative Borrowers, Committee of Senior Management certain wholetime Directors and Executives) and Committee of Executives, Compliance Committee, Product & Process Approval Committee, Regional Committees for India and overseas operations, Outsourcing Risk Management Committee, Product Committee, Governance Committee and other Committees (all comprising Executives). These committees are responsible for specific operational areas like asset approval/renewal of credit proposals, approval of products and processes and management of operational risk, under authorisation/supervision of the Board and its Committees. liability management, Committee, XIV. GENERAL BODY MEETINGS The details of General Body Meetings held in the last three years are given below: General Body Meeting Day, Date Time Venue Twenty-Fourth Annual General Meeting Wednesday, September 12, 2018 11:30 a.m. Sir Sayajirao Nagargruh, Vadodara Mahanagar Seva Sadan, Near GEB Colony, Old Padra Road, Akota, Vadodara 390 020 Twenty-Third Annual General Meeting Friday, June 30, 2017 12 noon Professor Chandravadan Mehta Auditorium, General Education Centre, Opposite D. N. Hall Ground, The Maharaja Sayajirao University, Pratapgunj, Vadodara 390 002 Twenty-Second Annual General Meeting Monday, July 11, 2016 12 noon Sir Sayajirao Nagargruh, Vadodara Mahanagar Seva Sadan, Near GEB Colony, Old Padra Road, Akota, Vadodara 390 020 The details of the Special Resolutions passed in the Annual General Meetings held in the previous three years are given below: General Body Meeting Day, Date Resolutions Annual General Meeting Wednesday, September 12, 2018 • Amendment to Capital Clause of the Memorandum of Association • Amendment to Article 5(a) of the Articles of Association • Amendment to the definition of Exercise Period under Employees Stock Option Scheme-2000 • Private placement of securities under Section 42 of the Companies Act, 2013 Annual General Meeting Friday, June 30, 2017 • Private placement of securities under Section 42 of the Companies Act, 2013 Annual General Meeting Monday, July 11, 2016 • Private placement of securities under Section 42 of the Companies Act, 2013 70 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Postal Ballot No resolution was passed through postal ballot during the financial year ended March 31, 2019. At present, no special resolution is proposed to be passed through postal ballot. XV. DISCLOSURES 1. There are no materially significant transactions with related parties i.e., directors, management, subsidiaries, or relatives conflicting with the Bank’s interests. The Bank has no promoter. 2. Penalties or strictures imposed on the Bank by any of the stock exchanges, the Securities & Exchange Board of India (SEBI) or any other statutory authority, for any non-compliance on any matter relating to capital markets, during the last three years, detailed as hereunder: i. ii. As mentioned by RBI in its press release dated March 29, 2018, RBI has through an order dated March 26, 2018, imposed a monetary penalty of ` 589.0 million on the Bank for non-compliance with directions/guidelines issued by RBI. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The RBI, in exercise of powers conferred under Section 47(A)(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, levied an aggregate penalty of ` 10.0 million vide its order dated February 25, 2019. The penalty has been levied for delay in compliance to RBI’s directives on “Time-bound implementation & strengthening of SWIFT related controls”. 3. In terms of the Whistle-Blower Policy of the Bank, no employee of the Bank has been denied access to the Audit Committee. XVI. MEANS OF COMMUNICATION It is ICICI Bank’s belief that all stakeholders should have access to information regarding its position to enable them to accurately assess its future potential. ICICI Bank disseminates information on its operations General Shareholder Information and initiatives on a regular basis. ICICI Bank‘s website (www.icicibank.com) serves as a key awareness facility for all its stakeholders, allowing them to access information at their convenience. It provides comprehensive information on ICICI Bank’s strategy, financial performance, operational performance and the latest press releases. (SEC) guidelines, ICICI Bank’s investor relations personnel respond to specific queries and play a proactive role in disseminating information to both analysts and investors. In accordance with SEBI and Securities all Exchange Commission information which could have a material bearing on ICICI Bank’s share price is released through leading domestic and global wire agencies. The the National Stock Exchange of India Limited (NSE), the BSE Limited (BSE), New York Stock Exchange (NYSE), Securities Exchange Commission (SEC), Singapore Stock Exchange, Japan Securities Dealers Association and SIX Swiss Exchange Ltd. from time to time. is also disseminated information to as information and financial and other compliances the The various required/prescribed under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are filed electronically with NSE/BSE through NSE’s Electronic Application Processing System (NEAPS) and through BSE Listing Centre and are also available on their respective websites in addition to the Bank’s website. ICICI Bank’s quarterly financial results are published either in the Financial Express (Mumbai, Pune, Ahmedabad, New Delhi, Lucknow, Chandigarh, Kolkata, Chennai, Bengaluru, Hyderabad and Kochi editions) or the Business Standard (Ahmedabad, Bengaluru, Bhubaneshwar, Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, Lucknow, Mumbai, New Delhi and Pune editions), and Vadodara Samachar (Vadodara). The financial results, official news releases, analyst call transcripts and presentations are also available on the Bank’s website. The Management’s Discussion & Analysis forms part of the Annual Report. Annual General Meeting Day, Date Time Venue Twenty-Fifth Annual General Meeting Friday, August 9, 2019 11:45 a.m. Professor Chandravadan Mehta Auditorium, General Education Centre, Opposite D. N. Hall Ground, The Maharaja Sayajirao University, Pratapgunj, Vadodara 390 002 71 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Financial Year : April 1, 2018 to March 31, 2019 Book Closure : July 24, 2019 to August 9, 2019 (both days inclusive) Dividend Payment Date : Will be paid/despatched on or after August 9, 2019 Listing of Equity Shares/ADSs/Bonds on Stock Exchanges Stock Exchange Code for ICICI Bank BSE Limited (BSE) (Equity) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 National Stock Exchange of India Limited (NSE) (Equity) Exchange Plaza, Bandra-Kurla Complex Bandra (East), Mumbai 400 051 New York Stock Exchange (ADSs)2 11, Wall Street, New York, NY 10005, United States of America 1 FII segment of BSE. 2 Each ADS of ICICI Bank represents two underlying equity shares. 532174 & 6321741 ICICIBANK IBN The bonds issued in domestic market comprised of privately placed bonds as well as bonds issued via public issues which are listed on BSE/NSE. ICICI Bank has paid annual listing fees for the relevant periods to BSE and NSE where its equity shares/bonds are listed and NYSE where its ADSs are listed. Listing of Other Securities The bonds issued overseas are issued either in public or private placement format. The listed bonds are traded on Singapore Exchange Securities Trading Limited, 2 Shenton Way, #02-02, SGX Centre 1, Singapore 068804 or SIX Swiss Exchange Ltd, P.O. Box 1758, CH-8021 Zurich, Switzerland or Tokyo Stock Exchange, 2-1 Nihombashi Kabutocho, Chuo-ku Tokyo 103-8220 Japan. Market Price Information The reported high and low closing prices and volume of equity shares of ICICI Bank traded during fiscal 2019 on BSE and NSE are set out in the following table: BSE NSE High ` Low ` Volume High ` Low ` Volume 291.70 311.10 300.85 307.25 344.40 335.05 355.10 369.60 366.60 382.00 358.90 400.00 400.00 261.90 48,964,990 277.10 16,729,093 271.15 21,579,782 259.30 32,034,681 297.85 27,140,030 305.00 16,355,694 303.60 31,068,109 349.80 21,701,012 342.75 20,667,652 343.45 35,262,982 338.55 22,186,545 353.50 31,473,075 259.30 325,163,645 291.75 310.95 300.65 307.35 344.35 335.10 355.00 370.00 366.50 382.25 359.30 400.55 400.55 261.85 276.90 271.40 259.25 298.55 305.55 303.70 349.65 342.80 343.55 338.75 354.25 Total Volume on BSE and NSE 554,034,479 505,069,489 437,411,078 454,140,171 438,940,061 460,519,843 494,208,829 526,243,510 484,867,421 512,007,451 327,737,124 344,092,818 603,713,714 634,781,823 417,163,584 438,864,596 320,932,298 341,599,950 467,373,555 502,636,537 289,573,739 311,760,284 359,345,712 390,818,787 259.25 5,146,336,604 5,471,500,249 Month April-18 May-18 June-18 July-18 August-18 September-18 October-18 November-18 December-18 January-19 February-19 March-19 Fiscal 2019 72 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS  The reported high and low closing prices and volume of ADRs of ICICI Bank traded during fiscal 2019 on the NYSE are given below: Month April-18 May-18 June-18 July-18 August-18 September-18 October-18 November-18 December-18 January-19 February-19 March-19 Fiscal 2019 High (USD) Low (USD) Number of ADS traded 8.85 9.17 8.83 8.83 9.77 9.26 9.49 10.34 10.34 10.78 10.00 11.46 11.46 8.19 8.36 7.88 7.72 8.77 8.49 8.19 9.39 9.26 9.55 9.50 9.91 7.72 187,144,800 129,614,888 143,643,499 144,318,500 142,154,987 147,329,300 219,347,100 131,262,900 125,519,700 154,374,100 127,747,800 144,777,900 1,797,235,474 The performance of ICICI Bank equity shares relative to the S&P BSE Sensitive Index (Sensex), S&P BSE Bank Index (Bankex) and NYSE Financial Index during the period April 1, 2018 to March 31, 2019 is given in the following chart: 160.00 150.00 140.00 130.00 120.00 110.00 100.00 90.00 80.00 8 1 / r p A 8 1 / y a M 8 1 / n u J 8 1 / l u J 8 1 / g u A 8 1 / p e S 8 1 / t c O 8 1 / v o N 8 1 / c e D 9 1 / n a J 9 1 / b e F 9 1 / r a M S&P BSE Sensex S&P BSE Bankex NYSE Financial Index ICICI Bank 73 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Share Transfer System ICICI Bank’s investor services are handled by 3i Infotech Limited (3i Infotech). 3i Infotech is a SEBI registered Category I - Registrar to an Issue & Share Transfer (R&T) Agent. 3i Infotech is an information technology company and in addition to R&T services, provides a wide range of technology & technology-enabled products and services. ICICI Bank’s equity shares are traded mainly in dematerialised form. During the year, 4,148,620 equity shares of face value ` 2 each involving 19,451 certificates were dematerialised. At March 31, 2019, 99.68% of paid-up equity share capital (including equity shares represented by ADS constituting 24.89% of the paid-up equity share capital) are held in dematerialised form. Physical share transfer requests were processed and the share certificates were returned normally within a period of seven days from the date of receipt, if the documents were correct, valid and complete in all respects. The number of equity shares of ICICI Bank transferred during the last three years (excluding electronic transfer of shares in dematerialised form) is given below: No. of transfer deeds No. of shares transferred As required under Regulation 40(9) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate is obtained every six months from a practising Company Secretary that all transfers have been completed within the stipulated time. The certificates are filed with BSE and NSE. India In terms of Regulation 76 of the Securities and Exchange Board of (Depositories and Participants) Regulations, 2018 and SEBI Circular D&CC/FITTC/CIR-16/2002 dated December 31, 2002, as amended vide Circular no. CIR/MRD/DP/30/2010 dated September 6, 2010 an audit is conducted on a quarterly basis by a firm of Chartered Accountants, for the purpose of, inter alia, reconciliation of the total admitted equity share capital with the depositories and in the physical form with the total issued/paid up equity share capital of ICICI Bank. Certificates issued in this regard are placed before the Stakeholders Relationship Committee and filed with BSE and NSE, where the equity shares of ICICI Bank are listed. Fiscal 2017 Fiscal 2018 Fiscal 2019 Shares of face value ` 2 Shares of face value ` 2 Shares of face value ` 2 414 629 109,155 157,922 2013 585,550 Registrar and Transfer Agents The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited. Investor services related queries/requests/complaints may be directed to Ms. R. C. D’souza at the address as under: 3i Infotech Limited International Infotech Park Tower# 5, 3rd Floor Vashi Railway Station Complex Vashi, Navi Mumbai 400 703 Maharashtra, India Tel. No.: +91-22-7123 8000 Fax No.: +91-22-7123 8099 E-mail : investor@icicibank.com Queries relating to the operational and financial performance of ICICI Bank may be addressed to: Rakesh Jha/Anindya Banerjee ICICI Bank Limited ICICI Bank Towers Bandra-Kurla Complex Mumbai 400 051 Tel. No.: +91-22-2653 7131 Fax No.: +91-22-2653 1175 E-mail: ir@icicibank.com 74 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Debenture Trustees Pursuant to Regulation 53 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the names and contact details of the debenture trustees for the public issue bonds and privately placed bonds of the Bank are given below: Bank of Maharashtra Head Office, Legal Dept. Lokmangal, "1501" Shivaji Nagar, Pune - 411 005 Tel. No.: +91-020-2553 6256 bomcolaw@mahabank.com Axis Trustee Services Limited The Ruby, 2nd Floor, SW 29, Senapati Bapat Marg, Dadar West, Mumbai - 400 028 Tel. No.: +91-22-2425 5202 debenturetrustee@axistrustee.com IDBI Trusteeship Services Limited Asian Building, Ground Floor, 17, R Kamani Marg, Ballard Estate, Mumbai - 400 001 Tel. No.: +91-22-4080 7001 itsupport@idbitrustee.com The details are available on the website of the Bank at the link (https://www.icicibank.com/Personal-Banking/ investments/icici-bank-bonds/index.page). Information on Shareholding Shareholding pattern of ICICI Bank at March 31, 2019 Shareholder Category No. of shares % holding Deutsche Bank Trust Company Americas (Depositary for ADS holders) 1,604,424,721 FIIs/FPIs, NRIs, Foreign Banks, Foreign Companies, OCBs and Foreign Nationals 2,105,174,383 Insurance Companies Bodies Corporate (including Government Companies and Clearing Members) Banks & Financial Institutions Mutual Funds/UTI Individuals, HUF and Trusts NBFCs Registered with RBI Provident Fund/Pension Fund Alternate Investment Fund IEPF Total 772,315,354 152,759,354 1,085,096 1,351,914,622 372,621,600 6,547,817 62,358,629 10,999,750 6,038,327 24.89 32.66 11.98 2.37 0.02 20.97 5.78 0.10 0.97 0.17 0.09 6,446,239,653 100.00 Shareholders of ICICI Bank with more than one percent holding at March 31, 2019 Name of the Shareholder Deutsche Bank Trust Company Americas* Life Insurance Corporation of India No. of shares % holding 1,604,424,721 24.89 509,224,087 7.90 HDFC Trustee Co Ltd (Various Mutual Fund Accounts)/HDFC Large Cap Fund 267,000,149 4.14 Dodge & Cox International Stock Fund 254,429,276 3.95 SBI Mutual Fund/SBI Dual Advantage Fund and Other Various Fund Accounts 173,093,609 2.69 ICICI Prudential Mutual Fund (Various Mutual Fund Accounts) Aditya Birla Sun Life Trustee Private Limited Reliance Capital Trustee Co Ltd/Reliance ETF/Reliance Emergent India Fund (Various Fund Accounts) Government of Singapore Kotak Capital Fund (Various Mutual Fund Accounts) 144,736,199 2.25 130,775,083 2.03 115,164,358 1.79 98,147,231 1.52 85,155,884 1.32 * Deutsche Bank Trust Company Americas holds equity shares of ICICI Bank as depositary for ADS holders. 75 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Distribution of shareholding of ICICI Bank at March 31, 2019 Range – Shares Upto 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 50,000 50,001 & above Total No. of Folios 799,843 51,868 4,124 2,895 1,968 860,698 Disclosure with respect to shares lying in suspense account The Bank had 100,222 equity shares held by 483 shareholders lying in suspense account at the beginning of the fiscal 2019. The Bank has been transferring the shares lying unclaimed to the eligible shareholders as and when the request for the same has been received after proper verification. During the year, the Bank had received requests from 33 shareholders holding 11,429 shares for claiming these shares out of which 4,559 shares held by 8 shareholders were transferred from the suspense account. As on March 31, 2019, 95,663 shares held by 475 shareholders remained unclaimed in the suspense account. The voting rights on the shares lying in suspense account are frozen till the rightful owner of such shares claims the shares. Transfer of unclaimed dividend and shares to investor education & protection fund (IEPF) Pursuant to the provisions of Sections 124 and 125 of the Companies Act, 2013, during fiscal 2019, dividend amount of ` 3.33 crore remaining unclaimed for a period of seven years from the date of its transfer to the Unpaid Dividend Accounts of the Company have been transferred to the Investor Education and Protection Fund (IEPF). Pursuant to Section 124(6) of the Companies Act, 2013 read with the Investor Education & Protection Fund Authority (Accounting, Audit, Transfer & Refund) Rules, 2016, during fiscal 2019, 1,314,679 equity shares in respect of which the dividend has not been claimed for seven consecutive years have been transferred to the designated demat account of the IEPF Authority. Members who have not yet encashed their dividend warrant(s) for the financial year ended March 31, 2012 and/or subsequent years are requested to submit their claims to the Registrar % No. of Shares 92.93 144,418,631 6.02 95,449,190 0.48 28,231,323 0.34 59,559,473 0.23 100.00 6,118,581,036 6,446,239,653 % 2.24 1.48 0.44 0.92 94.92 100.00 and Transfer Agent of the Company without any delay. The unclaimed dividend and the equity shares transferred to IEPF can be claimed by making an application in the prescribed form available on the website of IEPF i.e. www.iepf.gov.in. The details of the Nodal Officer appointed under the provisions of IEPF are available under the Investor Relations section on the website of the Bank at www.icicibank.com. Dematerialisation of securities and updation of PAN and Bank details SEBI, vide its Circular dated April 20, 2018, introduced a documented framework for streamlining and strengthening the systems and processes of RTAs, Issuer Companies and Bankers to an Issue with regards to handling and maintenance of records, transfer of securities and payment of dividend, as may be applicable. The said SEBI Circular, inter alia, provides for updation of PAN and Bank details the Shareholders, wherever not available. by This has been separately communicated to investors holding securities in physical form by the Bank. Those investors who are yet to respond are requested to take necessary action in the matter at the earliest. Outstanding GDRs/ADSs/Warrants or any Convertible instruments, conversion date and likely impact on equity ICICI Bank has 802.21 million ADS (equivalent to 1,604.42 million equity shares) outstanding, which constituted 24.89% of ICICI Bank’s total equity capital at March 31, 2019. There are no other convertible instruments outstanding as on March 31, 2019. Commodity price risk or foreign exchange risk and hedging activities The foreign exchange risk position including bullion is managed within the net overnight open position (NOOP) limit approved by the Board of Directors. The foreign currency assets of the Bank are primarily 76 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS floating rate linked assets. Wholesale liability raising for foreign currencies takes place in USD or other currencies via bond issuances, bilateral loans and syndicated/club loans as well as refinance from Export Credit Agencies (ECA) which may be at a fixed rate or floating rate linked. In case of fixed rate Long-term wholesale fund raising in USDs, the interest rate risk is generally hedged via interest rate swaps wherein the Bank moves to a floating rate index in order to match the asset profile. In case of fund raising in non USD currencies, the foreign exchange risk is hedged via foreign exchange swaps or currency interest rate swaps. The extant RBI guidelines do not allow AD Category I Banks to take any market positions in commodity related activities. However, the extant guidelines allows Bank to import gold and silver in line with the RBI license and selling of imported gold/silver on outright basis to domestic clients or providing gold metal loan to jewellery manufacturers and take gold deposits under the Gold Monetisation scheme. ICICI Bank provides pricing and hedging of Gold Metal Loan to jewellery customers and such exposures are covered on a back-to-back basis with gold suppliers. In view of the above, the disclosure pursuant the SEBI Circular no. SEBI/HO/CFD/CMD1/ to CIR/P/2018/0000000141 dated November 15, 2018 is not required to be given. Plant Locations – Not applicable Address for Correspondence Ranganath Athreya Company Secretary ICICI Bank Limited ICICI Bank Towers Bandra-Kurla Complex Mumbai - 400 051 Tel. No.: +91-22-2653 8900 Fax No.: +91-22-2653 1230 E-mail: companysecretary@icicibank.com is The Bank in compliance with requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Bank has also complied with the discretionary requirements such as maintaining a separate office for the Chairman at the Bank’s expense, ensuring financial statements with unmodified audit opinion, separation of posts of Chairman and Chief Executive Officer and reporting of internal auditor directly to the Audit Committee. ANALYSIS OF CUSTOMER COMPLAINTS a) Customer complaints in fiscal 2019 No. of complaints pending at the beginning of the year No. of complaints received during the year No. of complaints redressed during the year No. of complaints pending at the end of the year Note: The above does not include complaint redressed within 1 working day. b) Awards passed by the Banking Ombudsman in fiscal 2019 No. of unimplemented awards at the beginning of the year No. of awards passed by the Banking Ombudsman during the year No. of awards implemented during the year No. of unimplemented awards at the end of the year 6,209 264,726 262,259 8,676 Nil Nil Nil Nil COMPLIANCE CERTIFICATE OF THE AUDITORS ICICI Bank has annexed to this Report, a certificate obtained the statutory auditors, M/s Walker Chandiok & Co LLP, Chartered Accountants, regarding from compliance of conditions of Corporate Governance as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. 77 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS EMPLOYEE STOCK OPTION SCHEME The Bank has an Employee Stock Option Scheme (ESOS/Scheme) which was instituted in fiscal 2000 to enable the employees and wholetime Directors of ICICI Bank and its subsidiaries to participate in future growth and financial success of the Bank. The ESOS aims at achieving the twin objectives of (i) aligning employee interest to that of the shareholders; and (ii) retention of talent. Through employee stock option grants, the Bank seeks to foster a culture of long-term sustainable value creation. The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee (the SEBI Regulations). Benefits) Regulations, 2014 Pursuant to the SEBI Regulations, options are granted by the Board Governance, Remuneration & Nomination Committee (BGRNC) and noted by the Board. The Scheme was initially approved by the Members at their meeting held on February 21, 2000 and amended from time to time. The Members at the Annual General Meeting held on September 12, 2018 approved the change in exercise period to not exceeding five years from date of vesting of options as may be determined by the BGRNC for each grant. The above definition of Exercise Period has been made applicable to all future grants effective May 2018. The Bank has upto March 31, 2019 granted 499.24 million stock options from time to time aggregating to 7.74% of the issued equity capital of the Bank at March 31, 2019. As per the ESOS, as amended from time to time, the maximum number of options granted to any employee/Director in a year is limited to 0.05% of ICICI Bank’s issued equity shares at the time of the grant, and the aggregate of all such options is limited to 10% of ICICI Bank’s issued equity shares on the date of the grant (equivalent to 644.62 million shares of face value ` 2 each at March 31, 2019). Particulars of options granted by ICICI Bank as on March 31, 2019 are given below: Number of options outstanding at the beginning of the year Number of options granted during the year* Number of options forfeited/lapsed during the year Number of options vested during the year Number of options exercised during the year Number of shares arising as a result of exercise of options Money realised by exercise of options during the year (`) Number of options outstanding at the end of the year Number of options exercisable at the end of the year * Excludes options pertaining to Wholetime Directors pending for RBI approval. 235,672,250 31,112,400 18,979,999 46,916,376 18,248,877 18,248,877 3,486,300,104 229,555,774 152,151,329 The Bank follows the intrinsic value method to account for its stock-based employee compensation plans. The diluted earnings per share (EPS) pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard 20 (AS-20) was ` 5.17 in fiscal 2019 compared to basic EPS of ` 5.23. Based on the intrinsic value of options, no compensation cost was recognised during fiscal 2019. However, if the Bank had used the fair value of options based on the binomial tree model, compensation cost in fiscal 2019 would have been higher by ` 3.18 billion and proforma profit after tax would have been ` 30.45 billion. On a proforma basis, the Bank’s basic and diluted earnings per share would have been ` 4.73 and ` 4.68 respectively. The key assumptions used to estimate the fair value of options granted during fiscal 2019 are given below: Risk-free interest rate Expected life Expected volatility Expected dividend yield 7.32% to 8.31% 3.64 to 6.64 years 30.79% to 32.22% 0.43% to 0.80% The weighted average fair value of options granted during fiscal 2019 was ` 107.22 (` 86.43 during fiscal 2018) and the weighted average exercise price of options granted during fiscal 2019 was ` 283.91 (` 251.05 during fiscal 2018). 78 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSRisk free interest rates over the expected term of the option are based on the government securities yield in effect at the time of the grant. The expected term of an option is estimated based on the vesting term as well as expected exercise behavior of the employees who receive the option. Expected exercise behaviour is estimated based on the historical stock option exercise pattern of the Bank. Expected volatility during the estimated expected term of the option is based on historical volatility determined based on observed market prices of the Bank's publicly traded equity shares. Expected dividends during the estimated expected term of the option are based on recent dividend activity. The detailed disclosures as stipulated under Regulation 14 of the Securities and Exchange Board of India (Share Regulations, 2014 will be hosted on the website of the Bank at https://www.icicibank.com/aboutus/other-policies.page. Employee Benefits) Based CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The Bank has undertaken various initiatives for energy conservation at its premises. A detailed write up is given in the chapter Natural Capital, in the Integrated Report section of the Annual Report for fiscal 2019 and under Principle 6 of Section E of the Business Responsibility Report which will be available on the website of the Bank at https://www.icicibank.com/aboutus/annual.page. The Bank has used information technology extensively in its operations; for details refer to the chapter Strategic Focus Areas for Business in the Integrated Report section of the Annual Report for fiscal 2019. UPDATE ON RECENT DEVELOPMENTS AT THE BANK Shareholders were provided an update under this section last year that the Audit Committee of the Bank under direction given by the Board of Directors had instituted an independent enquiry, headed by a former Supreme Court Judge, Hon’ble Mr. Justice B. N. Srikrishna (Retd.), to consider various allegations relating to the then MD & CEO, Ms. Chanda Kochhar. The final findings and actions taken by the Board were disclosed by the Bank to the stock exchanges vide press release dated January 30, 2019 and is now generally available information. Shareholders can access the said press release at (www.icicibank.com). Any shareholder who requires a printed copy of this press release may also write to the Registrar and Transfer Agents of the Bank. line with the continuing efforts towards GREEN INITIATIVE IN CORPORATE GOVERNANCE In 'Green Initiative', the Bank has effected electronic delivery of Notice of Annual General Meeting and Annual Report to those Members whose e-mail ids were Participants/3i registered with the the Infotech/Bank. The Companies Act, 2013 and underlying rules as well as Regulation 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, permit the dissemination of financial statements and annual report in electronic mode to the Members. Your Directors are thankful to the Members for actively participating in the Green Initiative and seek your continued support. Depository SECRETARIAL STANDARDS Your Bank is in compliance with the Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) for the financial year ended March 31, 2019. DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm: 1. 2. 3. 4. 5. 6. that in the preparation of the annual accounts, the applicable accounting standards had been followed, along with proper explanation relating to material departures; that they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for that period; that they have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Banking Regulation Act, 1949 and the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities; that they have prepared the annual accounts on a going concern basis; that they have laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 79 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSCompliance with the Group Code of Business Conduct and Ethics I confirm that all Directors and members of the senior management have affirmed compliance with Group Code of Business Conduct and Ethics for the year ended March 31, 2019. May 6, 2019 Sandeep Bakhshi Managing Director & CEO ACKNOWLEDGEMENTS ICICI Bank is grateful to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India and overseas regulators for their continued co-operation, support and guidance. thank its international banking community, rating agencies and stock exchanges for their support. investors, the domestic and ICICI Bank wishes to ICICI Bank would like to take this opportunity to express sincere thanks to its valued clients and customers for their continued patronage. The Directors express their deep sense of appreciation to all the employees, whose outstanding professionalism, commitment and initiative has made the organisation’s growth and success possible and continues to drive its progress. Finally, the Directors wish to express their gratitude to the Members for their trust and support. For and on behalf of the Board May 6, 2019 Girish Chandra Chaturvedi Chairman 80 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSANNEXURE A FORM NO. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2019 (Pursuant to Section 204 (1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014) To, The Members, ICICI Bank Limited We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by ICICI Bank Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company, the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, the explanations and clarifications given to us and the representations made by the Management, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2019, generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records made available to us and maintained by the Company for the financial year ended on 31st March, 2019 according to the provisions of: (i) (ii) The Companies Act, 2013 (the Act) and the rules made thereunder; The Securities Contract (‘SCRA’) and the rules made thereunder; (Regulation) Act, 1956 (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and amendments from time to time; The Securities and Exchange Board of (Share Based Employees Benefits) India Regulations, 2014; The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not applicable to the Company during the audit period); The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period) and The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not applicable to the Company during the audit period) The Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992 The Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994 The Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993 The Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996 (m) The Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 81 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS (n) (o) (p) The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992 Securities and Exchange Board of India (Depositories and Participant) Regulations, 2018; (vi) Other laws applicable specifically to the 3) Company namely: (a) (b) Banking Regulation Act, 1949, Master Circulars, Notifications and Guidelines issued by the RBI from time to time The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (c) Recovery of Debts Due to Banks and Financial Institutions Act, 1993 4) (d) The Shops and Establishments Act, 1953 We have also examined compliance with the applicable clauses of the following: (i) (ii) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general meetings. 5) The Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange of India Limited read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. imposing penalties by Adjudicating Officer) Rules 2005 requiring responses on matters relating to alleged non-compliance with certain provisions of the erstwhile Listing Agreement and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has submitted its reply to SEBI. The Company and it’s ex-Compliance Officer of the Company received a Notice from SEBI on July 31, 2018 under Rule 4(1) of SCR (Procedure for Holding Inquiry and imposing penalties by Adjudicating Officer) Rules 2005 requiring responses on matters relating to alleged non-compliance with certain provisions of the erstwhile Listing Agreement with respect to delayed disclosure of an agreement relating to merger of the erstwhile Bank of Rajasthan with the Company. The Company received a show cause notice from RBI dated August 23, 2018 under Sections 35, 35A, 46 and 47A of Banking Regulation Act, 1949 relating to contravention of RBI guidelines on Time-bound implementation & strengthening of SWIFT related operational controls. The Reserve Bank of India (RBI), in exercise of powers conferred under section 47(A)(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, levied an aggregate penalty of `10 million vide its order dated February 25, 2019 on the Company. The penalty has been levied for delay in compliance to RBI’s directives on “Time-bound implementation & strengthening of SWIFT related controls”. During the period under review, the Company has complied with the Act, Rules, the provisions of Regulations, Guidelines, standards etc. mentioned above. The Company has spent an amount of ` 92.2 crores against the amount of ` 119.0 crores to be spent during the year towards Corporate Social Responsibility. During the year, The Company received a show cause notice from RBI dated April 25, 2018 under Section 11 of Foreign Exchange Management Act, 1999 relating to contravention of directions issued by Reserve Bank of India (RBI) in respect of follow-up with exporters and reporting of export realisation. The Company submitted a detailed response to the said show cause notice specifying the efforts taken by the Company. Taking into cognizance of efforts made by the Company, RBI through letter dated December 20, 2018 informed that no monetary penalty has been imposed. The Company and it’s Managing Director & CEO received a Notice from SEBI on May 24, 2018 under Rule 4(1) of SCR (Procedure for Holding Inquiry and 1) 2) 82 We further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. In respect of meetings held at short notice or meetings for which the agenda notes (other than those relating to Unpublished Price Sensitive Information (UPSI)) were sent at a notice of less than 7 days, the unanimous consent of the Board/Committee was taken for discussion of the said agenda items and the same has been recorded in the minutes. DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Decisions at the Meetings of the Board of Directors and of the Committees thereof were taken with requisite majority. We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period the following events occurred during the year which have a major bearing on the Company’s affairs in pursuance of the laws, rules, regulations, guidelines, standards etc. referred to above. 1. 2. 3. During the financial year ended March 31, 2019, the Company has issued 18,248,877 equity share of face value of ` 2 each under the Employee Stock option Scheme. The Company redeemed 350 Preference shares during the year and has complied with the applicable laws. During the financial year ended March 31, 2019, the Company has redeemed various series of debentures in the nature of Public issue bonds, Private 4. 5. 6. placement bonds and Pension bonds aggregating to ` 6842,34,81,107/- and has complied with the applicable laws. During Q1-2019, the Company sold equity shares representing 2.00% shareholding in ICICI Prudential Life Insurance Company Limited through an offer for sale on stock exchanges for a total consideration of `1145.97 crore. The Company has obtained approval of members by way of special resolution under Section 42 of the Act to borrow from time to time, by way of issue of non-convertible securities including but not limited to bonds and non-convertible debentures in one or more tranches of upto ` 25,000 crores on private placement basis. issued and allotted various The Company Non-Convertible Bonds in nature of Debentures of face value of ` 10,00,000/- each aggregating to ` 1,140 crores on private placement basis in the domestic market Place: Mumbai Date : 06.05.2019 For Parikh Parekh & Associates Company Secretaries Signature: P. N. Parikh Partner FCS No: 327 CP No: 1228 This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. 83 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS ANNEXURE A To, The Members ICICI Bank Limited Our report of even date is to be read along with this letter. 1. 2. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. 5. 6. Where ever required, we have obtained the Management representation about the Compliance of laws, rules and regulations and happening of events etc. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For Parikh Parekh & Associates Company Secretaries Signature: P. N. Parikh Partner FCS No: 327 CP No: 1228 Place: Mumbai Date : 06.05.2019 84 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS ANNEXURE B FORM NO. AOC-2 [Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014] Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis Nil 2. Details of material contracts or arrangement or transactions at arm’s length basis Nature of contracts/ transactions Term deposits placed with the Bank Investment in equity shares of related party by the Bank Short-term lendings by the Bank Loans given by related party based on standby letters of credit given by the Bank Discounting of letters of credit issued by the Bank Term loan extended by the Bank Purchase of investment securities by the Bank Sale of investment securities by the Bank 3 years - - Principal amounts of derivatives such as swaps and forwards contracts Various maturities Sr. No. 1 2 3 4 5 6 7 8 Name of the related party Life Insurance Corporation of India India Infradebt Limited India Infradebt Limited Nature of relationship Others Associate Associate ICICI Securities Primary Dealership Limited ICICI Bank UK PLC Subsidiary Subsidiary ICICI Home Finance Company Limited ICICI Securities Primary Dealership Limited ICICI Prudential Life Insurance Company Limited ICICI Prudential Life Insurance Company Limited ICICI Securities Primary Dealership Limited ICICI Lombard General Insurance Company Limited ICICI Securities Primary Dealership Limited ICICI Home Finance Company Limited Shree Renuka Sugars Limited1 ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Bank Canada ICICI Prudential Asset Management Company Limited Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Subsidiary Subsidiary Subsidiary Subsidiary Duration of contracts Various maturities 7 days - Salient terms of contracts/ transactions Interest at applicable coupon rates Invested at rights issue price ` in million 31,721.3 1,960.0 2,740.0 1 day to 5 days Interest at prevailing 158,050.0 Various maturities market rates Interest at prevailing market rates 2,327.9 2,174.6 1,000.0 31,591.0 3,066.4 Interest at negotiated competitive rates At market prices At market prices 18,391.1 15,368.2 1,518.1 At market prices 445,500.0 39,395.1 2,191.7 1,823.3 1,053.9 1,028.1 644.4 85 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. 9 10 11 12 Name of the related party ICICI Bank UK PLC Nature of relationship Subsidiary Nature of contracts/ transactions Current account deposits by the Bank Duration of contracts - ICICI Securities Limited Life Insurance Corporation of India ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited Life Insurance Corporation of India Subsidiary Others Subsidiary Subsidiary Others Current account deposits with the Bank Interest expense on borrowings/ deposits from related party ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited Subsidiary Subsidiary Commission income earned by the Bank on insurance products - - - Expenses incurred by the Bank towards service provider arrangement 1 year 10 years Insurance premium paid by the Bank Dividend paid by the Bank Dividend received by the Bank - - - 13 I-Process Services (India) Private Limited Associate 14 15 16 ICICI Merchant Services Private Limited ICICI Lombard General Insurance Company ICICI Prudential Life Insurance Company Limited Life Insurance Corporation of India ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Prudential Asset Management Company Limited ICICI Bank Canada ICICI Lombard General Insurance Company Limited Associate Subsidiary Subsidiary Others Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary 1 Ceased to be related party effective from May 7, 2018. May 6, 2019 86 Salient terms of contracts/ transactions Outstanding balance at March 31, 2019. Maintained for normal banking transactions Outstanding balance at March 31, 2019. Maintained for normal banking transactions Interest on bonds at applicable rates Interest on term deposits at applicable coupon rates Commission for corporate agency services to solicit and procure the sale and distribution of the policies Outsourcing of services and resources Merchant management fee Staff welfare insurance at competitive market rates Insurance policy for retail loan borrowers Dividend on equity shares Dividend on equity shares ` in million 1,357.6 18,228.8 9,300.6 5,856.4 675.8 11,111.8 1,827.9 9,760.2 1,276.7 5,327.1 4,109.9 1,287.2 3,597.0 904.9 3,719.6 1,939.6 1,656.5 1,373.6 1,269.2 Girish Chandra Chaturvedi Chairman DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSANNEXURE C FORM NO. MGT-9 Extract of Annual Return as on the financial year ended on March 31, 2019 [Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS CIN Registration Date Name of the Company L65190GJ1994PLC021012 January 5, 1994 ICICI Bank Limited Category/Sub-Category of the Company Company limited by shares/Indian Non-Government Company Address of the Registered office and contact details ICICI Bank Tower Near Chakli Circle Old Padra Road, Vadodara - 390 007 Gujarat, India Tel.: +91-265-6722239 Email : companysecretary@icicibank.com Whether listed company Yes Name, Address and Contact details of Registrar and Transfer Agent, if any 3i Infotech Limited International Infotech Park Tower# 5, 3rd Floor Vashi Railway Station Complex Vashi, Navi Mumbai - 400 703 Maharashtra, India Tel. : +91-22-7123 8000 Fax : +91-22-7123 8098 Email : investor@icicibank.com II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the Company shall be stated: Sr. No. 1 Name and Description of main products/services Banking and Financial Services NIC Code of the product/service 64191 % to total turnover of the Company 100% The Bank is a publicly held banking company engaged in providing a wide range of banking and financial services including retail banking, corporate banking and treasury operations. 87 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Name and address of the Company CIN/GLN* Holding/ Subsidiary/ Associate Subsidiary Company % of shares held 100.00% Applicable Section 2(87) Subsidiary Company 100.00% 2(87) U65922MH1999PLC120106 Subsidiary 100.00% 2(87) Company Subsidiary Company 100.00% 2(87) U65990MH2000PLC124773 Subsidiary 100.00% 2(87) Company L67200MH2000PLC129408 Subsidiary 55.87% 2(87) Company U99999DL1993PLC054135 Subsidiary 51.00% 2(87) Company L66010MH2000PLC127837 Subsidiary 52.87% 2(87) Company ICICI Bank Canada 150 Ferrand Drive Suite 1200, Toronto, ON M3C 3E5 Canada ICICI Bank UK PLC Registered Office: One Thomas More Square Five Thomas More Street London E1W 1YN ICICI Home Finance Company Limited Registered Office: ICICI Bank Towers Bandra-Kurla Complex Mumbai 400 051 ICICI International Limited Registered Office: IFS Court,Twenty Eight, Cybercity Ebene, Mauritius ICICI Investment Management Company Limited Registered Office: ICICI Bank Towers Bandra-Kurla Complex Mumbai 400 051 ICICI Lombard General Insurance Company Limited Registered Office: ICICI Lombard House 414 Veer Savarkar Marg Near Siddhivinayak Temple Prabhadevi Mumbai 400 025 ICICI Prudential Asset Management Company Limited Registered Office: 12th floor, Narain Manzil 23, Barakhamba Road New Delhi 110 001 ICICI Prudential Life Insurance Company Limited Registered Office: ICICI PruLife Towers 1089, Appasaheb Marathe Marg Prabhadevi Mumbai 400 025 Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 88 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSName and address of the Company CIN/GLN* Holding/ Subsidiary/ Associate U66000MH2009PLC191935 Subsidiary Company % of shares held 100.00% Applicable Section 2(87) Sr. No. 9. 10. 11. 12. 13. 14. 15. 16. 17. ICICI Prudential Pension Funds Management Company Limited Registered Office: ICICI Prulife Towers 1089, Appasaheb Marathe Marg Prabhadevi Mumbai 400 025 ICICI Prudential Trust Limited Registered Office: 12th floor, Narain Manzil 23, Barakhamba Road New Delhi 110 001 ICICI Securities Limited Registered Office: ICICI Centre H. T. Parekh Marg Churchgate Mumbai 400 020 ICICI Securities Holding Inc. Registered Office: 251 Little Falls Drive Wilmington, DE 19808 United States of America ICICI Securities Inc. 251 Little Falls Drive Wilmington, DE 19808 United States of America ICICI Securities Primary Dealership Limited Registered Office: ICICI Centre H. T. Parekh Marg, Churchgate Mumbai 400 020 ICICI Trusteeship Services Limited Registered Office: ICICI Bank Towers Bandra-Kurla Complex Mumbai 400 051 ICICI Venture Funds Management Company Limited Registered Office: ICICI Venture House, Ground Floor Appasaheb Marathe Marg Prabhadevi Mumbai 400 025 Arteria Technologies Private Limited@ Registered Office: Unit No.11, 1st Floor, Innovator International Tech Park Limited Bangalore - 560 066 U74899DL1993PLC054134 Subsidiary 50.80% 2(87) Company L67120MH1995PLC086241 Subsidiary 79.22% 2(87) Company Subsidiary Company 100.00% 2(87) Subsidiary Company 100.00% 2(87) U72900MH1993PLC131900 Subsidiary 100.00% 2(87) Company U65991MH1999PLC119683 Subsidiary 100.00% 2(87) Company U72200MH1989PLC166901 Subsidiary 100.00% 2(87) Company U72900KA2007PTC041911 Associate Company 19.98% 2(6) 89 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSSr. No. 18. 19. 20. 21. 22. 23. 24. Name and address of the Company India Infradebt Limited Registered Office: The Capital, 'B' Wing, #1101-A Bandra Kurla Complex Mumbai - 400 051 ICICI Merchant Services Private Limited Registered Office: 74, Kalpataru Square Off Andheri Kurla Road Kondivita Lane Andheri (East) Mumbai – 400 059 I-Process Services (India) Private Limited Registered Office: Unit No. 602, 6th Floor, “CENTRE POINT”, Andheri-Kurla Road J.B. Nagar, Andheri (East) Mumbai - 400 059 NIIT Institute of Finance Banking and Insurance Training Limited Registered Office: 8, Balaji Estate, First Floor Guru Ravi Das Marg, Kalkaji New Delhi 110 019 Rajasthan Asset Management Company Private Limited# Registered Office: 7th Floor, Ganga Heights Bapu Nagar, Tonk Road Jaipur, Rajasthan – 302 015 OTC Exchange of India Limited# Registered Office: 92-93 Maker Tower F, Cuffe Parade Mumbai 400 005 Falcon Tyres Limited# Registered Office: K R S Road, Metagalli Mysore, Karnataka 570 016 CIN/GLN* Holding/ Subsidiary/ Associate U65923MH2012PLC237365 Associate Company % of shares held 42.33% Applicable Section 2(6) U74140MH2009PTC194399 Associate Company 19.01% 2(6) U72900MH2005PTC152504 Associate Company 19.00% 2(6) U80903DL2006PLC149721 Associate Company 18.79% 2(6) U65999RJ2002PTC017380 Associate Company 24.30% 2(6) U67120MH1990NPL058298 Associate Company 20.00% 2(6) L25114KA1973PLC002455 Associate Company 26.39% 2(6) * CIN has been mentioned for Indian subsidiaries/Associate Companies. @ w.e.f. May 29, 2018 # These companies are not considered as associates in the financial statements, in accordance with the provisions of AS 23 on ‘Accounting for Investments in Associates in Consolidated Financial Statements’ 90 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS IV. SHAREHOLDING PATTERN (Equity Share Capital Break-up as percentage of Total Equity) (i) Category-wise Shareholding No. of Shares held at the beginning of the year (April 1, 2018) No. of Shares held at the end of the year (March 31, 2019) Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % change during the year 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - - - - - - - - - - - - - - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Sr. No. Category of shareholders A Promoters (1) Indian a) Individual / HUF b) Central Govt c) State Govt(s) d) Bodies Corp. e) Banks/FI f) Any Other Sub-total (A)(1) (2) Foreign a) NRIs - Individuals b) O ther - Individuals b) Bodies Corp. d) Banks/FI e) Any Other Sub-total (A)(2) Total Shareholding of Promoter (A) = (A)(1)+(A)(2) B Public Shareholding (1) Institutions a) Mutual Funds/UTI 1,104,410,402 51,765 1,104,462,167 17.18 1,351,905,866 8,756 1,351,914,622 20.97 3.79 b) Banks/Financial Institutions c) Central Govt/ State Govt(s) d) Venture Capital Funds e) Insurance Companies g) Foreign Venture Capital Funds h) Other (specify) Foreign Banks FII - DR Provident Funds/ Pension Funds Alternate Investment Fund 2,996,700 75,104 3,071,804 0.05 1,014,877 70,219 1,085,096 0.02 (0.03) 10,880,378 428 10,880,806 0.17 16,033,568 428 16,033,996 0.25 0.08 0 0 0 - 0 0 0 - - f) FIIs/FPIs 2,342,948,530 30,646 2,342,979,176 36.45 2,082,826,274 15,366 2,082,841,640 32.31 863,752,987 1,060 863,754,047 13.44 772,314,294 1,060 772,315,354 11.98 0 0 0 825,008 1,045,546 0 0 0 220,538 825,008 1,045,546 385,700 292,600 292,600 - - 0.02 0.01 52,643,783 0.82 62,358,629 1,920,162 0.03 10,999,750 62,358,629 0.97 0.15 10,999,750 0.17 0.14 0 0 0 220,538 385,700 52,643,783 1,920,162 0 0 0 (1.46) (4.14) - - - (0.00) - - 0.02 0.00 Sub-total (B)(1) 4,380,159,180 984,011 4,381,143,191 68.16 4,297,966,396 920,837 4,298,887,233 66.69 (1.47) 91 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS (2) Non-Institutions a) Bodies Corporate i) Indian ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital upto `1 lakh ii) Individual shareholders holding nominal share capital in excess of `1 lakh c) Others (specify) NBFCs registered with RBI Foreign Nationals Non-Resident Indians Clearing Members HUF Foreign Companies Foreign Bodies – DR IEPF Sr. No. Category of shareholders No. of Shares held at the beginning of the year (April 1, 2018) No. of Shares held at the end of the year (March 31, 2019) Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % change during the year 100,056,844 1,123,487 101,180,331 1.57 116,086,821 687,940 116,774,761 0 3,300 3,300 0.00 0 3,300 3,300 1.81 0.00 0.24 - 263,137,793 23,169,117 286,306,910 4.45 262,503,589 18,528,994 281,032,583 4.36 (0.09) 57,165,593 309,622 57,475,215 0.89 79,032,844 158,927 79,191,771 1.23 0.34 Trusts 2,535,352 1,550 2,536,902 948,746 0 948,746 0.01 0.04 6,547,817 0 6,547,817 5,364,019 55,902 5,419,921 0.10 0.08 0.09 0.04 116,622 0 116,622 0.00 63,090 0 63,090 0.00 (0.00) 18,526,666 332,942 18,859,608 0.29 19,855,429 278,555 20,133,984 0.31 0.02 13,480,657 50 13,480,707 7,003,579 34,500 7,038,079 0.21 0.11 19,950,547 50 19,950,597 6,947,257 30,068 6,977,325 0.31 0.11 0.10 (0.00) 0 155,019 155,019 0.00 0 155,019 155,019 0.00 - 294,358 4,735,293 0 0 294,358 4,735,293 0.00 0.07 639,204 6,038,327 0 0 639,204 6,038,327 0.01 0.09 8.42 0.01 0.02 0.75 Sub-total (B)(2) 468,001,503 25,129,587 493,131,090 7.67 523,028,944 19,898,755 542,927,699 Total Public Shareholding (B) = (B)(1)+(B)(2) C Shares held by Custodian for GDRs & ADRs 4,848,160,683 26,113,598 4,874,274,281 75.83 4,820,995,340 20,819,592 4,841,814,932 75.11 (0.72) 1,553,716,495 0 1,553,716,495 24.17 1,604,424,721 0 1,604,424,721 24.89 0.72 Grand Total (A+B+C) 6,401,877,178 26,113,598 6,427,990,776 100.00 6,425,420,061 20,819,592 6,446,239,653 100.00 Percentages have been rounded off to the nearest decimals 92 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS (ii) Shareholding of Promoters N.A. – ICICI Bank Limited does not have any promoters. (iii) Change in Promoters’ Shareholding (please specify, if there is no change) N.A. – ICICI Bank Limited does not have any promoters. (iv) Shareholding of top ten shareholders (other than Directors, Promoters and Deutsche Bank Trust Company Americas as Depositary of ADS holders) Sr. No. 1 Name of the shareholders Life Insurance Corporation of India At the beginning of the year January 18, 2019 Decrease January 25, 2019 Decrease February 01, 2019 Decrease February 08, 2019 Decrease February 15, 2019 Decrease February 22, 2019 Decrease March 01, 2019 Decrease March 08, 2019 Decrease March 15, 2019 Decrease March 22, 2019 Decrease March 30, 2019 Decrease At the end of the year 2 HDFC Trustee Co Ltd (Various Mutual Fund Accounts)/HDFC Large Cap Fund At the beginning of the year April 06, 2018 Increase April 13, 2018 Increase April 20, 2018 Decrease April 27, 2018 Decrease May 04, 2018 Decrease May 11, 2018 Decrease May 18, 2018 Decrease May 25, 2018 Increase June 01, 2018 Increase June 08, 2018 Increase June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Decrease July 06, 2018 Increase July 13, 2018 Increase July 20, 2018 Increase July 27, 2018 Decrease August 03, 2018 Increase August 10, 2018 Decrease August 17, 2018 Decrease Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares % of total shares of the Company No. of shares % of total shares of the Company 603,252,345 9,497,260 12,126,068 7,279,934 1,573,515 8,030,249 6,977,149 14,944,179 6,791,881 10,316,683 9,011,400 7,479,940 275,843,678 57,664 729,993 50,250 1,262,996 927,589 9,469,800 309,132 633,799 31,889 5,330,008 115,966 558,265 8,882 1,031,434 1,541,124 8,494 26,017 61,831 190,075 63,253 9.38 0.15 0.19 0.11 0.02 0.12 0.11 0.23 0.11 0.16 0.14 0.12 4.29 0.00 0.01 0.00 0.02 0.01 0.15 0.00 0.01 0.00 0.08 0.00 0.01 0.00 0.02 0.02 0.00 0.00 0.00 0.00 0.00 603,252,345 593,755,085 581,629,017 574,349,083 572,775,568 564,745,319 557,768,170 542,823,991 536,032,110 525,715,427 516,704,027 509,224,087 509,224,087 275,843,678 275,901,342 276,631,335 276,581,085 275,318,089 274,390,500 264,920,700 264,611,568 265,245,367 265,277,256 270,607,264 270,723,230 271,281,495 271,272,613 272,304,047 273,845,171 273,853,665 273,827,648 273,889,479 273,699,404 273,636,151 9.38 9.22 9.03 8.92 8.89 8.77 8.66 8.42 8.32 8.16 8.02 7.90 7.90 4.29 4.29 4.30 4.30 4.28 4.27 4.12 4.12 4.13 4.13 4.21 4.21 4.22 4.22 4.23 4.26 4.26 4.26 4.26 4.25 4.25 93 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders August 24, 2018 Decrease August 27, 2018 Increase August 31, 2018 Decrease September 05, 2018 Decrease September 07, 2018 Decrease September 14, 2018 Decrease September 21, 2018 Increase September 29, 2018 Increase October 05, 2018 Increase October 12, 2018 Decrease October 19, 2018 Decrease October 26, 2018 Increase November 02, 2018 Increase November 09, 2018 Increase November 16, 2018 Decrease November 23, 2018 Decrease November 30, 2018 Decrease December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Decrease December 28, 2018 Increase December 31, 2018 Increase January 04, 2019 Increase January 11, 2019 Decrease January 18, 2019 Increase January 25, 2019 Increase February 01, 2019 Increase February 08, 2019 Increase February 15, 2019 Increase February 22, 2019 Increase March 01, 2019 Increase March 08, 2019 Decrease March 15, 2019 Decrease March 22, 2019 Increase March 30, 2019 Increase At the end of the year 3 Dodge & Cox International Stock Fund At the beginning of the year April 20, 2018 Increase April 27, 2018 Increase May 25, 2018 Increase August 24, 2018 Decrease August 27, 2018 Decrease 94 Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 166,163 141,408 66,335 1,324,699 296,284 2,908,875 13,864 923,713 355,021 289,534 623,884 1,022,940 873,009 7,035 2,586,318 4,035,447 460,608 308,649 369,963 880,398 14,632 513,908 5,594 742,221 19,027 12,317 31,271 339,843 1,453,691 1,000,839 1,272,773 225,288 1,162,727 310,502 142,780 % of total shares of the Company 0.00 0.00 0.00 0.02 0.00 0.05 0.00 0.01 0.01 0.00 0.01 0.02 0.01 0.00 0.04 0.06 0.01 0.00 0.01 0.01 0.00 0.01 0.00 0.01 0.00 0.00 0.00 0.01 0.02 0.02 0.02 0.00 0.02 0.00 0.00 No. of shares 273,469,988 273,611,396 273,545,061 272,220,362 271,924,078 269,015,203 269,029,067 269,952,780 270,307,801 270,018,267 269,394,383 270,417,323 271,290,332 271,297,367 268,711,049 264,675,602 264,214,994 264,523,643 264,893,606 264,013,208 264,027,840 264,541,748 264,547,342 263,805,121 263,824,148 263,836,465 263,867,736 264,207,579 265,661,270 266,662,109 267,934,882 267,709,594 266,546,867 266,857,369 267,000,149 267,000,149 % of total shares of the Company 4.25 4.25 4.25 4.23 4.23 4.18 4.18 4.19 4.20 4.20 4.19 4.20 4.21 4.21 4.17 4.11 4.10 4.11 4.11 4.10 4.10 4.11 4.11 4.10 4.10 4.10 4.10 4.10 4.12 4.14 4.16 4.15 4.14 4.14 4.14 4.14 388,897,176 13,922,482 10,130,118 3,561,500 10,952,040 1,034,560 6.05 0.22 0.16 0.06 0.17 0.02 388,897,176 402,819,658 412,949,776 416,511,276 405,559,236 404,524,676 6.05 6.27 6.42 6.48 6.30 6.29 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders August 31, 2018 Decrease September 05, 2018 Decrease September 07, 2018 Decrease September 14, 2018 Decrease September 21, 2018 Decrease September 29, 2018 Decrease October 05, 2018 Decrease November 09, 2018 Decrease November 23, 2018 Decrease November 30, 2018 Decrease December 07, 2018 Decrease December 14, 2018 Decrease December 21, 2018 Decrease December 28, 2018 Decrease December 31, 2018 Decrease January 04, 2019 Decrease January 11, 2019 Decrease January 18, 2019 Decrease January 25, 2019 Decrease 4 March 15, 2019 Decrease March 22, 2019 Decrease At the end of the year SBI Mutual Fund/SBI Dual Advantage Fund and Other Various Fund Accounts At the beginning of the year April 06, 2018 Increase April 13, 2018 Increase April 20, 2018 Increase April 27, 2018 Increase May 04, 2018 Increase May 11, 2018 Decrease May 18, 2018 Increase May 25, 2018 Decrease June 01, 2018 Increase June 08, 2018 Increase June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Increase July 06, 2018 Increase July 13, 2018 Increase July 20, 2018 Increase July 27, 2018 Decrease August 03, 2018 Increase Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 3,083,800 430,300 2,669,100 4,560,060 6,322,840 13,915,047 4,031,953 5,171,900 10,975,611 18,102,298 4,956,334 20,107,969 11,452,240 3,130,837 3,249,600 4,023,774 7,311,737 11,095,713 832,594 6,438,313 8,233,380 133,169,518 759,139 2,320,740 608,348 1,780,448 1,667,876 2,754,895 668,838 641,092 267,741 3,832,479 1,488,261 99,431 582,892 1,934,642 718,523 954,569 71,145 3,193,731 % of total shares of the Company 0.05 0.01 0.04 0.07 0.10 0.22 0.06 0.08 0.17 0.28 0.08 0.31 0.18 0.05 0.05 0.06 0.11 0.17 0.01 0.10 0.13 2.07 0.01 0.04 0.01 0.03 0.03 0.04 0.01 0.01 0.00 0.06 0.02 0.00 0.01 0.03 0.01 0.01 0.00 0.05 No. of shares 401,440,876 401,010,576 398,341,476 393,781,416 387,458,576 373,543,529 369,511,576 364,339,676 353,364,065 335,261,767 330,305,433 310,197,464 298,745,224 295,614,387 292,364,787 288,341,013 281,029,276 269,933,563 269,100,969 262,662,656 254,429,276 254,429,276 133,169,518 133,928,657 136,249,397 136,857,745 138,638,193 140,306,069 137,551,174 138,220,012 137,578,920 137,846,661 141,679,140 143,167,401 143,266,832 143,849,724 145,784,366 146,502,889 147,457,458 147,386,313 150,580,044 % of total shares of the Company 6.24 6.23 6.19 6.12 6.02 5.80 5.74 5.66 5.49 5.21 5.13 4.82 4.64 4.59 4.54 4.48 4.36 4.19 4.18 4.08 3.95 3.95 2.07 2.08 2.12 2.13 2.16 2.18 2.14 2.15 2.14 2.14 2.20 2.23 2.23 2.24 2.27 2.28 2.29 2.29 2.34 95 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders August 10, 2018 Increase August 17, 2018 Increase August 24, 2018 Decrease August 27, 2018 Increase August 31, 2018 Decrease September 05, 2018 Decrease September 07, 2018 Increase September 14, 2018 Increase September 21, 2018 Increase September 29, 2018 Increase October 05, 2018 Decrease October 12, 2018 Increase October 19, 2018 Increase October 26, 2018 Increase November 02, 2018 Increase November 09, 2018 Increase November 16, 2018 Decrease November 23, 2018 Increase November 30, 2018 Increase December 07, 2018 Increase December 14, 2018 Decrease December 21, 2018 Increase December 28, 2018 Increase December 31, 2018 Increase January 04, 2019 Increase January 11, 2019 Increase January 18, 2019 Increase January 25, 2019 Increase February 01, 2019 Increase February 08, 2019 Decrease February 15, 2019 Increase February 22, 2019 Increase March 01, 2019 Increase March 08, 2019 Decrease March 15, 2019 Increase March 22, 2019 Increase March 30, 2019 Increase At the end of the year ICICI Prudential Mutual Fund (Various Mutual Fund Accounts) At the beginning of the year April 06, 2018 Increase April 13, 2018 Increase 5 96 Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 51,074 453,915 936,187 124,244 807,334 2,560,218 240,247 665,572 630,109 204,728 626,895 666,265 217,828 5,192,136 8,145,857 619,526 4,655,790 903,713 447,006 4,772,772 720,750 477,072 156,655 157,503 624,346 67,669 3,016,509 965,718 2,708,700 1,399,125 631,705 162,339 1,174,449 680,795 153,857 946,059 323,086 % of total shares of the Company 0.00 0.01 0.01 0.00 0.01 0.04 0.00 0.01 0.01 0.00 0.01 0.01 0.00 0.08 0.13 0.01 0.07 0.01 0.01 0.07 0.01 0.01 0.00 0.00 0.01 0.00 0.05 0.01 0.04 0.02 0.01 0.00 0.02 0.01 0.00 0.01 0.01 No. of shares 150,631,118 151,085,033 150,148,846 150,273,090 149,465,756 146,905,538 147,145,785 147,811,357 148,441,466 148,646,194 148,019,299 148,685,564 148,903,392 154,095,528 162,241,385 162,860,911 158,205,121 159,108,834 159,555,840 164,328,612 163,607,862 164,084,934 164,241,589 164,399,092 165,023,438 165,091,107 168,107,616 169,073,334 171,782,034 170,382,909 171,014,614 171,176,953 172,351,402 171,670,607 171,824,464 172,770,523 173,093,609 173,093,609 % of total shares of the Company 2.34 2.35 2.33 2.34 2.32 2.28 2.29 2.30 2.31 2.31 2.30 2.31 2.31 2.39 2.52 2.53 2.46 2.47 2.48 2.55 2.54 2.55 2.55 2.55 2.56 2.56 2.61 2.62 2.67 2.64 2.65 2.66 2.67 2.66 2.67 2.68 2.69 2.69 163,223,945 6,608,800 5,869,259 2.54 0.10 0.09 163,223,945 169,832,745 175,702,004 2.54 2.64 2.73 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders April 20, 2018 Increase April 27, 2018 Decrease May 04, 2018 Increase May 11, 2018 Decrease May 18, 2018 Decrease May 25, 2018 Decrease June 01, 2018 Decrease June 08, 2018 Decrease June 15, 2018 Decrease June 22, 2018 Increase June 30, 2018 Increase July 06, 2018 Increase July 13, 2018 Increase July 20, 2018 Decrease July 27, 2018 Decrease August 03, 2018 Decrease August 10, 2018 Decrease August 17, 2018 Decrease August 24, 2018 Decrease August 27, 2018 Decrease August 31, 2018 Decrease September 05, 2018 Decrease September 07, 2018 Increase September 14, 2018 Increase September 21, 2018 Increase September 29, 2018 Decrease October 05, 2018 Decrease October 12, 2018 Decrease October 19, 2018 Increase October 26, 2018 Decrease November 02, 2018 Decrease November 09, 2018 Increase November 16, 2018 Increase November 23, 2018 Decrease November 30, 2018 Increase December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Decrease December 28, 2018 Decrease December 31, 2018 Increase January 04, 2019 Increase January 11, 2019 Increase January 18, 2019 Increase Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 184,687 271,906 1,227,045 4,596,787 5,834,201 3,701,164 6,650,295 5,093,392 542,495 2,723,206 606,074 8,864,540 4,282,426 178,004 676,231 7,780,027 6,517,591 204,181 1,386,738 42,955 8,825,033 198,224 1,113 4,402 632,247 3,155,992 477,055 1,298,367 1,949,111 454,647 2,686,017 5,103 9,727 117,611 797,026 2,694,752 2,686,663 388,877 97,486 10,576 1,917,261 343,847 3,123,050 % of total shares of the Company 0.00 0.00 0.02 0.07 0.09 0.06 0.10 0.08 0.01 0.04 0.01 0.14 0.07 0.00 0.01 0.12 0.10 0.00 0.02 0.00 0.14 0.00 0.00 0.00 0.01 0.05 0.01 0.02 0.03 0.01 0.04 0.00 0.00 0.00 0.01 0.04 0.04 0.01 0.00 0.00 0.03 0.01 0.05 No. of shares 175,886,691 175,614,785 176,841,830 172,245,043 166,410,842 162,709,678 156,059,383 150,965,991 150,423,496 153,146,702 153,752,776 162,617,316 166,899,742 166,721,738 166,045,507 158,265,480 151,747,889 151,543,708 150,156,970 150,114,015 141,288,982 141,090,758 141,091,871 141,096,273 141,728,520 138,572,528 138,095,473 136,797,106 138,746,217 138,291,570 135,605,553 135,610,656 135,620,383 135,502,772 136,299,798 138,994,550 141,681,213 141,292,336 141,194,850 141,205,426 143,122,687 143,466,534 146,589,584 % of total shares of the Company 2.74 2.73 2.75 2.68 2.59 2.53 2.43 2.35 2.34 2.38 2.39 2.53 2.59 2.59 2.58 2.46 2.36 2.36 2.33 2.33 2.20 2.19 2.19 2.19 2.20 2.15 2.15 2.13 2.16 2.15 2.11 2.11 2.11 2.10 2.12 2.16 2.20 2.19 2.19 2.19 2.22 2.23 2.28 97 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders January 25, 2019 Increase February 01, 2019 Increase February 08, 2019 Decrease February 15, 2019 Decrease February 22, 2019 Decrease 6 March 01, 2019 Increase March 08, 2019 Decrease March 15, 2019 Decrease March 22, 2019 Decrease March 30, 2019 Decrease At the end of the year Aditya Birla Sun Life Trustee Private Limited At the beginning of the year April 06, 2018 Increase April 13, 2018 Decrease April 20, 2018 Decrease April 27, 2018 Increase May 04, 2018 Decrease May 11, 2018 Decrease May 18, 2018 Decrease May 25, 2018 Decrease June 01, 2018 Decrease June 08, 2018 Increase June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Decrease July 06, 2018 Increase July 13, 2018 Decrease July 20, 2018 Increase July 27, 2018 Decrease August 03, 2018 Increase August 10, 2018 Increase August 17, 2018 Increase August 24, 2018 Increase August 31, 2018 Decrease September 05, 2018 Decrease September 07, 2018 Increase September 14, 2018 Decrease September 21, 2018 Decrease September 29, 2018 Decrease October 05, 2018 Decrease October 12, 2018 Increase October 19, 2018 Increase Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 48,666 1,235,796 40,661 39,571 44,023 711,842 2,515,709 166,662 534,933 508,130 99,464,487 6,210,285 182,000 180,665 250,000 749,100 1,416,750 600,000 4,245,449 2,695,307 275,122 744,000 273,750 413,326 550,000 405,000 339,212 4,760,000 9,774,092 405,665 5,552,667 2,186,896 1,487,250 1,970,750 728,750 63,250 182,000 1,559,000 286,342 501,250 2,958,500 % of total shares of the Company 0.00 0.02 0.00 0.00 0.00 0.01 0.04 0.00 0.01 0.01 1.55 0.10 0.00 0.00 0.00 0.01 0.02 0.01 0.07 0.04 0.00 0.01 0.00 0.01 0.01 0.01 0.01 0.07 0.15 0.01 0.09 0.03 0.02 0.03 0.01 0.00 0.00 0.02 0.00 0.01 0.05 No. of shares 146,638,250 147,874,046 147,833,385 147,793,814 147,749,791 148,461,633 145,945,924 145,779,262 145,244,329 144,736,199 144,736,199 99,464,487 105,674,772 105,492,772 105,312,107 105,562,107 104,813,007 103,396,257 102,796,257 98,550,808 95,855,501 96,130,623 96,874,623 97,148,373 96,735,047 97,285,047 96,880,047 97,219,259 92,459,259 102,233,351 102,639,016 108,191,683 110,378,579 108,891,329 106,920,579 107,649,329 107,586,079 107,404,079 105,845,079 105,558,737 106,059,987 109,018,487 % of total shares of the Company 2.28 2.30 2.29 2.29 2.29 2.30 2.26 2.26 2.25 2.25 2.25 1.55 1.64 1.64 1.64 1.64 1.63 1.61 1.60 1.53 1.49 1.49 1.51 1.51 1.50 1.51 1.51 1.51 1.44 1.59 1.60 1.68 1.72 1.69 1.66 1.67 1.67 1.67 1.64 1.64 1.65 1.69 98 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders October 26, 2018 Increase November 02, 2018 Decrease November 09, 2018 Increase November 16, 2018 Increase November 23, 2018 Increase November 30, 2018 Increase December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Increase December 28, 2018 Increase January 04, 2019 Increase January 11, 2019 Increase January 18, 2019 Increase January 25, 2019 Increase February 01, 2019 Decrease February 08, 2019 Increase February 15, 2019 Increase February 22, 2019 Increase 7 March 01, 2019 Decrease March 08, 2019 Increase March 15, 2019 Decrease March 22, 2019 Decrease March 30, 2019 Decrease At the end of the year Reliance Capital Trustee Co Ltd/Reliance ETF/Reliance Emergent India Fund (Various Fund Accounts) At the beginning of the year April 06, 2018 Decrease April 13, 2018 Decrease April 20, 2018 Decrease April 27, 2018 Decrease May 04, 2018 Decrease May 11, 2018 Increase May 18, 2018 Increase May 25, 2018 Increase June 01, 2018 Increase June 08, 2018 Increase June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Decrease July 06, 2018 Increase July 13, 2018 Increase Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 2,330,042 28,714 984,000 1,570,750 895,500 3,215,000 1,487,750 5,674,900 1,062,638 379,750 2,621,750 375,000 291,500 1,039,500 1,060,000 474,250 1,054,656 168,400 1,000,000 534,200 18,378 161,619 134,279 101,446,335 2,052,671 15,819,250 251,836 1,964,455 31,011 2,972,999 847,355 3,718,223 5,055,968 4,595,451 5,320,162 4,954,992 6,660,520 8,883,426 4,487,574 % of total shares of the Company 0.04 0.00 0.02 0.02 0.01 0.05 0.02 0.09 0.02 0.01 0.04 0.01 0.00 0.02 0.02 0.01 0.02 0.00 0.02 0.01 0.00 0.00 0.00 No. of shares 111,348,529 111,319,815 112,303,815 113,874,565 114,770,065 117,985,065 119,472,815 125,147,715 126,210,353 126,590,103 129,211,853 129,586,853 129,878,353 130,917,853 129,857,853 130,332,103 131,386,759 131,555,159 130,555,159 131,089,359 131,070,981 130,909,362 130,775,083 130,775,083 % of total shares of the Company 1.73 1.73 1.74 1.77 1.78 1.83 1.86 1.94 1.96 1.97 2.01 2.01 2.02 2.03 2.02 2.02 2.04 2.04 2.03 2.03 2.03 2.03 2.03 2.03 1.58 0.03 0.25 0.00 0.03 0.00 0.05 0.01 0.06 0.08 0.07 0.08 0.08 0.10 0.14 0.07 101,446,335 99,393,664 83,574,414 83,322,578 81,358,123 81,327,112 84,300,111 85,147,466 88,865,689 93,921,657 98,517,108 103,837,270 108,792,262 102,131,742 111,015,168 115,502,742 1.58 1.55 1.30 1.30 1.26 1.26 1.31 1.32 1.38 1.46 1.53 1.61 1.69 1.59 1.73 1.80 99 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders July 20, 2018 Increase July 27, 2018 Decrease August 03, 2018 Increase August 10, 2018 Decrease August 17, 2018 Decrease August 24, 2018 Decrease August 27, 2018 Increase August 31, 2018 Increase September 05, 2018 Increase September 07, 2018 Increase September 14, 2018 Increase September 21, 2018 Increase September 29, 2018 Increase October 05, 2018 Increase October 12, 2018 Increase October 19, 2018 Decrease October 26, 2018 Decrease November 02, 2018 Decrease November 09, 2018 Increase November 16, 2018 Decrease November 23, 2018 Decrease November 30, 2018 Decrease December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Decrease December 28, 2018 Increase December 31, 2018 Increase January 04, 2019 Increase January 11, 2019 Increase January 18, 2019 Decrease January 25, 2019 Decrease February 01, 2019 Decrease February 08, 2019 Increase February 15, 2019 Increase February 22, 2019 Increase March 01, 2019 Decrease March 08, 2019 Increase March 15, 2019 Decrease March 22, 2019 Decrease March 30, 2019 Increase At the end of the year 100 Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 5,498,693 14,114,434 168,080 3,379,784 3,245 1,458,768 2,676,706 9,236,521 1,457,993 2,273,077 772,187 2,536,042 6,567,394 85,582 1,696,587 3,453,955 1,103,191 4,049,762 1,053,611 3,917,720 1,730,819 758,607 258,241 2,006,884 4,751,856 46,331 69,149 114,857 534,910 2,416,534 1,745,324 2,575,797 8,636,667 1,006,618 39,404 111,377 78,288 2,518,888 782,869 1,720,724 % of total shares of the Company 0.09 0.22 0.00 0.05 0.00 0.02 0.04 0.14 0.02 0.04 0.01 0.04 0.10 0.00 0.03 0.05 0.02 0.06 0.02 0.06 0.03 0.01 0.00 0.03 0.07 0.00 0.00 0.00 0.01 0.04 0.03 0.04 0.13 0.02 0.00 0.00 0.00 0.04 0.01 0.03 No. of shares 121,001,435 106,887,001 107,055,081 103,675,297 103,672,052 102,213,284 104,889,990 114,126,511 115,584,504 117,857,581 118,629,768 121,165,810 127,733,204 127,818,786 129,515,373 126,061,418 124,958,227 120,908,465 121,962,076 118,044,356 116,313,537 115,554,930 115,813,171 117,820,055 113,068,199 113,114,530 113,183,679 113,298,536 113,833,446 111,416,912 109,671,588 107,095,791 115,732,458 116,739,076 116,778,480 116,667,103 116,745,391 114,226,503 113,443,634 115,164,358 115,164,358 % of total shares of the Company 1.88 1.66 1.66 1.61 1.61 1.59 1.63 1.77 1.80 1.83 1.84 1.88 1.98 1.99 2.01 1.96 1.94 1.88 1.89 1.83 1.81 1.79 1.80 1.83 1.76 1.76 1.76 1.76 1.77 1.73 1.70 1.66 1.80 1.81 1.81 1.81 1.81 1.77 1.76 1.79 1.79 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders 8 Government of Singapore At the beginning of the year April 06, 2018 Increase April 13, 2018 Decrease April 20, 2018 Decrease April 27, 2018 Increase May 04, 2018 Decrease May 11, 2018 Decrease May 18, 2018 Decrease May 25, 2018 Decrease June 01, 2018 Decrease June 08, 2018 Increase June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Increase July 06, 2018 Decrease July 20, 2018 Decrease July 27, 2018 Increase August 03, 2018 Decrease August 10, 2018 Decrease August 17, 2018 Decrease August 24, 2018 Increase August 27, 2018 Increase August 31, 2018 Increase September 05, 2018 Increase September 07, 2018 Increase September 14, 2018 Increase September 21, 2018 Increase September 29, 2018 Decrease October 05, 2018 Decrease October 12, 2018 Increase October 19, 2018 Increase November 02, 2018 Increase November 09, 2018 Increase November 16, 2018 Increase November 23, 2018 Increase November 30, 2018 Increase December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Increase December 28, 2018 Decrease December 31, 2018 Increase January 04, 2019 Increase Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares % of total shares of the Company No. of shares % of total shares of the Company 101,380,233 3,529,872 1,126,939 1,598,915 157,183 1,563,865 8,487,422 1,102,651 13,318 1,695,245 2,833,318 1,358,851 3,312,440 1,992,577 37,383 254,852 1,865,647 1,323,700 342,374 4,123,838 245,236 444,906 953,900 285,932 236,264 260,813 483,649 985,610 1,004,301 535,763 124,648 515,161 99,703 27,248 279,802 1,380,352 206,324 31,859 388,054 20,391 6,107 239,130 1.58 0.05 0.02 0.02 0.00 0.02 0.13 0.02 0.00 0.03 0.04 0.02 0.05 0.03 0.00 0.00 0.03 0.02 0.01 0.06 0.00 0.01 0.01 0.00 0.00 0.00 0.01 0.02 0.02 0.01 0.00 0.01 0.00 0.00 0.00 0.02 0.00 0.00 0.01 0.00 0.00 0.00 101,380,233 104,910,105 103,783,166 102,184,251 102,341,434 100,777,569 92,290,147 91,187,496 91,174,178 89,478,933 92,312,251 93,671,102 96,983,542 98,976,119 98,938,736 98,683,884 100,549,531 99,225,831 98,883,457 94,759,619 95,004,855 95,449,761 96,403,661 96,689,593 96,925,857 97,186,670 97,670,319 96,684,709 95,680,408 96,216,171 96,340,819 96,855,980 96,955,683 96,982,931 97,262,733 98,643,085 98,849,409 98,881,268 99,269,322 99,248,931 99,255,038 99,494,168 1.58 1.63 1.61 1.59 1.59 1.57 1.43 1.42 1.42 1.39 1.44 1.46 1.51 1.54 1.54 1.53 1.56 1.54 1.54 1.47 1.48 1.48 1.50 1.50 1.51 1.51 1.52 1.50 1.49 1.50 1.50 1.50 1.51 1.51 1.51 1.53 1.53 1.54 1.54 1.54 1.54 1.54 101 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders January 11, 2019 Decrease January 18, 2019 Decrease January 25, 2019 Increase February 01, 2019 Decrease February 08, 2019 Increase February 22, 2019 Increase March 01, 2019 Decrease March 08, 2019 Decrease March 15, 2019 Increase March 22, 2019 Increase March 30, 2019 Increase At the end of the year Kotak Capital Fund (Various Mutual Fund Accounts) At the beginning of the year April 06, 2018 Decrease April 13, 2018 Decrease April 20, 2018 Decrease April 27, 2018 Decrease 9 May 04, 2018 Increase May 11, 2018 Increase May 18, 2018 Increase May 25, 2018 Increase June 01, 2018 Increase June 08, 2018 Decrease June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Increase July 06, 2018 Increase July 13, 2018 Increase July 20, 2018 Decrease July 27, 2018 Increase August 03, 2018 Decrease August 10, 2018 Decrease August 17, 2018 Decrease August 24, 2018 Increase August 27, 2018 Increase August 31, 2018 Increase September 05, 2018 Increase September 07, 2018 Increase September 14, 2018 Increase September 21, 2018 Increase September 29, 2018 Increase 102 Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 1,358,519 183,618 230,357 3,526,370 733,930 1,522,955 347,549 270,458 445,857 716,624 689,854 % of total shares of the Company 0.02 0.00 0.00 0.05 0.01 0.02 0.01 0.00 0.01 0.01 0.01 63,578,593 1,533,503 3,282,080 2,712,206 3,023,328 680,887 551,225 1,352,969 393,096 553,472 45,835 1,924,819 2,506,199 3,024,791 4,884,891 4,259,199 425,115 1,454,669 3,949,193 6,076,506 1,177,672 2,948,070 420,348 326,108 1,122,173 1,005,279 1,028,444 1,040,108 3,282,590 0.99 0.02 0.05 0.04 0.05 0.01 0.01 0.02 0.01 0.01 0.00 0.03 0.04 0.05 0.08 0.07 0.01 0.02 0.06 0.09 0.02 0.05 0.01 0.01 0.02 0.02 0.02 0.02 0.05 No. of shares 98,135,649 97,952,031 98,182,388 94,656,018 95,389,948 96,912,903 96,565,354 96,294,896 96,740,753 97,457,377 98,147,231 98,147,231 63,578,593 62,045,090 58,763,010 56,050,804 53,027,476 53,708,363 54,259,588 55,612,557 56,005,653 56,559,125 56,513,290 58,438,109 60,944,308 63,969,099 68,853,990 73,113,189 72,688,074 74,142,743 70,193,550 64,117,044 62,939,372 65,887,442 66,307,790 66,633,898 67,756,071 68,761,350 69,789,794 70,829,902 74,112,492 % of total shares of the Company 1.52 1.52 1.52 1.47 1.48 1.50 1.50 1.49 1.50 1.51 1.52 1.52 0.99 0.97 0.91 0.87 0.82 0.84 0.84 0.86 0.87 0.88 0.88 0.91 0.95 0.99 1.07 1.14 1.13 1.15 1.09 1.00 0.98 1.02 1.03 1.04 1.05 1.07 1.08 1.10 1.15 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders October 05, 2018 Decrease October 12, 2018 Decrease October 19, 2018 Increase October 26, 2018 Increase November 02, 2018 Increase November 09, 2018 Increase November 16, 2018 Decrease November 23, 2018 Increase November 30, 2018 Increase December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Decrease December 28, 2018 Increase December 31, 2018 Decrease January 04, 2019 Decrease January 11, 2019 Increase January 18, 2019 Increase January 25, 2019 Increase February 01, 2019 Increase February 08, 2019 Increase February 15, 2019 Increase February 22, 2019 Decrease March 01, 2019 Increase March 08, 2019 Decrease March 15, 2019 Decrease March 22, 2019 Decrease March 30, 2019 Decrease At the end of the year 10 National Pension System Trust At the beginning of the year April 06, 2018 Increase April 13, 2018 Increase April 20, 2018 Increase May 04, 2018 Increase May 11, 2018 Decrease May 25, 2018 Increase June 01, 2018 Increase June 08, 2018 Increase June 15, 2018 Increase June 22, 2018 Increase June 30, 2018 Increase July 06, 2018 Increase July 13, 2018 Increase Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 54,629 814,993 1,835,350 389,317 2,137,988 536,403 2,815,951 127,213 3,172,150 484,826 1,357,822 891,788 926,598 16,256 229,661 177,736 341,593 2,112,842 5,005,926 541,839 1,933,023 624,999 1,742,455 4,434,202 261,251 447,209 1,188,750 52,548,930 222,940 478,015 1,280 170,459 2,771 231,600 158,800 299,075 222,575 293,058 109,473 595,188 90,600 % of total shares of the Company 0.00 0.01 0.03 0.01 0.03 0.01 0.04 0.00 0.05 0.01 0.02 0.01 0.01 0.00 0.00 0.00 0.01 0.03 0.08 0.01 0.03 0.01 0.03 0.07 0.00 0.01 0.02 0.82 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 No. of shares 74,057,863 73,242,870 75,078,220 75,467,537 77,605,525 78,141,928 75,325,977 75,453,190 78,625,340 79,110,166 80,467,988 79,576,200 80,502,798 80,486,542 80,256,881 80,434,617 80,776,210 82,889,052 87,894,978 88,436,817 90,369,840 89,744,841 91,487,296 87,053,094 86,791,843 86,344,634 85,155,884 85,155,884 52,548,930 52,771,870 53,249,885 53,251,165 53,422,036 53,419,265 53,650,865 53,809,665 54,108,740 54,331,315 54,624,373 54,733,846 55,329,034 55,419,634 % of total shares of the Company 1.15 1.14 1.17 1.17 1.21 1.21 1.17 1.17 1.22 1.23 1.25 1.24 1.25 1.25 1.25 1.25 1.25 1.29 1.36 1.37 1.40 1.39 1.42 1.35 1.35 1.34 1.32 1.32 0.82 0.82 0.83 0.83 0.83 0.83 0.83 0.84 0.84 0.84 0.85 0.85 0.86 0.86 103 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the shareholders July 20, 2018 Increase July 27, 2018 Increase August 10, 2018 Increase August 17, 2018 Increase August 24, 2018 Increase August 27, 2018 Increase August 31, 2018 Increase September 05, 2018 Increase September 07, 2018 Increase September 14, 2018 Increase September 21, 2018 Increase September 29, 2018 Increase October 05, 2018 Increase October 12, 2018 Increase October 19, 2018 Increase October 26, 2018 Increase November 02, 2018 Increase November 09, 2018 Decrease November 16, 2018 Decrease November 23, 2018 Increase November 30, 2018 Increase December 07, 2018 Increase December 14, 2018 Increase December 21, 2018 Increase December 28, 2018 Increase December 31, 2018 Increase January 04, 2019 Increase January 11, 2019 Increase January 18, 2019 Increase January 25, 2019 Increase February 01, 2019 Increase February 08, 2019 Increase February 15, 2019 Increase February 22, 2019 Increase March 01, 2019 Increase March 08, 2019 Increase March 15, 2019 Increase March 22, 2019 Increase March 30, 2019 Increase At the end of the year Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 118,882 121,669 4,373 1,855 102,811 21,025 71,153 49,127 69,874 71,027 56,465 50,010 375,565 8,177 62,582 5,527 308,632 74,987 38,051 126,590 65,064 54,269 657,858 958,295 75,200 21,710 239,998 83,881 123,399 613,110 154,267 655,557 111,792 602,769 367,750 140,997 119,577 81,030 243,318 % of total shares of the Company 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.01 0.00 0.01 0.01 0.00 0.00 0.00 0.00 No. of shares 55,538,516 55,660,185 55,664,558 55,666,413 55,769,224 55,790,249 55,861,402 55,910,529 55,980,403 56,051,430 56,107,895 56,157,905 56,533,470 56,541,647 56,604,229 56,609,756 56,918,388 56,843,401 56,805,350 56,931,940 56,997,004 57,051,273 57,709,131 58,667,426 58,742,626 58,764,336 59,004,334 59,088,215 59,211,614 59,824,724 59,978,991 60,634,548 60,746,340 61,349,109 61,716,859 61,857,856 61,977,433 62,058,463 62,301,781 62,301,781 % of total shares of the Company 0.86 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.88 0.88 0.88 0.88 0.88 0.88 0.88 0.88 0.89 0.89 0.90 0.91 0.91 0.91 0.92 0.92 0.92 0.93 0.93 0.94 0.94 0.95 0.96 0.96 0.96 0.96 0.97 0.97 1 Top ten shareholders (on basis of PAN) of the Bank as on March 31, 2019 has been considered for the above disclosure. 2 The above mentioned details have been provided by our RTA on the basis of weekly beneficial position received from Depositories and relied upon. 104 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS (v) Shareholding of Directors and Key Managerial Personnel Sr. No. Name of the Directors Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares % of total shares of the Company No. of shares % of total shares of the Company 2 1 Lalit Kumar Chandel1 At December 4, 2018 At the end of the year Dileep Choksi At the beginning of the year At the end of the year Rama Bijapurkar2 At January 14, 2019 At the end of the year M. K. Sharma3 At the beginning of the year At June 30, 2018 5 (a) Chanda Kochhar4 4 3 At the beginning of the year April 9, 2018 ESOS Allotment April 12, 2018 ESOS Allotment April 26, 2018 ESOS Allotment June 7, 2018 ESOS Allotment July 2, 2018 ESOS Allotment July 16, 2018 ESOS Allotment July 19, 2018 ESOS Allotment September 24, 2018 ESOS Allotment September 27, 2018 ESOS Allotment At October 4, 2018 7 6 5 (b) Chanda Kochhar (as joint holder)4 At the beginning of the year At October 4, 2018 N. S. Kannan5 At the beginning of the year At June 18, 2018 Sandeep Bakhshi6 At July 31, 2018 August 23, 2018 Transfer November 16, 2018 ESOS Allotment December 17, 2018 Market Sale March 26, 2019 Market Sale At the end of the year Anup Bagchi At the beginning of the year April 26, 2018 ESOS Allotment May 11, 2018 Market Sale March 18, 2019 ESOS Allotment 8 6 0.00 2,750 0.00 2,600 0.00 55,000 0.00 2,597,787 20,000 25,000 20,000 100,000 100,000 100,000 103,050 25,000 239,250 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 825 0.00 468,737 0.01 6 6 2,750 2,750 2,600 2,600 55,000 55,000 2,597,787 2,617,787 2,642,787 2,662,787 2,762,787 2,862,787 2,962,787 3,065,837 3,090,837 3,330,087 3,330,087 825 825 468,737 468,737 452,805 50 100,000 18,250 10,000 0 107,250 107,250 288,750 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 452,805 452,755 552,755 534,505 524,505 524,505 0 107,250 0 288,750 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.04 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05 0.05 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.00 105 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. Name of the Directors March 26, 2019 Market Sale At the end of the year 9 (a) Vishakha Mulye (as first holder) At the beginning of the year December 6, 2018 ESOS Allotment March 14, 2019 Market Sale March 15, 2019 Market Sale March 18, 2019 Market Sale March 22, 2019 ESOS Allotment March 28, 2019 Market Sale March 29, 2019 Market Sale At the end of the year 9 (b) Vishakha Mulye (as joint holder) 10 At the beginning of the year At the end of the year Vijay Chandok At the beginning of the year April 2, 2018 ESOS Allotment April 12, 2018 ESOS Allotment May 15, 2018 Market Sale June 11, 2018 ESOS Allotment July 26, 2018 ESOS Allotment August 2, 2018 Market Sale August 6, 2018 Market Sale August 8, 2018 Market Sale August 9, 2018 Market Sale August 17, 2018 Market Sale August 20, 2018 ESOS Allotment August 23, 2018 ESOS Allotment September 7, 2018 Market Sale September 21, 2018 Market Sale October 8, 2018 ESOS Allotment October 11, 2018 ESOS Allotment October 15, 2018 ESOS Allotment October 17, 2018 ESOS Allotment October 22, 2018 ESOS Allotment October 29, 2018 Market Sale October 30, 2018 Market Sale November 1, 2018 ESOS Allotment November 5, 2018 ESOS Allotment November 7, 2018 Market Sale November 12, 2018 ESOS Allotment November 14, 2018 Market Sale 106 Shareholding at the beginning of the year Cumulative Shareholding during the Year No. of shares 288,750 % of total shares of the Company 0.00 No. of shares 0 0 % of total shares of the Company 0.00 0.00 838,612 123,750 50,000 50,000 25,000 233,750 10,000 25,000 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 838,612 962,362 912,362 862,362 837,362 0.01 0.01 0.01 0.01 0.01 1,071,112 0.02 1,061,112 0.02 0.02 1,036,112 1,036,112 0.02 1,375 0.00 28,300 2,400 4,500 3,150 2,400 4,900 10,000 10,000 2,500 10,000 5,000 4,500 4,400 5,000 2,000 2,300 4,500 2,300 6,900 2,200 12,950 7,000 6,600 8,900 1,000 4,400 5,000 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,375 1,375 28,300 30,700 35,200 32,050 34,450 39,350 29,350 19,350 16,850 6,850 1,850 6,350 10,750 5,750 3,750 6,050 10,550 12,850 19,750 21,950 9,000 2,000 8,600 17,500 16,500 20,900 15,900 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Shareholding at the beginning of the year Cumulative Shareholding during the Year Sr. No. Name of the Directors November 15, 2018 Market Sale November 19, 2018 ESOS Allotment November 19, 2018 Market Sale November 28, 2018 Market Sale December 3, 2018 ESOS Allotment December 12, 2018 Market Sale December 14, 2018 Market Sale December 17, 2018 ESOS Allotment December 17, 2018 Market Sale December 18, 2018 Market Sale December 20, 2018 ESOS Allotment December 24, 2018 ESOS Allotment December 26, 2018 Market Sale December 28, 2018 Market Sale December 31, 2018 Market Sale January 2, 2019 Market Sale February 6, 2019 Market Sale February 7, 2019 Market Sale February 11, 2019 ESOS Allotment February 14, 2019 Market Sale February 19, 2019 Market Sale February 21, 2019 ESOS Allotment February 21, 2019 Market Sale February 25, 2019 ESOS Allotment March 1, 2019 Market Sale March 4, 2019 ESOS Allotment March 5, 2019 Market Sale March 6, 2019 Market Sale March 7, 2019 Market Sale March 11, 2019 Market Sale March 12, 2019 Market Sale March 14, 2019 ESOS Allotment March 22, 2019 ESOS Allotment March 26, 2019 Market Sale March 28, 2019 Market Sale At the end of the year No. of shares 10,000 2,100 2,500 5,500 12,500 1,450 1,500 17,200 3,000 6,550 30,500 2,200 2,500 3,000 3,000 5,000 10,000 5,000 22,900 3,000 10,000 2,200 10,000 8,600 3,000 2,200 10,000 10,000 3,000 5,000 3,300 4,100 6,000 4,000 6,100 % of total shares of the Company 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 No. of shares 5,900 8,000 5,500 0 12,500 11,050 9,550 26,750 23,750 17,200 47,700 49,900 47,400 44,400 41,400 36,400 26,400 21,400 44,300 41,300 31,300 33,500 23,500 32,100 29,100 31,300 21,300 11,300 8,300 3,300 0 4,100 10,100 6,100 0 0 1 w.e.f. December 4, 2018 2 w.e.f. January 14, 2019 3 upto June 30, 2018 4 upto October 4, 2018 5 upto June 18, 2018 6 w.e.f. July 31, 2018 None of the other Directors held any shares during fiscal 2019. The cumulative shareholding column reflects the balance as on day end. % of total shares of the Company 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 107 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Sr. No. 1 2 3 Name of Key Managerial Personnel Rakesh Jha Chief Financial Officer At the beginning of the year April 23, 2018 ESOS Allotment April 26, 2018 ESOS Allotment December 20, 2018 Market Sale December 24, 2018 Market Sale December 27, 2018 Market Sale January 10, 2019 ESOS Allotment January 31, 2019 ESOS Allotment At the end of the year P. Sanker1 Company Secretary At the beginning of the year At July 27, 2018 Ranganath Athreya2 Company Secretary At July 28, 2018 February 21, 2019 ESOS Allotment March 29, 2019 Market Sale At the end of the year Shareholding at the beginning of the year No. of shares % of total shares of the Company Cumulative Shareholding during the Year % of total shares of the Company No. of shares 14,850 23,000 21,000 15,000 15,000 15,000 30,000 35,000 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14,850 37,850 58,850 43,850 28,850 13,850 43,850 78,850 78,850 38,500 0.00 38,500 38,500 110 1,500 1,500 0.00 0.00 0.00 110 1,610 110 110 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1 Upto July 27, 2018 2 w.e.f. July 28, 2018 The cumulative shareholding column reflects the balance as on day end. V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment ` in crore Unsecured Loans Deposits Total Indebtedness Secured Loans excluding deposits Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) Change in Indebtedness during the financial year (refer Note 1 & 2) • Addition • Reduction Net Change Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) 16,456.25 166,402.38 - 2,389.66 168,792.03 - 411.77 16,868.02 6,171.63 16,456.25 (10,284.62) 8,364.52 15,618.55 (7,254.03) 6,171.63 - 2.47 6,174.10 159,148.35 - 2,840.08 161,988.42 182,858.62 - - - - 2,801.43 - 185,660.05 - 14,536.15 - 32,074.80 - (17,538.65) 165,319.97 - - - - 2,842.55 168,162.52 - 108 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Data is pertaining to Schedule 4 borrowings under "Secured Loans/Unsecured loans". Notes: 1 Movement in short-term market borrowing is shown on net basis. 2 Uamortised premium and accrual of discount is included under "Addition" row. 3 Principal amount for secured and unsecured loan consists of schedule 4 borrowings balance. 4 Secured loans include borrowings under Collateralised Borrowing and Lending Obligation, and transactions under Liquidity Adjustment Facility, Marginal Standing Facility and REPO (including Tri-party Repo). 5 Being a banking company, there are no public deposits. VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Wholetime Directors and/or Manager: Sr. No. 1 2 3 4 5 Particulars of Remuneration Chanda Kochhar Sandeep Bakhshi N. S. Kannan Vishakha Mulye Vijay Chandok Anup Bagchi Total (`) Amount in ` Gross Salary: (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 Salary and Allowances for fiscal 2019 - (A) Bonus paid in fiscal 2019 (B) (b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961 Perquisites - (C) (c) Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961 Stock Option (Perquisite on Employee Stock Option exercised in fiscal 2019) Sweat Equity Commission (as % of Profit/Others) Others (A)+(B) +(C) Total remuneration paid in fiscal 2019 (excludes perquisites on Stock Options exercised in Fiscal 2019 as mentioned in point 2) Ceiling as per the Act 1 60,781,868 38,275,925 8,648,435 40,497,479 35,035,973 37,660,740 220,900,420 – – – – – – – 11,087,205 6,210,549 2,677,264 6,721,122 7,775,115 3,906,732 38,377,987 – – – – – – – 226,395,700 20,123,000 – – – – – – 0 92,475,351 28,625,627 86,821,351 454,441,029 – – – – – – – – – – – – – – – 71,869,073 44,486,474 11,325,699 47,218,601 42,811,088 41,567,472 259,278,407 1 Being a Banking Company, the provisions of the Banking Regulation Act, 1949 apply to the Bank and the remuneration of every wholetime Director is subject to the approval of RBI. The remuneration is however well within the limits prescribed under the Companies Act, 2013. 2 The performance bonus payable in fiscal 2019 (pertaining to fiscal 2018) is pending RBI approvals. 3 Last working date of Chanda Kochhar with the Bank was October 4, 2018. Her remuneration includes amount pertaining to full and final settlement given to her in October 2018. Sandeep Bakhshi assumed office as Chief Operating Officer (Designate) effective June 19, 2018. RBI approved his appointment as Wholetime Director designated as Chief Operating Officer effective July 31, 2018. He was subsequently appointed as Managing Director & CEO as per RBI approval effective October 15, 2018. 4 5 N.S. Kannan was with the Bank till June 18, 2018. 109 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS B. Remuneration to other Directors Sr. No. 1. Name of Directors Independent Directors G. C. Chaturvedi1,3 M. K. Sharma4 Rama Bijapurkar5 Uday Chitale1 Dileep C. Choksi1 Neelam Dhawan1 Radhakrishnan Nair1 Hari L. Mundra6 V. K. Sharma B. Sriram5 Tushaar Shah7 M. D. Mallya8 Total (1) 2. Other Non-Executive Directors9 Total (2) Total (1)+(2) Ceiling as per the Act# Fee for attending Board/ Committee meetings1 Commission2 Others* Total (`) Amount in ` – – – 2,02,740 10,00,000 216,438 – – 10,00,000 – 10,00,000 – 34,19,178 – 34,19,178 11,00,000 18,50,000 3,50,000 44,50,000 46,50,000 26,50,000 48,00,000 7,00,000 13,00,000 4,50,000 2,00,000 – 2,25,00,000 – 2,25,00,000 24,74,465 40,83,334 – – – – – – – – – – 6,557,799 35,74,465 59,33,334 3,50,000 46,52,740 56,50,000 28,66,438 48,00,000 7,00,000 23,00,000 4,50,000 12,00,000 – 32,476,977 – 65,57,799 – 32,476,977 1 The independent Directors were paid sitting fees for its meeting held on September 12, 2018 2 Commission pertaining to fiscal 2018, paid in fiscal 2019 3 w.e.f. July 1, 2018 4 upto June 30, 2018 5 w.e.f. January 14, 2019 6 w.e.f. October 26, 2018 7 upto May 2, 2018 8 w.e.f. May 29, 2018 and upto October 4, 2018 9 Government Nominee Director is only entitled to reimbursement of expenses for attending Board/Committee Meetings. * Gross amount paid as remuneration to G. C. Chaturvedi for the period July 17, 2018 to March 31, 2019 and to M. K. Sharma for the # period May 1, 2017 to June 30, 2018. Being a Banking Company, the provisions of the Banking Regulation Act, 1949 apply to the Bank. The remuneration is however well within the limits prescribed under the Companies Act, 2013. 110 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD Sr. No. 1 2 3 4 5 Particulars of Remuneration Gross Salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 Salary and Allowances for Fiscal 2019 - (A) Bonus Paid in fiscal 2019 - (B) (b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961 Perquisites – (C) (c) Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961 Stock Option (Perquisite on Employee Stock Option exercised in fiscal 2019) Sweat Equity Commission (as % of Profit/Others) Others (A)+(B) + (C) Total Remuneration paid in Fiscal 2019 (excludes Perquisites on Stock Options exercised in fiscal 2019 as mentioned in point 2) Rakesh Jha Chief Financial Officer Ranganath Athreya1 Company Secretary Amount in ` P. Sanker2 Company Secretary Total (`) 25,385,796 11,518,203 14,891,692 2,890,620 20,504,200 5,824,728 60,781,688 20,233,551 4,411,048 1,202,688 2,627,226 – – – 17,591,780 90,375 2,030,100 – – – – – – – – – 8,240,962 – 19,712,255 – – – 41,315,047 18,985,000 28,956,154 89,256,201 1 Ranganath Athreya was appointed Company Secretary effective July 28, 2018. The salary mentioned above is for FY2018-19. 2 P. Sanker was the Company Secretary of the Bank till July 27, 2018. The salary mentioned above is for FY2018-19. VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding May 6, 2019 Section of the Companies Act Brief Description Details of Penalty/ Punishment/ Compounding fees imposed Authority [RD / NCLT/ Court] Appeal made, if any (give Details) None None None G. C. Chaturvedi Chairman 111 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS ANNEXURE D DIVIDEND DISTRIBUTION POLICY 1. Introduction ICICI Bank Limited (the Bank or ICICI Bank) is a public company incorporated under the Companies Act, 1956 and licensed as a bank under the Banking Regulation Act, 1949. The Bank has been making profits since inception and has been paying equity share dividends in accordance with the guidelines of Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI), Companies Act, 1956, Companies Act, 2013 and Banking Regulation Act, 1949. This policy documents the guidelines on payment of dividends, and sets out the key considerations for arriving at the dividend payment decision. The Board will have the flexibility to determine the level of dividend based on the considerations laid out in the policy and other relevant developments. 2. Regulatory framework The Bank while proposing equity share dividend will ensure compliance with the RBI guidelines relating to declaration of dividend, capital conservation requirements under guidelines on Basel III norms issued by RBI, provisions of the Banking Regulation Act, 1949, the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, provisions of the Companies Act, 2013 and guidelines provided under the section titled “Dividends” in the Articles of Association (AOA) of the Bank. 3. Approval process The Board of Directors of the Bank would take into account the following aspects while deciding on the proposal for dividend: 6. d) a) profitability and key financial metrics; the interim dividend paid, if any; b) the auditors’ qualifications pertaining to the c) statement of accounts, if any; whether dividend/coupon non-equity preference shares) have been made; the Bank’s capital position and requirements as Adequacy Assessment Process (ICAAP) projections and regulatory norms; and the applicable regulatory requirements for (including instruments payments Internal Capital capital per e) f) The dividend decision would be subject consideration of any other including, for example: relevant to factors, • • • External factors including state of the domestic and global economy, capital market conditions and dividend policy of competitors; Tax implications including applicability and rate of dividend distribution tax; Shareholder expectations 112 The decision regarding dividend shall be taken only by the Board at its Meeting and not by a Committee of the Board or by way of a Resolution passed by circulation. Final dividend shall be paid only after approval at an Annual General Meeting (AGM) of the Bank. Shareholder approval is not required for payment of interim dividend. 4. Utilisation of retained earnings investments The Bank would utilise the retained earnings for general corporate purposes, including organic and inorganic subsidiaries/associates growth, in and/or appropriations/drawdowns as per the regulatory framework. The Board may decide to employ the retained earnings in ensuring maintenance of an optimal level of capital adequacy, meeting the Bank’s future growth/expansion plans, other strategic purposes and/or distribution to shareholders, subject to applicable regulations. 5. Parameters for various classes of shares Currently, the Bank has only one class of equity shareholders. In the absence of any other class of equity shares and/or equity shares with differential voting rights, the entire distributable profit for the purpose of declaration of dividend is considered for the equity shareholders. The Bank has preference shares on which a is appropriated out of profits. fixed rate of dividend Circumstances under which the shareholders may or may not expect dividend The Board of the Bank may vary the level of dividend or not recommend any dividend based on the regulatory eligibility criteria for recommendation of dividend, including any regulatory restriction placed on the Bank on declaration of dividend. There may also be obligations that the Bank could have undertaken under the terms of perpetual non-cumulative preference to shares or debt capital applicable regulations which might prohibit the Bank from declaring dividend in certain circumstances. instruments pursuant The Board of the Bank may vary the level of dividend or not recommend any dividend based on the capital and reserves position of the Bank. The Board may recommend lower or no dividends if it is of the view that there is a need to conserve capital. The Board may recommend higher dividends, subject to applicable if the capital and reserves position regulations, supports a higher distribution to the shareholders. 7. Review The dividend policy of the Bank would be reviewed annually, or earlier if material changes take place in the applicable regulations. DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS ANNEXURE E ALWYN D’SOUZA & CO. Company Secretaries Annex-103, Dimple Arcade, Asha Nagar, Kandivali (East), Mumbai 400101. Branch Office: B-002, Gr. Floor, Shreepati-2, Royal Complex, Behind Olympia Tower, Mira Road (East), Thane-401107; Tel: 022-28125781; Mob: 09820465195; E-mail: alwyn.co@gmail.com; Website: www.alwynjay.com CERTIFICATE [Pursuant to Regulation 34(3) read with Sub Clause 10(i) of Clause C of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015] To, ICICI Bank Limited ICICI Bank Tower, Near Chakli Circle, Old Padra Road, Vadodara, Gujarat - 390007 Dear Sir/Madam, I have considered and examined the annual submissions made by each Director of ICICI Bank Limited (“Company”). On the basis of the documents submitted to me and based on verification of relevant information available in public domain, I hereby certify that the following Directors on the Board of the Company are not debarred or disqualified from being appointed or continuing as directors of the Companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs or any such statutory authority: Sr. No. Name of Director 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Mr. Girish C. Chaturvedi Ms. Rama Bijapurkar Mr. Uday Chitale Ms. Neelam Dhawan Mr. S. Madhavan Mr. Hari L. Mundra Mr. Radhakrishnan Nair Mr. B. Sriram Mr. Lalit Kumar Chandel Mr. Sandeep Bakhshi Ms. Vishakha Mulye Mr. Vijay Chandok Mr. Anup Bagchi Place : Mumbai Date : May 3, 2019 Office Address Annex-103, Dimple Arcade, Asha Nagar, Kandivali (East), Mumbai 400101. DIN 00110996 00001835 00043268 00871445 06451889 00287029 07225354 02993708 00182667 00109206 00203578 01545262 00105962 Designation Independent Director Additional Independent Director Independent Director Independent Director Additional Independent Director Additional Independent Director Independent Director Additional Independent Director Nominee Director Managing Director Wholetime Director Wholetime Director Wholetime Director Alwyn D’Souza & Co. Company Secretaries [Alwyn D’Souza, FCS.5559] [Proprietor] [Certificate of Practice No.5137] 113 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSANNEXURE F ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES A brief outline of the company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs Corporate Social Responsibility (CSR) has been a long-standing commitment at ICICI Bank Limited (ICICI Bank/the Bank). The Bank’s contribution to social sector development includes several pioneering interventions and is implemented through the involvement of stakeholders within the Bank and through the broader community. The Bank established the ICICI Foundation for Inclusive Growth (ICICI Foundation) in 2008 with a view to significantly expand the activities in the area of CSR. Over the years, ICICI Foundation has developed projects in specific areas, particularly in the area of skill development, and has built capabilities for direct project implementation as opposed to other organisations. financial support to extending structure, operating The CSR Policy of the Bank sets the framework guiding the Bank’s CSR activities. It outlines the governance framework, monitoring mechanism, and CSR activities that would be undertaken. The CSR Committee is the governing body that articulates the scope of CSR activities and ensures compliance with the CSR policy. The Bank’s CSR activities are largely focussed in the areas of education, health, skill development and financial inclusion and other activities as the Bank may choose to select in fulfilling its CSR objectives. The CSR policy was approved by the Committee in July 2014, and subsequently was put up on the Bank’s website. Web-link to the Bank’s CSR policy: https://www.icicibank.com/managed-assets/docs/ about-us/ICICI-Bank-CSR-Policy.pdf 2. The Composition of the CSR Committee is chaired by an the The Bank’s CSR Committee independent Director. The composition of Committee is set out below: • Mr. Radhakrishnan Nair, Chairman • Mr. Anup Bagchi • Mr. Uday Chitale (w.e.f. June 30, 2019) • Ms. Rama Bijapurkar (w.e.f. June 30, 2019) The functions of the Committee include review of CSR initiatives undertaken by the ICICI Group and ICICI Foundation; formulation and recommendation to the Board of a CSR Policy indicating the activities to be undertaken by the company and recommendation of the amount of the expenditure to be incurred on such activities; reviewing and recommending the annual CSR plan to the Board; making recommendations to the Board with respect to the CSR initiatives, policies and practices of the ICICI Group; monitoring the CSR activities, implementation of and compliance with the CSR Policy; and reviewing and implementing, if required, any other matter related to CSR initiatives as recommended/suggested by Reserve Bank of India or any other body. Average net profit of the company for last three financial years The average net profit of the company for the last three financial years calculated as specified by the Companies Act, 2013 for fiscal 2019 was ` 59.48 billion. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above) The prescribed CSR expenditure requirement for fiscal 2019 was ` 1,189.6 million. 3. 4. 5. Details of CSR spent during the financial year (a) Total amount to be spent for the financial year Total amount spent towards CSR during fiscal 2019 was ` 922.0 million. (b) Amount unspent, if any Amount unspent was ` 267.6 million. 1. 114 DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS (c) Manner in which the amount spent during the financial year is detailed in the following table: 2. Projects or programs Local area or 1. other Specify the state and district where projects or programs was undertaken Amount outlay (budget) project or program wise (` mn) Amount spent on the projects or programs Sub-heads Direct 1. expenditure on projects or programs Overheads 2. (` mn) Amount spent direct or through implementing agency Cumulative expenditure upto the reporting period (` mn) Pan-India 380.0 380.0 2,125.0 Amount spent Sr. No. CSR Project or activity identified Sector in which the project is covered 1 Projects of ICICI Foundation for Inclusive Growth Promoting education, employment, enhancing vocational skills, livelihood enhancement projects Rural development and related activities Education & research Relief and welfare in calamity affected areas Contribution to relief fund 5. Health Promoting preventive health care and sanitation and making available safe drinking water 2. 3. 4. 6. 7. 8. through ICICI Foundation for Inclusive Growth. The Foundation was set up in 2008 to focus on activities in the area of CSR 4,796.0 Direct & through Bank’s business correspondent network supported construction of toilets, Rubella vaccination drive, and providing safe drinking water facilities 100.0 Armed Forces Flag Day Fund, Kendriya Sainik Board Rural development Pan-India 100.0 117.4 Promoting education Chennai 100.0 100.0 159.1 Direct, for Kerala - 100.0 176.5 Kerala Chief setting up a new university Minister’s Distress Relief Fund Pan-India 96.4 105.23 105.23 Direct; Armed forces welfare Measures for the benefit of armed forces veteran, war widows and their dependents Pan-India 50.0 50.0 Financial Literacy Promoting education Education Women empowerment Pan-India Pan-India 36.0 35.0 91.2 Disha Trust 16.0 16.0 16.0 Direct; 9. Miscellaneous Environmental sustainability, Swachh Bharat, reducing inequalities – 411.6 18.4 89.7 Direct: #Education For Equality campaign to promote girl child education promoting use of dustbins, protection of trees, and supporting socially and economically backward rural households 115 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS 6. In case the company has failed to spend the 2% of the average net profits of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. The amount spent towards CSR during fiscal 2019 was ` 922.0 million, which was 1.6% of the average net profits of the last three financial years. The Bank’s CSR spends in fiscal 2017 were 1.8% and in fiscal 2018 were 2.0% of the average net profits of the preceding three financial years. The Bank, through its CSR activities, has always focussed on efforts that can substantially impact the well-being of the disadvantaged segments of the population. The endeavour is to have a comprehensive approach that is meaningful and with a long-term focus to ensure scalability. Skill-development is a major requirement for meeting sustainable development goals of the Indian economy. Towards this objective, significant efforts have been made to improve skills of underprivileged youth since fiscal 2014. The ICICI Foundation for Inclusive Growth (ICICI Foundation) has driven the skill training efforts through various initiatives including the ICICI Academy for Skills (skill academies), Rural Self-Employment Training Institutes (RSETIs) and the rural initiatives in villages. During fiscal 2019, a total of 135,000 individuals received training through the various skill training initiatives, and of which 63.0% were women. The skill training facilities were further enhanced with the introduction of new in-demand courses like beauty therapist and home health aide at the skill academies. The total number of courses offered at the skill academies aggregated 12 and over 50 wide-ranging locally relevant courses were being offered at the villages. Further, in fiscal 2019 two new training centres were opened at Gorakhpur and Dehradun under the ICICI Academy for Skills. On a cumulative basis, till March 31, 2019, over 400,000 individuals were provided skill training thus facilitating employability and ensuring a meaningful increase in the livelihood of these individuals. Further, a total of 1,200 villages have been covered under the rural initiative of ICICI Foundation. The efforts made in the villages apart from facilitating job opportunities and marketability, has also promoted local entrepreneurship including among women. ICICI Foundation received several prestigious awards during the year in recognition of its efforts. 116 Details on skill training activities Number of individuals trained in fiscal 2019 - Of which women trainees Total number of individuals trained till March 31, 2019 - Of which women trainees Total number of villages covered Total number of states covered 135,189 63% 402,755 54% 1,200 29 The Bank also contributed towards other causes during fiscal 2019 as follows: • Promoting higher education by supporting the • Providing setting up of a new university in Chennai; to in Kerala and contributing to the Chief Minister’s disaster relief fund; flood-affected people relief • Supporting widows and children of ex-servicemen by contributing to the army fund; • Promoting preventive healthcare by supporting the Rubella vaccination drive in Maharashtra, encouraging construction of toilets and providing safe drinking water facilities; • Driving financial literacy and financial counselling through a dedicated team; • #EducationForEquality campaign to promote women empowerment. The Bank initiated a pan-India social awareness programme to be conducted beginning March 2019 till March 2020. The total amount earmarked for the social awareness programme is ` 250.0 million. Since the project began towards the end of the year, the amount could not be spent in fiscal 2019. Accordingly, it was not included in the total CSR spends for fiscal 2019. 7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company. The CSR Committee hereby confirms that the implementation and monitoring of CSR activities is in compliance with CSR objectives and the CSR Policy of the company. Anup Bagchi Executive Director May 6, 2019 Radhakrishnan Nair CSR Committee Chairman DIRECTORS’ REPORTANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS INDEPENDENT AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCE To the Members of ICICI Bank Limited 1. 2. This certificate is issued in accordance with the terms of our engagement letter dated 22 October 2018. We have examined the compliance of conditions of corporate governance by ICICI Bank Limited (‘the Bank’) for the year ended on 31 March 2019, as stipulated in Regulations 17 to 27, clauses (b) to (i) of Regulation 46(2), and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’). Management’s Responsibility 3. responsibility The compliance of conditions of corporate governance is the responsibility of the management. designing, This implementing operating effectiveness of internal control to ensure compliance with the conditions of corporate governance as stipulated in the Listing Regulations. the maintaining includes and to requirements of Auditor’s Responsibility the Listing Pursuant the 4. Regulations, our responsibility is to express a reasonable assurance in the form of an opinion as to whether the Bank has complied with the conditions of corporate governance, as stated in paragraph 2 above. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Bank for ensuring the compliance with the conditions of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Bank. 5. 6. We have examined the relevant records of the Bank in accordance with the applicable Generally Accepted Auditing Standards in India, the Guidance Note on Certification of Corporate Governance issued by the Institute of Chartered Accountants of India (‘ICAI’), and Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. Opinion 7. Based on the procedures performed by us and to the best of our information and according to the explanations provided to us, in our opinion, the Bank has complied, in all material respects, with the conditions of corporate governance, as stipulated in the Listing Regulations during the year ended 31 March 2019, subject to the findings of the enquiry report of Hon’ble Mr. Justice (Retd.) B.N Srikrishna, as described below: a. the case of In the allegations against Ms. Chanda Kochhar, the former MD and CEO, pertaining to conflict of interest in certain instances prior to 31 March 2018, the enquiry report of Hon’ble Mr. Justice (Retd.) B.N Srikrishna concluded that the former MD and CEO was in violation of the ICICI Bank Code of Conduct and its framework for dealing with conflict of interest, including due disclosure or recusal requirements. This also constitutes non-adherence the Listing Regulations, which requires the senior management to make disclosures to the Board of Directors relating to all material, financial and commercial transactions, where they have personal interest that may have a potential conflict with the interest of the listed entity at large. The final findings of the enquiry report and actions taken by the Bank were disclosed to the stock exchanges and a press release dated 30 January 2019 was also issued by the Bank in this respect, which is available on the Bank’s website. to regulation 26(5) of 8. We state that such compliance is neither an assurance as to the future viability of the Bank nor the efficiency or effectiveness with which the management has conducted the affairs of the Bank. Restriction on use 9. This certificate is issued solely for the purpose of complying with the aforesaid regulations and may not be suitable for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this certificate is shown or into whose hands it may come, without our prior consent in writing. For Walker Chandiok & Co LLP Chartered Accountants Firm Registration No. 001076N/N500013 Khushroo B. Panthaky Partner Membership No.: 042423 UDIN No:19042423AAAABF1088 Place: Mumbai Date: 06 May 2019 117 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS MANAGEMENT’S DISCUSSION & ANALYSIS OPERATING ENVIRONMENT Growth The growth of India’s Gross Domestic Product (GDP) was 7.2% in the nine months ended December 31, 2018 (9M-2019), the same level as in fiscal 2018. The Central Statistical Organisation has estimated that India’s GDP would grow by 7.0% in fiscal 2019. Investments, as measured by gross fixed capital formation, have grown by 10.8% during 9M-2019 compared to 9.3% in fiscal 2018. On a gross value added basis, growth in the agriculture sector is estimated to be 2.7% in fiscal 2019 compared to 5.0% in fiscal 2018 and in the services sector to be 7.4% in fiscal 2019 compared to 8.1% in fiscal 2018. Industrial sector growth is expected to be 7.7% in fiscal 2019 compared to 5.9% in fiscal 2018. food and Inflation and interest rates Inflation as measured by the Consumer Price Index (CPI) increased in the initial part of the year from 4.3% in March 2018 to 6.4% in June 2018 and subsequently declined to 2.9% in March 2019. Core inflation (inflation excluding in March 2018 to 6.4% in June 2018 and eased to 5.0% in March 2019. The Reserve Bank of India (RBI) increased the repo rate by 25 basis points each in June 2018 and August 2018, from 6.0% to 6.5%, and subsequently reduced the repo rate by 25 basis points in February 2019 to 6.25%. The policy stance was changed from “neutral” to “calibrated tightening” in October 2018 and again changed to “neutral” in February 2019. from 5.4% increased fuel) Financial markets The Rupee depreciated from ` 65.11 per US dollar at end-March 2018 to a high of ` 74.33 per US dollar on October 9, 2018 and subsequently appreciated to ` 69.16 per US dollar at end-March 2019. Since Indian banks are subject to reserve requirements, with a large part of the reserves held in government securities, movement in government bond yields have an impact on the treasury portfolio. During fiscal 2019, yields on government securities were volatile particularly in view of tight liquidity conditions between September-December 2018. This resulted in significant losses in the treasury book for most Indian banks during the third quarter of fiscal 2019. Yields on the 10-year benchmark government bonds increased from 7.4% at end-March 2018 to over 8.0% in September 2018, and subsequently declined to 7.4% at end-March 2019. Current account and fiscal position The increase in global crude oil prices in fiscal 2019 led to an increase in India’s current account deficit to 2.5% as a proportion of GDP during the nine months ended December 31, 2018, compared to 1.9% in fiscal 2018. The fiscal deficit position remained stable at 3.4% of GDP in fiscal 2019. In the interim budget for fiscal 2020, the government of India has announced measures that are expected to stimulate consumption in the Indian economy. At the same time, the interim budget has a significant borrowing programme for fiscal 2020, which could lead to pressures on government bond yields. 118 Banking sector trends During fiscal 2019, non-food credit grew by 13.3% at March 29, 2019 while deposits grew by 10.0%. This resulted in the credit to deposit ratio increasing from 75.5% at March 31, 2018 to 77.7% at end-March 2019. In terms of sector-wise deployment of credit, credit growth in the services sector was at 17.8%, in the retail sector was at 16.4%, in industry was at 6.9% and in agriculture sector was at 7.9%, as on March 29, 2019. Additions to non-performing assets moderated during the nine months ended December 31, 2018. As per RBI’s Financial Stability Report for December 2018, the gross non-performing asset ratio for Indian banks declined from a peak of 11.5% at March 31, 2018 to 10.8% at September 30, 2018. However, challenges emerged for the non-banking financial companies (NBFCs) following a default by a large non-banking financial company engaged primarily in infrastructure. This resulted in tightening liquidity conditions and increase in yields on their debt, leading to refinancing challenges for NBFCs. In a step towards initiating consolidation in the banking sector, the government announced the merger of three public sector banks in fiscal 2019. The merger was effective from April 1, 2019. the accounts referred under The process of resolution of large stressed accounts continued. Of the Insolvency and Bankruptcy Code (IBC) with the National Company Law Tribunal (NCLT), as required by the RBI, five large accounts from the first list were resolved during the year with the average recovery rate from these accounts exceeding 44.0%. Additions to the non-performing pool of banks declined during the year. However, challenges emerged in a few sectors and specific corporates/promoter groups during the year. Provisions made by banks continued to be elevated. The key regulatory developments impacting banks during fiscal 2019 were as follows: • • In March 2019, RBI deferred the implementation of Ind AS till further notice as the legislative amendments recommended by it were still under the consideration of the Government of India. the the implementation of last RBI deferred tranche of 0.625% of Capital Conservation Buffer (CCB) from March 31, 2019 to March 31, 2020. Accordingly, the minimum capital conservation ratios as earlier applicable from March 31, 2018 would now apply from March 31, 2019 till the CCB attains the level of 2.5% of risk weighted assets (RWA) as on March 31, 2020. The pre-specified trigger for loss absorption through conversion/write-down of Additional Tier 1 instruments shall remain at 5.5% of RWAs and would increase to 6.125% of RWAs on March 31, 2020. • In September 2018, RBI permitted banks to reckon an additional 2.0% of their net demand and time liabilities (NDTL), under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) within the ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSmandatory statutory liquidity requirement (SLR), as level one high quality liquid assets (HQLA) for the purpose of computing their liquidity coverage ratio (LCR). This was applicable from October 1, 2018 resulting in a total of 15.0% of NDTL comprising statutory liquidity ratio securities available for banks to be recognised as level one HQLA. In April 2019, RBI permitted a further 2.0% of NDTL to be reckoned as level one HQLA in a phased manner. With a view to align the SLR with the LCR requirement, RBI decided to reduce the SLR by 25 basis points every quarter until the SLR reaches 18.0% of NDTL. The first reduction of 25 basis points from 19.50% to 19.25% was effective from January 1, 2019. With a view to facilitate meaningful restructuring of micro, small and medium enterprises’ (MSME) accounts that are stressed, RBI permitted a one-time restructuring of existing loans to MSMEs that are in default but ‘standard’ as on January 1, 2019, without an asset classification downgrade. To be eligible for the scheme, the aggregate exposure, including non-fund based facilities of banks and NBFCs, to a borrower should not exceed ` 250.0 million as on January 1, 2019. The restructuring will have to be implemented by March 31, 2020. A provision of 5.0%, in addition to the provisions already held, shall be made in respect of accounts restructured under this scheme. With a view to facilitate flow of credit to well-rated NBFCs, in February 2019 RBI revised the risk weights on exposures to non-deposit taking systemically important NBFCs. From a uniform risk weight of 100%, RBI allowed rated exposures of banks to these NBFCs to be risk-weighted as per the rating assigned by the accredited rating agencies, in a manner similar to that for corporates. The rated exposures of banks to all NBFCs excluding Core Investment Companies (CICs), will now be risk-weighted in a manner similar to that for corporates. Exposures to CICs continue to be risk-weighted at 100%. In February 2019, RBI revised the definition of bulk deposits (i.e. deposits where banks have the discretion to offer differential rate of interest) from single deposit of ` 10.0 million and above to single deposit of ` 20.0 million and above. Banks are henceforth required to maintain their bulk deposit interest rate cards in the core banking system for supervisory review. In April 2019, the Supreme Court declared the RBI circular on revised framework for resolution of 12, stressed 2018 dated as unconstitutional. RBI the process of issuing revised guidelines. February assets in is In November 2018, the Securities and Exchange Board of India released a framework that requires a company rated AA and above and with an • • • • • • outstanding long term borrowing of ` 1.00 billion and above at March 31 in any given year, to necessarily raise 25.0% of its incremental borrowings for the following year through the bond market. This is effective from April 1, 2019. Outlook The Bank believes that the Indian economy has significant long-term potential, based on its demographic profile, consumption growth and vast potential for investment. These factors would drive the long-term growth of the Indian financial sector. The banking sector is expected to benefit from the growing formalisation of the economy, the recently introduced insolvency resolution regime and the rapid adoption of technology in banking. STRATEGY During fiscal 2019, the Bank was focussed on its strategic objective of risk calibrated profitable growth. Core operating profits of the Bank grew by 16.5% during fiscal 2019. The Bank made progress on increasing the granularity of its portfolio and enhancing the customer franchise during the year. Retail loans as a proportion of total loans increased from 56.6% at March 31, 2018 to 60.1% at March 31, 2019. Including non-fund based outstanding, retail loans as a proportion of total loans was 46.9% at March 31, 2019. The Bank continued to improve the portfolio mix by lending to higher rated well-established corporates and reduce concentration risk. The additions to non-performing loans moderated during the year, while provisions remained elevated. As a result, the provision coverage ratio improved substantially. The Bank maintained a strong capital position with capital adequacy ratios significantly above regulatory requirements. Going forward, the Bank’s strategic focus of growing its core operating profits in a risk calibrated and granular manner would continue. The Bank seeks to build scalable and resilient businesses while operating within the guardrails of risk management. The Bank would seek to contain provisions within the levels set by its enterprise risk management framework. The Bank would aim to pursue growth in low capital consuming businesses and further strengthen its liabilities franchise. A customer-centric approach with ownership of growing the core operating profit at every level within the organisation would be an important driver in meeting the Bank’s strategic objectives. The Bank would leverage its extensive network with wide geographical reach, a comprehensive range of products and services and state-of-the-art technology for providing superior customer experience. The Bank believes that there are significant opportunities across customer segments and their ecosystems. The Bank will aim to provide a comprehensive suite of financial services while profitably maximising its share of these opportunities, including by into mutually beneficial partnerships. The Bank is leveraging technology and into customer needs insights analytics for deeper entering 119 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSand behaviour and making customer onboarding and transacting smooth and frictionless. The Bank would continue to invest in technologies to provide an edge in its offerings to customers. The Bank aims to be the trusted financial services provider of choice for its customers and deliver products and services that create value. The Bank will focus on consistent execution of strategy, enhancing stakeholder confidence and shareholder value. STANDALONE FINANCIALS AS PER INDIAN GAAP SUMMARY Core operating profit increased by 16.5% from ` 189.39 billion in fiscal 2018 to ` 220.72 billion in fiscal 2019 primarily due to a 17.3% increase in net interest income and a 15.9% increase in fee income, offset, in part, by a 15.2% increase in operating expenses. Income from treasury-related activities decreased from ` 58.02 billion in fiscal 2018 to ` 13.66 billion in fiscal 2019 and provisions and contingencies (excluding provision for tax) increased by 13.6% from ` 173.07 billion in fiscal 2018 to ` 196.61 billion in fiscal 2019. Hence, profit after tax decreased by 50.4% from ` 67.77 billion in fiscal 2018 to ` 33.63 billion in fiscal 2019. reducing leverage in the corporate sector remained slow. As a result, there was a substantial increase in the level of additions to non-performing loans, including slippages from restructured loans into non-performing status, for the banking sector and the Bank since fiscal 2016. The revised framework for resolution of stressed assets, released by the RBI in February 2018, further accelerated the recognition of stressed accounts as non-performing in fiscal 2018. In fiscal 2019, the additions to non-performing loans in the banking system declined sharply. During fiscal 2019, a few large accounts referred under the Insolvency and Bankruptcy Code were resolved. The additions to non-performing loans of the Bank reduced significantly, while provisions remained elevated. As a result, the provision coverage ratio improved substantially. The gross additions to NPAs were ` 171.13 billion in fiscal 2016, ` 335.44 billion in fiscal 2017 and ` 287.30 billion in fiscal 2018. Gross additions to the Bank’s non-performing assets (NPAs) in fiscal 2019 decreased significantly to ` 110.39 billion. Gross NPAs (net of write-offs) decreased from ` 540.63 billion at March 31, 2018 to ` 462.92 billion at March 31, 2019. Net NPAs decreased by 51.3% from ` 278.86 billion at March 31, 2018 to ` 135.77 billion at March 31, 2019. The net NPA ratio decreased from 4.77% at March 31, 2018 to 2.06% at March 31, 2019. The provision coverage ratio (excluding cumulative technical/prudential write-offs) increased from 47.7% at March 31, 2018 to 70.6% at March 31, 2019. Net interest income increased by 17.3% from ` 230.26 billion in fiscal 2018 to ` 270.15 billion in fiscal 2019 reflecting an increase of 10.7% in the average volume of interest-earning assets and an increase in the net interest margin from 3.23% in fiscal 2018 to 3.42% in fiscal 2019. The income tax expense decreased by 37.0% from ` 6.57 billion in fiscal 2018 to ` 4.14 billion in fiscal 2019. The effective tax rate increased from 8.8% in fiscal 2018 to 10.9% in fiscal 2019 primarily reflecting the composition of income. Fee income increased by 15.9% from ` 103.41 billion in fiscal 2018 to ` 119.89 billion in fiscal 2019. Dividend from subsidiaries decreased by 11.2% from ` 12.14 billion in fiscal 2018 to ` 10.78 billion in fiscal 2019. Net worth increased from ` 1,051.59 billion at March 31, 2018 to ` 1,083.68 billion at March 31, 2019 primarily due to accretion to reserves out of profit for the year, offset, in part, by payment of dividend for fiscal 2018. Operating expenses increased by 15.2% from ` 157.04 billion in fiscal 2018 to ` 180.89 billion in fiscal 2019 primarily due to an increase in staff cost and other administrative expenses. Income from treasury-related activities decreased from ` 58.02 billion in fiscal 2018 to ` 13.66 billion in fiscal 2019. During fiscal 2019, the Bank sold equity shares representing 2.00% shareholding ICICI Prudential Life Insurance Company Limited resulting in a net gain of ` 11.10 billion. During fiscal 2018, the Bank had sold equity shares representing 7.00% shareholding in ICICI Lombard General Insurance Company Limited resulting in a net gain of ` 20.12 billion and had sold equity shares representing 20.78% shareholding in ICICI Securities Limited resulting in a net gain of ` 33.20 billion through initial public offers (IPO). in Provisions and contingencies (excluding provision for tax) increased by 13.6% from ` 173.07 billion in fiscal 2018 to ` 196.61 billion in fiscal 2019. The Indian corporate sector experienced several challenges over the last few years. These challenges resulted in lower than projected cash flows for the corporates and the progress in 120 Total assets increased by 9.7% from ` 8,791.89 billion at March 31, 2018 to ` 9,644.59 billion at March 31, 2019. Total advances increased by 14.5% from ` 5,123.95 billion at March 31, 2018 to ` 5,866.47 billion at March 31, 2019 primarily due to an increase in domestic advances by 16.9%, offset, in part, by a decrease in overseas advances increased by 16.4% from by 2.2%. Total deposits ` 5,609.75 billion at March 31, 2018 to ` 6,529.20 billion at March 31, 2019. Term deposits increased by 21.4% from ` 2,710.50 billion at March 31, 2018 to ` 3,289.79 billion at March 31, 2019. Current and savings account (CASA) deposits increased by 11.7% from ` 2,899.25 billion at March 31, 2018 to ` 3,239.40 billion at March 31, 2019. The Bank had a branch network of 4,874 branches and an ATM network of 14,987 ATMs at March 31, 2019. is subject to Basel The Bank III capital adequacy guidelines stipulated by RBI. As per these guidelines, the total capital adequacy ratio of the Bank at March 31, 2019 (after deduction of proposed dividend from capital funds) in accordance with RBI guidelines on Basel III was 16.89% with a Tier-1 capital adequacy ratio of 15.09% MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSas compared to 18.42% with a Tier-1 capital adequacy ratio of 15.92% at March 31, 2018. The CET-1 ratio was 13.63% at March 31, 2019 as compared to 14.43% at March 31, 2018. OPERATING RESULTS DATA The following table sets forth, for the periods indicated, the operating results data. ` in billion, except percentages Particulars Interest income Interest expense Net interest income Fee income1 Dividend from subsidiaries Other income (including lease income) Core operating income Operating expenses Core operating profit Treasury income Operating profit Provisions, net of write-backs Profit before tax Tax, including deferred tax Profit after tax 1 2 All amounts have been rounded off to the nearest ` 10.0 million. 3 Prior period figures have been re-grouped/re-arranged, where necessary. Includes merchant foreign exchange income and margin on customer derivative transactions. Fiscal 2018 Fiscal 2019 % change 15.3% 13.9 17.3 15.9 (11.2) 27.4 15.9 15.2 16.5 (76.5) (5.3) 13.6 (49.2) (37.0) (50.4%) ` 634.01 363.86 270.15 119.89 10.78 0.79 401.61 180.89 220.72 13.66 234.38 196.61 37.77 4.14 ` 33.63 ` 549.66 319.40 230.26 103.41 12.14 0.62 346.43 157.04 189.39 58.02 247.41 173.07 74.34 6.57 ` 67.77 Particulars Return on average equity (%)1 Return on average assets (%)2 Net interest margin (%) Cost to income (%)3 Earnings per share (`) Book value per share (`) 1 Return on average equity is the ratio of the net profit after tax to the quarterly average equity share capital and reserves. 2 Return on average assets is the ratio of net profit after tax to average assets. 3 Cost represents operating expense. Income represents net interest income and non-interest income. Fiscal 2018 Fiscal 2019 3.16 0.39 3.42 43.56 5.23 168.11 6.60 0.87 3.23 38.83 10.56 163.60 The return on average equity, return on average assets and earnings per share decreased primarily due to a decrease in profit after tax. NET INTEREST INCOME AND SPREAD ANALYSIS The following table sets forth, for the periods indicated the net interest income and spread analysis. ` in billion, except percentages Particulars Interest income Interest expense Net interest income Average interest-earning assets Average interest-bearing liabilities Net interest margin Average yield Average cost of funds Interest spread 1 All amounts have been rounded off to the nearest ` 10.0 million. Fiscal 2018 Fiscal 2019 % change 15.3% 13.9 17.3 10.7 11.8% - - - - ` 634.01 ` 549.66 363.86 319.40 270.15 230.26 7,892.29 7,129.46 ` 6,382.35 ` 7,132.64 3.42% 8.03% 5.10% 2.93% 3.23% 7.71% 5.00% 2.71% 121 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSNet interest income increased by 17.3% from ` 230.26 billion in fiscal 2018 to ` 270.15 billion in fiscal 2019 reflecting an increase of 10.7% in the average volume of interest-earning assets and an increase in net interest margin by 19 basis points. in yield on advances, an increase in yield on investments and an increase in interest on income tax refund. The cost of domestic funds decreased by 2 basis points from 5.31% in fiscal 2018 to 5.29% in fiscal 2019 primarily due to a decrease in cost of borrowings. The yield on average interest-earning assets increased by 32 basis points from 7.71% in fiscal 2018 to 8.03% in fiscal 2019. The cost of funds increased by 10 basis points from 5.00% in fiscal 2018 to 5.10% in fiscal 2019. The interest spread increased by 22 basis points from 2.71% in fiscal 2018 to 2.93% in fiscal 2019. Net interest margin increased by 19 basis points from 3.23% in fiscal 2018 to 3.42% in fiscal 2019. The net interest margin on domestic operations increased by 17 basis points from 3.60% in fiscal 2018 to 3.77% in fiscal 2019 primarily due to an increase in yield on interest-earning assets and a decrease in cost of funds. The yield on domestic interest-earning assets increased by 19 basis points from 8.28% in fiscal 2018 to 8.47% in fiscal 2019 primarily due to an increase in the proportion of advances in total interest-earning assets, an increase The net interest margin of overseas branches decreased by 19 basis points from 0.49% in fiscal 2018 to 0.30% in fiscal 2019 primarily due to an increase in cost of funds and a decrease in interest income on non-trading interest rate swaps, offset, in part, by an increase in yield on advances. The cost of overseas funds increased by 59 basis points from 3.03% in fiscal 2018 to 3.62% in fiscal 2019 primarily due to an increase in cost of borrowings on account of an increase in LIBOR. The yield on overseas advances increased by 72 basis points from 3.69% in fiscal 2018 to 4.41% in fiscal 2019 primarily due to higher interest collections on NPAs and an increase in LIBOR. During fiscal 2019, the Bank had an expense of ` 2.50 billion on non-trading interest rate swaps as compared to an income of ` 2.13 billion in fiscal 2018. The following table sets forth, for the periods indicated, the trend in yield, cost, spread and margin. Particulars Yield on interest-earning assets - On advances - On investments - On SLR investments - On other investments - On other interest-earning assets Cost of interest-bearing liabilities - Cost of deposits - Current and savings account (CASA) deposits - Term deposits - Cost of borrowings Interest spread Net interest margin Fiscal 2018 Fiscal 2019 8.03% 8.96 7.08 7.24 6.56 3.63 7.71% 8.63 6.82 7.07 6.11 3.63 5.00 4.87 2.81 6.60 5.41 5.10 4.87 2.73 6.68 5.86 2.71 3.23% 2.93 3.42% The yield on average interest-earning assets increased by 32 basis points from 7.71% in fiscal 2018 to 8.03% in fiscal 2019 primarily due to the following factors: • • The yield on domestic advances increased by 11 basis points from 9.51% in fiscal 2018 to 9.62% in fiscal 2019. The yield on overseas advances increased by 72 basis points in fiscal 2018 to 4.41% in fiscal 2019 primarily due to higher interest collections on NPAs and an increase in LIBOR. from 3.69% The overall yield on average advances increased by 33 basis points from 8.63% in fiscal 2018 to 8.96% in fiscal 2019 primarily due to an increase in proportion of domestic advances to total advances. The yield on average interest-earning investments increased by 26 basis points from 6.82% in fiscal 2018 to 7.08% in fiscal 2019. The yield on Statutory Liquidity Ratio (SLR) investments increased by 17 basis points from 7.07% in fiscal 2018 to 7.24% in fiscal 2019 primarily due to an increase in investment in government securities at higher yields and a reset of rate of interest on floating rate bonds at higher levels. The yield on non-SLR investments increased by 45 basis points from 6.11% in fiscal 2018 to 6.56% in fiscal 2019 primarily due to an increase in yield on certificate of deposits, commercial papers, pass through certificates and mutual funds. 122 MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS • The yield on other interest-earning assets remained at a similar level of 3.63% in fiscal 2018 and fiscal 2019. The Bank has foreign currency bond borrowings where the interest rate is fixed. In order to manage the market risk, the Bank undertakes non-trading fixed to floating interest rate swaps, where the Bank receives fixed and pays floating interest rate. During fiscal 2019, the Bank had an expense of ` 2.50 billion as compared to an income of ` 2.13 billion in fiscal 2018 primarily due to an increase in LIBOR. The yield on Rural Infrastructure Development Fund (RIDF) and related deposits decreased by 29 basis points from 5.34% in fiscal 2018 to 5.05% in fiscal 2019. Interest on income tax refund increased from ` 2.63 billion in fiscal 2018 to ` 4.48 billion in fiscal 2019. The receipt, amount and timing of such income depends on the nature and timing of determinations by tax authorities and are hence neither consistent nor predictable. The cost of funds increased by 10 basis points from 5.00% in fiscal 2018 to 5.10% in fiscal 2019 primarily due to the following factors: • The cost of borrowings increased by 45 basis points from 5.41% in fiscal 2018 to 5.86% in fiscal 2019 primarily due to an increase in the cost of foreign currency call and term borrowings and interest expense on funding swaps, offset, in part, by a decrease in the cost of refinance borrowings. • The cost of average deposits remained at a similar level of 4.87% in fiscal 2018 and fiscal 2019. The cost of term deposits increased by 8 basis points from 6.60% in fiscal 2018 to 6.68% in fiscal 2019. Effective August 19, 2017, the Bank reduced its interest rate on savings account deposits by 50 basis points on deposits below ` 5.0 million from 4.00% to 3.50%. This reduction positively impacted the cost of deposits by about 4 basis points during fiscal 2019 as compared to fiscal 2018. The average CASA deposits increased from 45.6% of total average deposits in fiscal 2018 to 45.9% of total average deposits in fiscal 2019. While the Bank expects continued growth in CASA deposits, the stronger growth in retail term deposits is likely to result in some decline in the proportion of average CASA deposits in total average deposits. The Bank’s interest income, yield on advances, net interest income and net interest margin are also likely to be impacted by recoveries from NPAs, the competitive environment systemic and regulatory developments. The timing and quantum of recoveries and interest on income tax refund is uncertain. liquidity, The RBI, in its statement of Development and Regulatory Policies dated December 5, 2018, had proposed that from April 1, 2019, all new floating rate loans (housing, auto, etc.) and floating rate loans to micro and small enterprises should be benchmarked to one of the prescribed external rates. The final guidelines are awaited. Any change in the methodology of determining benchmark rates may income, yield on advances, net interest income and net interest margin. impact the Bank’s interest The following table sets forth, for the period indicated, the trend in average interest-earning assets and average interest-bearing liabilities: Particulars Advances Interest-earning investments1 Other interest-earning assets Total interest-earning assets Deposits Borrowings1,2 Total interest-bearing liabilities ` in billion, except percentages Fiscal 2018 Fiscal 2019 % change ` 4,736.93 ` 5,351.93 13.0% 1,806.88 6.6 1,695.33 733.48 5.2 697.20 7,892.29 10.7 7,129.46 5,448.71 13.3 4,809.02 1,683.93 7.0 1,573.33 ` 6,382.35 ` 7,132.64 11.8% 1 Average investments and average borrowings include average short-term repurchase transactions. 2 Borrowings exclude preference share capital. 3 All amounts have been rounded off to the nearest ` 10.0 million. The average volume of interest-earning assets increased by 10.7% from ` 7,129.46 billion in fiscal 2018 to ` 7,892.29 billion in fiscal 2019. The increase in average interest-earning assets was primarily on account of an increase in average advances by ` 615.00 billion and average interest-earning investments by ` 111.55 billion. Average advances increased by 13.0% from ` 4,736.93 billion in fiscal 2018 to ` 5,351.93 billion in fiscal 2019 primarily due to an increase in domestic advances, offset, in part, by a decrease in overseas advances. Average interest-earning investments increased by 6.6% from ` 1,695.33 billion in fiscal 2018 to ` 1,806.88 billion in 123 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS fiscal 2019 primarily due to an increase in SLR investments by 9.9% from ` 1,256.31 billion in fiscal 2018 to ` 1,380.54 billion in fiscal 2019. Average interest-earning non-SLR investments decreased by 2.9% from ` 439.02 billion in fiscal 2018 to ` 426.34 billion in fiscal 2019. Average other interest-earning assets increased by 5.2% from ` 697.20 billion in fiscal 2018 to ` 733.48 billion in fiscal 2019 primarily due to an increase in balances with banks outside India, RIDF and related deposits and balance with RBI, offset, in part, by a decrease in call money lent. Average interest-bearing liabilities increased by 11.8% from ` 6,382.35 billion in fiscal 2018 to ` 7,132.64 billion in fiscal 2019 primarily due to an increase in average deposits by ` 639.69 billion and an increase in average borrowings by ` 110.60 billion. Average deposits increased by 13.3% from ` 4,809.02 billion in fiscal 2018 to ` 5,448.71 billion in fiscal 2019 due to an increase in average CASA deposits by ` 310.36 billion and an increase in average term deposits by ` 329.33 billion. Average borrowings increased by 7.0% from ` 1,573.33 billion in fiscal 2018 to ` 1,683.93 billion in fiscal 2019 primarily due to an increase in refinance borrowings and call and term money borrowings. FEE INCOME Fee income primarily includes fees from retail customers such as loan processing fees, fees from cards business, account servicing charges, third party referral fees and fees from corporate clients such as loan processing fees and transaction banking fees. Fee income increased by 15.9% from ` 103.41 billion in fiscal 2018 to ` 119.89 billion in fiscal 2019 primarily due to an increase in fee income from cards business and retail lending linked fees. DIVIDEND FROM SUBSIDIARIES Dividend from subsidiaries decreased by 11.2% from ` 12.14 billion in fiscal 2018 to ` 10.78 billion in fiscal 2019. The following table sets forth, for the periods indicated, the details of dividend received from subsidiaries: Name of the entity ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Prudential Asset Management Company Limited ICICI Bank Canada ICICI Lombard General Insurance Company Limited ICICI Venture Funds Management Company Limited ICICI Securities Primary Dealership Limited ICICI Prudential Trust ICICI Home Finance Company Limited Total dividend Insignificant amount 1 2 All amounts have been rounded off to the nearest ` 10.0 million. ` in billion Fiscal 2018 Fiscal 2019 5.44 3.72 1.94 1.77 2.27 1.66 1.37 1.09 0.40 1.27 0.46 0.67 0.36 0.001 0.001 - 0.50 10.78 12.14 - Other income (including lease income) Other income increased from ` 0.62 billion in fiscal 2018 to ` 0.79 billion in fiscal 2019. OPERATING EXPENSES The following table sets forth, for the periods indicated, the principal components of operating expenses. ` in billion, except percentages Particulars Payments to and provisions for employees Depreciation on owned property (including non-banking assets) Other administrative expenses Total operating expense 1 All amounts have been rounded off to the nearest ` 10.0 million. Fiscal 2018 Fiscal 2019 % change 15.1% (0.5) 16.6 15.2% ` 68.08 7.77 105.04 ` 180.89 ` 59.14 7.81 90.09 ` 157.04 expenses primarily Operating employee expenses, depreciation on assets and other administrative increased by 15.2% expenses. Operating expenses include from ` 157.04 billion in fiscal 2018 to ` 180.89 billion in fiscal 2019. 124 MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSPayments to and provisions for employees Employee expenses increased by 15.1% from ` 59.14 billion in fiscal 2018 to ` 68.08 billion in fiscal 2019 primarily due to an increase in provision for retirement benefit obligations due to a decrease in the discount rate linked to yield on government securities, an increase in dearness allowances and an increase in provision for performance bonus and performance-linked retention pay. Employee expense also reflects the impact of annual increments and promotions. The average staff strength increased from 83,577 for fiscal 2018 to 84,523 for fiscal 2019 (number of employees at March 31, 2018: 82,724 and at March 31, 2019: 86,763), primarily in retail and rural business. The employee base includes sales executives, employees on fixed term contracts and interns. Depreciation Depreciation on owned property decreased by 0.5% from ` 7.81 billion in fiscal 2018 to ` 7.77 billion in fiscal 2019. Other administrative expenses Other administrative expenses primarily include rent, taxes and lighting, advertisements, sales promotion, repairs and maintenance, direct marketing expenses and other expenditure. Other administrative expenses increased by 16.6% from ` 90.09 billion in fiscal 2018 to ` 105.04 billion in fiscal 2019. The increase in other administrative expenses was primarily due to an increase in retail business volumes. Profit/(loss) on treasury-related activities (net) Income from treasury-related activities includes income from sale of investments and unrealised profit/(loss) on account of revaluation of investments in the fixed income portfolio, equity and preference share portfolio, units of venture funds and security receipts issued by asset reconstruction companies. Profit from treasury-related activities decreased from ` 58.02 billion in fiscal 2018 to ` 13.66 billion in fiscal 2019. In fiscal 2019, the Bank made a net gain of ` 11.10 billion on sale of equity shares of ICICI Prudential Life Insurance Company Limited. In fiscal 2018, the Bank made a net gain of ` 20.12 billion on sale of equity shares of ICICI Lombard General Insurance Company Limited and a net gain of ` 33.20 billion on sale of equity shares of ICICI Securities Limited through an offer for sale in their IPOs. Further, treasury income in fiscal 2018 was higher due to higher realised gains in government securities and other fixed income portfolios. PROVISIONS AND CONTINGENCIES (EXCLUDING PROVISIONS FOR TAX) The following tables set forth, for the periods indicated, the components of provisions and contingencies. ` in billion, except percentages Particulars Provision for non-performing and other assets1 Provision for investments (including credit substitutes) (net) Provision for standard assets Others Total provisions and contingencies (excluding provision for tax) Includes restructuring related provision. 1 2 All amounts have been rounded off to the nearest ` 10.0 million. Fiscal 2018 Fiscal 2019 % change 18.0% (81.0%) (7.8%) - 13.6% ` 168.12 3.56 2.55 22.38 ` 196.61 ` 142.45 18.77 2.77 9.08 ` 173.07 Provisions are made by the Bank on standard, sub-standard and doubtful assets at rates prescribed by RBI. Loss assets and the unsecured portion of doubtful assets are provided for/written off as required by RBI guidelines. For loans and advances of overseas branches, provisions are made either as per RBI regulations or as per host country regulations, whichever is higher. Provisions on retail non-performing loans are made at the borrower level in accordance with the retail assets provisioning policy of the Bank, subject to the minimum provisioning levels prescribed by RBI. The Bank holds specific provisions against non-performing loans and advances and against certain performing loans and advances in accordance with RBI directions, including provisions on accounts directed by RBI to be referred to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 (IBC). The specific provisions on retail loans and advances held by the Bank are higher than the minimum regulatory requirement. In respect of non-retail loans reported as fraud to RBI and classified in doubtful category, the entire amount, without considering the value of security, is provided for over a period not exceeding four quarters starting from the quarter in which the fraud has been detected. In respect of non-retail loans where there have been delays in reporting the fraud to RBI or which are classified as loss accounts, the entire amount is provided for immediately. In cases of frauds in retail accounts, the entire amount is provided for immediately. Provision on loans and advances restructured/rescheduled is made in accordance with the applicable RBI guidelines on restructuring of loans and advances by banks. In addition to the specific provision on NPAs, the Bank maintains a general provision on standard loans and advances at rates prescribed by RBI. For standard loans and advances in overseas branches, the general provision is made at the higher of host country regulatory requirements and RBI requirements. The Bank also makes additional general provision on loans to specific borrowers in specific stressed sectors. The Bank makes floating provision as per a Board approved policy, which is in addition to the specific and general provisions made 125 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSby the Bank. The floating provision can be utilised with the approval of the Board and RBI. Provisions and contingencies (excluding provisions for tax) increased from ` 173.07 billion in fiscal 2018 to ` 196.61 billion in fiscal 2019 primarily due to an increase in provision on advances, offset, in part, by a decrease in provision for investments. in loans the corporate sector Provision for advances increased from ` 142.45 billion in fiscal 2018 at ` 168.12 billion in fiscal 2019 primarily due to additional provisions on loans classified as NPAs in earlier years. The Indian corporate sector experienced several challenges over the last few years. These challenges resulted in lower than projected cash flows for the corporates and the progress in reducing leverage remained slow. As a result, there was a substantial increase in the level of additions to non-performing loans, including slippages into non-performing status, from restructured for the banking sector and the Bank since fiscal 2016. The revised framework for resolution of stressed assets, released by RBI in February 2018, further accelerated the recognition of stressed accounts as non-performing in fiscal 2018. In fiscal 2019, the additions to non-performing loans in the banking system declined sharply. During fiscal 2019, a few large accounts referred under the Insolvency and Bankruptcy Code were resolved. The additions to non-performing loans of the Bank reduced significantly, while provisions remained elevated. The provision coverage ratio improved substantially. The provision coverage ratio (excluding cumulative technical/prudential write-offs) from 47.7% at March 31, 2018 to 70.6% at March 31, 2019. increased significantly During fiscal 2018, RBI advised the banks to initiate insolvency resolution process under the provisions of IBC FINANCIAL CONDITION for certain specific accounts. RBI also required the banks to make provision at 40% of the secured portion and 100% of unsecured portion, or provision as per extant RBI guideline on asset classification norms, whichever is higher, as at March 31, 2018. Banks were required to further increase the provision on the secured portion of the loan to 50.0% at June 30, 2018. During the three months ended June 30, 2018, the Bank had made the provision on these accounts as per April 2018 guidelines of RBI. At March 31, 2019, the Bank holds a provision of ` 75.65 billion in respect of outstanding loans amounting to ` 103.06 billion to these borrowers which amounts to a provision coverage ratio (excluding cumulative technical/prudential write-offs) of 73.9%. Provision for investments decreased from ` 18.77 billion in fiscal 2018 to ` 3.56 billion in fiscal 2019 primarily due to recovery towards bonds, which were fully provided in earlier years and lower provisions on equity shares. for standard Provision from ` 2.77 billion in fiscal 2018 to ` 2.55 billion in fiscal 2019. The cumulative general provision held at March 31, 2019 was ` 28.74 billion (March 31, 2018: ` 25.91 billion). assets decreased increased from Other provisions and contingencies ` 9.08 billion in fiscal 2018 to ` 22.38 billion in fiscal 2019 primarily due to provision on non-banking assets and non-fund based facilities. TAX EXPENSE The income tax expense decreased by 37.0% from ` 6.57 billion in fiscal 2018 to ` 4.14 billion in fiscal 2019. The effective tax rate increased from 8.8% in fiscal 2018 to 10.9% in fiscal 2019 primarily reflecting the composition of income. ASSETS The following table sets forth, at the dates indicated, the principal components of assets. ` in billion, except percentages Assets % change Advances Cash and bank balances Investments - Domestic - Overseas branches - Government and other approved investments1 - Equity investment in subsidiaries - Other investments (4.6%) 2.3 6.8 (0.3) (8.6) 14.5 16.9 (2.2) 0.3 14.1 8.7 9.7% Banks in India are required to maintain a specified percentage, currently 19.25% (at March 31, 2019), of their net demand and time liabilities by way of liquid assets like cash, gold or approved unencumbered securities. Deposits made in Rural Infrastructure Development Fund and other related deposits pursuant to shortfall in the amount required to be lent to certain specified sectors called priority sector as per RBI guidelines. Fixed assets (including leased assets) Other assets - RIDF and other related deposits2 Total assets 1 2 At March 31, 2018 ` 841.69 2,029.94 1,384.27 98.32 547.35 5,123.95 4,479.65 644.30 79.04 717.27 269.25 ` 8,791.89 At March 31, 2019 ` 802.96 2,077.33 1,479.09 98.03 500.21 5,866.47 5,236.15 630.32 79.31 818.52 292.55 ` 9,644.59 3 All amounts have been rounded off to the nearest ` 10.0 million. 126 MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Total assets of the Bank increased by 9.7% from ` 8,791.89 billion at March 31, 2018 to ` 9,644.59 billion at March 31, 2019, primarily due to a 14.5% increase in advances, 2.3% increase in investments and 14.1% increase in other assets. Cash and cash equivalents Cash and cash equivalents include cash in hand and balances with RBI and other banks, including money at call and short notice. Cash and cash equivalents decreased from ` 841.69 billion at March 31, 2018 to ` 802.96 billion at March 31, 2019 primarily due to a decrease in money at call and short notice and balances with banks outside India, offset, in part, by an increase in balance with RBI. Investments Total investments increased by 2.3% from ` 2,029.94 billion at March 31, 2018 to ` 2,077.33 billion at in March 31, 2019 primarily due investments in government securities by ` 87.38 billion and pass through certificates by ` 14.63 billion, offset, in part, by a decrease in investment in commercial papers by ` 23.04 billion and bonds and debentures by ` 11.56 billion. increase to an At March 31, 2019, the Bank had an outstanding net investment of ` 32.86 billion in security receipts issued by asset reconstruction companies compared to ` 34.38 billion at March 31, 2018. Advances Net advances increased by 14.5% from ` 5,123.95 billion at March 31, 2018 to ` 5,866.47 billion at March 31, 2019 primarily due to an increase in domestic advances. Domestic advances increased by 16.9% from ` 4,479.65 billion at March 31, 2018 to ` 5,236.15 billion at March 31, 2019. Net retail advances increased by 21.7% from ` 2,898.94 billion at March 31, 2018 to ` 3,528.33 billion at March 31, 2019. Net advances of overseas branches decreased by 2.2% from ` 644.30 billion at March 31, 2018 to ` 630.32 billion at March 31, 2019. Fixed and other assets Fixed assets from ` 79.04 billion at March 31, 2018 to ` 79.31 billion at March 31, 2019. increased by 0.3% (net block) Other assets increased by 14.1% from ` 717.27 billion at March 31, 2018 to ` 818.52 billion at March 31, 2019 primarily due to an increase in receivables on account of treasury transactions, income tax paid in advance and RIDF and related deposits, offset, in part, by a decrease in trade receivables on account of pending settlement. RIDF and related deposits made in lieu of shortfall in directed lending requirements increased by 8.7% from ` 269.25 billion at March 31, 2018 to ` 292.55 billion at March 31, 2019. LIABILITIES The following table sets forth, at the dates indicated, the principal components of liabilities (including capital and reserves). Liabilities Equity share capital Reserves Deposits - Savings deposits - Current deposits - Term deposits Borrowings (excluding subordinated debt and preference share capital) - Domestic - Overseas branches Subordinated debt (included in Tier-1 and Tier-2 capital) - Domestic - Overseas branches Preference share capital1 Other liabilities Total liabilities Included in Schedule 4 - ‘Borrowings’ of the balance sheet. 1 2 All amounts have been rounded off to the nearest ` 10.0 million. ` in billion, except percentages At March 31, 2018 ` 12.92 1,038.68 5,609.75 2,009.67 889.58 2,710.50 1,510.25 696.30 813.95 314.84 314.84 - 3.50 301.96 ` 8,791.89 At March 31, 2019 ` 12.94 1,070.74 6,529.20 2,276.71 962.69 3,289.80 1,382.85 635.07 747.78 270.35 270.35 - - 378.51 ` 9,644.59 % change 0.2% 3.1 16.4 13.3 8.2 21.4 (8.4) - (8.1) (14.1) (14.1) - (100.0) 25.4 9.7% Total liabilities (including capital and reserves) increased by 9.7% from ` 8,791.89 billion at March 31, 2018 to ` 9,644.59 billion at March 31, 2019 primarily due to a 16.4% increase in deposits, offset, in part, by a 9.6% decrease in borrowings. 127 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS Deposits Deposits increased by 16.4% from ` 5,609.75 billion at March 31, 2018 to ` 6,529.20 billion at March 31, 2019. Term deposits increased by 21.4% from ` 2,710.50 billion at March 31, 2018 to ` 3,289.80 billion at March 31, 2019. Savings account deposits increased by 13.3% from ` 2,009.67 billion at March 31, 2018 to ` 2,276.71 billion at March 31, 2019 and current account deposits increased by 8.2% from ` 889.58 billion at March 31, 2018 to ` 962.69 billion at March 31, 2019. The current and savings account (CASA) deposits increased by 11.7% from ` 2,899.25 billion at March 31, 2018 to ` 3,239.40 billion at March 31, 2019. The CASA ratio was 49.6% at March 31, 2019 compared to 51.7% at March 31, 2018. The average CASA increased by 14.2% from ` 2,191.86 billion in fiscal 2018 to ` 2,502.22 billion in fiscal 2019. The average CASA ratio was 45.9% in fiscal 2019 compared to 45.6%in fiscal 2018. Deposits of overseas branches increased by 9.3% from ` 49.58 billion at March 31, 2018 to ` 54.21 billion at March 31, 2019. Total deposits at March 31, 2019 formed 79.8% of the funding (i.e., deposits and borrowings, other than preference share capital). Borrowings Borrowings decreased by 9.6% from ` 1,828.59 billion at March 31, 2018 to ` 1,653.20 billion at March 31, 2019 primarily due to a decrease in borrowings with RBI under liquidity adjustment facility, foreign currency term money borrowings, borrowings under collateralised lending and borrowing obligations and subordinated bond borrowings, offset, in part, by an increase in foreign currency call money borrowings and refinance borrowings. Net borrowings of overseas branches decreased from ` 813.95 billion at March 31, 2018 to ` 747.78 billion at March 31, 2019. Other liabilities Other liabilities increased by 25.4% from ` 301.96 billion at March 31, 2018 to ` 378.51 billion at March 31, 2019 primarily due to an increase in payables on account of forex transactions, sundry creditors and bills payable. Equity share capital and reserves Equity share capital and reserves from ` 1,051.59 billion at March 31, 2018 to ` 1,083.68 billion at March 31, 2019 primarily due to accretion to reserves out of retained profit, offset, in part, by payment of dividend. increased OFF BALANCE SHEET ITEMS, COMMITMENTS AND CONTINGENCIES The following table sets forth, for the periods indicated, the principal components of contingent liabilities. Particulars Claims against the Bank, not acknowledged as debts Liability for partly paid investments Notional principal amount of outstanding forward exchange contracts Guarantees given on behalf of constituents Acceptances, endorsements and other obligations Notional principal amount of currency swaps Notional principal amount of interest rate swaps and currency options and interest rate futures Other items for which the Bank is contingently liable Total At March 31, 2018 ` 62.66 0.01 4,326.69 945.36 410.04 416.99 ` in billion At March 31, 2019 ` 55.01 0.01 4,701.00 1,066.66 433.79 423.34 6,592.93 137.76 ` 12,892.44 12,441.82 98.75 ` 19,220.38 1 All amounts have been rounded off to the nearest ` 10.0 million. Contingent liabilities increased from ` 12,892.44 billion at March 31, 2018 to ` 19,220.38 billion at March 31, 2019 primarily due to an increase in notional amount of interest rate swaps and currency options. The notional amount of interest rate swaps and currency options increased from ` 6,592.93 billion at March 31, 2018 to ` 12,441.82 billion at March 31, 2019 primarily due to an increase in outstanding position of overnight index swaps. Claims against the Bank, not acknowledged as debts, represent demands made in certain tax and legal matters against the Bank in the normal course of business and customer claims arising in fraud cases. In accordance with the Bank’s accounting policy and Accounting Standard 29, the Bank has reviewed and classified these items as possible obligations based on legal opinion/judicial precedents/assessment by the Bank. No provision in excess of provisions already made in the financial statements is considered necessary. The Bank enters into foreign exchange contracts in its normal course of business, to exchange currencies at a pre-fixed price at a future date. This item represents the notional principal amount of such contracts, which are derivative instruments. With respect to the transactions entered into with its customers, the Bank generally enters into off-setting transactions inter-bank market. This results in generation of a higher number of outstanding in the 128 MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTStransactions, and hence a large value of gross notional principal of the portfolio, while the net market risk is lower. As a part of project financing and commercial banking activities, the Bank has issued guarantees to support regular business activities of clients. These generally represent irrevocable assurances that the Bank will make payments in the event that the customer fails to fulfil its financial or performance obligations. Financial guarantees are obligations to pay a third party beneficiary where a customer fails to make payment towards a specified financial obligation, including advance payment guarantee. Performance guarantees are obligations to pay a third party beneficiary where a customer fails to perform a non-financial contractual obligation. The guarantees are generally issued for a period not exceeding ten years. The credit risks associated with these products, as well as the operating risks, are similar to those relating to other types of financial instruments. Cash margins available to reimburse losses realised under guarantees amounted to ` 129.53 billion at March 31, 2019 as compared to ` 136.65 billion at March 31, 2018. Other property or security may also be available to the Bank to cover potential losses under guarantees. The Bank is obligated under a number of capital contracts. Capital contracts are job orders of a capital nature, which have been committed. Estimated amounts of contracts remaining to be executed on capital account in domestic operations aggregated to ` 6.70 billion at March 31, 2019 compared to ` 4.87 billion at March 31, 2018. Other items for which the Bank is contingently liable decreased from ` 137.76 billion at March 31, 2018 to ` 98.75 billion at March 31, 2019 primarily due to pending settlement for purchase/sale of Government of India securities where settlement date method of accounting is followed in accordance with RBI guidelines. CAPITAL RESOURCES The Bank actively manages its capital to meet regulatory norms, current and future business needs and the risks in its businesses. The capital management framework of the Bank is administered by the Finance Group and the Risk Management Group under the supervision of the Board and the Risk Committee. The capital adequacy position and assessment is reported to the Board and the Risk Committee periodically. Regulatory capital The Bank is subject to the Basel III guidelines issued by RBI, effective from April 1, 2013, which are being implemented in a phased manner by March 31, 2020 as per the transitional arrangement provided by RBI for Basel III implementation. At March 31, 2019, the Bank was required to maintain a minimum Common Equity Tier-1 (CET1) capital ratio of 7.525%, minimum Tier-1 capital ratio of 9.025% and minimum total capital ratio of 11.025%. The minimum total capital requirement includes a capital conservation buffer of 1.875% and capital surcharge of 0.15% on account of the Bank being designated as a Domestic Systemically Important Bank (D-SIB). Under Pillar 1 of the RBI guidelines on Basel III, the Bank follows the standardised approach for measurement of credit risk, standardised duration method for measurement of market risk and basic indicator approach for measurement of operational risk. The following table sets forth the capital adequacy ratios computed in accordance with Basel III guidelines of RBI at March 31, 2018 and March 31, 2019. ` in billion, except percentages Basel III CET1 capital Tier-1 capital Tier-2 capital Total capital Credit Risk — Risk Weighted Assets (RWA) On balance sheet Off balance sheet Market Risk — RWA Operational Risk — RWA Total RWA Total capital adequacy ratio CET1 capital adequacy ratio Tier-1 capital adequacy ratio Tier-2 capital adequacy ratio 1 2 All amounts have been rounded off to the nearest ` 10.0 million. At March 31, 2018 915.87 At March 31, 20191 936.89 1,010.64 1,037.16 159.14 123.74 1,160.90 1,169.78 5,741.03 5,220.54 4,888.69 4,433.49 787.05 852.34 523.37 488.38 605.17 644.34 6,873.75 16.89% 13.63% 15.09% 1.80% 6,349.08 18.42% 14.43% 15.92% 2.50% Including retained earnings for fiscal 2019, post proposed mandatory appropriations and post appropriation of proposed dividend. At March 31, 2019, the Bank’s Tier-1 capital adequacy ratio was 15.09% as against the requirement of 9.03% and total capital adequacy ratio was 16.89% as against the requirement of 11.03%. 129 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSfunds Movement in the capital funds and risk weighted assets from March 31, 2018 to March 31, 2019 as per Basel III norms (net of deductions) decreased by Capital ` 8.88 billion from ` 1,169.78 billion at March 31, 2018 to ` 1,160.90 billion at March 31, 2019 primarily due to progressive discounting of Tier 2 capital instruments as per RBI extant guidelines and exercise of call option for Tier 2 capital instruments of ` 45.21 billion and innovative perpetual debt instrument of ` 5.00 billion, offset, in part, by inclusion of retained earnings for fiscal 2019 and issuance of Additional Tier 1 capital instruments of ` 11.40 billion during fiscal 2019. The mandatory appropriation towards Investment Fluctuation Reserve of ` 12.69 billion has been considered under Tier-2 capital. Credit risk RWA increased by ` 520.49 billion from ` 5,220.54 billion at March 31, 2018 to ` 5,741.03 billion at March 31, 2019 primarily due to an increase of ` 455.20 billion in RWA for on-balance sheet assets and an increase of ` 65.29 billion in RWA for off-balance sheet assets. On-balance sheet RWA increased primarily due to growth in advances during the year. Market risk RWA decreased by ` 34.99 billion from ` 523.37 billion at March 31, 2018 to ` 488.38 billion at March 31, 2019 primarily due to a decrease in value of equity investments, offset, in part, by an increase in RWA for fixed income securities. Operational risk RWA increased by ` 39.17 billion from ` 605.17 billion at March 31, 2018 to ` 644.34 billion at March 31, 2019. The operational risk capital charge is computed based on 15% of the average of the previous three financial years’ gross income and is revised on an annual basis at June 30. RWA is arrived at by multiplying the capital charge by 12.5. RWA as a percentage of average assets was 80.3% at March 31, 2019 (at March 31, 2018: 81.8%). Internal assessment of capital The capital management framework of the Bank includes a comprehensive internal capital adequacy assessment process conducted annually, which determines the level of capitalisation necessary to meet adequate regulatory norms and current and future business needs. Adequate stress testing, as determined by several stress scenarios is also done. The internal capital adequacy assessment process is undertaken at both the standalone bank level and the consolidated group level. The internal capital adequacy assessment process encompasses capital planning for a four-year time horizon, identification and measurement of material risks and the relationship between risk and capital. The capital management framework is complemented by the risk management framework, which covers the policies, processes, methodologies and frameworks established the management of material risks. Stress testing, which is a key aspect of the internal capital adequacy assessment process and the risk management for 130 insight into the framework, provides an impact of extreme but plausible scenarios on the Bank’s risk profile and capital position. Based on the stress testing framework approved by the Board, the Bank conducts stress tests on various portfolios and assesses the impact on the capital ratios and the adequacy of capital buffers for current and future periods. The Bank periodically assesses and refines its stress testing framework in an effort to ensure that the stress scenarios capture material risks as well as reflect possible extreme market moves that could arise as a result of market conditions and the operating environment. The business and capital plans and the stress testing results of certain key group entities are integrated into the internal capital adequacy assessment process. Based on the internal capital adequacy assessment process, the Bank determines the level of capital that needs to be maintained by considering the following in an integrated manner: • • • • • • strategic focus, business plan and growth objectives; regulatory capital requirements as per RBI guidelines; assessment of material stress testing; risks and impact of perception of shareholders and investors; future strategy with regard to divestments in subsidiaries; and investments or evaluation of options to raise capital from domestic and overseas markets, as permitted by RBI from time to time. The Bank continues to monitor relevant developments and believes that its current robust capital adequacy position and demonstrated track record of access to domestic and overseas markets for capital raising will enable it to maintain the necessary levels of capital as required by regulations while continuing to grow its business. LOAN CONCENTRATION The Bank follows a policy of portfolio diversification and evaluates its total financing exposure to a particular industry in the light of its forecasts of growth and profitability for that industry. The Bank’s Credit Risk Management Group monitors all major sectors of the economy and specifically tracks industries in which the Bank has credit exposures. The Bank monitors developments in various sectors to assess potential risks in its portfolio and new business opportunities. The Bank’s policy is to limit its exposure to any particular industry (other than retail loans) to 15.0% of its total exposure. In addition, the Bank has strengthened its framework for managing concentration risk with respect to single borrower and group exposures, based on the internal rating and track record of the borrowers. MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSThe following tables set forth, at the dates indicated, the composition of the Bank’s gross advances (net of write-offs). March 31, 2018 March 31, 2019 ` in billion, except percentages Particulars Total advances Retail finance1, 2 Services – finance Road, ports, telecom, urban development and other infrastructure Power Iron/steel and products Crude petroleum/refining and petrochemicals Wholesale/retail trade Services – non-finance Construction Electronics and engineering Mining Chemical and Fertilisers Food and beverages Cement Other industries3 Total ` 2,939.95 342.11 204.50 276.76 203.18 132.80 125.87 172.74 117.65 81.40 105.06 53.29 58.59 63.07 502.47 ` 5,379.45 % of total advances 54.7% 6.4 3.8 5.1 3.8 2.5 2.3 3.2 2.2 1.5 1.9 1.0 1.1 1.2 9.2 100.0% Total advances ` 3,619.36 456.24 287.11 201.60 167.24 156.74 152.42 145.51 120.66 101.00 78.65 66.12 56.03 33.83 547.34 ` 6,189.85 % of total advances 58.5% 7.4 4.6 3.3 2.7 2.5 2.5 2.4 1.9 1.6 1.3 1.1 0.9 0.5 8.8 100.0% 1 2 3 Includes home loans, automobile loans, commercial business loans, dealer financing and small ticket loans to small businesses, personal loans, credit cards, rural loans and loans against securities. Includes loans against FCNR deposits of ` 64.48 billion at March 31, 2019 (March 31, 2018: ` 15.48 billion). Other industries primarily include developer financing portfolio, gems and jewellery, metal and products (excluding iron and steel), textile, shipping, manufacturing products (excluding metal), automobiles, drugs and pharmaceuticals and FMCG. 4 All amounts have been rounded off to the nearest ` 10.0 million. The Bank’s capital allocation is focussed on higher growth in retail and rural lending and selective lending to the corporate sector with focus on an increase in lending to higher rated corporates and building a granular portfolio. Given the focus on the above priorities, gross retail finance advances (including loans against FCNR deposits) increased by 23.1% compared to an increase of 15.1% in total gross advances in fiscal 2019. As a result, the share of gross retail finance advances increased from 54.7% of gross advances at March 31, 2018 to 58.5% of gross advances at March 31, 2019. The following table sets forth, at the dates indicated, the composition of the Bank’s outstanding net advances: Particlars Advances - Domestic book - Retail - SME - Corporate - Overseas book At March 31, 2018 5,123.95 4,479.65 2,898.94 254.45 1,326.60 644.30 ` in billion At March 31, 2019 5,866.47 5,236.14 3,528.31 306.09 1,401.75 630.32 131 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSThe following table sets forth, at the dates indicated, the rating wise categorisation of the Bank’s outstanding net advances: Ratings category1,2 AA- and above A+, A, A- A- and above BBB+, BBB, BBB- BB and below3 Unrated Total Total net advances ` in billion, except percentages At March 31, 2018 42.4% 20.1 62.5 27.5 9.4 0.6 100.0% 5,123.95 At March 31, 2019 45.1% 22.0 67.1 28.2 4.5 0.2 100.0% 5,866.47 1 Based on internal ratings. 2 For retail loans, ratings have been undertaken at the product level. 3 Includes net non-performing loans The exposure to top 20 borrowers (excluding banks) as a percentage of total exposure decreased from 12.5% at March 31, 2018 to 10.8% at March 31, 2019. The proportion of exposure to borrowers internally rated A- and above in top 20 borrowers (excluding banks) increased from 96.0% at March 31, 2018 to 100.0% at March 31, 2019. The exposure to top 10 borrower groups decreased from 14.3% at March 31, 2018 to 13.6% at March 31, 2019. The following table sets forth, at the dates indicated, the composition of the Bank’s gross (net of write-offs) outstanding retail finance portfolio. Particulars Home loans Rural loans Automobile loans Personal loans (unsecured) Business banking1 Commercial business Credit cards (unsecured) Others2,3 Total retail finance portfolio3 March 31, 2018 March 31, 2019 ` in billion, except percentages Total retail advances ` 1,505.43 443.06 294.91 211.82 175.24 173.18 96.39 39.92 ` 2,939.95 % of total retail advances 51.2% 15.1 10.0 7.2 6.0 5.9 3.3 1.3 100.0% Total retail advances ` 1,784.11 511.19 318.80 314.63 236.62 227.20 126.90 99.91 ` 3,619.36 % of total retail advances 49.3% 14.1 8.8 8.7 6.5 6.3 3.5 2.8 100.0% Includes dealer financing and small ticket loans to small businesses. Includes loans against securities Includes loans against FCNR deposits of ` 64.48 billion at March 31, 2019 (March 31, 2018: ` 15.48 billion). 1 2 3 4 All amounts have been rounded off to the nearest ` 10.0 million. DIRECTED LENDING RBI requires banks to lend to certain sectors of the economy. Such directed lending comprises priority sector lending and export credit. Priority Sector Lending and Investment The RBI guidelines on priority sector lending require banks to lend 40.0% of their adjusted net bank credit (ANBC), to fund certain types of activities carried out by specified borrowers. The definition of ANBC includes bank credit in India adjusted by bills rediscounted with RBI and other approved institutions including Priority Sector and certain investments financial Lending Certificates (PSLCs) and investments in Rural Infrastructure Development Fund and other specified funds on account of priority sector shortfall and is computed with reference to the outstanding amount at corresponding date of the preceding year as prescribed by the RBI guidelines titled ‘Master Direction – Priority Sector Lending – Targets and Classification’. Further, the RBI allows exclusion from ANBC for loans extended in India against incremental foreign currency non-resident (bank)/non-resident external deposits during specified period and funds raised by way of issue of long-term bonds for financing infrastructure and low-cost housing, subject to certain limits. 132 MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSAs prescribed by RBI’s Master Direction on ‘Priority Sector Lending - Targets and Classification’ dated July 7, 2016, the priority sectors include categories such as agriculture, micro, small and medium enterprises, education, housing, social infrastructure, renewable energy and export credit. Out of the overall target of 40.0%, banks are required to lend a minimum of 18.0% of their ANBC to the agriculture sector. Sub-targets of 8.0% for lending to small & marginal farmers (out of agriculture) and 7.5% lending target to micro-enterprises were introduced from fiscal 2016. RBI has directed banks to maintain direct lending to non-corporate farmers at the banking system’s average level for the last three years, failing which banks will attract penalties for shortfall. RBI would notify the banks of the banking system’s average level at the beginning of each year. RBI notified a target level of 11.99% of ANBC for this purpose for fiscal 2019. The banks are also required to lend 10.0% of their ANBC to certain borrowers under the ‘weaker section’ category. Priority sector lending achievement is evaluated on a quarterly average basis from fiscal 2017 instead of only at the year-end. The Bank is required to comply with the priority sector lending requirements prescribed by RBI from time to time. The shortfall in the amount required to be lent to the priority sectors and weaker sections may be required to be deposited in funds with government sponsored Indian development banks like the National Bank for Agriculture and Rural Development, the Small Industries Development Bank of India, the National Housing Bank, MUDRA Limited and other institutions as decided by the RBI from time to time. These deposits have a maturity of up to seven years and carry interest rates lower than market rates. At March 31, 2019, the Bank’s total investment in such bonds was ` 292.55 billion, which was fully eligible for consideration in overall priority sector lending achievement. financial As prescribed in the RBI guideline, the Bank’s priority sector lending achievement is computed on a quarterly average basis from fiscal 2017 onwards. Total average priority sector lending for fiscal 2019 was ` 1,891.65 billion (fiscal 2018: ` 1,500.78 billion) constituting 41.5% (fiscal 2018: 37.7%) of ANBC, against the requirement of 40.0% of ANBC. The average lending to the agriculture sector was ` 749.77 billion (fiscal 2018: ` 587.55 billion) constituting 16.5% (fiscal 2018: 14.8%) of ANBC against the requirement of 18.0% of ANBC. The average advances to weaker sections were ` 403.47 billion (fiscal 2018: ` 246.63 billion) constituting 8.9% (fiscal 2018: 6.2%) of ANBC against the requirement of 10.0% of ANBC. Average lending to small and marginal farmers was ` 307.73 billion (fiscal 2018: ` 170.72 billion) constituting 6.8% (fiscal 2018: 4.3%) of ANBC against the requirement of 8.0% of ANBC. The average lending to micro enterprises was ` 360.10 billion (fiscal 2018: ` 266.32 billion) constituting 7.9% (fiscal 2018: 6.7%) of ANBC against the requirement of 7.5% of ANBC. The average lending to non-corporate farmers was ` 496.10 billion (fiscal 2018: ` 352.03 billion) constituting 10.9% (fiscal 2018: 8.9%) of ANBC against the requirement of 11.99% of ANBC (11.78% for fiscal 2018). The above includes the impact of PSLCs purchased/sold by the Bank. CLASSIFICATION OF LOANS its assets as performing and The Bank classifies non-performing in accordance with RBI guidelines. Under RBI guidelines, an asset is generally classified as non-performing if any amount of interest or principal remains overdue for more than 90 days in respect of term loans. In respect of overdraft or cash credit, an asset is classified as non-performing if the account remains out of order for a period of 90 days and in respect of bills, if the account remains overdue for more than 90 days. RBI guidelines also require an asset to be classified as non-performing based on certain other criteria like restructuring of a loan, inability of a borrower to complete a project funded by the Bank within stipulated timelines and certain other non-financial parameters. In respect of borrowers where loans and advances made by overseas branches are identified as impaired as per host country regulations for reasons other than record of recovery, but which are standard as per RBI guidelines, the amount outstanding in the host country is classified as non-performing. RBI has separate guidelines for classification of loans for projects under implementation, which are based on the date of commencement of commercial production and date of completion of the project as originally envisaged at the time of financial closure. For infrastructure projects, a loan is classified as non-performing if it fails to commence commercial operations within two years from the documented date of commencement and for non-infrastructure projects, the loan is classified as non-performing if it fails to commence operations within 12 months the documented date of such commencement. from RBI also has separate guidelines for restructured loans. Upto March 31, 2015, a fully secured standard asset could be restructured by re-scheduling of principal repayments and/or the interest element, but had to be separately disclosed as a restructured asset. The diminution in the fair value of the restructured loan, if any, measured in present value terms, was either written off or a provision was made to the extent of the diminution involved. Similar guidelines applied for restructuring of sub-standard loans. Loans restructured after April 1, 2015 (excluding loans given for implementation of projects in infrastructure sector and non-infrastructure sector and which are delayed up to a specified period) by re-scheduling of principal repayments and/or the interest element are classified as non-performing. For such loans, the diminution in the fair value of the loan, if any, measured in present value terms, has to be provided for in addition to the provisions applicable to non-performing loans. the 133 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSThe following table sets forth, at the dates indicated, information regarding asset classification of the Bank’s gross non-performing assets (net of write-offs, interest suspense and derivative income reversals). Particulars Non-performing assets Sub-standard assets Doubtful assets Loss assets Total non-performing assets1 March 31, 2018 March 31, 2019 ` in billion ` 75.51 450.03 15.09 ` 540.63 ` 52.98 385.24 24.70 ` 462.92 Include advances, lease receivables and credit substitutes like debentures and bonds. Excludes preference shares. 1 2 All amounts have been rounded off to the nearest ` 10.0 million. The following table sets forth, at the dates indicated, information regarding the Bank’s non-performing assets (NPAs). Particulars Gross NPA1 Net NPA March 31, 2016 March 31, 2017 March 31, 2018 March 31, 2019 1 Net of write-offs, interest suspense and derivatives income reversal. 2 3 All amounts have been rounded off to the nearest ` 10.0 million. ` 267.21 ` 425.52 ` 540.63 ` 462.92 Include advances, lease receivables and credit substitutes like debentures and bonds. Excludes preference shares. ` in billion, except percentages Net customer assets ` 4,972.29 ` 5,209.52 ` 5,848.78 ` 6,580.34 % of net NPA to net customer assets2 2.67% 4.89% 4.77% 2.06% ` 132.97 ` 254.51 ` 278.86 ` 135.77 The following table sets forth, at March 31, 2018 and March 31, 2019, the composition of gross non-performing assets (net of write-offs) by industry sector. Particulars Retail finance1 Power Mining Construction Iron/steel and products Road, ports, telecom, urban development and other infrastructure Services – non-finance Crude petroleum/refining and petrochemicals Electronics and engineering Food and beverages Shipping Wholesale/retail trade Manufacturing products (excluding metal) Services – finance Metal & products (excluding iron & steel) Other industries2 Total March 31, 2018 Amount ` 47.14 105.35 89.72 59.65 68.54 26.90 47.71 18.37 15.47 6.72 11.75 6.20 8.83 - - 28.28 ` 540.63 % 8.7% 19.5 16.6 11.0 12.7 5.0 8.8 3.4 2.9 1.2 2.2 1.1 1.6 - - 5.3 100.0% ` in billion, except percentages March 31, 2019 Amount ` 60.22 72.98 64.08 52.77 41.54 28.35 29.74 18.90 16.90 15.97 10.64 9.38 5.77 3.33 0.10 32.25 ` 462.92 % 13.0% 15.8 13.8 11.4 9.0 6.1 6.4 4.1 3.6 3.4 2.3 2.0 1.2 0.7 - 7.2 100.0% 1 2 Includes home loans, automobile loans, commercial business loans, dealer financing and small ticket loans to small businesses, personal loans, credit cards, rural loans and loans against securities. Other industries primarily include textile, chemical and fertilizers, gems and jewellery, drugs and pharmaceuticals, FMCG, automobiles and developer financing. 3 All amounts have been rounded off to the nearest ` 10.0 million. 134 MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS for the sector, The operating environment Indian banks had remained challenging for the past few years particularly due to the stress in the Indian corporate sector. The Indian corporate sector has experienced a prolonged period of muted growth in sales and profits. Several challenges impacted including an elongation of working capital cycles and a high level of receivables, including from the government, significant challenges in project completion and cash flow generation due to policy changes, delays in approvals like clearances on environment and land, judicial decisions like the deallocation of coal mines, significant decline in global commodity prices in fiscal 2015 and fiscal 2016 and adjustments to structural reforms such as demonetisation and Goods & Services Tax. These challenges resulted in lower than projected cash flows and the progress in reducing leverage in the corporate sector remained slow. As a result, there was a substantial increase in the level of additions to non-performing loans, including slippages from restructured loans, into non-performing status for the banking sector and the Bank from fiscal 2016. Further, the revised framework for resolution of stressed assets, released by RBI in February 2018, further accelerated the recognition of stressed accounts as non-performing in fiscal 2018. Subsequently, the additions to non-performing loans in the banking system declined sharply during fiscal 2019. During fiscal 2019, a few large accounts referred under the Insolvency and Bankruptcy Code were resolved. However, challenges emerged in some sectors and specific corporates/promoter groups towards the later part of the year. The gross additions to NPAs were ` 171.13 billion in fiscal 2016, ` 335.44 billion in fiscal 2017 and ` 287.30 billion in fiscal 2018. The gross additions to NPAs decreased significantly to ` 110.39 billion in fiscal 2019. In fiscal 2019, additions to gross NPAs were primarily in the food and beverages, services-non finance and mining sectors. In fiscal 2019, the Bank recovered/upgraded non-performing assets amounting to ` 47.16 billion, wrote-off non-performing assets amounting to ` 112.49 billion and sold non-performing assets amounting to ` 28.45 billion. As a result, gross NPAs (net of write-offs) of the Bank decreased from ` 540.63 billion at March 31, 2018 to ` 462.92 billion at March 31, 2019. Net NPAs decreased from ` 278.86 billion at March 31, 2018 to ` 135.77 billion at March 31, 2019. The ratio of net NPAs to net customer assets decreased from 4.77% at March 31, 2018 to 2.06% at March 31, 2019. At March 31, 2019, gross non-performing loans in the retail portfolio were 1.69% of gross retail loans compared to 1.61% at March 31, 2018 and net non-performing loans in the retail portfolio were 0.72% of net retail loans compared to 0.65% at March 31, 2018. The provision coverage ratio at March 31, 2019 including cumulative technical/prudential write-offs was 80.7% (March 31, 2018: 60.5%). Excluding cumulative technical/prudential write-offs, the provision coverage ratio was 70.6% (March 31, 2018: 47.7%). The total non-fund based outstanding to borrowers classified as non-performing was ` 42.20 billion (March 31, 2018: ` 29.80 billion). The Bank held a provision of ` 15.91 billion at March 31, 2019 (March 31, 2018: ` 3.46 billion) against these non-fund based outstanding. The gross outstanding loans to borrowers whose facilities have been restructured decreased from ` 15.95 billion at March 31, 2018 to ` 3.49 billion at March 31, 2019 billion at March 31, 2018 primarily due to upgradation from standard restructured category to standard category of ` 10.40 billion. The net outstanding loans to borrowers whose facilities have been restructured decreased from 15.53 billion at March 31, 2018 to ` 3.21 billion at March 31, 2019. The aggregate non-fund based outstanding to borrowers whose loans were restructured was ` 2.15 billion at March 31, 2019 (March 31, 2018: ` 3.96 billion). At March 31, 2019 the Bank had performing loans of ` 6.24 billion where S4A had been implemented and performing loans of ` 19.14 billion where 5/25 scheme had been implemented. The aggregate non-fund based outstanding to these borrowers (where S4A had been implemented) was ` 15.39 billion. In addition to the above, at March 31, 2019, the outstanding loans and non-fund facilities to borrowers in the corporate and small and medium enterprises portfolio rated BB and below were ` 175.25 billion, which included ` 42.20 billion of non-fund outstanding to borrowers classified as NPA. The Bank, in its previous Annual Report for 2018, had reported on the various steps and measures taken pursuant to its becoming aware in March 2018 of an anonymous whistleblower complaint alleging incorrect asset classifications stemming from claimed irregular transactions in borrower accounts, incorrect accounting of interest income and NPA recoveries as fees, and overvaluation of collateral securing corporate loans. As previously reported, the Bank, at the direction of the Audit Committee and with the assistance of external counsel, is continuing to investigate all of the allegations made in the complaint. The Bank has an established process whereby all whistleblower complaints and matters escalated to senior management are investigated for appropriate action, including an assessment of the impact on financial statements, if any. In addition, as a large and internationally active bank, with operations and listing of its equity and debt instruments in multiple jurisdictions, the Bank is regularly engaged with regulators, including the United States Securities and Exchange Commission (‘SEC’), on a range of matters, including regarding the March 2018 complaint. Even before this complaint, the Bank has been responding to requests for information from the SEC investigatory staff regarding an enquiry relating to the timing and amount of the Bank’s loan impairment provisions taken under U.S. GAAP. The Bank evaluates loans for impairment under U.S. GAAP for the purpose 135 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSof preparing the annual footnote reconciling the Bank’s Indian GAAP financial statements to U.S. GAAP. The Bank has voluntarily complied with all requests of the SEC investigatory staff for information and continues to cooperate with the SEC on the matter. SEGMENT INFORMATION RBI, in its guidelines on ‘segmental reporting’, has their stipulated specified business segments and definitions, for the purposes of public disclosures on business information for banks in India. The standalone segmental report for fiscal 2019, based on the segments identified and defined by RBI, has been presented as follows: • • • • Retail Banking includes exposures of the Bank, which satisfy the four qualifying criteria of ‘regulatory retail portfolio’ as stipulated by RBI guidelines on the Basel III framework. Wholesale Banking includes all advances to trusts, partnership firms, companies and statutory bodies, by the Bank, which are not included in the Retail Banking segment, as per RBI guidelines for the Bank. Treasury includes portfolio of the Bank. the entire investment Other Banking includes leasing operations and other items not attributable to any particular business segment of the Bank. Framework for transfer pricing All liabilities are transfer priced to a central treasury unit, which pools all funds and lends to the business units at appropriate rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve requirements and directed lending requirements. Retail banking segment The profit before tax of the segment increased by 15.2% from ` 71.41 billion in fiscal 2018 to ` 82.23 billion in fiscal 2019 primarily due to an increase in net interest income and non-interest income, offset, in part, by an increase in non-interest expenses and provisions. Net interest income increased by 17.7% from ` 134.48 billion in fiscal 2018 to ` 158.28 billion in fiscal 2019 primarily due to growth in average loan portfolio and an increase in average deposits. Non-interest income increased by 15.9% from ` 65.72 billion in fiscal 2018 to ` 76.15 billion in fiscal 2019 income from primarily due to an increase credit card portfolio, transaction banking fees and lending linked fees. in fee increased by 16.3% from Non-interest expenses ` 121.34 billion in fiscal 2018 to ` 141.16 billion in fiscal 2019 primarily due to an increase in employee cost and other administrative expenses reflecting an increase in business volume. 136 While the provision as a percentage of retail loan portfolio continues to remain low for the Bank, the provisions (net of write-back) increased by 48.2% from ` 7.45 billion in fiscal 2018 to ` 11.04 billion in fiscal 2019 primarily due to an increase in retail loan portfolio and a change in composition. The provision also included the impact of provision on farmer finance. Wholesale banking segment The loss (before tax) of the segment increased from ` 82.81 billion in fiscal 2018 to ` 102.42 billion in fiscal 2019 primarily due to an increase in provisions, offset, in part, by an increase in net interest income. Net interest income increased by 20.3% from ` 60.97 billion in fiscal 2018 to ` 73.36 billion in fiscal 2019 primarily due to an increase in loan portfolio, an increase in average deposits and higher interest collection on non-performing assets during fiscal 2019. Non-interest income increased by 12.4% from ` 35.91 billion in fiscal 2018 to ` 40.38 billion in fiscal 2019. Provisions increased from ` 146.68 billion in fiscal 2018 to ` 181.52 billion in fiscal 2019 primarily due to additional provisions on cases classified as NPAs in earlier periods, provision on non-fund based facilities and provision on non-banking assets acquired under debt-asset swap. Treasury segment The profit before tax of the segment decreased by 36.3% from ` 81.14 billion in fiscal 2018 to ` 51.65 billion in fiscal 2019 primarily due to a decrease in non-interest income, offset, in part, by a decrease in provision on investments. ` from income decreased Non-interest 71.70 billion in fiscal 2018 to ` 27.71 billion in fiscal 2019. Non-interest income of fiscal 2018 included gain on sale of equity shares of ICICI Lombard General Insurance Company Limited of ` 20.12 billion (before tax and after IPO expenses) and ICICI Securities Limited of ` 33.20 billion (before tax and after IPO expenses) through IPO. Non-interest income of fiscal 2019 included gain on sale of equity shares of ICICI Prudential Life Insurance Company Limited of ` 11.10 billion (before tax and after IPO expenses) through an offer for sale. Gain on government securities and other fixed income positions was higher in fiscal 2018 as compared to fiscal 2019 primarily due to higher realised gains. Provisions decreased from ` 18.87 billion in fiscal 2018 to ` 3.71 billion in fiscal 2019 primarily due to recovery towards bonds, which were fully provided in earlier years and lower provision on equity shares. Other banking segment Profit before tax of other banking segment increased from ` 4.60 billion in fiscal 2018 to ` 6.31 billion in fiscal 2019 primarily due to an increase in net interest income. Net interest income increased from ` 4.30 billion in fiscal 2018 to ` 6.53 billion in fiscal 2019 primarily due to an increase in interest on income tax refund. Interest on income tax refund increased from ` 2.63 billion in fiscal 2018 to ` 4.48 billion in fiscal 2019. MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSCONSOLIDATED FINANCIALS AS PER INDIAN GAAP From April 1, 2018, certain group companies (ICICI Securities Limited, ICICI Securities Primary Dealership Limited, ICICI Prudential Asset Management Company and ICICI Home Finance Company) have adopted Ind AS. However, for preparation of consolidated financial statements of the Bank, financial statements as per Indian GAAP for these entities have been considered. The consolidated profit after tax decreased by 44.8% from ` 77.12 billion in fiscal 2018 to ` 42.54 billion in fiscal 2019 primarily due to a decrease in the profit of ICICI Bank, ICICI Prudential Life Insurance and loss incurred by ICICI Bank UK PLC, offset, in part, by an increase in profit of ICICI Lombard General Insurance. The consolidated assets of the Bank and its subsidiaries and other consolidating entities from ` 11,242.81 billion at March 31, 2018 to ` 12,387.94 billion at March 31, 2019. Consolidated advances increased from ` 5,668.54 billion at March 31, 2018 to ` 6,469.62 billion at March 31, 2019. increased At March 31, 2019, the consolidated Tier-1 capital adequacy ratio was 14.73% as against the minimum requirement of 9.025% and total consolidated capital adequacy ratio was 16.47% as against the minimum requirement of 11.025%. ICICI PRUDENTIAL LIFE INSURANCE COMPANY (ICICI LIFE) ICICI Life offers a range of products within the protection and savings category. ICICI Life’s market share was 17.7% in fiscal 2019 based on new business written premium (on a retail weighted new business premium basis) according to the Life Insurance Council. The Value of New Business (VNB) margin was 17.0% for fiscal 2019 compared to 16.5% for fiscal 2018. The company’s VNB increased from ` 12.86 billion for fiscal 2018 to ` 13.28 billion for fiscal 2019. ICICI Life’s total premium grew by 14.3% from ` 270.69 billion in fiscal 2018 to ` 309.30 billion in fiscal 2019. Annualised Premium Equivalent (APE) from the protection business increased by 61.9% from ` 4.46 billion in fiscal 2018 to ` 7.22 billion in fiscal 2019 and it accounts for 9.33% of overall APE for fiscal 2019. In fiscal 2019, the protection business contributed over 20% of new business premium received. The post-dividend Embedded Value grew by 15.1% from ` 187.88 billion at March 31, 2018 to ` 216.23 billion at March 31, 2019. The total assets under management of ICICI Life stood at ` 1,604.10 billion at March 31, 2019. Net premium earned increased from ` 268.11 billion in fiscal 2018 to ` 305.79 billion in fiscal 2019. The profit after tax decreased from ` 16.20 billion in fiscal 2018 to ` 11.41 billion in fiscal 2019 primarily due to higher new business strain resulting from the new business growth of protection business. ICICI LOMBARD GENERAL INSURANCE COMPANY (ICICI GENERAL) ICICI General is among the large private sector general insurance companies in India. ICICI General’s overall market share was 8.5% during fiscal 2019 on the basis of gross direct premium according to the General Insurance Council of India. The Gross Domestic Premium Income of ICICI General increased by 17.2% year-on-year to ` 144.88 billion in fiscal 2019. The company’s combined ratio improved to 98.5% in fiscal 2019 from 100.2% in fiscal 2018. The return on equity increased to 21.3% in fiscal 2019 as against 20.8% in fiscal 2018. The solvency ratio at March 31, 2019 was 224.0% against the minimum regulatory requirement of 150.0%. The number of policies issued increased to 26.5 million in fiscal 2019 compared to 23.5 million policies in fiscal 2018. Net earned premium increased from ` 69.12 billion in fiscal 2018 to ` 83.75 billion in fiscal 2019 primarily due to an increase in motor, health and personal accident insurance business. The profit after tax increased from ` 8.62 billion in fiscal 2018 to ` 10.49 billion in fiscal 2019 primarily due to an increase in net earned premium, offset, in part, by an increase in claims and benefits paid and tax expenses. ICICI PRUDENTIAL ASSET MANAGEMENT COMPANY (ICICI PRUDENTIAL AMC) ICICI Prudential AMC is India’s leading asset manager with average quarterly assets under management (AUM) of ` 3,207.93 billion at March 31, 2019. The company’s overall market share in the domestic mutual fund business was 13.1% on a quarterly average basis. At March 31, 2019, the quarterly average equity mutual fund AUM (excluding exchange traded funds) managed by the company was ` 1,376.42 billion with a market share of 14.3%. Indian GAAP, the profit after tax of As per ICICI Prudential AMC increased from ` 6.26 billion in fiscal 2018 to ` 6.87 billion in fiscal 2019 primarily due to an increase in fee income, offset, in part, by an increase in staff cost. During fiscal 2019, ICICI Prudential AMC has paid a compensation to certain schemes and its investors amounting to ` 1.09 billion, in relation to certain investments made by the relevant schemes. This compensation was made based on an advice received from the regulators. is a leading retail broking ICICI SECURITIES LIMITED (ICICI SECURITIES) ICICI Securities firm. The company has a leadership position in the equity brokerage space with over 4.4 million operational accounts. Its customers have access to high quality research and advisory services, backed by a robust technology platform financial goals. to meet In the distribution business, ICICI Securities is the second largest non-bank mutual fund distributor with assets under management of over ` 347.00 billion. The company their 137 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSalso sells other financial products like National Pension Scheme, life, health and general insurance, sovereign gold bonds, corporate fixed deposits, etc. through a network of close to 200 branches in more than 75 cities and a network of sub-brokers and ICICI Bank branches. As per Indian GAAP, the consolidated profit after tax of ICICI Securities Limited and its subsidiaries decreased from ` 5.58 billion in fiscal 2018 to ` 4.95 billion in fiscal 2019 primarily due to a decrease in brokerage income on account of a decrease in equity delivery volumes and a decrease in third party product distribution fees. ICICI SECURITIES PRIMARY DEALERSHIP (I-SEC PD) I-Sec PD maintained its leading position in auction bidding and underwriting as well as in secondary market trading activity in fiscal 2019. The company remained profitable, despite the spike in yields during the year. I-Sec PD managed multiple corporate debt placements in fiscal 2019 and was ranked 5th in the PRIME League Tables. The company is empanelled as one of the fund managers managing the corpus of both the Employee Provident Fund Organisation, India’s largest retirement fund, and the Coal Mines Provident Fund, India’s second largest fund. As per Indian GAAP, the profit after tax of I-Sec PD decreased from ` 1.12 billion in fiscal 2018 to ` 0.61 billion in fiscal 2019 primarily due to a decrease in trading gains. Trading gains decreased primarily due to an increase in yield on government securities. During fiscal 2019, yield on 10-year government securities increased by 9 basis points. to its ICICI HOME FINANCE COMPANY (ICICI HFC) ICICI HFC is primarily engaged in providing retail mortgage loans to individuals. It also provides property search services individual and corporate customers. The Company is registered as a housing finance company with National Housing Bank (NHB). During fiscal 2019, the company diversified its liability portfolio by raising funds through external commercial borrowings of ` 19.66 billion, refinance line from NHB of ` 10.00 billion and also increased its fixed deposit portfolio to ` 10.49 billion. The company disbursed total loans amounting to ` 63.33 billion during the year, including buy-out of portfolios from other housing finance companies. This led to a 37% growth in its loan book to ` 133.33 billion at March 31, 2019. As per Indian GAAP, the profit after tax of ICICI HFC decreased from ` 0.64 billion in fiscal 2018 to ` 0.28 billion in fiscal 2019 primarily due to an increase in staff costs and other administrative expenses. Net NPAs increased from ` 2.04 billion at March 31, 2018 to ` 2.71 billion at March 31, 2019 primarily due to addition to NPAs in Construction Realty Finance (CRF) portfolio. ICICI VENTURE FUNDS MANAGEMENT COMPANY (ICICI VENTURE) ICICI Venture concluded eight new investments with an aggregate capital outlay of over USD 565.0 million across IAF Series 4, iREIF, AION (a strategic partnership between 138 ICICI Venture and Apollo Global Management in the area of special situations) and Resurgent (a power platform company co-sponsored by ICICI Venture and Tata Power). ICICI Venture also concluded nine full or partial exits across various funds for an aggregate realisation of about USD 300.0 million. During fiscal 2019, subsequent closings of its third real estate fund iREIF were concluded taking the total commitment beyond the target fund size of ` 5.0 billion to ` 5.25 billion, thereby triggering the green shoe option. The profit after tax of ICICI Venture Fund Management Company Limited increased from ` 0.11 billion in fiscal 2018 to ` 0.70 billion in fiscal 2019 primarily due to an increase in income from venture capital units, offset, in part, by an increase in staff cost and a decrease in management fees. ICICI BANK CANADA The profit after tax of ICICI Bank Canada increased from CAD 44.2 million (` 2.22 billion) in fiscal 2018 to CAD 52.4 million (` 2.79 billion) in fiscal 2019 primarily due to an increase in net interest income, fee income and higher write-back of provisions, offset, in part, by loss on foreign exchange and an increase in operating expenses. ICICI Bank Canada’s return on average net worth was 9.40% in fiscal 2019 as compared to 6.90% in fiscal 2018. At March 31, 2019, ICICI Bank Canada had total assets of CAD 6.63 billion compared to CAD 6.32 billion at March 31, 2018. Net NPAs increased from nil at March 31, 2018 to CAD 9.3 million (` 0.48 billion) at March 31, 2019. ICICI Bank Canada had a total capital adequacy ratio of 17.1% at March 31, 2019 as against 17.3% at March 31, 2018. ICICI Bank Canada has distributed common share dividends of CAD 25.6 million in fiscal 2019 compared to CAD 21.6 million in fiscal 2018. ICICI BANK UK PLC (ICICI BANK UK) The operating income of ICICI Bank UK was USD 79.8 million for fiscal 2019, compared to USD 83.2 for fiscal 2018, primarily due to a decrease in non-interest income and loss on sale of financial assets, offset, in part, by an increase in net interest income. Loss of ICICI Bank UK increased from US$ 25.5 million (` 1.65 billion) in fiscal 2018 to US$ 52.9 million (` 3.71 billion) in fiscal 2019 primarily due to higher specific provisions on non-performing loans. At March 31, 2019, ICICI Bank UK had total assets of USD 3.84 billion compared to USD 3.88 billion at March 31, 2018. Net NPAs decreased from US$ 194.0 million (` 12.64 billion) at March 31, 2018 to US$ 63.1 million (` 4.36 billion) at March 31, 2019. There was an improvement in the company’s gross impairment ratio to 8.3% and net impairment ratio to 2.6% in fiscal 2019 compared to 13.0% and 8.2%, respectively, in fiscal 2018. ICICI Bank UK had a capital adequacy ratio of 16.8% at March 31, 2019 compared to 16.5% at March 31, 2018. MANAGEMENT’S DISCUSSION & ANALYSISANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSThe following table sets forth, for the periods and at the dates indicated, the profit/(loss) and total assets of our principal subsidiaries. Profit after tax Total assets1 ` in billion Company Fiscal 2018 Fiscal 2019 ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Securities Limited (consolidated) ICICI Bank Canada ICICI Venture Funds Management Company Limited ICICI Securities Primary Dealership Limited ICICI Home Finance Company Limited ICICI Bank UK PLC 1 ` 16.20 8.62 6.26 5.58 2.22 0.11 1.12 0.64 ` (1.65) ` 11.41 10.49 6.87 4.95 2.79 0.70 0.61 0.28 ` (3.71) At March 31, 2018 ` 1,417.24 297.41 11.29 28.49 319.93 3.31 172.10 100.60 ` 253.96 At March 31, 2019 ` 1,629.32 334.02 13.10 46.51 341.61 3.07 115.93 138.83 ` 266.43 Total assets are as per classification used in the consolidated financial statements and hence the total assets as per subsidiary’s financial statements may differ. 2 See also ‘Financials- Statement pursuant to Section 129 of the Companies Act, 2013’. 3 All amounts have been rounded off to the nearest ` 10.0 million. MIGRATION TO INDIAN ACCOUNTING STANDARDS (IND AS) Banks in India currently prepare their financial statements as per the guidelines issued by RBI, the Accounting Standards notified under section 133 of the Companies Act, 2013 and generally accepted accounting principles in India (Indian GAAP). In January 2016, the Ministry of Corporate Affairs issued the roadmap for implementation of new Indian Accounting Standards (Ind AS), which were based on convergence with the International Financial Reporting Standards (IFRS), for scheduled commercial banks, insurance companies and non-banking financial companies (NBFCs). In March 2019, RBI deferred the implementation of Ind AS for banks till further notice as the recommended legislative amendments were under consideration of Government of India. accounting, The key impact areas for the Bank include accounting of instruments, employee stock options, financial and consolidation implementation of technology systems. Of these, the accounting of financial assets differs significantly from Indian GAAP in many areas, which include classification, fair valuation, expected credit losses, effective interest rate accounting and derecognition. deferred tax The Bank is in the process of implementing a centralised system solution to cater to Ind AS specific accounting requirements in certain areas such as effective interest rate accounting and expected credit loss. For implementation of Ind AS, the Bank has formed a Steering Committee, which meets regularly to supervise the progress of the project. An update on the implementation status is also submitted to the Audit Committee at quarterly intervals. 139 ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTSKEY FINANCIAL INDICATORS: LAST 10 YEARS 0 2 . 9 2 5 , 6 7 4 . 6 6 8 , 5 8 6 . 3 8 0 , 1 9 5 . 4 4 6 , 9 2 % 9 . 6 1 2 7 . 0 2 2 5 1 . 0 7 2 % 2 4 . 3 3 6 . 3 3 3 2 . 5 7 1 . 5 % 2 . 3 0 0 . 1 ) s e g a t n e c r e p d n a a t a d e r a h s r e p t p e c x e , n o i l l i b n i ` ( 9 1 0 2 8 1 0 2 7 1 0 2 6 1 0 2 5 1 0 2 4 1 0 2 3 1 0 2 2 1 0 2 1 1 0 2 0 1 0 2 5 7 . 9 0 6 , 5 9 3 . 0 0 9 , 4 6 2 . 4 1 2 , 4 3 6 . 5 1 6 , 3 4 1 . 9 1 3 , 3 4 1 . 6 2 9 , 2 0 0 . 5 5 5 , 2 2 0 . 6 5 2 , 2 7 1 . 0 2 0 , 2 5 9 . 3 2 1 , 5 2 3 . 2 4 6 , 4 4 6 . 2 5 3 , 4 2 2 . 5 7 8 , 3 3 0 . 7 8 3 , 3 9 4 . 2 0 9 , 2 8 2 . 7 3 5 , 2 6 6 . 3 6 1 , 2 6 0 . 2 1 8 , 1 s t i s o p e d l a t o T s e c n a v d a l a t o T 140 9 5 . 1 5 0 , 1 1 5 . 9 9 9 6 3 . 7 9 8 9 2 . 4 0 8 3 1 . 2 3 7 6 0 . 7 6 6 5 0 . 4 0 6 1 9 . 0 5 5 8 1 . 6 1 5 s e v r e s e r & l a t i p a c y t i u q E 9 8 . 1 9 7 , 8 1 9 . 7 1 7 , 7 5 9 . 6 0 2 , 7 9 2 . 1 6 4 , 6 2 4 . 6 4 9 , 5 5 9 . 7 6 3 , 5 9 6 . 0 9 8 , 4 4 3 . 2 6 0 , 4 0 0 . 4 3 6 , 3 s t e s s a l a t o T 2 % 4 . 8 1 2 % 4 . 7 1 2 % 6 . 6 1 2 % 0 . 7 1 2 % 7 . 7 1 1 % 7 . 8 1 1 % 5 . 8 1 1 % 5 . 9 1 1 % 4 . 9 1 o i t a r y c a u q e d a l a t i p a c l a t o T 9 3 . 9 8 1 0 1 . 9 7 1 3 0 . 8 9 1 7 2 . 0 8 1 7 7 . 5 5 1 4 0 . 7 2 1 9 9 . 3 0 1 3 6 . 2 9 6 2 . 0 3 2 7 3 . 7 1 2 4 2 . 2 1 2 0 4 . 0 9 1 5 7 . 4 6 1 6 6 . 8 3 1 4 3 . 7 0 1 7 1 . 0 9 1 5 . 5 8 4 1 . 1 8 t i f o r p g n i t a r e p o e r o C e m o c n i t s e r e t n i t e N % 3 2 . 3 % 5 2 . 3 % 9 4 . 3 % 8 4 . 3 % 3 3 . 3 % 1 1 . 3 % 3 7 . 2 % 4 6 . 2 % 9 4 . 2 i n g r a m t s e r e t n i t e N 7 7 . 7 6 6 5 . 0 1 6 4 . 0 1 % 6 . 6 0 5 . 1 1 0 . 8 9 1 3 . 5 1 5 2 . 5 1 6 2 . 7 9 3 2 . 5 1 4 1 . 5 1 5 7 . 1 1 1 0 1 . 8 9 6 5 . 7 1 9 3 . 7 1 5 4 . 5 1 9 3 . 5 1 5 2 . 3 8 3 1 . 3 1 8 0 . 3 1 5 6 . 4 6 0 2 . 0 1 7 1 . 0 1 3 2 . 8 9 1 . 8 % 3 . 0 1 % 3 . 1 1 % 3 . 4 1 % 7 . 3 1 % 9 . 2 1 % 1 . 1 1 % 6 . 9 0 5 . 2 0 0 . 5 0 0 . 5 0 6 . 4 0 0 . 4 0 3 . 3 0 8 . 2 1 5 . 1 5 5 2 . 0 4 x a t r e t f a t i f o r P 7 5 . 6 5 5 . 6 % 9 . 7 0 4 . 2 4 , 3 ) c i s a B ( e r a h s r e p s g n n r a E i 4 , 3 ) d e t u l i D ( e r a h s r e p s g n n r a E i y t i u q e e g a r e v a n o n r u t e R 3 e r a h s r e p d n e d v D i i e u a v l e c a f a g n i v a h s e r a h s y t i u q e e v i f o t n i 0 1 ` f o e r a h s y t i u q e e n o f o n o i s i v i d - b u s e h t d e v o r p p a k n a B e h t f o s r e d l o h e r a h s e h t , 5 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u D . k r o w e m a r f I I l e s a B r e p s a d e t a l u c l a c n e e b s a h o i t a r y c a u q e d a l a t i p a c l a t o T . k r o w e m a r f I I I l e s a B r e p s a d e t a l u c l a c n e e b s a h o i t a r y c a u q e d a l a t i p a c l a t o T . 1 . 2 . 3 y l l u f ) n e T ( 0 1 y r e v e r o f h c a e 2 ` f o e r a h s y t i u q e s u n o b ) e n O ( 1 . e . i , 0 1 : 1 f o n o i t r o p o r p e h t n i s e r a h s s u n o b d e u s s i k n a B e h t , 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u D . 4 . d e t n e s e r p s d o i r e p e h t f o h c a e r o f e u s s i s u n o b f o t c e f f e e h t s t c e l f e r n o i t a m r o f n i e r a h s r e P . ) S D A g n i y l r e d n u s e r a h s g n i d u l c n i ( d l e h s e r a h s y t i u q e p u - d a p i . d e t n e s e r p s d o i r e p e h t f o h c a e r o f n o i s i v i d - b u s f o t c e f f e e h t s t c e l f e r n o i t a m r o f n i e r a h s r e P . h c a e 2 ` f o ANNUAL REPORT 2018-19INTEGRATED REPORTSTATUTORY REPORTSFINANCIAL STATEMENTS STANDALONE FINANCIAL STATEMENTS INDEPENDENT AUDITORS’ REPORT To the Members of ICICI Bank Limited 1. 2. 3. 4. Report on the Audit of the Standalone Financial Statements Opinion We have audited the accompanying standalone financial statements of ICICI Bank Limited (‘the Bank’), which comprise the Balance Sheet as at 31 March 2019, the Profit and Loss Account and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Incorporated in these standalone financial statements are the returns of the international branches for the year ended 31 March 2019. The branches in Dubai, South Africa, and New York have been audited by the respective local auditors. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the section 29 of the Banking Regulation Act, 1949, as well as the Companies Act, 2013 (‘Act’) and circulars and guidelines issued by the Reserve Bank of India, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended), of the state of affairs of the Bank as at 31 March 2019, and its profit and its cash flows for the year ended on that date. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Bank, in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’), together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 142 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 5. We have determined the matters described below to be the key audit matters to be communicated in our report. a. Information Technology (‘IT’) systems and controls impacting financial reporting (Refer chapter ‘Key risks impacting the Bank’s business’ under the Integrated Report of the Annual Report) Key Audit Matter How our audit addressed the key audit matter The IT environment of the Bank is complex and involves a large number of independent and inter- dependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions at numerous locations. As a result, there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the Bank. Appropriate IT general controls and application controls are required to ensure that such IT systems are able to process the data, as required, completely, accurately and consistently for reliable financial reporting. The accuracy and reliability of the financial reporting process depends on the IT systems and the related control environment, including:  IT general controls over user access management and change management across applications, networks, database, and operating systems;  IT automated application controls. In assessing the integrity of the IT systems, we involved our IT experts to obtain an understanding of the IT infrastructure and IT systems relevant to the Bank’s financial reporting process for evaluation and testing of IT general controls and IT automated controls existing in such IT systems. Access rights were tested over applications, operating systems, networks, and databases, which are relied upon for financial reporting. We also assessed the operating effectiveness of controls over granting, removal and periodical review of access rights. We further tested segregation of duties, including preventive controls to ensure that access to change applications, the operating system or databases in the production environment were granted only to authorized personnel. Other areas control environment, security change management. that were assessed under IT included password policies, around controls and the configurations, Due to the importance of the impact of the IT systems and related control environment on the Bank’s financial reporting process, we have identified testing of such IT systems and related control environment as a key audit matter for the current year audit. We also evaluated the design and tested the operating effectiveness of key automated controls within various business processes. This included testing the integrity of system interfaces, the completeness and accuracy of data feeds, and automated calculations. 143 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSINDEPENDENT AUDITORS’ REPORT b. Identification and provisioning for non-performing assets (‘NPAs’) As at 31 March 2019, the Bank reported total loans and advances (net of provisions) of ` 5,866,466 million (2018: ` 5,123,953 million), gross NPAs of ` 456,760 million (2018: ` 532,402 million), and provision for non-performing assets of ` 322,263 million (2018: 254,166 million). The provision coverage ratio as at 31 March 2019 is 70.6% (2018: 47.7%). (Refer schedules 9, 18.18 and 18.21) Key Audit Matter The identification of NPAs and provisioning for advances is made in accordance with the extant RBI regulations or host country regulations, in the case of international branches. Based on our risk assessment, the following are significant in assessment of the NPA provisions:  Recognition of defaults, in accordance with the criteria set out in the RBI Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining (IRAC norms) or in accordance with the host country regulations, as applicable. Further, the Bank is also required to apply its judgement to determine the identification of NPAs by applying certain qualitative aspects; to Advances  The measurement of provision under RBI guidelines is dependent on the ageing of overdue balances, secured/ unsecured status of advances, stress and liquidity concerns in certain sectors, and valuation of collateral. The provision on NPAs at certain overseas branches requires estimation of amounts and timing of expected future cash flows and exit values. Considering the significance of the above matter to the financial statements, the heightened regulatory inspections, and significant auditor attention required, we have identified this as a key audit matter for the current year audit. How our audit addressed the key audit matter We tested the design and operating effectiveness of key controls, including IT based controls, focusing on the following:  Identification and classification of NPAs in line with RBI IRAC norms and certain qualitative aspects;  Periodic internal reviews of asset quality;  Assessment of adequacy of NPA provisions; and  Periodic valuation of collateral for NPAs. To test the identification of loans with default events and other triggers, we selected a sample of performing loans and independently assessed as to whether there was a need to classify such loans as NPAs. With respect to provisions recognised towards NPAs, we selected samples based on high risk industry sectors, such as shipping, rigs, power, mining, and oil and gas exploration. For the samples selected, we re- performed the provision calculations and compared our outcome to that prepared by the management and challenged various assumptions and judgements which were used by the management. We assessed the appropriateness and adequacy of disclosures against the relevant accounting standards and RBI requirements relating to NPAs. 144 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSINDEPENDENT AUDITORS’ REPORT c. Provisions for litigation and taxation and contingent liabilities As at 31 March 2019, the Bank has reported the following: Particulars Legal cases Taxes (Refer schedules 12, 18.40 and 18.41) Key Audit Matter As at 31 March 2019, the Bank has ongoing legal and tax cases with varied degrees of complexities. This indicates that a significant degree of management judgement is involved in determining the appropriateness of provisions and related disclosures. judgement is needed Significant management in determining whether an obligation exists and whether a provision should be recognised as at the reporting date, in accordance with the accounting criteria set under Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets (‘AS 29’), or whether it needs to be disclosed as a contingent liability. Further, significant judgements are also involved in measuring such obligations, the most significant of which are:  Assessment of liability: Judgement is involved in the determination of whether an outflow in respect of identified material matters are probable and can be estimated reliably;  Adequacy of provisions: The appropriateness of assumptions and judgements used in the estimation of significant provisions; and  Adequacy of disclosures of provision for liabilities and charges, and contingent liabilities. Considering the significance of the above matter to the financial statements, and significant auditor attention required to test such estimates, we have identified this as a key audit matter for current year audit. (` in millions) Included under contingent liabilities At 31.03.2018 647 62,013 At 31.03.2019 1,096 53,913 How our audit addressed the key audit matter Our audit procedures included, but were not limited to, the following: We tested the design and operating effectiveness of the Bank’s key controls over the estimation, monitoring and disclosure of provisions and contingent liabilities. For significant legal matters, we sought external confirmations and also reviewed the confirmations obtained by the management from external legal counsels and corroborated with management’s documented conclusions on the assessment of outstanding litigations against the Bank. In respect of taxation matters, we involved our tax specialists to gain an understanding of the current status of the outstanding tax litigations, including understanding of various orders / notices received by the Bank and the management’s grounds of appeals before the relevant appellate authorities, and critically evaluated the likelihood of the liability devolving upon the Bank, in accordance with the principles of AS 29. the management’s assessment of For the significant provisions made, we understood, assessed and challenged the adequacy of provisions recognised by the management. We also reviewed the historical accuracy of the provisions recognised to determine the efficacy of the process of estimation by the management. Further, we assessed whether the disclosures related to significant litigations and taxation matters were fairly presented. 145 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT d. Valuation of derivatives Particulars Notional value of derivatives Included under Contingent liabilities At 31.03.2019 17,566,162 (` in millions) At 31.03.2018 11,336,607 (Refer schedules 12 and 18.15) Key Audit Matter Derivatives are valued through models with external inputs. The derivatives portfolio of the Bank primarily includes transactions which are carried out on behalf of its clients (and are covered on a back-to-back basis) and transactions to hedge the Bank’s interest and foreign currency risk. A significant degree of management judgement is involved in the application of valuation techniques through which the value of the Bank’s derivatives is determined. The financial statement risk arises particularly with to complex valuation models, parameters, and inputs that are used in determining fair values. respect Considering the significance of the above matter to the financial statements, significant management estimates and judgements, and auditor attention required to test such estimates and judgements, we have identified this as a key audit matter for current year audit. How our audit addressed the key audit matter Our audit procedures included, but were not limited to, the following: We included our valuation experts as a part of our audit team to obtain an understanding, evaluate the design, and test the operating effectiveness of the key controls over the valuation processes, including:  independent price verification performed by a management expert; and  model governance and validation. On a sample basis, our valuation experts performed an independent reassessment of the valuation of derivatives, to ensure compliance with the relevant RBI regulations, reasonableness of the valuation methodology and the inputs used. We also challenged the appropriateness of significant models and methodologies used in valuation. Information other than the Standalone Financial Statements and Auditor’s Report thereon The Bank’s Board of Directors are responsible for the other information. The other information comprises the information included in the Management’s Discussion and Analysis, Directors’ Report, including annexures to the Directors’ Report, but does not include the standalone financial statements and our auditor’s report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 6. Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements The Bank’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended) and provisions of section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by Reserve Bank of India (‘RBI’) from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the 146 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. 7. In preparing the financial statements, management is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so. 8. The Board of Directors is also responsible for overseeing the Bank’s financial reporting process. 9. Auditor’s Responsibilities for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 10. As part of an audit in accordance with Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:     Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for explaining our opinion on whether the Bank has adequate internal financial controls system in place and the operating effectiveness of such controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Bank to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 11. 12. 13. 147 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 14. Other Matters We did not audit the financial statements of 3 international branches included in the standalone financial statements of the Bank whose financial statements reflects total assets of ` 657,940 million as at 31 March 2019, and total revenue and net cash outflows of ` 22,507 million and ` 5,168 million respectively for the year ended on that date, as considered in the standalone financial statements. The financial statements of these branches have been audited by the branch auditors whose reports have been furnished to us by the management, and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of branches, is based solely on the report of such branch auditors. Our opinion on the standalone financial statements is not modified in respect of the above matter. 15. The financial statements of the Bank for the year ended 31 March 2018 were audited by the predecessor auditors, who have expressed an unmodified opinion on those financial statements vide their audit report dated 7 May 2018. 16. Report on Other Legal and Regulatory Requirements The Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of section 29 of the Banking Regulation Act, 1949 and section 133 of the Act read with rule 7 of the Companies (Rules), 2014 (as amended). 17. As required by sub-section (3) of section 30 of the Banking Regulation Act, 1949, we report that: a) we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory; b) the transactions of the Bank, which have come to our notice, have been within the powers of the Bank; and c) since the key operations of the Bank are automated with the key applications integrated to the core banking system, the audit is carried out centrally as all the necessary records and data required for the purposes of our audit are available therein. However, during the course of our audit, we have visited 102 branches to examine the records maintained at such branches for the purpose of our audit. Further, as stated above, returns from branches were received duly audited by other auditors and were found adequate for the purpose of our audit. 18. With respect to the matter to be included in the Auditor's Report under section 197(16) of the Act, we report that since the Bank is a banking company, as defined under Banking Regulation Act, 1949, the reporting under section 197(16) in relation to whether the remuneration paid by the Bank is in accordance with the provisions of sections 197 of the Act and whether any excess remuneration has been paid in accordance with the aforesaid section, is not applicable. 19. Further, as required by section 143 (3) of the Act, we report that: a) b) c) d) e) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; in our opinion, proper books of account as required by law have been kept by the Bank, so far as it appears from our examination of those books and proper returns, adequate for the purposes of our audit, have been received from the branches not audited by us; the reports on the accounts of the branch offices of the Bank audited under section 143(8) of the Act by the branch auditors of the Bank have been sent to us and have been properly dealt with by us in preparing this report; the standalone financial statements dealt with by this report are in agreement with the books of account and with the returns received from the international branches not audited by us; in our opinion, the aforesaid standalone financial statements comply with Accounting Standards prescribed under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended), to the extent they are not inconsistent with the accounting policies prescribed by RBI; 148 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT f) g) h) on the basis of the written representations received from the directors as on 31 March 2019 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of section 164(2) of the Act; we have also audited the internal financial controls over financial reporting (IFCoFR) of the Bank as on 31 March 2019 in conjunction with our audit of the standalone financial statements of the Bank for the year ended on that date and our report dated 06 May 2019 as per Annexure A expressed an unmodified opinion; with respect to the other matters to be included in the Auditor’s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us: i. ii. iii. iv. the Bank, as detailed in schedule 18.40 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2019; the Bank, as detailed in schedule 18.40 to the standalone financial statements, has made provision as at 31 March 2019, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Bank during the year ended 31 March 2019; the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable. Place: Mumbai Date: 06 May 2019 For Walker Chandiok & Co LLP Chartered Accountants Firm’s Registration No.: 001076N/N500013 Khushroo B. Panthaky Partner Membership No.: 042423 149 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT ANNEXURE A to the Independent Auditor’s Report of even date to the members of ICICI Bank Limited on the standalone financial statements for the year ended 31 March 2019 1. 2. 3. 4. 5. 6. Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’) In conjunction with our audit of the standalone financial statements of ICICI Bank Limited (‘the Bank’) as at and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (‘IFCoFR’) of the Bank as at that date. Management’s Responsibility for Internal Financial Controls The Bank’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Bank’s business, including adherence to the Bank’s policies, the safeguarding of 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, as required under the Act. Auditor’s Responsibility Our responsibility is to express an opinion on the Bank's IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI’) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘the Guidance Note’) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Bank’s IFCoFR. Meaning of Internal Financial Controls over Financial Reporting An enitity's IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. An entity's IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorisations of management and directors of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the entity's assets that could have a material effect on the financial statements. 150 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT ANNEXURE A (Contd.) 7. 8. Inherent Limitations of Internal Financial Controls over Financial Reporting Owing to the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Bank has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2019, based on the internal control over financial reporting criteria established by the Bank considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI. Place: Mumbai Date: 06 May 2019 For Walker Chandiok & Co LLP Chartered Accountants Firm’s Registration No.: 001076N/N500013 Khushroo B. Panthaky Partner Membership No.: 042423 151 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS FINANCIAL STATEMENTS OF ICICI BANK LIMITED BALANCE SHEET at March 31, 2019 CAPITAL AND LIABILITIES Capital Employees stock options outstanding Reserves and surplus Deposits Borrowings Other liabilities and provisions TOTAL CAPITAL AND LIABILITIES ASSETS Cash and balances with Reserve Bank of India Balances with banks and money at call and short notice Investments Advances Fixed assets Other assets TOTAL ASSETS Contingent liabilities Bills for collection Significant accounting policies and notes to accounts Schedule At 31.03.2019 ` in ‘000s At 31.03.2018 1 2 3 4 5 6 7 8 9 10 11 12 17 & 18 12,894,598 46,755 1,070,739,063 6,529,196,711 1,653,199,742 378,514,609 9,644,591,478 12,858,100 55,699 1,038,675,565 5,609,752,085 1,828,586,206 301,963,958 8,791,891,613 378,580,118 424,382,742 2,077,326,800 5,866,465,827 79,314,287 818,521,704 9,644,591,478 331,023,817 510,669,991 2,029,941,808 5,123,952,856 79,035,149 717,267,992 8,791,891,613 19,220,382,868 493,919,862 12,892,440,018 285,883,604 The Schedules referred to above form an integral part of the Unconsolidated Balance Sheet. As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Khushroo B. Panthaky Partner Membership no.: 042423 Place: Mumbai Date: May 6, 2019 Girish Chandra Chaturvedi Chairman DIN-00110996 Uday M. Chitale Director DIN-00043268 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Vishakha Mulye Executive Director DIN-00203578 Sandeep Batra President Ajay Mittal Chief Accountant Vijay Chandok Executive Director DIN-01545262 Anup Bagchi Executive Director DIN-00105962 Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary 152 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSFINANCIAL STATEMENTS OF ICICI BANK LIMITED PROFIT AND LOSS ACCOUNT for the year ended March 31, 2019 I. INCOME Interest earned Other income TOTAL INCOME II. EXPENDITURE Interest expended Operating expenses Provisions and contingencies (refer note 18.40) TOTAL EXPENDITURE III. PROFIT/(LOSS) Net profit/(loss) for the year Profit brought forward TOTAL PROFIT/(LOSS) IV. APPROPRIATIONS/TRANSFERS Transfer to Statutory Reserve Transfer to Reserve Fund Transfer to Capital Reserve Transfer to Capital Redemption Reserve Transfer to/(from) Investment Reserve Account Transfer to/(from) Investment Fluctuation Reserve Transfer to Revenue and other reserves Transfer to Special Reserve Dividend paid during the year Corporate dividend tax paid during the year Balance carried over to balance sheet TOTAL Significant accounting policies and notes to accounts Earnings per share (refer note 18.1) Basic (`) Diluted (`) Face value per share (`) Schedule Year ended 31.03.2019 ` in ‘000s Year ended 31.03.2018 13 14 15 16 17 & 18 634,011,926 145,121,636 779,133,562 549,658,922 174,196,326 723,855,248 363,863,951 180,890,620 200,745,975 745,500,546 319,400,463 157,039,436 179,641,120 656,081,019 33,633,016 184,952,554 218,585,570 67,774,229 187,449,376 255,223,605 8,409,000 7,568 280,000 3,500,000 - 12,692,000 - 5,250,000 9,651,292 7 178,795,703 218,585,570 16,944,000 10,541 25,654,600 - - - 7,000,000 6,000,000 14,574,649 87,261 184,952,554 255,223,605 5.23 5.17 2.00 10.56 10.46 2.00 The Schedules referred to above form an integral part of the Unconsolidated Profit and Loss Account. As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Khushroo B. Panthaky Partner Membership no.: 042423 Place: Mumbai Date: May 6, 2019 Girish Chandra Chaturvedi Chairman DIN-00110996 Uday M. Chitale Director DIN-00043268 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Vishakha Mulye Executive Director DIN-00203578 Sandeep Batra President Ajay Mittal Chief Accountant Vijay Chandok Executive Director DIN-01545262 Anup Bagchi Executive Director DIN-00105962 Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary 153 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSFINANCIAL STATEMENTS OF ICICI BANK LIMITED CASH FLOW STATEMENT for the year ended March 31, 2019 Cash flow from/(used in) operating activities Profit/(loss) before taxes Adjustments for: Depreciation and amortisation Net (appreciation)/depreciation on investments1 Provision in respect of non-performing and other assets General provision for standard assets Provision for contingencies & others Income from subsidiaries, joint ventures and consolidated entities (Profit)/loss on sale of fixed assets Adjustments for: (Increase)/decrease in investments (Increase)/decrease in advances Increase/(decrease) in deposits (Increase)/decrease in other assets Increase/(decrease) in other liabilities and provisions Refund/(payment) of direct taxes Net cash flow from/(used in) operating activities (i)+(ii)+(iii) Cash flow from/(used in) investing activities Redemption/sale from/(investments in) subsidiaries and/or joint ventures (including application money) Income from subsidiaries, joint ventures and consolidated entities Purchase of fixed assets Proceeds from sale of fixed assets (Purchase)/sale of held-to-maturity securities Net cash flow from/(used in) investing activities Cash flow from/(used in) financing activities Proceeds from issue of share capital (including ESOPs) Proceeds from long-term borrowings Repayment of long-term borrowings Net proceeds/(repayment) of short-term borrowings Dividend and dividend tax paid Net cash flow from/(used in) financing activities Effect of exchange fluctuation on translation reserve Net increase/(decrease) in cash and cash equivalents (A) + (B) + (C) + (D) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 1. Year ended 31.03.2019 ` in ‘000s Year ended 31.03.2018 37,767,625 74,345,555 8,728,507 (228,192) 168,111,998 2,553,682 22,383,465 (10,779,490) (1,919) 228,535,676 195,917,120 (906,414,812) 919,444,626 (37,800,079) 51,681,004 222,827,859 (67,175,650) 384,187,885 11,383,004 10,779,490 (8,309,176) 380,294 (252,986,732) (238,753,120) 3,486,300 144,363,924 (202,012,943) (118,696,850) (9,651,299) (182,510,868) (1,654,845) 8,926,673 (24,564,830) 142,445,162 2,771,076 9,080,155 (12,140,645) (38,027) 200,825,119 23,193,089 (648,694,293) 709,361,437 (66,412,242) (52,290,284) (34,842,293) (32,946,347) 133,036,479 60,860,496 12,140,645 (8,240,963) 219,081 (454,667,276) (389,688,017) 3,939,495 339,671,083 (329,302,704) 341,537,066 (14,661,910) 341,183,030 31,702 (i) (ii) (iii) (A) (B) (C) (D) 84,563,194 757,130,614 841,693,808 For the year ended March 31, 2019, includes gain on sale of a part of equity investment in a subsidiary, ICICI Prudential Life Insurance Company Limited, through an offer for sale on stock exchanges (year ended March 31, 2018: includes gain on sale of a part of equity investment in the subsidiaries, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited, through initial public offers). (38,730,948) 841,693,808 802,962,860 2. Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice. As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Khushroo B. Panthaky Partner Membership no.: 042423 Place: Mumbai Date: May 6, 2019 154 Girish Chandra Chaturvedi Chairman DIN-00110996 Uday M. Chitale Director DIN-00043268 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Vishakha Mulye Executive Director DIN-00203578 Sandeep Batra President Ajay Mittal Chief Accountant Vijay Chandok Executive Director DIN-01545262 Anup Bagchi Executive Director DIN-00105962 Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSFINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Balance Sheet SCHEDULE 1 - CAPITAL Authorised capital 12,500,000,000 equity shares of ` 2 each1 (March 31, 2018: 10,000,000,000 equity shares of ` 2 each, 15,000,000 shares of ` 100 each2 and 350 preference shares of ` 10.0 million each) Equity share capital Issued, subscribed and paid-up capital 6,427,990,776 equity shares of ` 2 each (March 31, 2018: 5,824,476,135 equity shares) Add: 18,248,8773 equity shares of ` 2 each (March 31, 2018: 603,514,6413,4 equity shares) issued during the period At 31.03.2019 ` in ‘000s At 31.03.2018 25,000,000 25,000,000 12,855,981 11,648,952 36,498 12,892,479 2,119 12,894,598 1,207,029 12,855,981 2,119 12,858,100 Add: Forfeited equity shares5 TOTAL CAPITAL 1. Pursuant to the approval of shareholders, the Bank has re-classified its authorised share capital during the year ended March 31, 2019. 2. 3. 4. These shares were of such class and with such rights, privileges, conditions or restrictions as may be determined by the Bank in accordance with the Articles of Association of the Bank and subject to the legislative provisions in force for the time being in that behalf. Represents equity shares issued pursuant to exercise of employee stock options during the year ended March 31, 2019 (year ended March 31, 2018: 20,530,097 equity shares). For the year ended March 31, 2018, includes 582,984,544 equity shares issued as bonus shares pursuant to approval by the shareholders of the Bank through postal ballot on June 12, 2017. 5. On account of forfeiture of 266,089 equity shares of ` 10 each. SCHEDULE 2 - RESERVES AND SURPLUS I. Statutory reserve Opening balance Additions during the year Deductions during the year Closing balance II. Special Reserve Opening balance Additions during the year Deductions during the year Closing balance III. Securities premium Opening balance Additions during the year1 Deductions during the year2 Closing balance IV. Investment reserve account Opening balance Additions during the year Deductions during the year Closing balance At 31.03.2019 228,968,519 8,409,000 - 237,377,519 89,790,000 5,250,000 - 95,040,000 325,709,362 3,451,496 - 329,160,858 - - - - ` in ‘000s At 31.03.2018 212,024,519 16,944,000 - 228,968,519 83,790,000 6,000,000 - 89,790,000 322,970,033 3,905,298 (1,165,969) 325,709,362 - - - - 155 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS V. Investment fluctuation reserve Opening balance Additions during the year3 Deductions during the year Closing balance VI. Capital reserve Opening balance Additions during the year4 Deductions during the year Closing balance VII. Capital redemption reserve Opening balance Additions during the year5 Deductions during the year Closing balance VIII. Foreign currency translation reserve Opening balance Additions during the year Deductions during the year Closing balance IX. Revaluation reserve (refer note 18.34) Opening balance Additions during the year6 Deductions during the year7 Closing balance X. Reserve fund Opening balance Additions during the year8 Deductions during the year Closing balance XI. Revenue and other reserves Opening balance Additions during the year Deductions during the year Closing balance XII. Balance in profit and loss account9 TOTAL RESERVES AND SURPLUS 1. Represents amount on account of exercise of employee stock options. At 31.03.2019 - 12,692,000 - 12,692,000 128,261,725 280,000 - 128,541,725 - 3,500,000 - 3,500,000 16,563,360 - (1,654,845) 14,908,515 30,031,905 1,023,923 (610,735) 30,445,093 66,400 7,568 - 73,968 ` in ‘000s At 31.03.2018 - - - - 102,607,125 25,654,600 - 128,261,725 - - - - 16,531,658 31,702 - 16,563,360 30,421,420 249,101 (638,616) 30,031,905 55,858 10,542 - 66,400 39,585,696 617,986 - 40,203,682 178,795,703 1,070,739,063 31,947,081 7,638,615 - 39,585,696 179,698,598 1,038,675,565 2. 3. Represents amount utilised on account of issuance of bonus shares during the year ended March 31, 2018. Represents an amount transferred to Investment Fluctuation Reserve (IFR) on net profit on sale of AFS and HFT investments during the year. As per the RBI circular, from the year ended March 31, 2019, an amount not less than the lower of net profit on sale of AFS and HFT category investments during the year or net profit for the year less mandatory appropriations is required to be transferred to IFR, until the amount of IFR is at least 2% of the HFT and AFS portfolio. 4. Represents appropriations made for profit on sale of investments in held-to-maturity category, net of taxes and transfer to Statutory Reserve and profit on sale of land and buildings, net of taxes and transfer to Statutory Reserve. 156 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS5. 6. 7. 8. 9. Represents amount transferred from accumulated profit on account of Redeemable Non-Cumulative Preference Shares (350 RNCPS) of ` 10.0 million each redeemed at par on April 20, 2018. The Bank has created Capital redemption reserve, as required under the Companies Act, 2013, out of surplus profits available for previous years. Represents gain on revaluation of premises carried out by the Bank. Represents amount transferred from Revaluation Reserve to General Reserve on account of incremental depreciation charge on revaluation amounting to ` 584.8 million (year ended March 31, 2018: ` 572.4 million) and revaluation surplus on assets sold amounting to ` 25.9 million (year ended March 31, 2018: ` 66.2 million) for the year ended March 31, 2019. Represents appropriations made to Reserve Fund in accordance with regulations applicable to Sri Lanka branch. During the year ended March 31, 2018, the Bank made provision amounting to ` 5,254.0 million for frauds on non-retail accounts through reserves and surplus, as permitted by RBI. During year ended March 31, 2019, the entire provision has been recognised in profit and loss account and equivalent debit has been reversed in reserves and surplus as required by RBI. SCHEDULE 3 - DEPOSITS A. Demand deposits I. i) ii) From banks From others Savings bank deposits II. III. Term deposits i) ii) From banks From others TOTAL DEPOSITS B. Deposits of branches in India I. II. Deposits of branches outside India TOTAL DEPOSITS SCHEDULE 4 - BORROWINGS I. Borrowings in India Reserve Bank of India i) ii) Other banks iii) Other institutions and agencies a) Government of India b) Financial institutions iv) Borrowings in the form of bonds and debentures (excluding subordinated debt) v) Application money-bonds vi) Capital instruments a) Innovative Perpetual Debt Instruments (IPDI) (qualifying as additional Tier-1 capital) b) Hybrid debt capital instruments issued as bonds/debentures (qualifying as Tier-2 capital) c) Redeemable Non-Cumulative Preference Shares (350 RNCPS of ` 10.0 million each issued to preference share holders of erstwhile ICICI Limited on amalgamation, redeemed at par on April 20, 2018) At 31.03.2019 ` in ‘000s At 31.03.2018 74,379,016 888,315,153 2,276,709,040 66,198,901 823,383,452 2,009,670,527 165,000,950 3,124,792,552 6,529,196,711 115,526,501 2,594,972,704 5,609,752,085 6,474,983,663 54,213,048 6,529,196,711 5,560,172,442 49,579,643 5,609,752,085 At 31.03.2019 ` in ‘000s At 31.03.2018 35,000,000 8,644,375 115,920,000 26,811,250 - 233,005,364 - 228,142,451 197,590,424 - 209,052,250 - 101,200,000 94,800,000 33,800,000 84,035,112 - 3,500,000 157 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS d) Unsecured redeemable debentures/bonds (subordinated debt included in Tier-2 capital) TOTAL BORROWINGS IN INDIA II. Borrowings outside India At 31.03.2019 ` in ‘000s At 31.03.2018 135,347,140 744,587,303 136,007,107 898,268,170 Capital instruments i) ii) Bonds and notes iii) Other borrowings - 414,847,916 515,470,120 930,318,036 1,828,586,206 Secured borrowings in I and II above amount to Nil (March 31, 2018: Nil) except borrowings of ` 61,716.3 million (March 31, 2018: ` 164,562.5 million) under collateralised borrowing and lending obligation, market repurchase transactions (including tri-party repo) with banks and financial institutions and transactions under liquidity adjustment facility and marginal standing facility. TOTAL BORROWINGS OUTSIDE INDIA TOTAL BORROWINGS 1. - 428,236,204 480,376,235 908,612,439 1,653,199,742 SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS Bills payable I. Inter-office adjustments (net) II. III. Interest accrued IV. Sundry creditors V. General provision for standard assets (refer note 18.20) VI. Others (including provisions)1 TOTAL OTHER LIABILITIES AND PROVISIONS 1. Includes specific provision for standard loans amounting to ` 4,769.0 million (March 31, 2018: ` 7,967.1 million). At 31.03.2019 83,343,117 717,556 33,721,860 92,952,935 28,737,645 139,041,496 378,514,609 At 31.03.2019 ` in ‘000s At 31.03.2018 71,724,980 976,360 32,725,823 65,150,053 25,906,623 105,480,119 301,963,958 ` in ‘000s At 31.03.2018 SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA Cash in hand (including foreign currency notes) I. II. Balances with Reserve Bank of India in current accounts TOTAL CASH AND BALANCES WITH RESERVE BANK OF INDIA 87,038,841 291,541,277 378,580,118 80,447,910 250,575,907 331,023,817 158 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE I. In India i) Balances with banks a) b) In current accounts In other deposit accounts ii) Money at call and short notice a) With banks b) With other institutions TOTAL II. Outside India i) In current accounts In other deposit accounts ii) iii) Money at call and short notice TOTAL TOTAL BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE SCHEDULE 8 - INVESTMENTS I. Investments in India [net of provisions] i) Government securities ii) Other approved securities iii) Shares (includes equity and preference shares) iv) Debentures and bonds v) vi) Others (commercial paper, mutual fund units, pass through Subsidiaries and/or joint ventures1 certificates, security receipts, certificate of deposits and other related investments) TOTAL INVESTMENTS IN INDIA II. Investments outside India [net of provisions] i) ii) Government securities Subsidiaries and/or joint ventures abroad (includes equity and preference shares) iii) Others (equity shares, bonds and certificate of deposits) TOTAL INVESTMENTS OUTSIDE INDIA TOTAL INVESTMENTS At 31.03.2019 ` in ‘000s At 31.03.2018 2,626,426 5,066,921 2,770,626 2,078,261 89,457,750 13,410,213 110,561,310 143,207,910 48,901,848 121,711,674 313,821,432 424,382,742 At 31.03.2019 190,613,750 26,044,514 221,507,151 167,043,020 43,441,376 78,678,444 289,162,840 510,669,991 ` in ‘000s At 31.03.2018 1,479,230,542 - 18,840,258 142,328,392 61,201,686 1,391,852,905 - 23,780,704 153,889,101 61,488,797 312,175,395 2,013,776,273 331,088,034 1,962,099,541 20,026,853 23,477,202 36,826,862 6,696,812 63,550,527 2,077,326,800 36,826,862 7,538,203 67,842,267 2,029,941,808 159 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS At 31.03.2019 ` in ‘000s At 31.03.2018 2,062,886,134 49,109,861 2,013,776,273 2,003,754,441 41,654,900 1,962,099,541 B. A. Investments in India Gross value of investments Less: Aggregate of provision/depreciation/(appreciation) Net investments Investments outside India Gross value of investments Less: Aggregate of provision/depreciation/(appreciation) Net investments TOTAL INVESTMENTS 1. 73,275,153 5,432,886 67,842,267 2,029,941,808 During the year ended March 31, 2019, the Bank sold a part of its equity investment in a subsidiary, ICICI Prudential Life Insurance Company Limited, through an offer for sale on stock exchanges (year ended March 31, 2018: the Bank sold a part of its equity investment in the subsidiaries, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited, through initial public offers). 64,377,243 826,716 63,550,527 2,077,326,800 2. Refer note 18.11 - Investments and note 18.12 - Non-SLR Investments. SCHEDULE 9 - ADVANCES [net of provisions] A. Bills purchased and discounted1 Cash credits, overdrafts and loans repayable on demand i) ii) iii) Term loans TOTAL ADVANCES Secured by tangible assets (includes advances against book debts) Covered by bank/government guarantees B. i) ii) iii) Unsecured TOTAL ADVANCES I. C. Advances in India Priority sector i) ii) Public sector iii) Banks iv) Others TOTAL ADVANCES IN INDIA II. Advances outside India i) Due from banks ii) Due from others Bills purchased and discounted a) b) Syndicated and term loans c) Others TOTAL ADVANCES OUTSIDE INDIA TOTAL ADVANCES 1. Net of bills re-discounted amounting to Nil (March 31, 2018: Nil). 160 At 31.03.2019 ` in ‘000s At 31.03.2018 346,315,071 1,458,967,622 4,061,183,134 5,866,465,827 282,717,624 1,302,545,244 3,538,689,988 5,123,952,856 4,139,796,885 111,759,404 1,614,909,538 5,866,465,827 3,772,296,920 81,194,562 1,270,461,374 5,123,952,856 1,696,365,965 146,431,801 3,253,967 3,390,090,132 5,236,141,865 929,701,682 197,704,530 777,335 3,351,468,495 4,479,652,042 18,471,145 18,706,876 149,622,161 308,156,810 154,073,846 630,323,962 5,866,465,827 89,025,272 379,320,030 157,248,636 644,300,814 5,123,952,856 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 10 - FIXED ASSETS I. Premises Gross block At cost at March 31 of preceding year Additions during the year1 Deductions during the year Closing balance Less: Depreciation to date2 Net block3 II. Other fixed assets (including furniture and fixtures) Gross block At cost at March 31 of preceding year Additions during the year Deductions during the year Closing balance Less: Depreciation to date4 Net block III. Assets given on lease At 31.03.2019 ` in ‘000s At 31.03.2018 73,921,124 2,125,674 (505,208) 75,541,590 (15,309,915) 60,231,675 72,701,320 1,501,268 (281,464) 73,921,124 (13,795,329) 60,125,795 59,585,000 6,368,177 (6,521,259) 59,431,918 (42,763,904) 16,668,014 53,522,935 7,493,392 (1,431,327) 59,585,000 (43,090,256) 16,494,744 Gross block At cost at March 31 of preceding year Additions during the year Deductions during the year Closing balance Less: Depreciation to date, accumulated lease adjustment and provisions5 Net block 16,904,628 - (189,999) 16,714,629 (14,300,019) 2,414,610 79,035,149 Includes revaluation gain amounting to ` 1,023.9 million (March 31, 2018: ` 249.1 million) on account of revaluation carried out by the Bank. 16,714,629 - - 16,714,629 (14,300,031) 2,414,598 79,314,287 TOTAL FIXED ASSETS 1. 2. 3. 4. 5. Includes depreciation charge amounting to ` 1,789.2 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 1,754.3 million), including depreciation charge on account of revaluation of ` 584.8 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 572.4 million). Includes assets of ` 22.2 million (March 31, 2018: ` 37.4 million) which are held for sale. Includes depreciation charge amounting to ` 5,979.9 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 6,053.1 million). The depreciation charge/lease adjustment/provisions is an insignificant amount for the year ended March 31, 2019 (year ended March 31, 2018: insignificant amount). 161 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS At 31.03.2019 ` in ‘000s At 31.03.2018 SCHEDULE 11 - OTHER ASSETS Inter-office adjustments (net) I. II. Interest accrued III. Tax paid in advance/tax deducted at source (net) IV. Stationery and stamps V. Non-banking assets acquired in satisfaction of claims1,2 VI. Advances for capital assets VII. Deposits VIII. Deferred tax assets (net) (refer note 18.42) IX. Deposits in Rural Infrastructure and Development Fund X. Others3 TOTAL OTHER ASSETS 1. - 69,899,215 61,699,162 1,375 19,650,832 1,215,031 14,146,176 74,770,217 269,249,912 206,636,072 717,267,992 During the year ended March 31, 2019, the Bank has not acquired any assets (year ended March 31, 2018: ` 952.6 million) in satisfaction of claims under debt-asset swap transactions. No assets were sold during the year ended March 31, 2019 (year ended March 31, 2018: ` 279.1 million). - 76,326,429 95,268,761 973 10,040,166 1,802,579 14,078,922 104,365,701 292,545,621 224,092,552 818,521,704 2. 3. Represents balance net of provision held amounting to ` 22,147.3 million (March 31, 2018: ` 13,184.2 million). For the year ended March 31, 2018, includes receivable amounting to ` 3,988.7 million pertaining to a non-performing loan sold during the year ended March 31, 2018, which was received by the Bank on April 2, 2018. Claims against the Bank not acknowledged as debts Liability for partly paid investments SCHEDULE 12 - CONTINGENT LIABILITIES I. II. III. Liability on account of outstanding forward exchange contracts1 IV. Guarantees given on behalf of constituents a) In India b) Outside India Interest rate swaps, currency options and interest rate futures1 V. Acceptances, endorsements and other obligations VI. Currency swaps1 VII. VIII. Other items for which the Bank is contingently liable TOTAL CONTINGENT LIABILITIES 1. Represents notional amount. At 31.03.2019 ` in ‘000s At 31.03.2018 55,009,794 12,455 4,701,000,557 62,660,192 12,455 4,326,689,229 855,465,382 211,192,112 433,788,146 423,344,515 12,441,817,000 98,752,907 19,220,382,868 747,815,379 197,543,699 410,036,446 416,989,369 6,592,928,249 137,765,000 12,892,440,018 2. There has been a Supreme Court judgement dated February 28, 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the Employees Provident Fund (EPF) Act. There are interpretative aspects related to the Judgement including the effective date of application. The Bank will continue to assess any further developments in this matter for the implications on financial statements, if any. 162 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Year ended 31.03.2019 479,426,244 127,968,772 7,360,862 19,256,048 634,011,926 Year ended 31.03.2019 102,318,773 13,006,602 387,624 1,919 17,711,181 ` in ‘000s Year ended 31.03.2018 408,662,070 115,681,704 6,633,788 18,681,360 549,658,922 ` in ‘000s Year ended 31.03.2018 87,894,054 63,058,535 (5,161,974) 38,027 15,431,519 FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Profit and Loss Account Interest/discount on advances/bills Income on investments Interest on balances with Reserve Bank of India and other inter-bank funds SCHEDULE 13 - INTEREST EARNED I. II. III. IV. Others1,2 TOTAL INTEREST EARNED 1. Includes interest on income tax refunds amounting to ` 4,482.3 million (March 31, 2018: ` 2,625.9 million). 2. Includes interest and amortisation of premium on non-trading interest rate swaps and foreign currency swaps. SCHEDULE 14 - OTHER INCOME Commission, exchange and brokerage I. Profit/(loss) on sale of investments (net)1 II. III. Profit/(loss) on revaluation of investments (net) IV. Profit/(loss) on sale of land, buildings and other assets (net)2 Profit/(loss) on exchange/derivative transactions (net) V. Income earned by way of dividends, etc. from subsidiary companies and/or VI. joint ventures abroad/in India VII. Miscellaneous income (including lease income) TOTAL OTHER INCOME 1. 12,140,645 795,520 174,196,326 For the year ended March 31, 2019, includes gain on sale of a part of equity investment in a subsidiary, ICICI Prudential Life Insurance Company Limited, through an offer for sale on stock exchanges (year ended March 31, 2018: gain on sale of a part of equity investment in the subsidiaries, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited, through initial public offers). Refer note 18.11 - Investments. 10,779,490 916,047 145,121,636 2. Includes profit/(loss) on sale of assets given on lease. Interest on deposits Interest on Reserve Bank of India/inter-bank borrowings SCHEDULE 15 - INTEREST EXPENDED I. II. III. Others (including interest on borrowings of erstwhile ICICI Limited) TOTAL INTEREST EXPENDED Year ended 31.03.2019 265,246,797 15,907,990 82,709,164 363,863,951 ` in ‘000s Year ended 31.03.2018 234,287,704 9,493,244 75,619,515 319,400,463 163 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Profit and Loss Account (Contd.) Payments to and provisions for employees Rent, taxes and lighting1 SCHEDULE 16 - OPERATING EXPENSES I. II. III. Printing and stationery IV. Advertisement and publicity V. Depreciation on Bank's property VI. Depreciation (including lease equalisation) on leased assets VII. Directors' fees, allowances and expenses VIII. Auditors' fees and expenses IX. Law charges X. Postages, courier, telephones, etc. XI. Repairs and maintenance XII. Insurance XIII. Direct marketing agency expenses XIV. Other expenditure2 TOTAL OPERATING EXPENSES 1. Includes lease expense amounting to ` 9,236.7 million (March 31, 2018: ` 8,966.3 million). Year ended 31.03.2019 68,082,380 11,988,705 2,056,233 7,290,475 7,769,089 13 36,766 89,675 1,077,091 4,068,143 15,384,867 6,504,334 15,971,240 40,571,609 180,890,620 ` in ‘000s Year ended 31.03.2018 59,139,503 11,763,808 1,770,857 4,013,714 7,807,420 12 15,292 83,883 805,748 3,728,904 14,856,619 5,484,575 13,035,643 34,533,458 157,039,436 2. Net of recoveries from group companies towards shared services. 164 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Accounts SCHEDULE 17 SIGNIFICANT ACCOUNTING POLICIES Overview ICICI Bank Limited (ICICI Bank or the Bank), incorporated in Vadodara, India is a publicly held banking company engaged in providing a wide range of banking and financial services including commercial banking and treasury operations. ICICI Bank is a banking company governed by the Banking Regulation Act, 1949. The Bank also has overseas branches in Bahrain, China, Dubai, Hong Kong, Singapore, South Africa, Sri Lanka, United States of America and Offshore Banking units. Basis of preparation The financial statements have been prepared in accordance with requirements prescribed under the Third Schedule of the Banking Regulation Act, 1949. The accounting and reporting policies of ICICI Bank used in the preparation of these financial statements conform to Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines issued by Reserve Bank of India (RBI) from time to time and the Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of the Companies (Accounts) Rules, 2014 to the extent applicable and practices generally prevalent in the banking industry in India. The Bank follows the historical cost convention and the accrual method of accounting, except in the case of interest and other income on non-performing assets (NPAs) where it is recognised upon realisation. The preparation of financial statements requires management to make estimates and assumptions that are considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. The impact of any revision in these estimates is recognised prospectively from the period of change. SIGNIFICANT ACCOUNTING POLICIES 1. Revenue recognition a) b) Interest income is recognised in the profit and loss account as it accrues except in the case of non-performing assets (NPAs) where it is recognised upon realisation, as per the income recognition and asset classification norms of RBI. Income from finance leases is calculated by applying the interest rate implicit in the lease to the net investment outstanding on the lease over the primary lease period. c) Income on discounted instruments is recognised over the tenure of the instrument on a constant yield basis. d) Dividend income is accounted on accrual basis when the right to receive the dividend is established. e) Loan processing fee is accounted for upfront when it becomes due. f) Project appraisal/structuring fee is accounted for on the completion of the agreed service. g) Arranger fee is accounted for as income when a significant portion of the arrangement/syndication is completed. h) Commission received on guarantees issued is amortised on a straight-line basis over the period of the guarantee. i) j) The annual/renewal fee on credit cards and debit cards are amortised on a straight line basis over one year. Fees paid/received for priority sector lending certificates (PSLC) is amortised on straight-line basis over the period of the certificate. k) All other fees are accounted for as and when they become due. l) Net income arising from sell-down/securitisation of loan assets prior to February 1, 2006 has been recognised upfront as interest income. With effect from February 1, 2006, net income arising from securitisation of loan assets is amortised over the life of securities issued or to be issued by the special purpose vehicle/special purpose entity to which the assets are sold. Net income arising from sale of loan assets through direct assignment with recourse obligation is amortised over the life of underlying assets sold and net income from sale of loan assets through direct assignment, without any recourse obligation, is recognised at the time of sale. Net loss arising on account of the sell-down/securitisation and direct assignment of loan assets is recognised at the time of sale. m) The Bank deals in bullion business on a consignment basis. The difference between price recovered from customers and cost of bullion is accounted for at the time of sales to the customers. The Bank also deals in bullion on a borrowing and lending basis and the interest paid/received is accounted on accrual basis. 165 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 2. Investments Investments are accounted for in accordance with the extant RBI guidelines on investment classification and valuation as given below. 1. 2. 3. All investments are classified into ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Reclassifications, if any, in any category are accounted for as per RBI guidelines. Under each classification, the investments are further categorised as (a) government securities, (b) other approved securities, (c) shares, (d) bonds and debentures, (e) subsidiaries and joint ventures and (f) others. ‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. Any premium over the face value of fixed rate and floating rate securities acquired is amortised over the remaining period to maturity on a constant yield basis and straight line basis respectively. ‘Available for Sale’ and ‘Held for Trading’ securities are valued periodically as per RBI guidelines. Any premium over the face value of fixed rate and floating rate investments in government securities, classified as ‘Available for Sale’, is amortised over the remaining period to maturity on constant yield basis and straight line basis respectively. Quoted investments are valued based on the closing quotes on the recognised stock exchanges or prices declared by Primary Dealers Association of India (PDAI) jointly with Fixed Income Money Market and Derivatives Association (FIMMDA)/Financial Benchmark India Private Limited (FBIL), periodically. The market/fair value of unquoted government securities which are in nature of Statutory Liquidity Ratio (SLR) securities included in the ‘Available for Sale’ and ‘Held for Trading’ categories is as per the rates published by FIMMDA/FBIL. The valuation of other unquoted fixed income securities, including Pass Through Certificates, wherever linked to the Yield-to-Maturity (YTM) rates, is computed with a mark-up (reflecting associated credit risk) over the YTM rates for government securities published by FIMMDA. The sovereign foreign securities and non-INR India linked bonds are valued on the basis of prices published by the sovereign regulator or counterparty quotes. Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available, or at ` 1, as per RBI guidelines. Securities are valued scrip-wise. Depreciation/appreciation on securities, other than those acquired by way of conversion of outstanding loans, is aggregated for each category. Net appreciation in each category under each investment classification, if any, being unrealised, is ignored, while net depreciation is provided for. The depreciation on securities acquired by way of conversion of outstanding loans is fully provided for. Non-performing investments are identified based on the RBI guidelines. 4. Treasury bills, commercial papers and certificate of deposits being discounted instruments, are valued at carrying cost. 5. The units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund. 6. 7. 8. Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the profit and loss account. Cost of investments is computed based on the First-In-First-Out (FIFO) method. Equity investments in subsidiaries/joint ventures are classified under ‘Held to Maturity’ and ’Available for Sale’. The Bank assesses these investments for any permanent diminution in value and appropriate provisions are made. Profit/loss on sale of investments in the ‘Held to Maturity’ category is recognised in the profit and loss account and profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to Capital Reserve. Profit/loss on sale of investments in ‘Available for Sale’ and ‘Held for Trading’ categories is recognised in the profit and loss account. 9. Market repurchase, reverse repurchase and transactions with RBI under Liquidity Adjustment Facility (LAF) are accounted for as borrowing and lending transactions in accordance with the extant RBI guidelines. 10. Broken period interest (the amount of interest from the previous interest payment date till the date of purchase/sale of instruments) on debt instruments is treated as a revenue item. 166 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 11. At the end of each reporting period, security receipts issued by the asset reconstruction companies are valued in accordance with the guidelines applicable to such instruments, prescribed by RBI from time to time. Accordingly, in cases where the cash flows from security receipts issued by the asset reconstruction companies are limited to the actual realisation of the financial assets assigned to the instruments in the concerned scheme, the Bank reckons the net asset value obtained from the asset reconstruction company from time to time, for valuation of such investments at each reporting period end. The security receipts which are outstanding and not redeemed as at the end of the resolution period are treated as loss assets and are fully provided for. 12. The Bank follows trade date method of accounting for purchase and sale of investments, except for government of India and state government securities where settlement date method of accounting is followed in accordance with RBI guidelines. 13. The Bank undertakes short sale transactions in dated central government securities in accordance with RBI guidelines. The short positions are categorised under HFT category and are marked to market. The mark-to-market loss is charged to profit and loss account and gain, if any, is ignored as per RBI guidelines. 3. Provision/write-offs on loans and other credit facilities The Bank classifies its loans and investments, including at overseas branches and overdues arising from crystallised derivative contracts, into performing and NPAs in accordance with RBI guidelines. Loans and advances held at the overseas branches that are identified as impaired as per host country regulations for reasons other than record of recovery, but which are standard as per the extant RBI guidelines, are classified as NPAs to the extent of amount outstanding in the host country. Further, NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. In the case of corporate loans and advances, provisions are made for sub-standard and doubtful assets at rates prescribed by RBI. Loss assets and the unsecured portion of doubtful assets are provided/written-off as per the extant RBI guidelines. For loans and advances booked in overseas branches, which are standard as per the extant RBI guidelines but are classified as NPAs based on host country guidelines, provisions are made as per the host country regulations. For loans and advances booked in overseas branches, which are NPAs as per the extant RBI guidelines and as per host country guidelines, provisions are made at the higher of the provisions required under RBI regulations and host country regulations. Provisions on homogeneous retail loans and advances, subject to minimum provisioning requirements of RBI, are assessed on the basis of the ageing of the loans in the non-performing category. As per RBI guidelines, in respect of non-retail loans reported as fraud to RBI and classified in doubtful category, the entire amount, without considering the value of security, is provided for over a period not exceeding four quarters starting from the quarter in which fraud has been detected. In respect of non-retail loans where there has been delay in reporting the fraud to the RBI or which are classified as loss accounts, the entire amount is provided immediately. In case of fraud in retail accounts, the entire amount is provided immediately. In respect of borrowers classified as non-cooperative borrowers or willful defaulters, the Bank makes accelerated provisions as per extant RBI guidelines. The Bank holds specific provisions against non-performing loans and advances and against certain performing loans and advances in accordance with RBI directions, including RBI direction for provision on accounts referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016. The assessment of incremental specific provisions is made after taking into consideration the existing specific provision held. The specific provisions on retail loans and advances held by the Bank are higher than the minimum regulatory requirements. a) Provision due to diminution in the fair value of restructured/rescheduled loans and advances is made in accordance with the applicable RBI guidelines. Non-performing and restructured loans are upgraded to standard as per the extant RBI guidelines. b) c) Amounts recovered against debts written-off in earlier years and provisions no longer considered necessary in the context of the current status of the borrower are recognised in the profit and loss account. The Bank maintains general provision on performing loans and advances in accordance with the RBI guidelines, including provisions on loans to borrowers having unhedged foreign currency exposure, provisions on loans to specific borrowers in specific stressed sectors, provision on exposures to step-down subsidiaries of 167 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS d) e) Indian companies and provision on incremental exposure to borrowers identified as per RBI’s large exposure framework. For performing loans and advances in overseas branches, the general provision is made at higher of host country regulations requirement and RBI requirement. In addition to the provisions required to be held according to the asset classification status, provisions are held for individual country exposures including indirect country risk (other than for home country exposure). The countries are categorised into seven risk categories namely insignificant, low, moderately low, moderate, moderately high, high and very high, and provisioning is made on exposures exceeding 180 days on a graded scale ranging from 0.25% to 25%. For exposures with contractual maturity of less than 180 days, provision is required to be held at 25% of the rates applicable to exposures exceeding 180 days. The indirect exposure is reckoned at 50% of the exposure. If the country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded assets, no provision is required on such country exposure. The Bank makes floating provision as per the Board approved policy, which is in addition to the specific and general provisions made by the Bank. The floating provision is utilised, with the approval of Board and RBI, in case of contingencies which do not arise in the normal course of business and are exceptional and non-recurring in nature and for making specific provision for impaired loans as per the requirement of extant RBI guidelines or any regulatory guidance/instructions. The floating provision is netted-off from advances. 4. Transfer and servicing of assets The Bank transfers commercial and consumer loans through securitisation transactions. The transferred loans are de-recognised and gains/losses are accounted for, only if the Bank surrenders the rights to benefits specified in the underlying securitised loan contract. Recourse and servicing obligations are accounted for net of provisions. In accordance with the RBI guidelines for securitisation of standard assets, with effect from February 1, 2006, the Bank accounts for any loss arising from securitisation immediately at the time of sale and the profit/premium arising from securitisation is amortised over the life of the securities issued or to be issued by the special purpose vehicle to which the assets are sold. With effect from May 7, 2012, the RBI guidelines require the profit/premium arising from securitisation to be amortised over the life of the transaction based on the method prescribed in the guidelines. In accordance with RBI guidelines, in case of non-performing/special mention account-2 loans sold to securitisation company (SC)/reconstruction company (RC), the Bank reverses the excess provision in profit and loss account in the year in which amounts are received. Any shortfall of sale value over the net book value on sale of such assets is recognised by the Bank in the year in which the loan is sold. 5. Fixed assets Fixed assets, other than premises, are carried at cost less accumulated depreciation and impairment, if any. Premises are carried at revalued amount, being fair value at the date of revaluation less accumulated depreciation. Cost includes freight, duties, taxes and incidental expenses related to the acquisition and installation of the asset. Depreciation is charged over the estimated useful life of fixed assets on a straight-line basis. The useful lives of the groups of fixed assets are given below. Asset Premises owned by the Bank Leased assets and improvements to leasehold premises ATMs1 Plant and machinery1 (including office equipment) Electric installations and equipments Computers Servers and network equipment1 Furniture and fixtures1 Motor vehicles1 Others (including software and system development expenses)1 1. Useful life 60 years 60 years or lease period whichever is lower 6 - 8 years1 5 -10 years1 10 - 15 years 3 years 4 – 10 years1 5 – 10 years1 5 years1 4 years1 The useful life of assets is based on historical experience of the Bank, which is different from the useful life as prescribed in Schedule II to the Companies Act, 2013. 168 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS a) Assets purchased/sold during the year are depreciated on a pro-rata basis for the actual number of days the asset has been capitalised. b) Items individually costing upto ` 5,000/- are depreciated fully over a period of 12 months from the date of purchase. c) Assets at residences of Bank’s employees are depreciated over the estimated useful life of 5 years. d) In case of revalued/impaired assets, depreciation is provided over the remaining useful life of the assets with reference to revised asset values. In case of premises, which are carried at revalued amounts, the depreciation on the excess of revalued amount over historical cost is transferred from Revaluation Reserve to General Reserve annually. e) The profit on sale of premises is appropriated to capital reserve, net of transfer to Statutory Reserve and taxes, in accordance with RBI guidelines. Non-banking assets Non-Banking Assets (NBAs) acquired in satisfaction of claims are carried at lower of net book value and net realisable value. Further, the Bank creates provision on non-banking assets as per specific RBI directions. 6. Transactions involving foreign exchange Foreign currency income and expenditure items of domestic operations are translated at the exchange rates prevailing on the date of the transaction. Income and expenditure items of integral foreign operations (representative offices) are translated at daily closing rates, and income and expenditure items of non-integral foreign operations (foreign branches and offshore banking units) are translated at quarterly average closing rates. Monetary foreign currency assets and liabilities of domestic and integral foreign operations are translated at closing exchange rates notified by Foreign Exchange Dealers’ Association of India (FEDAI) relevant to the balance sheet date and the resulting gains/losses are included in the profit and loss account. Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated at relevant closing exchange rates notified by FEDAI at the balance sheet date and the resulting gains/losses from exchange differences are accumulated in the foreign currency translation reserve until the disposal of the net investment in the non-integral foreign operations. Pursuant to RBI guideline, the Bank does not recognise the cumulative/proportionate amount of such exchange differences as income or expenses, which relate to repatriation of accumulated retained earnings from overseas operations. The premium or discount arising on inception of forward exchange contracts that are entered into to establish the amount of reporting currency required or available at the settlement date of a transaction is amortised over the life of the contract. All other outstanding forward exchange contracts are revalued based on the exchange rates notified by FEDAI for specified maturities and at interpolated rates for contracts of interim maturities. The contracts of longer maturities where exchange rates are not notified by FEDAI are revalued based on the forward exchange rates implied by the swap curves in respective currencies. The resultant gains or losses are recognised in the profit and loss account. Contingent liabilities on account of guarantees, endorsements and other obligations denominated in foreign currencies are disclosed at the closing exchange rates notified by FEDAI relevant to the balance sheet date. 7. Accounting for derivative contracts The Bank enters into derivative contracts such as interest rate and currency options, interest rate and currency futures, interest rate and currency swaps, credit default swaps and cross currency interest rate swaps. The swap contracts entered to hedge on-balance sheet assets and liabilities are structured such that they bear an opposite and offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments is correlated with the movement of underlying assets and liabilities and accounted pursuant to the principles of hedge accounting. Hedge swaps are accounted for on an accrual basis and are not marked to market unless their underlying transaction is marked to market. 169 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  Foreign currency and rupee derivative contracts entered into for trading purposes are marked to market and the resulting gain or loss is accounted for in the profit and loss account. Pursuant to RBI guidelines, any receivables under derivative contracts which remain overdue for more than 90 days and mark-to-market gains on other derivative contracts with the same counter-parties are reversed through profit and loss account. 8. Employee Stock Option Scheme (ESOS) The Employees Stock Option Scheme (the Scheme) provides for grant of options on the Bank’s equity shares to wholetime directors and employees of the Bank and its subsidiaries. The Scheme provides that employees are granted an option to subscribe to equity shares of the Bank that vest in a graded manner. The options may be exercised within a specified period. The Bank follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date and amortised over the vesting period. The fair market price is the latest closing price, immediately prior to the grant date, which is generally the date of the meeting of the Board Governance, Remuneration & Nomination Committee in which the options are granted, on the stock exchange on which the shares of the Bank are listed. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date is considered. 9. Employee Benefits Gratuity The Bank pays gratuity, a defined benefit plan, to employees who retire or resign after a minimum prescribed period of continuous service and in case of employees at overseas locations as per the rules in force in the respective countries. The Bank makes contribution to a trust which administers the funds on its own account or through insurance companies. The actuarial gains or losses arising during the year are recognised in the profit and loss account. Actuarial valuation of the gratuity liability is determined by an actuary appointed by the Bank. Actuarial valuation of gratuity liability is determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. Superannuation Fund and National Pension Scheme The Bank contributes 15.0% of the total annual basic salary of certain employees to superannuation funds, a defined contribution plan, managed and administered by insurance companies. Further, the Bank contributes 10.0% of the total basic salary of certain employees to National Pension Scheme (NPS), a defined contribution plan, which is managed and administered by pension fund management companies. The Bank also gives an option to its employees allowing them to receive the amount in lieu of such contributions along with their monthly salary during their employment. The amounts so contributed/paid by the Bank to the superannuation fund and NPS or to employees during the year are recognised in the profit and loss account. Pension The Bank provides for pension, a defined benefit plan covering eligible employees of erstwhile Bank of Madura, erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The Bank makes contribution to a trust which administers the funds on its own account or through insurance companies. The plan provides for pension payment including dearness relief on a monthly basis to these employees on their retirement based on the respective employee’s years of service with the Bank and applicable salary. Actuarial valuation of the pension liability is determined by an actuary appointed by the Bank. Actuarial valuation of pension liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. The actuarial gains or losses arising during the year are recognised in the profit and loss account. Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan. 170 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Provident Fund The Bank is statutorily required to maintain a provident fund, a defined benefit plan, as a part of retirement benefits to its employees. Each employee contributes a certain percentage of his or her basic salary and the Bank contributes an equal amount for eligible employees. The Bank makes contribution as required by The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 to Employees’ Pension Scheme administered by the Regional Provident Fund Commissioner. The Bank makes balance contributions to a fund administered by trustees. The funds are invested according to the rules prescribed by the Government of India. Actuarial valuation for the interest rate guarantee on the provident fund balances is determined by an actuary appointed by the Bank. The actuarial gains or losses arising during the year are recognised in the profit and loss account. The overseas branches of the Bank and its eligible employees contribute a certain percentage of their salary towards respective government schemes as per local regulatory guidelines. The contribution made by the overseas branches is recognised in profit and loss account at the time of contribution. Compensated absences The Bank provides for compensated absence based on actuarial valuation conducted by an independent actuary. 10. Income Taxes Income tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Bank. The current tax expense and deferred tax expense is determined in accordance with the provisions of the Income Tax Act, 1961 and as per Accounting Standard 22 - Accounting for Taxes on Income respectively. Deferred tax adjustments comprise changes in the deferred tax assets or liabilities during the year. Deferred tax assets and liabilities are recognised by considering the impact of timing differences between taxable income and accounting income for the current year, and carry forward losses. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. The impact of changes in deferred tax assets and liabilities is recognised in the profit and loss account. Deferred tax assets are recognised and re-assessed at each reporting date, based upon management’s judgement as to whether their realisation is considered as reasonably certain. However, in case of unabsorbed depreciation or carried forward loss, deferred tax assets will be recognised only if there is virtual certainty of realisation of such assets. Minimum Alternate Tax (MAT) credit is recognised as an asset to the extent there is convincing evidence that the Bank will pay normal income tax during specified period, i.e. the period for which MAT credit is allowed to be carried forward as per prevailing provisions of the Income Tax Act, 1961. In accordance with the recommendation contained in the guidance note issued by ICAI, MAT credit is to be recognised as an asset in the year in which it becomes eligible for set off against normal income tax. The Bank reviews MAT credit entitlements at each balance sheet date and writes down the carrying amount to the extent there is no longer convincing evidence to the effect that the Bank will pay normal income tax during the specified period. 11. Impairment of Assets The Bank follows revaluation model of accounting for its premises and the recoverable amount of the revalued assets is considered to be close to its revalued amount. Accordingly, separate assessment for impairment of premises is not required. 12. Provisions, contingent liabilities and contingent assets The Bank estimates the probability of any loss that might be incurred on outcome of contingencies on the basis of information available up to the date on which the financial statements are prepared. A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates of amounts required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. In cases where the available information indicates that the loss on the contingency is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made in the financial statements. In case of remote possibility neither provision nor disclosure is made in the financial statements. The Bank does not account for or disclose contingent assets, if any. 171 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The Bank estimates the probability of redemption of customer loyalty reward points using an actuarial method by employing an independent actuary and accordingly makes provision for these reward points. Actuarial valuation is determined based on certain assumptions regarding mortality rate, discount rate, cancellation rate and redemption rate. 13. Earnings per share (EPS) Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if contracts to issue equity shares were exercised or converted during the year. Diluted earnings per equity share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive. 14. Lease transactions Lease payments for assets taken on operating lease are recognised as an expense in the profit and loss account over the lease term on straight line basis. 15. Cash and cash equivalents Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice. 172 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 18 NOTES FORMING PART OF THE ACCOUNTS The following disclosures have been made taking into account the requirements of Accounting Standards (ASs) and Reserve Bank of India (RBI) guidelines in this regards. 1. Earnings per share Basic and diluted earnings per equity share are computed in accordance with AS 20 – Earnings per share. Basic earnings per equity share is computed by dividing net profit/(loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed using the weighted average number of equity shares and weighted average number of dilutive potential equity shares outstanding during the year. The following table sets forth, for the periods indicated, the computation of earnings per share. Particulars Basic Weighted average number of equity shares outstanding Net profit/(loss) attributable to equity share holders Basic earnings per share (`) Diluted Weighted average no. of equity shares outstanding Net profit/(loss) attributable to equity share holders Diluted earnings per share (`)1 Nominal value per share (`) 1. The dilutive impact is due to options granted to employees by the Bank. ` in million, except per share data Year ended March 31, 2018 Year ended March 31, 2019 6,435,966,473 33,633.0 5.23 6,417,180,759 67,774.2 10.56 6,509,276,099 33,633.0 5.17 2.00 6,482,375,300 67,774.2 10.46 2.00 2. Business/information ratios The following table sets forth, for the periods indicated, the business/information ratios. Year ended March 31, 2019 7.35% 1.68% 2.72% 0.39% 0.4 Year ended March 31, 2018 7.06% 2.24% 3.18% 0.87% 0.8 Sr. No. Particulars Interest income to working funds1 Non-interest income to working funds1 1. 2. 3. Operating profit to working funds1,2 4. 5. 6. 1. 2. 3. 4. 5. Return on assets3 Net profit/(loss) per employee4 (` in million) Business (average deposits plus average advances) per employee4,5 (` in million) For the purpose of computing the ratio, working funds represent the monthly average of total assets computed for reporting dates of Form X submitted to RBI under Section 27 of the Banking Regulation Act, 1949. 107.8 122.2 Operating profit is profit for the year before provisions and contingencies. For the purpose of computing the ratio, assets represent the monthly average of total assets computed for reporting dates of Form X submitted to RBI under Section 27 of the Banking Regulation Act, 1949. Computed based on average number of employees which include sales executives, employees on fixed term contracts and interns. The average deposits and the average advances represent the simple average of the figures reported in Form A to RBI under Section 42(2) of the Reserve Bank of India Act, 1934. 173 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 3. Capital adequacy ratio The Bank is subject to the Basel III capital adequacy guidelines stipulated by RBI with effect from April 1, 2013. The guidelines provide a transition schedule for Basel III implementation till March 31, 2020. As per the guidelines, the Tier-1 capital is made up of Common Equity Tier-1 (CET1) and Additional Tier-1. At March 31, 2019, Basel III guidelines require the Bank to maintain a minimum Capital to Risk-Weighted Assets Ratio (CRAR) of 11.025% with minimum CET1 CRAR of 7.525% and minimum Tier-1 CRAR of 9.025%. The minimum total CRAR, Tier-1 CRAR and CET1 CRAR requirement include capital conservation buffer of 1.875% and additional capital requirement of 0.15% on account of the Bank being designated as Domestic Systemically Important Bank. The following table sets forth, for the periods indicated, computation of capital adequacy as per Basel III framework. Particulars CET1 CRAR (%) Tier-1 CRAR (%) Tier-2 CRAR (%) Total CRAR (%) Amount of equity capital raised Amount of Additional Tier-1 capital raised; of which a) Perpetual Non-Cumulative Preference Shares b) Perpetual Debt Instruments Amount of Tier-2 capital raised; of which a) Debt Capital Instruments b) Preference Share Capital Instruments [Perpetual Cumulative Preference Shares (PCPS)/Redeemable Non- Cumulative Preference Shares (RNCPS)/Redeemable Cumulative Preference Shares (RCPS)] ` in million, except percentages At March 31, 2018 14.43% 15.92% 2.50% 18.42% - At March 31, 2019 13.63% 15.09% 1.80% 16.89% - - 11,400.0 - 55,550.0 - - - - 4. Liquidity coverage ratio The Basel Committee for Banking Supervision (BCBS) had introduced the liquidity coverage ratio (LCR) in order to ensure that a bank has an adequate stock of unencumbered high quality liquid assets (HQLA) to survive a significant liquidity stress lasting for a period of 30 days. LCR is defined as a ratio of HQLA to the total net cash outflows estimated for the next 30 calendar days. As per the RBI guidelines, the minimum LCR required to be maintained by banks shall be implemented in a phased manner from January 1, 2015 as given below. Starting from January 1 Minimum LCR 2015 60.0% 2016 70.0% 2017 80.0% 2018 90.0% 2019 100.0% 174 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS . k n a B e h t f o R C L e h t f o s e u a v l i d e t h g e w d n a d e t h g e w n u i f o e g a r e v a y l r e t r a u q e h t , d e t a c d n i i s d o i r e p e h t r o f , h t r o f t e s l s e b a t i g n w o l l o f e h T n o i l l i m n i ` d e d n e s h t n o m e e r h T 8 1 0 2 , 0 3 e n u J d e d n e s h t n o m e e r h T 8 1 0 2 , 0 3 r e b m e t p e S d e d n e s h t n o m e e r h T 8 1 0 2 , 1 3 r e b m e c e D d e d n e s h t n o m e e r h T d e d n e s h t n o m e e r h T 8 1 0 2 , 1 3 h c r a M 9 1 0 2 , 1 3 h c r a M l a t o T l a t o T l a t o T l a t o T l a t o T l a t o T l a t o T l a t o T l a t o T l a t o T e u a v l e u a v l e u a v l e u a v l e u a v l e u a v l e u a v l e u a v l e u l a v e u l a v ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( ) e g a r e v a ( d e t h g e w i d e t h g e w n u i d e t h g e w i d e t h g e w n u i d e t h g e w i d e t h g e w n u i d e t h g e w i d e t h g e w n u i d e t h g i e w d e t h g i e w n u s t e s s a d u q i i l y t i l a u q h g H i l s r a u c i t r a P . o N . r S 1 . 2 4 2 , 5 7 0 , 1 . A N . 4 . 9 9 7 , 7 0 1 , 1 . A N . 0 . 4 4 0 , 6 4 2 , 1 . A N . 5 . 0 1 0 , 1 5 0 , 1 . A N . 0 . 2 2 6 , 4 3 4 , 1 . . A N s t e s s a d u q i i l y t i l a u q h g h i l a t o T . 1 7 . 4 8 4 , 7 2 1 . 3 9 6 , 9 4 5 1 . 5 3 9 , 7 2 0 . 3 0 7 , 8 5 5 1 . 4 5 5 , 8 2 9 . 1 8 0 , 1 7 5 6 . 6 6 9 , 6 2 4 . 2 3 3 , 9 3 5 9 . 7 5 1 , 9 2 0 . 9 5 1 , 3 8 5 9 . 5 2 8 , 4 9 2 7 . 4 0 1 , 3 2 2 , 3 4 . 9 4 5 , 3 0 3 4 . 6 4 8 , 4 1 3 , 3 9 . 3 8 8 , 6 1 3 4 . 9 7 3 , 4 5 4 , 3 3 . 6 5 2 , 4 8 2 1 . 9 2 2 , 2 1 1 , 3 9 . 1 4 3 , 0 3 3 9 . 8 9 9 , 4 9 5 , 3 2 . 1 4 3 , 7 6 2 6 . 1 1 4 , 3 7 6 , 2 3 . 4 1 6 , 5 7 2 4 . 3 4 1 , 6 5 7 , 2 8 . 9 2 3 , 8 8 2 5 . 7 9 2 , 3 8 8 , 2 7 . 9 8 2 , 7 5 2 7 . 6 9 8 , 2 7 5 , 2 0 . 4 8 1 , 1 0 3 9 . 9 3 8 , 1 1 0 , 3 : h c h w i f o , s r e m o t s u c s s e n i s u b l l a m s m o r f s t i s o p e d d n a s t i s o p e d l i a t e R . 2 s w o l f t u o h s a C s t i s o p e d e b a t s l s s e L s t i s o p e d e b a t S l ) i ( ) i i ( . s e u a v l y l i a d n o d e s a b d e t u p m o c n e e b s a h e g a r e v a l e p m i s e h T 5 . 0 6 8 , 9 6 7 0 . 6 6 3 , 1 0 5 , 1 2 . 7 7 1 , 2 1 7 9 . 1 5 9 , 4 5 4 , 1 4 . 2 9 8 , 7 3 7 1 . 9 8 1 , 0 1 5 , 1 8 . 8 6 8 , 7 8 7 6 . 4 8 2 , 9 0 5 , 1 3 . 6 9 5 , 7 0 8 0 . 4 7 1 , 8 1 6 , 1 : h c h w i f o , i g n d n u f 1 . 5 2 6 , 1 9 6 . 0 0 5 , 6 6 3 4 . 4 9 6 , 9 9 7 . 7 7 7 , 8 9 3 4 . 9 3 5 , 3 0 1 6 . 7 5 1 , 4 1 4 4 . 6 3 2 , 3 8 6 . 5 4 9 , 2 3 3 0 . 6 7 4 , 0 1 1 0 . 4 0 9 , 1 4 4 7 . 7 8 0 , 3 1 6 7 . 7 1 7 , 9 6 0 , 1 8 . 4 6 1 , 8 5 5 2 . 6 5 8 , 1 0 0 , 1 1 . 4 0 6 , 3 4 5 6 . 2 8 2 , 5 0 0 , 1 1 . 7 8 5 , 8 0 6 7 . 3 9 2 , 0 8 0 , 1 3 . 4 4 5 , 1 2 6 0 . 4 9 6 , 0 0 1 , 1 s t i s o p e d l a n o i t a r e p o - n o N ) i i ( ) s e i t r a p r e t n u o c l l a ( ) s e i t r a p r e t n u o c l l a ( s t i s o p e d l a n o i t a r e p O ) i ( 7 . 7 4 1 , 5 6 7 . 7 4 1 , 5 6 0 . 8 1 3 , 4 5 0 . 8 1 3 , 4 5 9 . 8 4 7 , 0 9 9 . 8 4 7 , 0 9 3 . 5 4 0 , 6 9 3 . 5 4 0 , 6 9 0 . 6 7 5 , 5 7 0 . 6 7 5 , 5 7 t b e d d e r u c e s n U ) i i i ( - . A N . - . A N . - . A N . 5 . 0 . A N . 8 . 4 1 . . A N i g n d n u f l l e a s e o h w d e r u c e S 7 . 4 8 9 , 2 0 1 6 . 9 8 4 , 1 0 4 3 . 7 9 6 , 9 0 1 7 . 2 2 0 , 1 3 4 4 . 3 2 2 , 6 1 1 6 . 4 2 0 , 4 6 4 1 . 2 1 1 , 2 0 1 9 . 2 1 4 , 2 1 4 0 . 3 1 8 , 9 0 1 0 . 2 6 6 , 6 3 4 : h c h w i f o , s t n e m e r i u q e r l a n o i t i d d A 3 . 2 8 2 3 . 2 8 2 9 . 4 5 2 9 . 4 5 2 7 . 5 4 2 7 . 5 4 2 3 . 1 2 3 3 . 1 2 3 4 . 4 4 2 4 . 4 4 2 4 . 7 6 4 , 6 5 4 . 7 6 4 , 6 5 8 . 5 4 5 , 0 6 8 . 5 4 5 , 0 6 4 . 5 8 9 , 2 6 4 . 5 8 9 , 2 6 2 . 3 7 8 , 4 5 2 . 3 7 8 , 4 5 4 . 5 5 3 , 0 6 4 . 5 5 3 , 0 6 l a r e t a l l o c r e h t o d n a s e r u s o p x e e v i t a v i r e d o t d e t a e r l s w o l f t u O ) i ( s t n e m e r i u q e r s t c u d o r p t b e d n o g n d n u f i f o s s o l o t d e t a e r l s w o l f t u O ) i i ( 0 . 5 3 2 , 6 4 9 . 9 3 7 , 4 4 3 6 . 6 9 8 , 8 4 0 . 2 2 2 , 0 7 3 3 . 2 9 9 , 2 5 5 . 3 9 7 , 0 0 4 6 . 7 1 9 , 6 4 4 . 8 1 2 , 7 5 3 2 . 3 1 2 , 9 4 2 . 2 6 0 , 6 7 3 s e i t i l i c a f y t i d u q i i l d n a t i d e r C ) i i i ( 2 . 9 8 1 , 6 8 2 . 9 8 1 , 6 8 2 . 1 5 4 , 9 9 2 . 1 5 4 , 9 9 1 . 9 3 4 , 5 0 1 1 . 9 3 4 , 5 0 1 0 . 4 9 3 , 9 7 0 . 4 9 3 , 9 7 4 . 2 1 5 , 1 0 1 4 . 2 1 5 , 1 0 1 s n o i t a g i l b o g n d n u f i l a u t c a r t n o c r e h t O 3 . 6 8 2 , 6 7 0 . 2 2 3 , 5 8 9 , 1 3 . 8 5 3 , 8 7 6 . 3 2 5 , 5 4 0 , 2 6 . 5 2 5 , 2 8 0 . 6 0 8 , 3 5 1 , 2 5 . 2 2 5 , 4 7 6 . 6 6 1 , 0 4 9 , 1 7 . 8 7 2 , 8 8 0 . 4 2 7 , 3 7 2 , 2 s n o i t a g i l b o g n d n u f i t n e g n i t n o c r e h t O 6 . 6 4 1 , 0 3 3 , 1 . . A N 4 . 3 3 2 , 3 0 3 , 1 . . A N 4 . 4 6 9 , 8 5 3 , 1 . . A N 2 . 4 5 1 , 8 2 3 , 1 . . A N 1 . 7 5 5 , 7 3 4 , 1 . . A N s w o l f t u o h s a c l a t o T 6 . 2 1 1 . 4 7 1 , 5 8 6 . 3 1 1 . 1 7 1 , 4 4 - 3 . 6 7 9 , 0 2 5 . 4 0 . 4 9 9 , 0 5 - 3 . 5 1 8 , 1 7 ) s o p e r e s r e v e r . g . e ( g n d n e i l d e r u c e S l l e a s e o h w d e r u c e s n U . 3 . 4 . 5 . 6 . 7 . 8 . 9 4 . 1 9 3 , 6 3 9 % 3 8 . 4 1 1 1 . 2 4 2 , 5 7 0 , 1 . . A N . A N . . . A N 6 . 0 3 5 , 1 6 9 % 1 2 . 5 1 1 4 . 9 9 7 , 7 0 1 , 1 . . A N . A N . . . A N 0 . 4 4 0 , 6 4 2 , 1 . . A N 9 . 9 9 7 , 0 0 0 , 1 . A N . % 0 5 . 4 2 1 . . A N 4 . 8 7 2 , 6 3 9 % 5 2 . 2 1 1 5 . 0 1 0 , 1 5 0 , 1 . . A N . A N . . . A N 0 . 2 2 6 , 4 3 4 , 1 . . A N 2 . 1 4 9 , 0 9 0 , 1 . . A N % 0 5 . 1 3 1 . . A N 4 . 5 9 0 , 6 2 6 . 6 7 5 , 2 4 2 . 8 6 0 , 2 3 9 . 2 6 0 , 0 5 2 . 1 5 0 , 8 3 5 . 4 6 9 , 8 5 9 . 9 8 7 , 7 2 8 . 6 8 1 , 5 4 0 . 5 9 4 , 6 3 1 . 1 4 1 , 9 5 2 . 7 4 6 , 7 6 3 1 . 5 8 5 , 4 2 4 0 . 1 2 6 , 9 0 3 2 . 6 6 4 , 4 7 3 3 . 3 1 1 , 0 2 3 0 . 4 7 5 , 2 9 3 4 . 1 8 0 , 4 6 3 3 . 8 6 2 , 2 3 4 9 . 0 2 1 , 0 1 3 0 . 1 9 1 , 0 9 3 2 . 5 5 7 , 3 9 3 8 . 5 3 3 , 2 5 5 8 . 2 0 7 , 1 4 3 2 . 0 0 7 , 8 6 4 5 . 4 6 1 , 8 5 3 8 . 4 1 5 , 2 7 4 8 . 5 7 8 , 1 9 3 1 . 9 4 4 , 8 2 5 9 . 5 1 6 , 6 4 3 4 . 7 4 1 , 1 2 5 ) 2 1 ( - ) 8 ( s w o l f t u o h s a c t e n l a t o T . 4 1 s e r u s o p x e g n m r o f r e p i y l l u f m o r f s w o l f n I . 0 1 s w o l f n i h s a c r e h t O . 1 1 s w o l f n i h s a c l a t o T . 2 1 A L Q H l a t o T . 3 1 ) % ( o i t a r e g a r e v o c i y t i d u q L i . 5 1 t n e m e g a n a M y t i l i i b a L t e s s A e h t f o t h g i s r e v o l a r t n e c e h t r e d n u ) G M L A ( p u o r G t n e m e g a n a M y t i l i i b a L t e s s A e h t y b d e g a n a m s i k n a B e h t f o y t i d u q L i i e h t r o F . y t i d u q i i l f o t n e m e g a n a m l l a r e v o e h t r o f l e b i s n o p s e r s i i a d n I - G M L A , k n a B e h t f o s n o i t a r e p o c i t s e m o d e h t r o F . ) O C L A ( e e t t i m m o C s i h c a o r p p a d e s i l a r t n e c a e l i h w , t n e m e g a n a m y t i d u q i i l y a d - o t - y a d r o f d e w o l l o f s i h c a o r p p a d e s i l a r t n e c e d a , k n a B e h t f o s e h c n a r b s a e s r e v o n o i t a r e d i s n o c o t n i g n i k a t i d e n a t n a m s i i s e h c n a r b s a e s r e v o e h t n i i y t i d u q L i . e c i f f O - d a e H h t i w n o i t a n d r o - o c i n i i g n d n u f m r e t - g n o l r o f d e w o l l o f . s n o i t a u g e r l I B R e h t d n a y r t n u o c t s o h h t o b 175 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The Bank during the three months ended March 31, 2019 maintained average HQLA (after haircut) of ` 1,434,622.0 million (March 31, 2018: ` 1,051,010.5 million) against the average liquidity requirement of ` 1,090,941.2 million (March 31, 2018: ` 842,650.4 million) at minimum LCR requirement of 100.0% (March 31, 2018: 90.0%). HQLA primarily includes government securities in excess of minimum statutory liquidity ratio (SLR) and to the extent allowed under marginal standing facility (MSF) and facility to avail liquidity for LCR (FALLCR) of ` 1,189,674.2 million (March 31, 2018: ` 815,035.6 million). With effect from June 15, 2018, RBI permitted banks to reckon an additional 2.0% of their net demand and time liabilities (NDTL) under FALLCR within the mandatory statutory liquidity requirement (SLR), as Level 1 high quality liquid assets (HQLA) for the purpose of computing their LCR. Further, in September 2018, RBI permitted banks to reckon an additional 2.0% of their net demand and time liabilities (NDTL) with effect from October 1, 2018 under FALLCR within the mandatory statutory liquidity requirement (SLR), as Level 1 high quality liquid assets (HQLA) for the purpose of computing their LCR. Hence, the carve-out from SLR under FALLCR will now be 13.0% compared to 9.0% as of March 31, 2018. This takes the total carve out from SLR available to banks at 15.0% of their NDTL including 2.0% of MSF. Additionally, cash balance in excess of cash reserve requirement with RBI and balances with central banks of countries where the Bank’s branches are located amounted to ` 178,691.5 million (March 31, 2018: ` 160,400.8 million). Further, average level 2 assets primarily consisting of AA- and above rated corporate bonds and commercial papers, amounted to ` 47,040.3 million (March 31, 2018: ` 50,909.9 million). At March 31, 2019, top liability products/instruments and their percentage contribution to the total liabilities of the Bank were term deposits 34.11% (March 31, 2018: 30.83%), savings account deposits 23.61% (March 31, 2018: 22.86%), bond borrowings 9.29% (March 31, 2018: 10.68%) and current account deposits 9.98% (March 31, 2018: 10.12%). Top 20 depositors constituted 5.74% (March 31, 2018: 6.20%) of total deposits of the Bank at March 31, 2019. Further, the total borrowings mobilised from significant counterparties (from whom the funds borrowed were more than 1.00% of the Bank’s total liabilities) were 7.04% (March 31, 2018: 8.92%) of the total liabilities of the Bank at March 31, 2019. The weighted cash outflows are primarily driven by unsecured wholesale funding which includes operational deposits, non-operational deposits and unsecured debt. During the three months ended March 31, 2019, unsecured wholesale funding contributed 56.18% (March 31, 2018: 59.32%) of the total weighted cash outflows. The non-operational deposits include term deposits with premature withdrawal facility. Retail deposits including deposits from small business customers and other contingent funding obligations contributed 22.98% (March 31, 2018: 21.40%) and 6.14% (March 31, 2018: 5.61%) of the total weighted cash outflows, respectively. The other contingent funding obligations primarily include bank guarantees (BGs) and letters of credit (LCs) issued on behalf of the Bank’s clients. In view of the margin rules for non-centrally cleared derivative transactions issued by the Basel Committee on Banking Supervision and discussion paper issued by the RBI, certain derivative transactions would be subject to margin reset and consequent collateral exchange would be as governed by Credit Support Annex (CSA). The margin rules are applicable for both the domestic and overseas operations of the Bank. The Bank has entered into CSAs which would require maintenance of collateral due to valuation changes on transactions under the CSA framework. The Bank considers the increased liquidity requirement on account of valuation changes in the transactions settled through Qualified Central Counterparties (QCCP) in India including the Clearing Corporation of India (CCIL) and other exchange houses as well as for transactions covered under CSAs. The potential outflows on account of such transactions have been considered based on the look-back approach prescribed in the RBI guidelines. The average LCR of the Bank for the three months ended March 31, 2019 was 131.50% (March 31, 2018: 112.25%). During the three months ended March 31, 2019, other than Indian Rupee, USD was the only significant foreign currency which constituted more than 5.00% of the balance sheet size of the Bank. The average LCR of the Bank for USD currency, computed based on daily LCR values, was 117.77% for the three months ended March 31, 2019 (March 31, 2018: 112.57% computed based on month-end LCR values). 5. Information about business and geographical segments Business Segments Pursuant to the guidelines issued by RBI on AS 17 - Segment Reporting - Enhancement of Disclosures dated April 18, 2007, effective from year ended March 31, 2008, the following business segments have been reported. • Retail Banking includes exposures which satisfy the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures laid down in Basel Committee on Banking Supervision (BCBS) 176 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS document ‘International Convergence of Capital Measurement and Capital Standards: A Revised Framework’. This segment also includes income from credit cards, debit cards, third party product distribution and the associated costs. • Wholesale Banking includes all advances to trusts, partnership firms, companies and statutory bodies, which are not included under Retail Banking. • Treasury includes the entire investment and derivative portfolio of the Bank. • Other Banking includes leasing operations and other items not attributable to any particular business segment. Income, expenses, assets and liabilities are either specifically identified with individual segments or are allocated to segments on a systematic basis. All liabilities are transfer priced to a central treasury unit, which pools all funds and lends to the business units at appropriate rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve requirements. The transfer pricing mechanism of the Bank is periodically reviewed. The segment results are determined based on the transfer pricing mechanism prevailing for the respective reporting periods. The following tables set forth, for the periods indicated, the business segment results on this basis. For the year ended March 31, 2019 ` in million Sr. No. Particulars Revenue 1. Less: Inter-segment revenue 2. Total revenue (1)–(2) 3. 4. Segment results 5. Unallocated expenses 6. Operating profit (4)-(5) 7. Income tax expenses (including deferred tax credit) 8. Net profit/(loss) (6)-(7) Segment assets 9. 10. Unallocated assets1 11. Total assets (9)+(10) 12. Segment liabilities 13. Unallocated liabilities 14. Total liabilities (12)+(13) 15. Capital expenditure 16. Depreciation 1. Retail Banking Wholesale Banking Treasury 591,723.3 341,685.1 539,240.6 82,231.2 (102,423.5) 51,651.3 Total Other Banking Business 15,621.1 1,488,270.1 709,136.5 779,133.6 37,767.6 - 37,767.6 6,308.6 3,071,558.3 2,884,954.5 3,329,564.1 4,889,760.0 1,874,784.2 2,800,228.12 5,436.5 5,559.0 1,966.4 2,111.0 - 0.4 4,134.6 33,633.0 158,880.1 9,444,957.0 199,634.5 9,644,591.5 79,819.2 9,644,591.5 - 9,644,591.5 7,469.9 7,769.1 67.0 98.7 Includes tax paid in advance/tax deducted at source (net) and deferred tax assets (net). 2. Includes share capital and reserves and surplus. 177 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Sr. No. Particulars Revenue 1. Less: Inter-segment revenue 2. Total revenue (1)–(2) 3. 4. Segment results 5. Unallocated expenses 6. Operating profit (4)-(5) 7. Income tax expenses (including deferred tax credit) 8. Net profit/(loss) (6)-(7) 9. Segment assets 10. Unallocated assets1 11. Total assets (9)+(10) 12. Segment liabilities 13. Unallocated liabilities 14. Total liabilities (12)+(13) 15. Capital expenditure 16. Depreciation 1. For the year ended March 31, 2018 ` in million Retail Banking Wholesale Banking Treasury 502,625.4 300,940.2 519,603.8 71,414.2 (82,813.0) 81,149.3 Total Other Banking Business 12,787.2 1,335,956.6 612,101.4 723,855.2 74,345.5 - 74,345.5 4,595.0 2,586,385.4 2,657,712.2 3,303,399.8 4,135,023.7 1,672,682.4 2,946,198.72 7,393.7 6,665.6 1,302.8 1,081.8 24.3 17.7 6,571.3 67,774.2 107,924.8 8,655,422.2 136,469.4 8,791,891.6 37,986.8 8,791,891.6 - 8,791,891.6 8,745.6 7,807.4 24.8 42.3 Includes tax paid in advance/tax deducted at source (net) and deferred tax assets (net). 2. Includes share capital and reserves and surplus. Geographical segments The Bank reports its operations under the following geographical segments. • Domestic operations comprise branches in India. • Foreign operations comprise branches outside India and offshore banking units in India. The following table sets forth, for the periods indicated, geographical segment results. Revenues Domestic operations Foreign operations Total Year ended March 31, 2019 736,185.1 42,948.5 779,133.6 ` in million Year ended March 31, 2018 685,764.0 38,091.2 723,855.2 The following table sets forth, for the periods indicated, geographical segment assets. Domestic operations Foreign operations Total Segment assets do not include tax paid in advance/tax deducted at source (net) and deferred tax assets (net). At March 31, 2019 8,554,413.9 890,543.1 9,444,957.0 ` in million At March 31, 2018 7,724,037.0 931,385.2 8,655,422.2 Assets 178 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, for the periods indicated, capital expenditure and depreciation thereon for the geographical segments. Particulars Domestic operations Foreign operations Total 6. Maturity pattern Capital expenditure incurred during Year ended March 31, 2018 8,584.1 161.5 8,745.6 Year ended March 31, 2019 7,329.9 140.0 7,469.9 Depreciation provided during Year ended March 31, 2019 7,679.8 89.3 7,769.1 Year ended March 31, 2018 7,739.8 67.6 7,807.4 ` in million The following table sets forth, the maturity pattern of assets and liabilities of the Bank at March 31, 2019. Maturity buckets Loans & Advances1 Investment securities1 Deposits1 Borrowings1 Day 1 2 to 7 days 8 to 14 days 15 to 30 days 31 days to 2 months 2 to 3 months 3 to 6 months 6 months to 1 year 1 to 3 years 3 to 5 years Above 5 years Total 1. Includes foreign currency balances. 112,052.1 327,197.8 18,074.7 443,751.3 135,338.6 42,903.4 162,499.0 62,223.9 44,478.6 140,542.6 89,610.7 153,054.5 210,081.1 51,194.8 215,897.3 171,189.6 48,940.1 229,534.3 335,622.8 100,862.9 476,884.4 722,505.4 212,942.9 673,180.7 237,442.3 653,019.0 1,544,031.3 332,798.6 1,795,681.7 1,036,848.4 1,431,578.2 478,774.2 1,782,252.1 5,866,465.8 2,077,326.8 6,529,196.7 2. Excludes off-balance sheet assets and liabilities. ` in million Total Total foreign foreign currency currency liabilities2 assets2 3,566.6 235,787.1 19,645.1 124,344.4 8,186.2 16,749.6 52,279.6 65,936.0 142,897.9 89,126.2 54,264.0 81,016.6 177,512.8 136,678.8 285,663.2 127,971.4 206,655.1 129,809.1 109,048.7 84,077.9 115,570.4 140,159.2 1,653,199.7 1,231,656.3 1,175,289.6 - 74,566.7 1,116.9 53,488.3 130,147.6 45,880.0 164,802.0 256,331.1 336,246.3 314,786.8 275,834.0 179 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS The following table sets forth, the maturity pattern of assets and liabilities of the Bank at March 31, 2018. Maturity buckets Loans & Advances1 Investment securities1 Deposits1 Borrowings1 Day 1 2 to 7 days 8 to 14 days 15 to 30 days 31 days to 2 months 2 to 3 months 3 to 6 months 6 months to 1 year 1 to 3 years 3 to 5 years Above 5 years Total 1. Includes foreign currency balances. 92,186.7 248,957.1 8,269.3 435,307.2 220,653.2 45,366.0 142,865.4 80,973.0 51,069.5 83,340.3 100,440.0 114,084.8 195,498.1 40,682.1 176,811.3 161,686.7 54,101.1 211,245.8 294,857.1 99,057.9 448,622.1 487,247.8 191,411.3 552,756.4 557,322.3 274,485.7 1,240,469.0 275,685.9 1,586,822.7 905,127.2 1,370,131.5 443,494.5 1,572,617.8 5,123,952.9 2,029,941.8 5,609,752.1 ` in million Total Total foreign foreign currency currency liabilities2 assets2 1,597.0 12,974.8 8,076.4 320,146.2 23,194.4 18,014.4 42,027.0 45,594.1 29,495.8 67,639.3 74,672.7 60,259.6 119,756.2 104,404.0 211,011.2 113,605.0 418,914.5 162,479.4 117,477.0 88,163.8 113,742.0 227,599.5 1,828,586.2 1,220,880.1 1,159,964.2 - 155,100.1 31,043.3 48,153.1 51,716.4 78,375.8 97,585.3 215,439.8 531,721.2 267,450.8 352,000.4 2. Excludes off-balance sheet assets and liabilities. The estimates and assumptions used by the Bank for classification of assets and liabilities under the different maturity buckets is based on the returns submitted to RBI for the relevant periods. 7. Preference shares During the year ended March 31, 2019, the Bank redeemed preference shares of ` 3,500.0 million after obtaining requisite approval from RBI. The Bank has created capital redemption reserve of ` 3,500.0 million as required under the Companies Act, 2013, out of surplus profits available for previous years. 8. Employee Stock Option Scheme (ESOS) In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of all such options granted to the eligible employees shall not exceed 10% of the aggregate number of the issued equity shares of the Bank on the date(s) of the grant of options in line with SEBI Regulations. Under the stock option scheme, eligible employees are entitled to apply for equity shares. In April 2016, exercise period was modified from 10 years from the date of grant or five years from the date of vesting, whichever is later, to 10 years from the date of vesting of options. In June 2017, exercise period was further modified to not exceed 10 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee to be applicable for future grants. In May 2018, exercise period was further modified to not exceed 5 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee to be applicable for future grants. Options granted after March 2014, vest in a graded manner over a three-year period with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 12 months from the date of grant other than certain options granted in April 2014 which vested to the extent of 50% on April 30, 2017 and the balance vested on April 30, 2018 and option granted in September 2015 which vested to the extent of 50% on April 30, 2018 and balance 50% would vest on April 30, 2019. However, for the options granted in September 2015, if the participant’s employment terminates due to retirement (including pursuant to any early/voluntary retirement scheme), all the unvested options would lapse. Options granted in January 2018 would vest at the end of four years from the date of grant. Certain options granted in May 2018, would vest to the extent of 50% on May 7, 2021 and balance 50% would vest on May 7, 2022 and any unvested options would lapse upon termination of employment due to retirement (including pursuant to early/voluntary retirement scheme). 180 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  Options granted prior to March 2014 except mentioned below, vested in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the grants vesting in each year, commencing from the end of 12 months from the date of grant. Options granted in April 2009 vested in a graded manner over a five-year period with 20%, 20%, 30% and 30% of grant vesting each year, commencing from the end of 24 months from the date of grant. Options granted in September 2011 vested in a graded manner over a five-year period with 15%, 20%, 20% and 45% of grant vesting each year, commencing from the end of 24 months from the date of the grant. The exercise price of the Bank’s options, except mentioned below, is the last closing price on the stock exchange, which recorded highest trading volume preceding the date of grant of options. In February 2011, the Bank granted 16,692,500 options to eligible employees and whole-time Directors of the Bank and certain of its subsidiaries at an exercise price of ` 175.82. This exercise price was the average closing price on the stock exchange during the six months ended October 28, 2010. Of these options granted, 50% vested on April 30, 2014 and the balance 50% vested on April 30, 2015. Based on intrinsic value of options, no compensation cost was recognised during the year ended March 31, 2019 (year ended March 31, 2018: Nil). If the Bank had used the fair value of options based on binomial tree model, compensation cost in the year ended March 31, 2019 would have been higher by ` 3,179.0 million (year ended March 31, 2018: ` 3,526.6 million) and proforma profit after tax would have been ` 30,454.0 million (year ended March 31, 2018: ` 64,247.6 million). On a proforma basis, the Bank’s basic and diluted earnings per share would have been ` 4.73 (year ended March 31, 2018: ` 10.01) and ` 4.68 (year ended March 31, 2018: ` 9.91) respectively for the year ended March 31, 2019. The following table sets forth, for the periods indicated, the key assumptions used to estimate the fair value of options granted. Particulars Risk-free interest rate Expected life Expected volatility Expected dividend yield Year ended Year ended March 31, 2018 March 31, 2019 7.06% to 7.59% 7.32% to 8.31% 3.64 to 6.64 years 3.90 to 6.90 years 30.79% to 32.22% 31.71% to 32.92% 0.73% to 1.81% 0.43% to 0.80% The weighted average fair value of options granted during the year ended March 31, 2019 was ` 107.22 (year ended March 31, 2018: ` 86.43). Risk free interest rates over the expected term of the option are based on the government securities yield in effect at the time of the grant. The expected term of an option is estimated based on the vesting term as well as expected exercise behavior of the employees who receive the option. Expected exercise behaviour is estimated based on the historical stock option exercise pattern of the Bank. Expected volatility during the estimated expected term of the option is based on historical volatility determined based on observed market prices of the Bank's publicly traded equity shares. Expected dividends during the estimated expected term of the option are based on recent dividend activity. 181 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, for the periods indicated, the summary of the status of the Bank’s stock option plan. Particulars Outstanding at the beginning of the year Add: Granted during the year1 Less: Lapsed during the year, net of re-issuance Less: Exercised during the year Outstanding at the end of the year Options exercisable 1. ` except number of options Stock options outstanding Year ended March 31, 2019 Year ended March 31, 2018 Number of options 235,672,250 35,419,900 20,415,499 18,248,877 232,427,774 152,151,329 Weighted average exercise price 224.19 283.91 229.88 191.04 235.40 222.84 Number of options 226,715,682 35,137,770 5,114,174 21,067,028 235,672,250 136,428,736 Weighted average exercise price 217.12 251.05 248.30 187.00 224.19 208.44 Includes stock options granted to WTDs which are pending regulatory approvals. The following table sets forth, the summary of stock options outstanding at March 31, 2019. Range of exercise price (` per share) Number of shares arising out of options Weighted average exercise price (` per share) 60-99 100-199 200-299 300-399 1,602,975 33,771,457 196,076,442 976,900 79.15 166.66 248.04 329.56 The following table sets forth, the summary of stock options outstanding at March 31, 2018. Range of exercise price (` per share) Number of shares arising out of options Weighted average exercise price (` per share) 60-99 100-199 200-299 300-399 1,849,150 47,665,539 185,857,561 300,000 79.12 165.43 240.57 309.50 Weighted average remaining contractual life (Number of years) 3.84 4.23 8.11 8.64 Weighted average remaining contractual life (Number of years) 4.91 4.85 9.43 13.79 The options were exercised regularly throughout the period and weighted average share price as per National Stock Exchange price volume data during the year ended March 31, 2019 was ` 326.37 (year ended March 31, 2018: ` 296.94). 9. Subordinated debt The following table sets forth, the details of subordinated debt bonds qualifying for Additional Tier-1 capital raised during the year ended March 31, 2019. Particulars Subordinate Additional Tier-1 1. Date of Issue Coupon Rate (%) 9.90% (annually) December 28, 2018 Tenure Perpetual1 Amount 11,400.0 Call option exercisable on December 28, 2023 and on every interest payment date thereafter (exercisable with RBI approval). 182 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, the details of subordinated debt bonds qualifying for Additional Tier-1 capital raised during the year ended March 31, 2018. Particulars Subordinate Additional Tier-1 Subordinate Additional Tier-1 Subordinate Additional Tier-1 1. Date of Issue September 20, 2017 October 4, 2017 March 20, 2018 Coupon Rate (%) 8.55% (annually) 8.55% (annually) 9.15% (annually) Tenure Perpetual1 Perpetual2 Perpetual3 ` in million Amount 10,800.0 4,750.0 40,000.0 Call option exercisable on September 20, 2022 and on every interest payment date thereafter (exercisable with RBI approval). 2. 3. Call option exercisable on October 4, 2022 and on every interest payment date thereafter (exercisable with RBI approval). Call option exercisable on June 20, 2023 and on every interest payment date thereafter (exercisable with RBI approval). During the year ended March 31, 2019, the Bank has not raised subordinated debt qualifying for Tier-2 capital (March 31, 2018: Nil). 10. Repurchase transactions The following tables set forth for the periods indicated, the details of securities sold and purchased under repo and reverse repo transactions respectively including transactions under Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF). Sr. No. Particulars Minimum outstanding balance during the Maximum outstanding balance during the Daily average outstanding balance during the Year ended March 31, 2019 ` in million Outstanding balance at March 31, 2019 Government Securities Corporate Debt Securities Securities sold under Repo, LAF and MSF i) ii) Securities purchased under Reverse Repo and LAF i) ii) 1. Government Securities Corporate Debt Securities Amounts reported are based on face value of securities under Repo and Reverse repo. - - - - 183,972.2 1,000.0 293,919.6 2,000.0 2. 3. Amounts reported are based on lending/borrowing amount under LAF and MSF. Includes tri-party repo transactions. 37,694.6 2.7 59,525.3 49.3 61,716.3 - 99,000.0 - Minimum outstanding balance during the Maximum outstanding balance during the Daily average outstanding balance during the Year ended March 31, 2018 ` in million Outstanding balance at March 31, 2018 - - 129,841.0 1,000.0 15,706.0 4.4 115,920.0 - Sr. No. Particulars Government Securities Corporate Debt Securities Securities sold under Repo, LAF and MSF i) ii) Securities purchased under Reverse Repo and LAF i) ii) 1. Government Securities Corporate Debt Securities Amounts reported are based on face value of securities under Repo and Reverse repo. - - 323,000.0 2,000.0 2. Amounts reported are based on lending/borrowing amount under LAF and MSF. 70,930.9 7.7 170,390.0 - 183 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 11. Investments The following table sets forth, for the periods indicated, the details of investments and the movement of provision held towards depreciation on investments of the Bank. Particulars Sr. No. 1. Value of Investments i) Gross value of investments a) In India b) Outside India ii) Provision for depreciation c) In India d) Outside India iii) Net value of investments e) In India f) Outside India 2. Movement of provisions held towards depreciation on investments i) Opening balance ii) Add: Provisions made during the year iii) Less: Write-off/write-back of excess provisions during the year iv) Closing balance At March 31, 2019 ` in million At March 31, 2018 2,062,886.2 64,377.2 2,003,754.4 73,275.2 (49,109.9) (826.7) (41,654.9) (5,432.9) 2,013,776.3 63,550.5 1,962,099.5 67,842.3 47,087.8 9,757.5 (6,908.7) 49,936.6 35,429.8 28,923.0 (17,265.0) 47,087.8 During the year ended March 31, 2019, the Bank sold 2.00% of its shareholding in ICICI Prudential Life Insurance Limited and made a net gain of ` 11,095.9 million on this sale. During the year ended March 31, 2018, the Bank sold approximately 7.00% of its shareholding in ICICI Lombard General Insurance Company Limited in the IPO and made a net gain of ` 20,121.5 million on this sale. Further, the Bank sold approximately 20.78% of its shareholding in ICICI Securities Limited in the IPO and made a net gain of ` 33,197.7 million on this sale. The following table sets forth, for the periods indicated, break-up of other investments in Schedule 8. Investments I. In India Pass through certificates Commercial paper Certificate of deposits Security receipts Venture funds Others Total II. Outside India Certificate of deposits Shares Bonds Venture funds Total Grand total 184 At March 31, 2019 ` in million At March 31, 2018 136,172.1 105,614.9 30,301.1 32,856.3 2,923.9 4,307.1 312,175.4 4,493.9 310.1 - 1,892.8 6,696.8 318,872.2 120,469.0 128,647.6 43,897.9 34,383.0 3,436.8 253.7 331,088.0 4,234.9 309.5 2,023.0 970.8 7,538.2 338,626.2 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 12. Investment in securities, other than government and other approved securities (Non-SLR investments) i) Issuer composition of investments in securities, other than government and other approved securities The following table sets forth, the issuer composition of investments of the Bank in securities, other than government and other approved securities at March 31, 2019. Sr. No. Issuer PSUs FIs Banks Private corporates Subsidiaries/ Joint ventures 1. 2. 3. 4. 5. 6. Others3,4 7. Amount 56,242.6 103,246.7 39,093.3 147,387.6 98,028.5 183,868.7 Extent of private placement (a) 48,032.5 84,848.2 29,358.1 145,949.3 - 180,059.8 Extent of ‘below investment grade’ securities (b) Extent of ‘unrated’ securities2,3 (c) ` in million Extent of ‘unlisted’ securities2,3 (d) - 797.0 - 7,209.4 - 37,367.8 - 187.2 - 2,494.4 - 20.0 N.A. 2,701.6 - - - 8,924.7 - 20.0 N.A. 8,944.7 Provision held towards depreciation Total Amounts reported under columns (a), (b), (c) and (d) above are not mutually exclusive. (49,798.0) 578,069.4 N.A. 488,247.9 N.A. 45,374.2 1. 2. 3. 4. 7. 1. 2. 3. 4. Excludes equity shares, units of equity-oriented mutual fund, units of venture capital fund, pass through certificates, security receipts, commercial papers, certificates of deposit, non-convertible debentures (NCDs) with original or initial maturity up to one year issued by corporate (including NBFC), unlisted convertible debentures and securities acquired by way of conversion of debt. Excludes investments in non-Indian government securities by overseas branches amounting to ` 20,026.9 million. Excludes investments in non-SLR government of India securities amounting to ` 135.0 million. The following table sets forth, the issuer composition of investments of the Bank in securities, other than government and other approved securities at March 31, 2018. Sr. No. Issuer PSUs FIs Banks Private corporates Subsidiaries/ Joint ventures 1. 2. 3. 4. 5. 6. Others3,4 Amount 29,705.0 139,996.7 46,543.0 181,651.3 98,315.7 165,317.7 Extent of private placement (a) 27,588.3 86,664.0 17,935.7 155,962.0 - 165,297.2 - - - 6,394.7 - 37,886.8 Extent of ‘below investment grade’ securities (b) Extent of ‘unrated’ securities2,3 (c) Provision held towards depreciation Total Amounts reported under columns (a), (b), (c) and (d) above are not mutually exclusive. (46,917.7) 614,611.7 N.A. 453,447.2 N.A. 44,281.5 ` in million Extent of ‘unlisted’ securities2,3 (d) 1,389.5 - - 17,811.4 - - N.A. 19,200.9 - 5.4 - 2,983.3 - - N.A. 2,988.7 Excludes equity shares, units of equity-oriented mutual fund, units of venture capital fund, pass through certificates, security receipts, commercial papers, certificates of deposit, non-convertible debentures (NCDs) with original or initial maturity up to one year issued by corporate (including NBFC), unlisted convertible debentures and securities acquired by way of conversion of debt. Excludes investments in non-Indian government securities by overseas branches amounting to ` 23,477.2 million. Excludes investments in non-SLR government of India securities amounting to ` 7,578.5 million. 185 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ii) Non-performing investments in securities, other than government and other approved securities The following table sets forth, for the periods indicated, the movement in gross non-performing investments in securities, other than government and other approved securities. Particulars Opening balance Additions during the year Reduction during the year Closing balance Total provision held Year ended March 31, 2019 38,440.3 13,827.3 (7,980.4) 44,287.2 37,597.3 ` in million Year ended March 31, 2018 14,258.8 33,485.8 (9,304.3) 38,440.3 28,712.6 13. Sales and transfers of securities to/from Held to Maturity (HTM) category During the three months ended June 30, 2018, with the approval of Board of Directors, the Bank transferred securities amounting to ` 157,519.9 million from held-to-maturity (HTM) category to available-for-sale (AFS) category, being transfer of securities at the beginning of the accounting year as permitted by RBI. During the year ended March 31, 2019, the Bank undertook one transaction for sale of securities with a net book value of ` 2,283.2 million, which was 0.20% of the HTM portfolio at April 1, 2018. During the year ended March 31, 2018, the Bank undertook 52 transactions for sale of securities with a net book value of ` 44,039.5 million, which was 4.69% of the HTM portfolio at April 1, 2017. The above sale is excluding sale to RBI under pre-announced open market operation auctions and repurchase of government securities by Government of India, as permitted by RBI guidelines. The market value of investments held in the HTM category was ` 1,722,629.5 million at March 31, 2019 (March 31, 2018: ` 1,549,786.6 million). This includes investments in unlisted subsidiaries/joint ventures classified in the HTM category at cost. 14. CBLO transactions During the year ended March 31, 2019, the Clearing Corporation of India Limited (CCIL) has discontinued transactions under CBLO. At March 31, 2018, the Bank had outstanding borrowings amounting to ` 48,642.5 million and the amortised book value of securities given as collateral by the Bank to CCIL for availing the CBLO facility was ` 157,319.7 million. 15. Derivatives The Bank is a major participant in the financial derivatives market. The Bank deals in derivatives for balance sheet management, proprietary trading and market making purposes whereby the Bank offers derivative products to its customers, enabling them to hedge their risks. Dealing in derivatives is carried out by identified groups in the treasury of the Bank based on the purpose of the transaction. Derivative transactions are entered into by the treasury front office. Treasury Control and Service Group (TCSG) conducts an independent check of the transactions entered into by the front office and also undertakes activities such as confirmation, settlement, accounting, risk monitoring and reporting and ensures compliance with various internal and regulatory guidelines. The market making and the proprietary trading activities in derivatives are governed by the Investment policy and Derivative policy of the Bank, which lays down the position limits, stop loss limits as well as other risk limits. The Risk Management Group (RMG) lays down the methodology for computation and monitoring of risk. The Risk Committee of the Board (RCB) reviews the Bank’s risk management policy in relation to various risks including credit and recovery policy, investment policy, derivative policy, Asset Liability Management (ALM) policy and operational risk management policy. The RCB comprises independent directors and the Managing Director & CEO. The Bank measures and monitors risk of its derivatives portfolio using such risk metrics as Value at Risk (VaR), stop loss limits and relevant greeks for options. Risk reporting on derivatives forms an integral part of the management information system. The use of derivatives for hedging purposes is governed by the hedge policy approved by ALCO. Subject to prevailing RBI guidelines, the Bank deals in derivatives for hedging fixed rate, floating rate or foreign currency assets/liabilities. Transactions for hedging and market making purposes are recorded separately. For hedge transactions, the Bank identifies the hedged item (asset or liability) at the inception of the hedge itself. The effectiveness is assessed at the time of inception of the hedge and periodically thereafter. Hedge derivative transactions are accounted for pursuant 186 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS to the principles of hedge accounting based on guidelines issued by RBI. Derivatives for market making purpose are marked to market and the resulting gain/loss is recorded in the profit and loss account. The premium on option contracts is accounted for as per Foreign Exchange Dealers Association of India (FEDAI) guidelines. Over the counter (OTC) derivative transactions are covered under International Swaps and Derivatives Association (ISDA) master agreements with the respective counter parties. The exposure on account of derivative transactions is computed as per RBI guidelines. The following tables set forth, for the periods indicated, the details of derivative positions. Sr. No. Particulars 1. Derivatives (Notional principal amount) a) For hedging b) For trading 2. Marked to market positions3 a) Asset (+) b) Liability (-) 3. Credit exposure4 At March 31, 2019 Currency derivative1 Interest rate derivative2 At March 31, 2018 Currency derivative1 Interest rate derivative2 ` in million - 1,169,273.7 405,113.5 11,290,774.4 524.1 994,889.8 385,450.3 5,629,053.4 21,822.9 (16,486.8) 72,219.9 28,898.7 (30,163.3) 124,854.3 22,385.8 (13,461.6) 72,907.7 16,311.0 (17,429.8) 74,451.6 4. 5. 1. 2. 3. 4. 5. 6. - 423.5 Likely impact of one percentage change in interest rate (100*PV01)5 a) On hedging derivatives6 b) On trading derivatives Maximum and minimum of 100*PV01 observed during the period a) On hedging6 Maximum Minimum b) On trading Maximum Minimum Exchange traded and OTC options, cross currency interest rate swaps and currency futures are included in currency derivatives. 2,210.6 10.7 10,011.7 62.7 12,807.0 9,779.7 1.3 1,425.2 1,482.1 423.1 1,425.2 735.3 31.6 1.1 1.3 - 14,133.6 10,992.5 1,732.1 2.0 12,597.9 370.1 OTC Interest rate options, Interest rate swaps, forward rate agreements, swaptions and exchange traded interest rate derivatives are included in interest rate derivatives. For trading portfolio including accrued interest. Includes accrued interest and has been computed based on current exposure method. Amounts given are absolute values on a net basis, excluding options. The swap contracts entered into for hedging purpose would have an opposite and off-setting impact with the underlying on- balance sheet items. The following tables set forth, for the periods indicated, the details of forex contracts. Particulars Sr. No. 1. 2. Marked to market positions Forex contracts (Notional principal amount) a) Asset (+) b) Liability (-) 3. Credit exposure1 4. Likely impact of one percentage change in interest rate (100*PV01)2 Computed based on current exposure method. Amounts given are absolute values on a net basis. 1. 2. At March 31, 2019 Trading 4,144,178.3 Non-trading 556,822.2 At March 31, 2018 Trading 4,049,874.7 Non-trading 276,814.5 ` in million 19,107.0 (17,799.0) 132,225.8 2,261.8 (6,000.7) 16,396.5 18,880.0 (17,457.4) 124,398.4 921.0 (2,851.5) 6,523.2 53.6 15.2 63.5 2.4 187 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The net overnight open position (NOOP) at March 31, 2019 (as per last NOOP value reported to RBI for the year ended March 31, 2019) was ` 2,688.1 million (March 31, 2018: ` 992.6 million). The Bank has no exposure in credit derivative instruments (funded and non-funded) including credit default swaps (CDS) and principal protected structures at March 31, 2019 (March 31, 2018: Nil). The Bank offers deposits to customers of its overseas branches with structured returns linked to interest, forex, credit or equity benchmarks. The Bank covers these exposures in the inter-bank market. At March 31, 2019, the net open notional position on this portfolio was Nil (March 31, 2018: Nil) with no mark-to-market gain/loss (March 31, 2018: Nil). The profit and loss impact on the aforementioned structured deposits portfolio on account of mark-to-market and realised profit and loss during the year ended March 31, 2019 was Nil (year ended March 31, 2018: Nil). The non-Indian Rupee denominated derivatives are marked to market by the Bank based on counter-party valuation quotes or internal models using inputs from market sources such as Bloomberg/Reuters, counter-parties and Fixed Income Money Market and Derivative Association (FIMMDA). The Indian Rupee denominated credit derivatives are marked to market by the Bank based on CDS curve published by FIMMDA. 16. Exchange traded interest rate derivatives and currency derivatives Exchange traded interest rate derivatives The following table sets forth, for the periods indicated, the details of exchange traded interest rate derivatives. Particulars Sr. No. 1. Notional principal amount of exchange traded interest rate derivatives At March 31, 2019 ` in million At March 31, 2018 undertaken during the year - 10 year Government Security Notional Bond 2. Notional principal amount of exchange traded interest rate derivatives outstanding - 10 year Government Security Notional Bond 3. Notional principal amount of exchange traded interest rate derivatives outstanding and not ‘highly effective’ 4. Mark-to-market value of exchange traded interest rate derivatives outstanding and not ‘highly effective’ 23,272.8 52,811.0 6,250.0 1,000.0 N.A. N.A. N.A. N.A. Exchange traded currency derivatives The following table sets forth, for the periods indicated, the details of exchange traded currency derivatives. Particulars Sr. No. 1. Notional principal amount of exchange traded currency derivatives undertaken during the year 2. Notional principal amount of exchange traded currency derivatives options outstanding 3. Notional principal amount of exchange traded currency derivatives outstanding and not ‘highly effective’ 4. Mark-to-market value of exchange traded currency derivatives outstanding and not ‘highly effective’ At March 31, 2019 ` in million At March 31, 2018 1,965,113.3 1,395,871.3 31,719.2 34,651.8 N.A. N.A. N.A. N.A. 17. Forward rate agreement (FRA)/Interest rate swaps (IRS)/Cross currency swaps (CCS) The Bank enters into FRA, IRS and CCS contracts for balance sheet management and market making purposes whereby the Bank offers derivative products to its customers to enable them to hedge their interest rate risk and currency risk within the prevalent regulatory guidelines. 188 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  A FRA is a financial contract between two parties to exchange interest payments for ‘notional principal’ amount on settlement date, for a specified period from start date to maturity date. Accordingly, on the settlement date cash payments based on contract rate and the settlement rate, which is the agreed bench-mark/reference rate prevailing on the settlement date, are made by the parties to one another. The benchmark used in the FRA contracts of the Bank is London Inter-Bank Offered Rate (LIBOR) of various currencies. An IRS is a financial contract between two parties exchanging or swapping a stream of interest payments for a ‘notional principal’ amount on multiple occasions during a specified period. The Bank deals in interest rate benchmarks like Mumbai Inter-Bank Offered Rate (MIBOR), Indian Government Securities Benchmark Rate (INBMK), Mumbai Inter-Bank Forward Offer Rate (MIFOR) and LIBOR of various currencies. A CCS is a financial contract between two parties exchanging interest payments and principal, wherein interest payments and principal in one currency would be exchanged for an equally valued interest payments and principal in another currency. These contracts are subject to the risks of changes in market interest rates and currency rates as well as the settlement risk with the counterparties. The following table sets forth, for the periods indicated, the details of the FRA/IRS. At March 31, 2019 11,628,471.9 ` in million At March 31, 2018 5,956,569.2 Particulars Sr. No. 1. Notional principal of FRA/IRS 2. 3. 4. 5. 1. 2. 3. 3. 4. 5. 1. 2. 3. 4. Losses which would be incurred if all counter parties failed to fulfil their obligations under the agreement1 Collateral required by the Bank upon entering into FRA / IRS Concentration of credit risk2 Fair value of FRA/IRS3 For trading portfolio both mark-to-market and accrued interest have been considered and for hedging portfolio only accrued interest has been considered. 31,039.6 - 2,496.6 (1,623.4) 18,466.2 - 583.2 (6,363.0) Credit risk concentration is measured as the highest net receivable under swap contracts from a particular counter party. Fair value represents mark-to-market including accrued interest. The following table sets forth, for the periods indicated, the details of the CCS. Particulars Sr. No. 1. Notional principal of CCS1 2. Losses which would be incurred if all counter parties failed to fulfil their obligations under the agreement2 Collateral required by the Bank upon entering into CCS Concentration of credit risk3 Fair value of CCS4 CCS includes cross currency interest rate swaps and currency swaps. At March 31, 2019 423,344.5 ` in million At March 31, 2018 416,989.4 18,520.0 - 7,911.7 8,116.3 18,255.0 - 5,180.3 8,765.1 For trading portfolio both mark-to-market and accrued interest have been considered and for hedging portfolio only accrued interest has been considered. Credit risk concentration is measured as the highest net receivable under swap contracts from a particular counter party. Fair value represents mark-to-market including accrued interest. 189 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS The following tables set forth, for the periods indicated, the nature and terms of FRA and IRS. Hedging Benchmark Type AUD LIBOR Fixed receivable v/s floating payable Fixed receivable v/s floating payable CHF LIBOR Fixed receivable v/s floating payable JPY LIBOR Fixed receivable v/s floating payable SGD SOR USD LIBOR Fixed receivable v/s floating payable Total Trading Benchmark Type AUD LIBOR Floating receivable v/s fixed payable AUD LIBOR Fixed receivable v/s floating payable Floating receivable v/s fixed payable CAD CDOR Fixed receivable v/s floating payable EURIBOR Floating receivable v/s fixed payable EURIBOR Floating receivable v/s floating payable EURIBOR Fixed receivable v/s floating payable GBP LIBOR Floating receivable v/s fixed payable GBP LIBOR Floating receivable v/s fixed payable INBMK Fixed receivable v/s floating payable INBMK Fixed receivable v/s floating payable JPY LIBOR Floating receivable v/s fixed payable JPY LIBOR Floating receivable v/s floating payable JPY LIBOR Floating receivable v/s fixed payable MIBOR Fixed receivable v/s floating payable MIBOR Floating receivable v/s fixed payable MIFOR MIFOR Fixed receivable v/s floating payable USD LIBOR Fixed receivable v/s floating payable USD LIBOR Floating receivable v/s fixed payable USD LIBOR Floating receivable v/s floating payable Floating receivable v/s USD LIBOR floating payable v/s EURIBOR Other Fixed receivable v/s fixed payable Total At March 31, 2019 At March 31, 2018 ` in million Notional principal 7,353.0 6,934.9 9,362.9 11,483.4 369,979.3 405,113.5 No. of deals 3 2 2 5 63 75 Notional principal 7,506.8 6,834.6 9,219.7 13,203.0 348,686.2 385,450.3 No. of deals 3 2 2 6 63 76 At March 31, 2019 At March 31, 2018 ` in million Notional principal 468.6 441.2 244.3 16,319.6 17,794.3 388.3 12,194.8 13,469.7 21,431.0 10,000.0 5,628.2 5,043.3 624.2 4,082,550.5 4,107,599.7 459,260.0 553,185.0 855,667.1 951,302.9 105,356.0 No. of deals 17 1 5 53 32 1 22 30 29 15 13 7 1 4,522 5,096 829 984 849 827 66 Notional principal - - - 9,277.1 11,122.3 401.6 5,551.3 7,948.5 14,250.0 30,195.3 2,000.6 1,093.0 613.6 1,829,058.7 1,540,590.7 332,795.0 293,635.0 694,365.7 733,965.6 56,026.6 - 4,389.7 11,223,358.4 - 69 13,468 647.4 7,580.9 5,571,118.9 No. of deals - - - 32 20 1 12 14 26 48 10 3 1 2,507 2,362 657 620 923 771 61 2 91 8,161 190 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS The following tables set forth, for the periods indicated, the nature and terms of CCS. Hedging Benchmark1 Type USD LIBOR Total 1. Fixed receivable v/s floating payable Benchmark indicates floating leg of the fixed v/s floating CCS. Trading Benchmark1 Type AUD BBSW V/s USD LIBOR CHF LIBOR V/s USD LIBOR EURIBOR EURIBOR V/s GBP LIBOR EURIBOR V/s USD LIBOR EURIBOR V/s USD LIBOR GBP LIBOR V/s USD LIBOR GBP LIBOR V/s USD LIBOR HIBOR v/s USD LIBOR JPY LIBOR JPY LIBOR JPY LIBOR V/s USD LIBOR JPY LIBOR V/s USD LIBOR SGD SOR V/s USD LIBOR SGD SOR V/s USD LIBOR USD LIBOR USD LIBOR Others Total Floating receivable v/s floating payable Floating receivable v/s floating payable Fixed receivable v/s floating payable Floating payable v/s floating receivable Floating receivable v/s floating payable Floating payable v/s floating receivable Floating receivable v/s floating payable Floating payable v/s floating receivable Floating receivable v/s floating payable Floating receivable v/s fixed payable Fixed receivable v/s floating payable Floating receivable v/s floating payable Floating payable v/s floating receivable Floating receivable v/s floating payable Floating payable v/s floating receivable Fixed receivable v/s floating payable Floating receivable v/s fixed payable Fixed receivable v/s fixed payable 1. Benchmark indicates floating leg of the fixed v/s floating CCS. ` in million At March 31, 2019 At March 31, 2018 Notional principal - - No. of deals - - Notional principal 524.1 524.1 No. of deals 1 1 ` in million At March 31, 2018 At March 31, 2019 Notional principal No. of deals 7,359.3 6,946.8 110.5 2,703.5 1 2 2 2 Notional principal 15,534.4 7,081.3 954.2 2,742.7 8,223.5 19 6,601.8 4,970.8 3,556.8 7,088.9 13,673.1 310.7 851.5 9 6 9 2 1 7 4,677.9 275.1 4,283.8 12,889.4 1,829.2 3,144.8 12,785.5 12 13,741.1 2,765.3 11,982.2 345.8 90,338.7 95,754.7 153,577.1 423,344.7 4 3 2 197 110 216 604 4,083.6 13,156.0 325.9 92,755.5 111,817.1 120,571.5 416,465.3 No. of deals 3 3 15 2 9 10 2 4 2 3 15 13 4 9 2 269 118 235 718 191 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 18. Non-performing assets1 The following table sets forth, for the periods indicated, the details of movement of gross non-performing assets (NPAs), net NPAs and provisions. Particulars Sr. No. 1. Net NPAs (funded) to net advances (%) 2. Movement of NPAs (Gross) a) Opening balance2 b) Additions: Fresh NPAs during the year Sub-total (1) c) Reductions during the year • Upgradations • Recoveries (excluding recoveries made from upgraded accounts) • Technical/prudential write-offs • Write-offs other than technical/prudential write-offs Sub-total (2) d) Closing balance2 (1)-(2) 3. Movement of net NPAs a) Opening balance2 b) Additions during the year c) Reductions during the year d) Closing balance2 4. Movement of provision for NPAs (excluding provision on standard assets) a) Opening balance2 b) Addition during the year Sub-total (1) c) Write-off/(write-back) of excess provisions • Write-back of excess provision on account of upgradations • Write-back of excess provision on account of reduction in NPAs • Provision utilised for write-offs Sub-total (2) d) Closing balance2 (1)-(2) Represents loans and advances. Net of write-off. 1. 2. Year ended March 31, 2019 2.29% ` in million Year ended March 31, 2018 5.43% 532,401.8 105,959.6 638,361.4 (11,903.6) (54,126.1) (102,638.4) (12,932.9) (181,601.0) 456,760.4 278,235.6 53,969.5 (197,707.9) 134,497.2 254,166.2 197,391.4 451,557.6 (2,360.6) (12,392.7) (114,541.1) (129,294.4) 322,263.2 421,593.9 286,349.5 707,943.4 (38,668.2) (53,186.8) (67,720.7) (15,965.9) (175,541.6) 532,401.8 252,168.1 147,672.6 (121,605.1) 278,235.6 169,425.8 198,649.5 368,075.3 (14,289.9) (15,956.7) (83,662.5) (113,909.1) 254,166.2 The following table sets forth, for the periods indicated, the details of movement in technical/prudential write-off. Particulars Opening balance Add: Technical/prudential write-offs during the year Sub-total (1) Less: Recoveries made from previously technical/prudential written-off accounts during the year Less: Sacrifice made from previously technical/prudential written-off accounts during the year Sub-total (2) Closing balance (1)-(2) Year ended March 31, 2019 172,128.4 102,638.4 274,766.8 ` in million Year ended March 31, 2018 121,658.1 67,720.7 189,378.8 (13,871.5) (2,040.2) (22,235.7) (36,107.2) 238,659.6 (15,210.2) (17,250.4) 172,128.4 192 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  On February 12, 2018, RBI issued a revised framework for resolution of stressed assets, which superceded the existing guidelines on SDR, change in ownership outside SDR (except projects under implementation) and S4A with immediate effect. Under the revised framework, the stand-still benefits for accounts where any of these schemes had been invoked but not yet implemented were revoked and accordingly these accounts were classified as per the extant RBI norms on income recognition and asset classification in the three months ended March 31, 2018. Further, in accordance with RBI guidelines, the loans and advances held at the overseas branches that are identified as impaired as per host country regulations for reasons other than record of recovery, but which are standard as per the extant RBI guidelines, are classified as NPAs to the extent of amount outstanding in the host country. During the year ended March 31, 2019, the Bank classified certain loans as NPAs at overseas branches amounting to ` 3,244.1 million (year ended March 31, 2018: Nil) as per the requirement of these guidelines and made a provision of ` 718.2 million (year ended March 31, 2018: Nil) on these loans. Disclosure on exposure to Infrastructure Leasing & Financial Services Limited (ILFS) and its group entities At March 31, 2019, the Bank has classified its fund-based outstanding to Infrastructure Leasing & Financial Services Limited (ILFS) entities amounting to ` 2,759.4 million as non-performing and holds a provision of ` 1,459.7 million as per extant RBI guidelines. The Bank also has non-fund based outstanding of ` 5,449.2 million to ILFS entities and holds a provision of ` 4,682.6 million towards this outstanding at March 31, 2019. Divergence in asset classification and provisioning for NPAs In terms of the RBI circular no. //DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI’s annual supervisory process in their notes to accounts to the financial statements, wherever either (a) the additional provisioning requirements assessed by RBI exceed 10% of the reported net profits before provisions and contingencies (15% of the published net profits after tax for the year ended March 31, 2017) or (b) the additional gross NPAs identified by RBI exceed 15% of the published incremental gross NPAs for the reference period, or both. Based on the condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI’s supervisory process for the year ended March 31, 2018 and for the year ended March 31, 2017. Accounts covered under Insolvency and Bankruptcy Code, 2016 During the year ended March 31, 2018, RBI had advised banks to initiate insolvency resolution process under the provisions of Insolvency and Bankruptcy Code, 2016 (IBC) for certain specific accounts. Banks were required to make provision at 40% on the secured portion and 100% on unsecured portion of the loan, or provision as per extant RBI guideline on asset classification norms, whichever was higher at March 31, 2018. Banks were required to further increase the provision on secured portion of the loan to 50.0% at June 30, 2018. At March 31, 2019, the Bank holds a provision of ` 76,210.3 million in respect of outstanding loans amounting to ` 103,065.0 million to these borrowers, which amounts to provision coverage of 73.94%. 19. Floating provision During the year ended March 31, 2019, the Bank did not make any floating provision (March 31, 2018: Nil). The following table sets forth, for the periods indicated, the movement in floating provision held by the Bank. Particulars Opening balance1 Add: Provision made during the year Less: Provision utilised during the year Closing balance1 1. Represents amount taken over from erstwhile Bank of Rajasthan upon amalgamation. At March 31, 2019 1.9 - - 1.9 ` in million At March 31, 2018 1.9 - - 1.9 20. General provision on standard assets The general provision on standard assets held by the Bank at March 31, 2019 was ` 28,737.6 million (March 31, 2018: ` 25,906.6 million). The general provision on standard assets amounting to ` 2,553.7 million was made during the year ended March 31, 2019 (year ended March 31, 2018: ` 2,771.1 million) as per applicable RBI guidelines. 193 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  RBI, through its circular dated January 15, 2014 had advised banks to create incremental provision on standard loans and advances to entities with unhedged foreign currency exposure (UFCE). The Bank assesses the UFCEs of the borrowers through its credit appraisal and internal ratings process. The Bank also undertakes reviews of such exposures through thematic reviews evaluating the impact of exchange rate fluctuations on the Bank’s portfolio on an yearly basis. The Bank holds provision amounting to ` 2,250.0 million (March 31, 2018: ` 1,900.0 million) on advances to entities with UFCE at March 31, 2019. The Bank has made provision amounting to ` 350.0 million during the year ended March 31, 2019 (year ended March 31, 2018: ` 50.0 million). The Bank held incremental capital of ` 8,048.3 million at March 31, 2019 on advances to borrowers with UFCE (March 31, 2018: ` 5,487.5 million). The Bank makes additional general provision on stressed sectors of the economy, as per RBI guidelines and as per the Board approved policy. The Bank has reversed general provision amounting to ` 483.4 million during the year ended March 31, 2019 (year ended March 31, 2018: provision made amounting to ` 1,911.5 million). At March 31, 2019, the Bank holds provision of ` 1,428.1 million (March 31, 2018: ` 1,911.5 million). RBI, through its circular dated August 25, 2016, required banks to make additional provision from the year ended March 31, 2019 on incremental exposure of the banking system in excess of normally permitted lending limit (NPLL) on borrowers classified as specified borrower. During the year ended March 31, 2019, the Bank made provision amounting to ` 124.2 million on these specified borrowers. At March 31, 2019, the Bank holds provision of ` 124.2 million. 21. Provision Coverage Ratio The provision coverage ratio of the Bank at March 31, 2019 computed as per the extant RBI guidelines was 70.6% (March 31, 2018: 47.7%). 22. Priority Sector Lending Certificates (PSLCs) During the year ended March 31, 2019, the Bank purchased PSLCs under agriculture category amounting to ` 249,175.0 million (year ended March 31, 2018: ` 35,000.0 million). During the year ended March 31, 2019, the Bank did not purchase any PSLCs under general category (year ended March 31, 2018: ` 17,300.0 million). During the year ended March 31, 2019, the Bank sold PSLC under general category amounting to ` 197,500.0 million (year ended March 31, 2018: ` 1,000.0 million) and under micro enterprise category amounting to ` 47,252.5 million (year ended March 31, 2018: Nil). 23. Securitisation A. The Bank sells loans through securitisation and direct assignment. The following tables set forth, for the periods indicated, the information on securitisation and direct assignment activity of the Bank as an originator till May 7, 2012. Particulars ` in million, except number of loans securitised Year ended Year ended March 31, 2018 March 31, 2019 - - - - - - 28.1 24.2 Includes gain/(loss) on deal closures, gain amortised during the year and expenses relating to utilisation of credit enhancement. Total number of loan assets securitised Total book value of loan assets securitised Sale consideration received for the securitised assets Net gain/(loss) on account of securitisation1 1. Particulars Outstanding credit enhancement (funded) Outstanding liquidity facility Net outstanding servicing asset/(liability) Outstanding subordinate contributions At March 31, 2019 3,468.8 0.7 (12.1) 1,462.2 ` in million At March 31, 2018 3,469.7 0.1 (15.5) 1,469.7 The outstanding credit enhancement in the form of guarantees amounted to Nil at March 31, 2019 (March 31, 2018: Nil) and outstanding liquidity facility in the form of guarantees amounted to ` 265.1 million at March 31, 2019 (March 31, 2018: ` 265.8 million). 194 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The outstanding credit enhancement in the form of guarantees for third party originated securitisation transactions amounted to ` 4,858.6 million at March 31, 2019 (March 31, 2018: ` 4,189.5 million) and outstanding liquidity facility for third party originated securitisation transactions amounted to Nil at March 31, 2019 (March 31, 2018: Nil). The following table sets forth, for the periods indicated, the details of provision for securitisation and direct assignment transactions. Particulars Opening balance Additions during the year Deductions during the year Closing balance Year ended March 31, 2019 823.3 12.0 (3.4) 831.9 ` in million Year ended March 31, 2018 802.7 25.0 (4.4) 823.3 B. The information on securitisation and direct assignment activity of the Bank as an originator as per RBI guidelines ‘Revisions to the Guidelines on Securitisation Transactions’ dated May 7, 2012 is given below. a. b. The Bank, as an originator, has not sold any loan through securitisation during the year ended March 31, 2019 (March 31, 2018: Nil). The following table sets forth, for the periods indicated, the information on the loans sold through direct assignment. Particulars Sr. No. 1. Number of SPVs sponsored by the bank for securitisation transactions Total amount of assets sold through direct assignment during the year 2. Total amount of exposures retained by the Bank to comply with Minimum Retention Requirement (MRR) a) Off-balance sheet exposures 3. • First loss • Others b) On-balance sheet exposures • First loss • Others 4. Amount of exposure to securitisation transactions other than MRR a) Off-balance sheet exposures i) Exposure to own securitisation • First loss • Others ii) Exposure to third party securitisation • First loss • Others b) On-balance sheet exposures i) Exposure to own securitisation • First loss • Others ii) Exposure to third party securitisation • First loss • Others At March 31, 2019 - - ` in million At March 31, 2018 - - - - - 19.8 - - - - - - - - - - - 19.8 - - - - - - - - The overseas branches of the Bank, as originators, sold seven loans through direct assignment amounting to ` 4,684.1 million during the year ended March 31, 2019 (year ended March 31, 2018: 15 loans amounting to ` 19,132.7 million). 195 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 24. Financial assets transferred during the year to securitisation company (SC)/reconstruction company (RC) The Bank has transferred certain assets to Asset Reconstruction Companies (ARCs) in terms of the guidelines issued by RBI circular no. DBR.No.BP.BC.2/21.04.048/2015-16 dated July 1, 2015. For the purpose of the valuation of the underlying security receipts issued by the underlying trusts managed by ARCs, the SRs are valued at their respective net asset values as advised by the ARCs. The following table sets forth, for the periods indicated, the details of the assets transferred. Particulars Number of accounts Aggregate value (net of provisions) of accounts sold to SC/RC Aggregate consideration3 Additional consideration realised in respect of accounts transferred in earlier years Aggregate gain/(loss) over net book value1,2,3 1. ` in million, except number of accounts Year ended March 31, 2018 12 2,718.5 3,039.3 Year ended March 31, 2019 15 2,764.1 3,851.5 - 1,087.4 - 320.8 The Bank made a loss of ` 1,024.0 million on sale of financial assets to ARCs (year ended March 31, 2018: Nil). 2. 3. The Bank made a gain of ` 2,111.4 million on sale of financial assets to ARCs (year ended March 31, 2018: gain of ` 320.8 million), out of which Nil (year ended March 31, 2018: ` 200.2 million) is set aside towards the security receipts received on such sale. Excludes security receipts received amounting to Nil towards interest overdue not recognised as income (year ended March 31, 2018: ` 34.5 million). The following tables set forth, for the periods indicated, the details of investments in security receipts (SRs). Particulars Net book value of investments in SRs which are - - Backed by NPAs sold by the Bank as underlying1 - Backed by NPAs sold by other banks/financial institutions (FIs)/non- banking financial companies (NBFCs) as underlying At March 31, 2019 ` in million At March 31, 2018 22,450.4 23,803.5 10.5 22,460.9 52.6 23,856.1 Total 1. During the year ended March 31, 2019, no investment in a security receipt was fully redeemed by the ARC (year ended March 31, 2018: Nil) and there was no gain/loss to the Bank (year ended March 31, 2018: Nil). Sr. No. Particulars 1. 2. Book value of SRs backed by NPAs sold by the Bank as underlying Provision held against above Book value of SRs backed by NPAs sold by other banks/financial institutions/non-banking financial companies as underlying Provision held against above Gross book value Total provision held against above Net book value At March 31, 2019 SRs issued within past five years SRs issued more than five years ago but within past eight years SRs issued more than eight years ago 24,933.6 2,483.2 1,138.7 1,138.7 - - 24,933.6 2,483.2 22,450.4 10.5 - 1,149.2 1,138.7 10.5 - - - - - - - ` in million Total 26,072.3 3,621.9 10.5 - 26,082.8 3,621.9 22,460.9 196 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Sr. No. Particulars At March 31, 2018 SRs issued within past five years SRs issued more than five years ago but within past eight years SRs issued more than eight years ago 1. 2. Book value of SRs backed by NPAs sold by the Bank as underlying Provision held against above Book value of SRs backed by NPAs sold by other banks/financial institutions/non-banking financial companies as underlying Provision held against above Gross book value Total provision held against above Net book value 26,502.2 2,698.7 - - 26,502.2 2,698.7 23,803.5 - - 52.6 - 52.6 - 52.6 - - - - - - - ` in million Total 26,502.2 2,698.7 52.6 - 26,554.8 2,698.7 23,856.1 25. Details of non-performing assets purchased/sold, excluding those sold to SC/RC The Bank did not purchase any non-performing assets in terms of the guidelines issued by RBI circular no. DBR.No.BP.BC.2/21.04.048/2015-16 dated July 1, 2015 during the year ended March 31, 2019 (year ended March 31, 2018: Nil). The following table sets forth, for the periods indicated, details of non-performing assets sold to banks, NBFCs and other financial institutions. Particulars Number of accounts Aggregate value (net of provisions) of accounts sold, excluding those sold to SC/RC Aggregate consideration Aggregate gain/(loss) over net book value ` in million, except number of accounts Year ended March 31, 2018 1 Year ended March 31, 2019 - - - - 3,444.5 3,988.7 544.2 The following table sets forth, for the periods indicated, details of non-performing assets sold to entities, other than banks, NBFCs and other financial institutions. Particulars Number of accounts Aggregate value (net of provisions) of accounts sold, excluding those sold to SC/RC Aggregate consideration Aggregate gain/(loss) over net book value ` in million, except number of accounts Year ended March 31, 2018 - Year ended March 31, 2019 2 - 28,653.3 28,653.3 - - - 197 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ) e ( - 1 3 . 0 1 6 . 9 7 2 - - - - - - - - - - - - - - 1 ) 1 ( ) 3 . 0 ( - 6 . 9 7 2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ) d ( ) c ( ) b ( d r a d n a t S . . A N . . A N . . A N . . A N . . A N . . A N . . A N . . A N . . A N - - - - - - - - - - - - - - - - - - - - - - - - - - - ) a ( - 1 3 . 0 1 6 . 9 7 2 - - - - - - - - - - - - - ) e ( 3 4 5 . 0 8 2 , 6 4 1 . 0 1 3 , 6 3 ) d ( 5 8 . 6 7 2 8 . 6 7 2 ) c ( 0 3 9 . 3 3 8 , 1 4 2 . 7 7 6 , 5 3 - - - - - - - - - - - - - - - - - - - - - ) 5 . 3 7 1 ( 1 . 4 0 1 , 6 ) 3 . 1 ( ) 3 . 1 ( 9 . 0 4 2 . 5 2 5 , 4 - - - - - - - - - - - - ) b ( d r a d n a t S ) a ( 8 1 . 6 5 3 8 . 9 6 1 , 4 - - - - - - - ) 1 . 3 1 2 ( 2 . 0 8 5 , 1 - - - - ) 8 . 5 4 ( ) 8 . 5 4 ( 4 3 . 8 7 3 , 3 3 . 8 7 3 , 3 ) 1 ( ) 3 . 3 1 7 , 1 ( ) 3 . 3 1 7 , 1 ( . . A N . . A N . . A N . . A N . . A N . . A N . . A N . . A N . . A N - - - - 1 ) 1 ( ) 3 . 0 ( - 6 . 9 7 2 ) 7 ( ) 1 . 4 1 0 , 3 1 ( ) 6 . 2 3 9 , 1 1 ( ) 1 ( ) 1 . 6 ( ) 1 . 6 ( ) 6 ( ) 0 . 8 0 0 , 3 1 ( ) 5 . 6 2 9 , 1 1 ( 6 3 1 . 7 4 0 , 3 3 8 . 5 3 4 , 0 3 8 7 . 7 4 6 , 3 7 . 7 4 6 , 3 3 2 5 . 3 5 1 , 7 2 6 . 2 6 5 , 6 2 - - - - - - - - - ) 3 ( ) 8 . 0 1 7 , 1 ( ) 8 . 0 1 7 , 1 ( - - - 5 5 . 5 2 2 9 . 5 4 2 , 2 8 1 0 2 , 1 l i r p A t a s t n u o c c a d e r u t c u r t s e R r a e y e h t g n i r u d g n i r u t c u r t s e r h s e r F i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P s r e w o r r o b f o . o N . 1 . 2 . m s i n a h c e m g n i r u t c u r t s e r g n i r u t c u r t s e R f o e p y T n o i t a c i f i s s a C l t e s s A . o N . r S s l i a t e D r a e y e h t g n i r u d y r o g e t a c d r a d n a t s d e r u t c u r t s e r o t s n o i t a d a r g p U . 3 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I d e r u t c u r t s e r g n i t s i x e i f o g n d n a t s t u o . 4 d e d n e r a e y e h t g n i r u d s e s a c i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N s r e w o r r o b f o . o N 1 9 1 0 2 , 1 3 h c r a M e c n e h d n a 9 1 0 2 , 1 3 h c r a M t a i t h g e w k s i r d e r u t c u r t s e r s a n w o h s e b t o n d e e n l a n o i t i d d a i / r o d n a g n n o i s i v o r p r e h g h i t c a r t t a o t e s a e c h c h w i , 8 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s d e r u t c u r t s e R . 5 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s s r e w o r r o b f o . o N s t n u o c c a d e r u t c u r t s e r f o s n o i t a d a r g n w o D . 6 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N r a e y e h t g n i r u d s t n u o c c a d e r u t c u r t s e r l f o e a s / y r e v o c e r / s f f o - e t i r W i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N 9 1 0 2 , 1 3 h c r a M t a s t n u o c c a d e r u t c u r t s e R i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P i g n d n a t s t u o t n u o m A s r e w o r r o b f o . o N n o e r e h t n o i s i v o r P . 7 . 8 s t n u o c c a f o r e b m u n t p e c x e , n o i l l i m n i ` m s i n a h c e M g n i r u t c u r t s e R t b e D E M S r e d n U m s i n a h c e M R D C r e d n U l a t o T s s o L l u f t b u o D - b u S d r a d n a t S l a t o T s s o L l u f t b u o D - b u S d r a d n a t S t b e d E M S d n a R D C r e d n u s t e s s a n a o l d e r u t c u r t s e r f o s l i a t e d , 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f , h t r o f s t e s l e b a t i g n w o l l o f e h T s t e s s a d e r u t c u r t s e r f o t c e p s e r n i n o i t a m r o f n I . 6 2 198 f o t r a p s a ) t n e m t o l l a i g n d n e p y e n o m n o i t a c i l p p a i g n d u l c n i ( y t i u q e o t n i s n a o l f o n o i s r e v n o c , t n e m e v l o v e d d e s a b d n u f - n o n , t n e m e s r u b s i d h s e r f , t s e r e t n i d e u r c c a , n o i t a u t c u l f e t a r e g n a h c x e , y t i l i c a f t i d e r c h s a c f o n o i t a s i l i t u , s t n e m y a p e r o t e u d s i s t n u o c c a d e r u t c u r t s e r f o i g n d n a t s t u o l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . 1 . c t e , e m e h c s g n i r u t c u r t s e r FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS s t n u o c c a f o r e b m u n t p e c x e , n o i l l i m n i ` l a t o T s r e h t O ) e ( 2 7 5 , 1 ) d ( 6 9 5 . 5 3 8 , 1 5 1 6 . 0 6 6 , 9 8 6 . 2 5 9 6 . 2 5 9 ) c ( ) b ( d r a d n a t S ) a ( 3 0 0 , 1 7 . 4 5 2 , 8 8 3 . 4 7 8 , 4 3 1 1 3 2 8 . 8 5 5 . 1 3 2 4 2 8 . 1 2 4 8 . 9 4 9 , 5 1 ) e ( 8 2 5 , 1 ) d ( 1 9 5 . 0 5 3 , 3 5 7 . 4 5 5 , 5 0 1 8 . 5 7 6 8 . 5 7 6 ) c ( 3 7 9 4 . 0 4 0 , 3 9 5 . 7 7 5 , 2 5 ) b ( 1 3 2 8 . 8 5 5 . 1 3 ) a ( 3 3 2 7 . 5 6 7 . 9 7 7 , 1 1 d r a d n a t S l a t o T s s o L l u f t b u o D - b u S d r a d n a t S l a t o T s s o L l u f t b u o D - b u S d r a d n a t S 8 1 0 2 , 1 l i r p A t a s t n u o c c a d e r u t c u r t s e R r a e y e h t g n i r u d g n i r u t c u r t s e r h s e r F i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P s r e w o r r o b f o . o N . 1 . 2 g n i r u t c u r t s e R f o e p y T n o i t a c i f i s s a C l t e s s A . o N . r S s l i a t e D . s t e s s a n a o l d e r u t c u r t s e r l a t o t d n a r e h t o f o s l i a t e d , 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f , h t r o f s t e s l e b a t g n w o i l l o f e h T 2 1 2 , 2 1 . 8 7 5 , 6 4 . 9 6 9 , 3 6 1 9 . 5 9 . 5 4 9 1 , 1 7 . 1 4 4 , 3 6 . 1 0 4 , 3 9 . 1 6 5 1 0 0 , 1 9 . 0 5 8 , 2 - 1 6 . 9 7 2 1 1 2 , 2 5 . 8 9 2 , 6 4 . 9 6 9 , 3 6 1 9 . 5 9 . 5 4 9 1 , 1 7 . 1 4 4 , 3 6 . 1 0 4 , 3 9 . 1 6 5 1 0 0 , 1 9 . 0 5 8 , 2 - - - - ) 5 . 0 ( ) 4 . 3 1 ( ) 1 1 ( ) 5 . 3 1 ( ) 5 . 3 1 ( - - ) 3 . 7 0 1 ( 5 . 2 8 2 , 7 1 6 . 2 6 6 . 2 6 - - - - - - - - 8 . 5 6 4 8 . 1 5 6 , 5 1 3 . 0 ) 1 . 0 ( 1 1 1 . 0 0 . 3 1 - ) 5 . 0 ( ) 4 . 3 1 ( ) 1 1 ( ) 5 . 3 1 ( ) 5 . 3 1 ( - ) 6 . 5 3 6 ( 8 . 7 6 5 , 1 - 2 . 6 6 4 . 8 7 1 , 1 1 - 9 . 3 6 9 . 3 6 - - - - - - - - 9 . 4 2 4 6 . 6 2 1 , 1 1 3 . 0 ) 1 . 0 ( 1 1 1 . 0 0 . 3 1 - ) 4 . 2 1 ( ) 5 . 2 2 4 ( ) 0 9 3 ( ) 1 1 ( ) 8 . 0 8 6 , 2 5 ( ) 5 . 0 5 6 , 2 3 ( ) 6 . 6 1 6 ( ) 6 . 6 1 6 ( ) 9 4 2 ( ) 8 . 4 3 0 , 2 5 ( ) 0 . 1 2 0 , 2 3 ( ) 8 2 1 ( ) 4 . 8 2 ( ) 9 . 2 1 ( - ) 2 ( ) 0 . 1 ( ) 2 8 3 ( ) 0 1 ( ) 4 . 6 6 6 , 9 3 ( ) 9 . 7 1 7 , 0 2 ( ) 5 . 0 1 6 ( ) 5 . 0 1 6 ( ) 3 4 2 ( ) 8 . 6 2 0 , 9 3 ( ) 5 . 4 9 0 , 0 2 ( ) 8 2 1 ( ) 4 . 8 2 ( ) 9 . 2 1 ( - - ) 6 . 1 2 1 ( ) 1 . 2 1 1 ( ) 2 ( ) 1 . 2 0 4 , 0 1 ( . . A N . . A N . . A N . . A N . . A N . . A N . . A N . . A N . . A N 0 1 6 . 1 0 6 , 3 6 . 1 0 6 , 3 8 9 ) 9 . 1 8 9 , 1 ( ) 6 . 4 8 9 , 1 ( ) 9 9 ( ) 5 . 8 2 ( ) 3 . 8 1 ( - ) 9 ( - - ) 8 . 2 1 7 , 1 ( ) 8 . 0 1 7 , 1 ( ) 8 . 5 7 ( ) 3 . 6 6 ( ) 2 ( ) 2 ( ) 1 . 2 0 4 , 0 1 ( ) 1 . 2 0 4 , 0 1 ( . . A N . . A N . . A N 6 3 . 3 2 2 3 . 3 2 2 9 9 ) 6 . 8 6 2 ( ) 3 . 1 7 2 ( ) 9 9 ( ) 5 . 8 2 ( ) 3 . 8 1 ( . . A N . . A N . . A N . . A N . . A N . . A N - ) 2 ( ) 1 . 2 0 4 , 0 1 ( - ) 6 ( ) 0 . 2 ( - ) 1 ( ) 7 . 0 ( s e s a c d e r u t c u r t s e r g n i t s i x e f o g n d n a t s t u o i l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . 4 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 1 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N e c n e h d n a 9 1 0 2 , 1 3 h c r a M t a i t h g e w k s i r d e r u t c u r t s e r s a n w o h s e b t o n d e e n l a n o i t i d d a i / r o d n a g n n o i s i v o r p r e h g h i t c a r t t a o t e s a e c h c h w i , 8 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s d e r u t c u r t s e R . 5 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s s r e w o r r o b f o . o N s t n u o c c a d e r u t c u r t s e r f o s n o i t a d a r g n w o D . 6 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P r a e y e h t g n i r u d y r o g e t a c d r a d n a t s d e r u t c u r t s e r o t s n o i t a d a r g p U . 3 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N 9 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N r a e y e h t g n i r u d s t n u o c c a d e r u t c u r t s e r l f o e a s / y r e v o c e r / s f f o - e t i r W i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N s t n u o c c a d e r u t c u r t s e R i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 9 1 0 2 , 1 3 h c r a M t a s r e w o r r o b f o . o N . 7 . 8 . 1 . 2 . 3 199 2 9 3 , 3 0 0 1 3 . 1 0 1 , 5 9 3 5 . 6 3 1 , 8 7 6 . 2 9 9 , 3 3 6 . 2 9 9 , 3 6 4 0 , 2 1 . 5 6 7 , 4 8 3 5 . 2 0 3 , 3 7 5 0 0 , 1 3 5 . 2 6 5 7 . 2 5 8 , 2 1 4 2 3 9 . 8 7 2 9 . 0 9 4 , 3 5 5 3 , 3 6 . 4 7 7 , 1 6 7 . 0 0 7 , 7 4 2 9 9 . 4 4 3 9 . 4 4 3 3 2 0 , 2 6 . 1 1 6 , 7 5 9 . 9 3 7 , 6 4 5 . 2 6 5 5 0 0 , 1 7 . 2 5 8 , 2 5 3 2 4 . 3 5 4 . 5 6 9 d e u r c c a , n o i t a u t c u l f e t a r e g n a h c x e , y t i l i c a f t i d e r c h s a c f o n o i t a s i l i t u , s t n e m y a p e r o t e u d s i s t n u o c c a d e r u t c u r t s e r i f o g n d n a t s t u o l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . c t e , e m e h c s g n i r u t c u r t s e r f o t r a p s a ) t n e m t o l l i a g n d n e p n o i t a c i l i p p a g n d u l c n i ( y t i u q e o t n i s n a o l f o n o i s r e v n o c , t n e m e v l o v e d d e s a b d n u f - n o n , t n e m e s r u b s i d h s e r f , t s e r e t n i . m s i n a h c e m ) F L J ( m u r o F r e d n e L i t n o J r e d n u d e r u t c u r t s e r s e s a c e d u l c n i o s l a m s i n a h c e m ’ s r e h t O ‘ . s t n u o c c a e s e h t n o n o i l l i m 9 . 6 8 3 ` o t g n i t n u o m a n o i s i v o r p s d o h y l l l a n o i t i d d a k n a B e h T FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ) e ( 1 0 . 1 - - - - - - - - - ) 7 . 0 ( - - - - - - - - - - 1 3 . 0 s t n u o c c a f o r e b m u n t p e c x e , n o i l l i m n i ` m s i n a h c e M g n i r u t c u r t s e R t b e D E M S r e d n U m s i n a h c e M R D C r e d n U l a t o T s s o L l u f t b u o D - b u S d r a d n a t S l a t o T s s o L l u f t b u o D - b u S d r a d n a t S - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ) d ( ) c ( ) b ( d r a d n a t S ) a ( 1 0 . 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ) e ( 5 4 ) d ( 6 ) c ( 0 2 5 . 9 8 4 , 8 6 1 . 6 2 5 , 4 2 4 . 8 1 0 , 1 4 . 8 1 0 , 1 0 . 3 9 8 , 9 3 1 . 1 7 5 , 1 2 - ) 7 . 0 ( ) 6 . 5 6 4 , 8 ( 4 . 7 2 5 , 5 2 6 . 7 7 6 . 7 7 ) 9 . 0 4 7 ( 4 . 4 7 9 , 4 1 - - - - - - - - - - - - ) b ( d r a d n a t S - - - - - - - ) a ( 9 1 6 . 6 3 9 , 1 1 . 8 7 5 , 7 2 7 1 0 2 , 1 l i r p A t a s t n u o c c a d e r u t c u r t s e R r a e y e h t g n i r u d g n i r u t c u r t s e r h s e r F i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P s r e w o r r o b f o . o N . 1 . 2 g n i r u t c u r t s e R f o e p y T n o i t a c i f i s s a C l t e s s A . o N . r S s l i a t e D . m s i n a h c e m g n i r u t c u r t s e r t b e d r a e y e h t g n i r u d y r o g e t a c d r a d n a t s d e r u t c u r t s e r o t s n o i t a d a r g p U . 3 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N s e s a c d e r u t c u r t s e r g n i t s i x e f o g n d n a t s t u o i l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . 4 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 1 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N 8 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N . . . A N . A N . A N . . . . A N . A N . A N . . . . A N . A N . A N . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 3 . 0 3 4 5 . 0 8 2 , 6 4 1 . 0 1 3 , 6 3 5 8 . 6 7 2 8 . 6 7 2 0 3 9 . 3 3 8 , 1 4 2 . 7 7 6 , 5 3 - - - - - - . . . A N . A N . A N . - - - 1 1 0 . 6 0 6 , 5 1 9 . 5 5 0 , 2 1 ) 2 ( ) 1 ( ) 4 . 3 4 7 , 3 1 ( ) 4 . 3 4 7 , 3 1 ( ) 2 . 9 1 8 ( ) 2 . 9 1 8 ( ) 1 ( ) 2 . 4 2 9 , 2 1 ( ) 2 . 4 2 9 , 2 1 ( . . . A N . A N . A N . . . . A N . A N . A N . - - - 8 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s s r e w o r r o b f o . o N s t n u o c c a d e r u t c u r t s e r f o s n o i t a d a r g n w o D . 6 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P ) 3 . 2 0 8 , 7 ( 4 . 5 7 4 , 0 1 t c a r t t a o t e s a e c h c h w i , 7 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s d e r u t c u r t s e R . 5 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P e c n e h d n a 8 1 0 2 , 1 3 h c r a M t a i t h g e w k s i r d e r u t c u r t s e r s a n w o h s e b t o n d e e n l a n o i t i d d a i / r o d n a g n n o i s i v o r p r e h g h i - - - - - - - - - ) 1 1 ( ) 0 . 6 0 6 , 5 1 ( ) 9 . 5 5 0 , 2 1 ( - - - 8 1 . 6 5 3 8 . 9 6 1 , 4 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N r a e y e h t g n i r u d s t n u o c c a d e r u t c u r t s e r l f o e a s / y r e v o c e r / s f f o - e t i r W i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N s t n u o c c a d e r u t c u r t s e R i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M t a s r e w o r r o b f o . o N . 7 . 8 f o t r a p s a ) t n e m t o l l a i g n d n e p y e n o m n o i t a c i l p p a i g n d u l c n i ( y t i u q e o t n i s n a o l f o n o i s r e v n o c , t n e m e v l o v e d d e s a b d n u f - n o n , t n e m e s r u b s i d h s e r f , t s e r e t n i d e u r c c a , n o i t a u t c u l f e t a r e g n a h c x e , y t i l i c a f t i d e r c h s a c f o n o i t a s i l i t u , s t n e m y a p e r o t e u d s i s t n u o c c a d e r u t c u r t s e r f o i g n d n a t s t u o l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . 1 . c t e , e m e h c s g n i r u t c u r t s e r E M S d n a R D C r e d n u s t e s s a n a o l d e r u t c u r t s e r f o s l i a t e d , 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f , h t r o f s t e s l e b a t i g n w o l l o f e h T 200 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS s t n u o c c a f o r e b m u n t p e c x e , n o i l l i m n i ` l a t o T s r e h t O ) e ( ) d ( ) c ( ) b ( ) a ( ) e ( ) d ( ) c ( ) b ( ) a ( d r a d n a t S d r a d n a t S l a t o T s s o L l u f t b u o D - b u S d r a d n a t S l a t o T s s o L l u f t b u o D - b u S d r a d n a t S 4 1 4 , 1 6 . 4 7 3 , 4 4 1 6 . 9 9 7 , 7 4 4 0 1 7 . 8 4 5 , 1 7 . 8 4 5 , 1 5 8 7 6 . 5 9 8 , 4 9 8 . 9 4 0 , 3 4 1 2 2 3 . 8 6 3 8 . 7 4 4 , 2 4 0 3 8 . 2 3 8 , 2 5 . 2 8 4 , 5 4 8 6 3 , 1 1 . 4 8 8 , 5 7 5 . 3 7 2 , 3 2 8 9 3 . 0 3 5 3 . 0 3 5 5 6 7 6 . 2 0 0 , 5 5 7 . 8 7 4 , 1 2 1 2 2 3 . 8 6 3 8 . 7 4 4 , 2 4 8 2 2 . 6 9 8 4 . 3 0 9 , 7 1 7 1 0 2 , 1 l i r p A t a s t n u o c c a d e r u t c u r t s e R . 1 r a e y e h t g n i r u d g n i r u t c u r t s e r h s e r F . 2 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P s r e w o r r o b f o . o N g n i r u t c u r t s e R f o e p y T n o i t a c i f i s s a C l t e s s A . o N . r S s l i a t e D . s t e s s a n a o l d e r u t c u r t s e r l a t o t d n a r e h t o f o s l i a t e d , 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f , h t r o f s t e s l e b a t g n w o i l l o f e h T 5 7 3 5 . 1 2 7 , 3 5 7 . 6 0 3 , 9 2 2 6 . 0 6 . 0 9 4 1 8 . 9 5 6 , 3 5 6 . 4 7 2 , 9 2 8 1 2 3 . 7 5 3 . 1 3 - ) 4 . 0 ( ) 9 . 2 ( ) 7 ( ) 9 . 2 ( ) 9 . 2 ( - ) 0 . 9 4 6 , 2 2 ( 2 . 6 5 4 , 5 3 - 4 . 4 0 1 4 . 4 0 1 - - - - 7 . 4 7 6 , 9 1 ) 8 . 8 0 2 , 6 1 ( - - - - ) 1 ( ) 3 . 0 ( 6 8 . 3 2 . 0 8 8 . 2 - - ) 6 . 4 4 5 , 6 ( 1 . 7 7 6 , 5 1 8 . 8 2 9 , 9 ) 7 . 2 8 1 , 4 1 ( 8 . 6 2 8 . 6 2 3 . 0 0 7 , 4 ) 9 . 7 6 4 , 5 1 ( - ) 4 . 0 ( ) 9 . 2 ( ) 7 ( ) 9 . 2 ( ) 9 . 2 ( - - - - - - - - - - ) 1 ( ) 3 . 0 ( 5 7 3 5 . 1 2 7 , 3 5 7 . 6 0 3 , 9 2 2 6 . 0 6 . 0 3 9 4 1 3 8 . 9 5 6 , 3 5 3 6 . 4 7 2 , 9 2 8 1 2 3 . 7 5 3 . 1 3 6 8 . 3 2 . 0 8 8 . 2 - - s e s a c d e r u t c u r t s e r g n i t s i x e f o g n d n a t s t u o i l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . 4 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 1 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N r a e y e h t g n i r u d y r o g e t a c d r a d n a t s d e r u t c u r t s e r o t s n o i t a d a r g p U . 3 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N 8 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N 4 . 8 5 2 , 1 7 . 1 0 2 , 5 t c a r t t a o t e s a e c h c h w i , 7 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s d e r u t c u r t s e R . 5 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P e c n e h d n a 8 1 0 2 , 1 3 h c r a M t a i t h g e w k s i r d e r u t c u r t s e r s a n w o h s e b t o n d e e n l a n o i t i d d a i / r o d n a g n n o i s i v o r p r e h g h i - - - - 1 . 0 6 3 8 . 3 8 6 . . . A N . A N . A N . . . . A N . A N . A N . . . . A N . A N . A N . 5 1 . 4 2 1 1 . 4 2 1 0 9 1 5 . 4 1 5 , 5 2 8 . 4 1 0 , 9 1 ) 0 6 1 ( ) 9 . 6 6 3 ( ) 4 . 0 4 4 , 2 ( - - - ) 5 3 ( - - - - ) 1 . 8 3 8 , 2 2 ( ) 2 . 8 8 0 , 8 1 ( 1 . 0 6 3 8 . 3 8 6 . . . A N . A N . A N . 5 1 . 4 2 1 1 . 4 2 1 . . . A N . A N . A N . . . . A N . A N . A N . - - - 9 7 1 5 . 8 0 9 , 9 9 . 8 5 9 , 6 ) 0 6 1 ( ) 9 . 6 6 3 ( ) 4 . 0 4 4 , 2 ( ) 4 2 ( ) 1 . 2 3 2 , 7 ( ) 3 . 2 3 0 , 6 ( ) 7 1 2 ( ) 3 . 1 7 9 , 3 2 ( ) 7 . 2 8 5 , 3 2 ( ) 8 ( ) 3 . 2 2 8 ( ) 3 . 2 2 8 ( ) 1 2 1 ( ) 8 . 6 8 9 , 2 2 ( ) 2 . 9 5 7 , 2 2 ( ) 7 4 ( ) 6 . 5 ( ) 1 . 1 ( ) 1 4 ( ) 1 . 0 ( ) 6 . 6 5 1 ( ) 5 1 2 ( ) 3 . 9 3 8 , 9 ( ) 9 . 7 2 2 , 0 1 ( ) 7 ( ) 1 . 3 ( ) 1 . 3 ( 2 7 5 , 1 5 . 5 3 8 , 1 5 1 4 6 . 0 6 6 , 9 8 6 9 6 . 2 5 9 4 6 . 2 5 9 3 0 0 , 1 3 . 4 7 8 , 4 3 1 4 7 . 4 5 2 , 8 8 1 3 2 8 . 8 5 4 5 . 1 3 2 4 2 4 8 . 1 2 4 8 . 9 4 9 , 5 1 8 2 5 , 1 1 9 5 . 0 5 3 , 3 5 7 . 4 5 5 , 5 0 1 8 . 5 7 6 8 . 5 7 6 ) 0 2 1 ( ) 0 . 5 3 8 , 9 ( ) 6 . 2 6 0 , 0 1 ( 3 7 9 4 . 0 4 0 , 3 9 5 . 7 7 5 , 2 5 ) 7 4 ( ) 6 . 5 ( ) 1 . 1 ( 1 3 2 8 . 8 5 5 . 1 3 ) 1 4 ( ) 1 . 0 ( ) 6 . 6 5 1 ( 7 . 5 6 3 3 2 7 . 9 7 7 , 1 1 8 1 0 2 , 1 l i r p A t a s e c n a v d a d r a d n a t s s r e w o r r o b f o . o N s t n u o c c a d e r u t c u r t s e r f o s n o i t a d a r g n w o D . 6 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t g n i r u d s r e w o r r o b f o . o N r a e y e h t g n i r u d s t n u o c c a d e r u t c u r t s e r l f o e a s / y r e v o c e r / s f f o - e t i r W . 7 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M t a s t n u o c c a d e r u t c u r t s e R . 8 i g n d n a t s t u o t n u o m A n o e r e h t n o i s i v o r P i g n d n a t s t u o t n u o m A s r e w o r r o b f o . o N n o e r e h t n o i s i v o r P 8 1 0 2 , 1 3 h c r a M d e d n e s r e w o r r o b f o . o N d e u r c c a , n o i t a u t c u l f e t a r e g n a h c x e , y t i l i c a f t i d e r c h s a c f o n o i t a s i l i t u , s t n e m y a p e r o t e u d s i s t n u o c c a d e r u t c u r t s e r i f o g n d n a t s t u o l e v e l r e w o r r o b n i ) e s a e r c e d ( / e s a e r c n I . c t e , e m e h c s g n i r u t c u r t s e r f o t r a p s a ) t n e m t o l l i a g n d n e p n o i t a c i l i p p a g n d u l c n i ( y t i u q e o t n i s n a o l f o n o i s r e v n o c , t n e m e v l o v e d d e s a b d n u f - n o n , t n e m e s r u b s i d h s e r f , t s e r e t n i . m s i n a h c e m ) F L J ( m u r o F r e d n e L i t n o J r e d n u d e r u t c u r t s e r s e s a c e d u l c n i o s l a m s i n a h c e m ’ s r e h t O . n o i t c e r i d s ’ I B R n o d e s a b d e r u t c u r t s e r s a d e i f i s s a l c d n a 7 1 0 2 , 1 3 h c r a M t a A P N e r e w h c i h w n o i l l i m 2 . 4 6 9 , 0 2 ` o t g n i t n u o m a s r e w o r r o b e e r h t o t s n a o l s e d u l c n I . s t n u o c c a e s e h t n o n o i l l i m 4 . 8 6 0 , 2 ` o t g n i t n u o m a n o i s i v o r p s d o h y l l l a n o i t i d d a k n a B e h T . 1 . 2 . 3 . 4 201 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  During the year ended March 31, 2019, the Bank has not upgraded any borrower to standard category subsequent to change in ownership in accordance with RBI circular dated February 12, 2018 (year ended March 31, 2018: one borrower with fund based outstanding of ` 15,452.7 million, which included ` 10,262.0 million of credit substitutes and shares converted as per the resolution plan at March 31, 2018. The Bank held an aggregate provision of ` 7,785.1 million against this borrower, of which ` 6,508.2 million was against credit substitutes and shares at March 31, 2018). The following table sets forth, for the periods indicated, details for cases of change in ownership for projects under implementation (accounts which are currently under the stand-still period). Particulars ` in million, except number of borrowers At At March 31, 2018 March 31, 2019 Number of project loan borrowers where the Bank has decided to effect change in ownership Gross amount outstanding - Standard - Standard restructured - NPA - - - - 1 2,346.3 - - The following table sets forth, for the periods indicated, details of cases where scheme for Sustainable Structuring of Stressed Assets (S4A) is implemented. Particulars Number of borrowers where S4A has been applied Total gross amount outstanding1 - Standard - NPA Gross amount outstanding in Part A - Standard - NPA Gross amount outstanding in Part B - Standard - NPA Provision held - Standard - NPA ` in million, except number of borrowers At At March 31, 2018 March 31, 2019 6 6 6,243.62 1,236.2 3,340.42 712.4 2,903.22 523.7 1,924.9 1,377.0 6,596.92 1,144.8 4,084.92 108.7 2,512.0 1,036.1 1,281.4 789.0 1. 2. Represents loans, credit substitutes and shares under S4A scheme. Includes outstanding amounting to ` 1,081.6 million at March 31, 2019 (March 31, 2018: ` 1,327.2 million) which was upgraded to standard from NPA on implementation of S4A and ` 832.4 million at March 31, 2019 (March 31, 2018: Nil) which was upgraded to standard from NPA on satisfactory performance during specified period. The Bank does not recognise any amount towards interest on the cases under S4A. 202 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS The following table sets forth, for the periods indicated, details of cases under flexible structuring of existing loans. Particulars Number of borrowers taken up for flexible structuring Amount of loans taken up for flexible structuring2 - Standard - NPA Exposure weighted average duration of loans taken up for flexible structuring - Before applying flexible structuring - After applying flexible structuring ` in million, except number of borrowers Year ended March 31, 2018 31 Year ended March 31, 2019 - - - - - 11,709.8 - 4.57 10.98 1. During the year ended March 31, 2018, two borrowers were taken up for flexible structuring, out of which one borrower was demerged into two entities through NCLAT order dated February 28, 2018. 2. Represents implementation amount. 27. Concentration of Deposits, Advances, Exposures and NPAs (I) Concentration of deposits, advances, exposures and NPAs Concentration of deposits Total deposits of 20 largest depositors Deposits of 20 largest depositors as a percentage of total deposits of the Bank Concentration of advances1 Total advances to 20 largest borrowers (including banks) Advances to 20 largest borrowers as a percentage of total advances of the Bank At March 31, 2019 374,674.8 5.74% At March 31, 2019 1,285,208.1 12.05% ` in million At March 31, 2018 347,959.8 6.20% ` in million At March 31, 2018 1,365,485.0 14.11% 1. Represents credit exposure (funded and non-funded) including derivatives exposures as per RBI guidelines on exposure norms. Concentration of exposures1 Total exposure to 20 largest borrowers/customers (including banks) Exposures to 20 largest borrowers/customers as a percentage of total exposure of the Bank 1. Represents credit and investment exposures as per RBI guidelines on exposure norms. Concentration of NPAs Total exposure1 to top four NPA accounts 1. Represents gross exposure (funded and non-funded). At March 31, 2019 1,329,728.6 ` in million At March 31, 2018 1,431,945.8 11.87% 13.95% At March 31, 2019 126,059.0 ` in million At March 31, 2018 154,385.3 203 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS (II) Sector-wise advances Sr. No. Particulars Priority sector A. 1. Agriculture and allied activities 2. 3. Advances to industries sector eligible as priority sector lending Services of which: Transport operators Wholesale trade Personal loans of which: Housing Vehicle loans Sub-total (A) B. Non-priority sector 1. Agriculture and allied activities 4. Advances to industries sector of which: Infrastructure Basic metal and metal products Chemicals and Chemical Products (Dyes Paints etc.) Services of which: Commercial real estate Wholesale trade Non-banking financial companies Personal loans2 of which: Housing Sub-total (B) Total (A)+(B) Represents loans and advances. Excludes commercial business loans and dealer funding. 2. 3. 4. 1. 2. 3. ` in million, except percentages At March 31, 2019 Outstanding advances Gross NPAs1 % of gross NPAs1 to total advances in that sector 447,302.2 397,708.1 225,975.2 141,403.9 58,202.1 643,945.1 472,491.4 146,710.1 1,714,930.6 - 1,564,129.6 487,267.8 216,009.7 179,564.7 1,168,240.2 322,897.1 150,220.3 218,295.4 1,742,551.9 1,108,918.5 4,474,921.7 6,189,852.3 16,663.8 4,386.3 3,942.0 1,845.5 1,310.5 8,239.1 4,138.4 3,666.9 33,231.2 - 333,459.9 96,141.2 41,442.0 6,131.7 66,989.5 15,332.8 9,712.9 2,500.1 23,079.8 9,970.3 423,529.2 456,760.4 3.73% 1.10% 1.74% 1.31% 2.25% 1.28% 0.88% 2.50% 1.94% - 21.32% 19.73% 19.19% 3.41% 5.73% 4.75% 6.47% 1.15% 1.32% 0.90% 9.46% 7.38% Sub-sectors have been disclosed where advances exceed 10% of total advances in that sector at reporting date. Sr. No. Particulars Priority sector A. 1. Agriculture and allied activities 2. 3. Advances to industries sector eligible as priority sector lending Services of which: Transport operators Wholesale trade 204 ` in million, except percentages At March 31, 2018 Outstanding advances Gross NPAs1 % of gross NPAs1 to total advances in that sector 393,267.6 231,019.8 75,247.9 14,846.4 36,832.9 12,330.0 4,387.3 1,599.6 165.5 971.5 3.14% 1.90% 2.13% 1.12% 2.64% FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Sr. No. Particulars 4. Personal loans of which: Housing Vehicle loans Sub-total (A) B. Non-priority sector 1. Agriculture and allied activities 2. 3. 4. Advances to industries sector of which: Infrastructure Basic metal and metal products Services of which: Commercial real estate Wholesale trade Non-banking financial companies Personal loans2 of which: Housing Sub-total (B) Total (A)+(B) ` in million, except percentages At March 31, 2018 Outstanding advances Gross NPAs1 243,380.3 229,255.3 11,946.7 942,915.6 - 1,629,611.9 484,409.9 253,136.8 1,109,598.3 280,361.6 131,292.0 135,066.6 1,697,325.1 1,120,039.7 4,436,535.3 5,379,450.9 2,498.2 2,255.3 120.2 20,815.1 - 415,068.6 127,310.9 63,862.2 75,133.1 10,704.7 5,789.1 0.2 21,385.0 8,706.7 511,586.7 532,401.8 % of gross NPAs1 to total advances in that sector 1.03% 0.98% 1.01% 2.21% - 25.47% 26.28% 25.23% 6.77% 3.82% 4.41% 0.00% 1.26% 0.78% 11.53% 9.90% 1. 2. 3. Represents loans and advances. Excludes commercial business loans and dealer funding. Sub-sectors have been disclosed where advances exceed 10% of total advances in that sector at reporting date. (III) Overseas assets, NPAs1 and revenue Particulars Total assets2 Total NPAs (net) Total revenue2 Year ended March 31, 2019 890,543.1 31,624.1 42,948.5 ` in million Year ended March 31, 2018 931,385.2 122,524.3 38,091.2 1. 2. Represents loans and advances. Represents the total assets and total revenue of foreign operations as reported in Schedule 18 of the financial statements, note no. 5 on information about business and geographical segments. 205 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS (IV) Off-balance sheet special purpose vehicles (SPVs) sponsored (which are required to be consolidated as per accounting norms) for the year ended March 31, 2019 (a) The following table sets forth, the names of SPVs/trusts sponsored by the Bank/subsidiaries which are consolidated. Sr. No. A. B. Name of the SPV sponsored1 Domestic 1. ICICI Strategic Investments Fund2 2. India Advantage Fund-III2 3. India Advantage Fund-IV2 Overseas None 1. 2. SPVs/Trusts which are consolidated and set-up/sponsored by the Bank/Subsidiaries of the Bank. The nature of business of the above entities is venture capital fund. (b) The following table sets forth, the names of SPVs/trusts which are not sponsored by the Bank/subsidiaries and are consolidated. Sr. No. A. B. Name of the SPV Domestic None Overseas None 28. Intra-group exposure The following table sets forth, for the periods indicated, the details of intra-group exposure. Sr. No. 1. 2. 3. Particulars Total amount of intra-group exposures Total amount of top 20 intra-group exposures Percentage of intra-group exposure to total exposures of the Bank on borrowers/customers 4. Details of breach of limits on intra-group exposures and regulatory action thereon, if any 29. Exposure to sensitive sectors At March 31, 2019 100,938.0 100,938.0 ` in million At March 31, 2018 125,838.4 125,838.4 0.90% 1.23% Nil Nil The Bank has exposure to sectors, which are sensitive to asset price fluctuations. The sensitive sectors include capital markets and real estate. The following table sets forth, for the periods indicated, the position of exposure to capital market sector. Particulars Sr. No. 1. Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds, the corpus of which is not exclusively invested in corporate debt 2. Advances against shares/bonds/ debentures or other securities or on clean basis to individuals for investment in shares (including IPOs/ ESOPs), convertible bonds, convertible debentures and units of equity-oriented mutual funds At March 31, 2019 ` in million At March 31, 2018 32,604.3 24,451.5 1,170.7 1,336.0 206 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Sr. No. 3. Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security At March 31, 2019 ` in million At March 31, 2018 25,489.9 49,530.2 6. 5. 4. Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares/convertible bonds/ convertible debentures/units of equity oriented mutual funds does not fully cover the advances Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stock brokers and market makers Loans sanctioned to corporate against the security of shares/ bonds/debentures or other securities or on clean basis for meeting promoter’s contribution to the equity of new companies in anticipation of raising resources 7. Bridge loans to companies against expected equity flows/issues 8. Underwriting commitments taken up by the Bank in respect of primary issue of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds Financing to stockbrokers for margin trading 9. 10. All exposures to venture capital funds (both registered and unregistered) 11. Others Total exposure to capital market1 - - 89,571.4 74,928.9 - 1,500.0 - - 6,019.6 3,148.2 159,504.1 - - - - 5,634.3 591.7 156,472.6 1. At March 31, 2019, excludes investment in equity shares of ` 26,626.7 million (March 31, 2018: ` 27,085.1 million) exempted from the regulatory ceiling, out of which investments of ` 25,023.4 million (March 31, 2018: ` 25,481.8 million) were acquired under resolution schemes of RBI. The following table sets forth, for the periods indicated, the summary of exposure to real estate sector. Sr. No. I Particulars Direct exposure i) Residential mortgages of which: individual housing loans eligible for priority sector advances ii) Commercial real estate1 iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposure a) Residential b) Commercial real estate At March 31, 2019 2,306,322.6 1,801,730.9 300,507.8 458,878.9 ` in million At March 31, 2018 2,003,591.0 1,573,084.4 188,656.5 400,703.7 45,712.8 40,267.1 5,445.7 189,347.5 29,802.9 25,370.6 4,432.3 189,766.3 II 1. Indirect exposure Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs) Total exposure to real estate sector Commercial real estate exposure include loans to individuals against non-residential premises, loans given to land and building developers for construction, corporate loans for development of special economic zone, loans to borrowers where servicing of loans is from a real estate activity and exposures to mutual funds/venture capital funds/private equity funds investing primarily in the real estate companies. 189,347.5 2,495,670.1 189,766.3 2,193,357.3 207 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 30. Factoring business At March 31, 2019, the outstanding receivables acquired by the Bank under factoring business were Nil (March 31, 2018: Nil). 31. Risk category-wise country exposure As per the extant RBI guidelines, the country exposure of the Bank is categorised into various risk categories listed in the following table. The funded country exposure (net) of the Bank as a percentage of total funded assets for United States of America was 2.69% (March 31, 2018: 3.08%), for Singapore was 1.12% (March 31, 2018: 1.13%) and for United Kingdom was 1.06% (March 31, 2018: Nil). As the net funded exposure to United States of America, Singapore and United Kingdom exceeded 1.0% of total funded assets, the Bank held a provision of ` 595.0 million on country exposure at March 31, 2019 (March 31, 2018: ` 455.0 million) based on RBI guidelines. The following table sets forth, for the periods indicated, the details of exposure (net) and provision held by the bank. Risk category Insignificant Low Moderately Low Moderate Moderately High High Very High Total Exposure (net) at March 31, 2019 1,051,721.0 287,964.5 1,525.9 15,601.1 9.6 - - 1,356,822.1 Provision held at March 31, 2019 595.0 - - - - - - 595.0 Exposure (net) at March 31, 2018 914,183.7 282,931.3 8,706.1 7,737.7 9,928.4 - - 1,223,487.2 ` in million Provision held at March 31, 2018 455.0 - - - - - - 455.0 32. Details of Single Borrower Limit and Borrower Group Limit exceeded by the Bank During the year ended March 31, 2019 and March 31, 2018, the Bank has complied with the RBI guidelines on single borrower and borrower group limit. 33. Unsecured advances against intangible assets The Bank has not made advances against intangible collaterals of the borrowers, which are classified as ‘Unsecured’ in the financial statements at March 31, 2019 (March 31, 2018: Nil). 34. Revaluation of fixed assets The Bank follows the revaluation model for its premises (land and buildings) other than improvements to leasehold property as per AS 10 – ‘Property, Plant and Equipment’. The Bank had initially revalued its premises at March 31, 2016 and subsequently as per the Bank’s policy, annual revaluation is carried out through external valuers, using methodologies such as direct comparison method and income generation method and the incremental amount has been taken to revaluation reserve. The revalued amount at March 31, 2019 was ` 56,852.6 million (March 31, 2018: ` 56,637.9 million) as compared to the historical cost less accumulated depreciation of ` 26,407.5 million (March 31, 2018: ` 26,606.0 million). The revaluation reserve is not available for distribution of dividend. 208 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 35. Fixed Assets The following table sets forth, for the periods indicated, the movement in software acquired by the Bank, as included in fixed assets. Particulars At cost at March 31 of preceding year Additions during the year Deductions during the year Depreciation to date Net block 36. Description of contingent liabilities The following table describes the nature of contingent liabilities of the Bank. At March 31, 2019 18,608.1 2,477.2 (3,681.9) (12,789.4) 4,614.0 ` in million At March 31, 2018 15,066.6 3,573.5 (32.0) (14,033.0) 4,575.1 Contingent liability Brief Description Sr. No. 1. Claims against the Bank, not acknowledged as debts 2. Liability for partly paid investments 3. Liability on account of outstanding forward exchange contracts 4. Guarantees given on behalf of constituents, acceptances, endorsements and other obligations This item represents demands made in certain tax and legal matters against the Bank in the normal course of business and customer claims arising in fraud cases. In accordance with the Bank’s accounting policy and AS 29, the Bank has reviewed and classified these items as possible obligations based on legal opinion/ judicial precedents/assessment by the Bank. This item represents amounts remaining unpaid towards liability for partly paid investments. These payment obligations of the Bank do not have any profit/loss impact. The Bank enters into foreign exchange contracts in the normal course of its business, to exchange currencies at a pre-fixed price at a future date. This item represents the notional principal amount of such contracts, which are derivative instruments. With respect to the transactions entered into with its customers, the Bank generally enters into off-setting transactions in the inter-bank market. This results in generation of a higher number of outstanding transactions, and hence a large value of gross notional principal of the portfolio, while the net market risk is lower. This item represents the guarantees and documentary credits issued by the Bank in favour of third parties on behalf of its customers, as part of its trade finance banking activities with a view to augment the customers’ credit standing. Through these instruments, the Bank undertakes to make payments for its customers’ obligations, either directly or in case the customers fail to fulfill their financial or performance obligations. 209 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Contingent liability Brief Description Sr. No. 5. Currency swaps, interest rate swaps, currency options and interest rate futures 6. Other items for which the Bank is contingently liable This item represents the notional principal amount of various derivative instruments which the Bank undertakes in its normal course of business. The Bank offers these products to its customers to enable them to transfer, modify or reduce their foreign exchange and interest rate risks. The Bank also undertakes these contracts to manage its own interest rate and foreign exchange positions. With respect to the transactions entered into with its customers, the Bank generally enters into off-setting transactions in the inter-bank market. This results in generation of a higher number of outstanding transactions, and hence a large value of gross notional principal of the portfolio, while the net market risk is lower. Other items for which the Bank is contingently liable primarily include the amount of government securities bought/sold and remaining to be settled on the date of financial statements. This also includes the value of sell down options and other facilities pertaining to securitisation, the notional principal amounts of credit derivatives, amount applied in public offers under Application Supported by Blocked Amounts (ASBA), bill re-discounting, amount transferred to RBI under the Depositor Education and Awareness Fund (DEAF), exposure under partial credit enhancement, commitment towards contribution to venture fund and the amount that the Bank is obligated to pay under capital contracts. Capital contracts are job orders of a capital nature which have been committed. 37. Insurance business The following table sets forth, for the periods indicated, the break-up of income derived from insurance business. Sr. No. 1. 2. 3. Particulars Income from selling life insurance policies Income from selling non-life insurance policies Income from selling mutual fund/collective investment scheme products Year ended March 31, 2019 9,792.3 1,382.8 ` in million Year ended March 31, 2018 8,821.1 1,133.5 3,156.7 4,999.5 38. Employee benefits Pension The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for pension benefits. Particulars Opening obligations Service cost Interest cost Actuarial (gain)/loss Liabilities extinguished on settlement Benefits paid Obligations at the end of year 210 Year ended March 31, 2019 15,391.1 232.2 1,123.7 1,803.8 (1,833.7) (176.8) 16,540.3 ` in million Year ended March 31, 2018 16,686.9 275.0 1,113.1 (1,162.8) (1,399.0) (122.1) 15,391.1 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Opening plan assets, at fair value Expected return on plan assets Actuarial gain/(loss) Assets distributed on settlement Contributions Benefits paid Closing plan assets, at fair value Fair value of plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Amount not recognised as an asset (limit in Para 59(b) of AS 15 on ‘employee benefits’) Asset/(liability) Cost1 Service cost Interest cost Expected return on plan assets Actuarial (gain)/loss Curtailments & settlements (gain)/loss Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ Net cost Actual return on plan assets Expected employer’s contribution next year Investment details of plan assets Insurer managed funds Government of India securities Corporate bonds Equity securities in listed companies Others Assumptions Discount rate Salary escalation rate: On Basic pay On Dearness relief Estimated rate of return on plan assets Year ended March 31, 2019 16,303.7 1,381.1 (125.9) (2,037.4) 94.1 (176.8) 15,438.8 15,438.8 (16,540.3) ` in million Year ended March 31, 2018 16,888.1 1,433.4 (449.6) (1,554.5) 108.4 (122.1) 16,303.7 16,303.7 (15,391.1) - (1,101.5) 232.2 1,123.7 (1,381.1) 1,929.7 203.7 (310.1) 1,798.1 1,255.2 1,000.0 1.00% 49.63% 44.91% 3.55% 0.91% 7.05% 1.50% 7.00% 8.00% (310.1) 602.5 275.0 1,113.1 (1,433.4) (713.2) 155.5 241.8 (361.2) 983.8 3,000.0 0.88% 48.98% 43.48% 6.00% 0.66% 7.45% 1.50% 7.00% 8.00% 1. Included in line item ‘Payments to and provision for employees’ of Schedule-16 Operating expenses. Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations. 211 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Experience adjustment Particulars Plan assets Defined benefit obligations Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) Surplus/(deficit) Experience adjustment on plan assets Experience adjustment on plan liabilities Year ended March 31, 2019 15,438.8 (16,540.3) Year ended March 31, 2018 16,303.7 (15,391.1) Year ended March 31, 2017 16,888.1 (16,686.9) Year ended March 31, 2016 13,191.6 (14,191.6) ` in million Year ended March 31, 2015 10,103.4 (12,999.9) - (1,101.5) (310.1) 602.5 (68.4) 132.8 - (1,000.0) - (2,896.5) (125.9) (449.6) 589.5 (4.1) 104.7 1,038.6 290.1 (80.0) 1,503.4 1,271.2 Gratuity The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for gratuity benefits. Particulars Opening obligations Add: Adjustment for exchange fluctuation on opening obligations Adjusted opening obligations Service cost Interest cost Actuarial (gain)/loss Past service cost Liability transferred from/to other companies Benefits paid Obligations at the end of the year Opening plan assets, at fair value Expected return on plan assets Actuarial gain/(loss) Contributions Asset transferred from/to other companies Benefits paid Closing plan assets, at fair value Fair value of plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Amount not recognised as an asset (limit in Para 59(b) of AS 15 on ‘employee benefits’) Asset/(liability) Cost1 Service cost Interest cost Expected return on plan assets Year ended March 31, 2019 9,087.7 3.0 9,090.7 942.9 710.4 269.0 - 12.1 (910.7) 10,114.4 8,979.9 726.3 (60.3) 1,073.9 12.1 (910.7) 9,821.2 9,821.2 (10,114.4) - (293.2) 942.9 710.4 (726.3) ` in million Year ended March 31, 2018 8,701.8 0.4 8,702.2 893.4 599.3 (318.5) 14.7 4.4 (807.8) 9,087.7 8,559.0 689.6 (115.9) 650.5 4.5 (807.8) 8,979.9 8,979.9 (9,087.7) - (107.8) 893.4 599.3 (689.6) 212 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Actuarial (gain)/loss Past service cost Exchange fluctuation loss/(gain) Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ Net cost Actual return on plan assets Expected employer’s contribution next year Investment details of plan assets Insurer managed funds Government of India securities Corporate bonds Special deposit schemes Equity Others Assumptions Discount rate Salary escalation rate Estimated rate of return on plan assets Year ended March 31, 2019 329.3 - 3.0 - 1,259.3 666.0 800.0 ` in million Year ended March 31, 2018 (202.6) 14.7 0.4 - 615.6 573.7 1,500.0 - 29.90% 43.51% 2.96% 12.89% 10.74% 7.40% 7.00% 8.00% - 27.49% 48.70% 3.25% 15.70% 4.86% 7.60% 7.00% 8.00% 1. Included in line item ‘Payments to and provision for employees’ of Schedule-16 Operating expenses. Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations. Experience adjustment Particulars Plan assets Defined benefit obligations Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) Surplus/(deficit) Experience adjustment on plan assets Experience adjustment on plan liabilities Year ended March 31, 2019 9,821.2 (10,114.4) Year ended March 31, 2018 8,979.9 (9,087.7) Year ended March 31, 2017 8,559.0 (8,701.8) Year ended March 31, 2016 6,933.0 (7,386.7) ` in million Year ended March 31, 2015 6,570.7 (6,754.6) - (293.2) (60.3) 118.4 - (107.8) (115.9) 162.0 - (142.8) 454.5 125.2 - (453.7) (345.7) 120.1 - (183.9) 589.1 41.9 The estimates of future salary increases, considered in actuarial valuation, take into consideration inflation, seniority, promotion and other relevant factors. Provident Fund (PF) As there is no liability towards interest rate guarantee on exempt provident fund on the basis of actuarial valuation, the Bank has not made any provision for the year ended March 31, 2019 (year ended March 31, 2018: Nil). 213 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for provident fund. Particulars Opening obligations Service cost Interest cost Actuarial (gain)/loss Employees contribution Liability transferred from/to other companies Benefits paid Obligations at end of the year Opening plan assets Expected return on plan assets Actuarial gain/(loss) Employer contributions Employees contributions Asset transferred from/to other companies Benefits paid Closing plan assets Plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Asset/(liability) Cost1 Service cost Interest cost Expected return on plan assets Actuarial (gain)/loss Net cost Actual return on plan assets Expected employer's contribution next year Investment details of plan assets Government of India securities Corporate bonds Special deposit scheme Others Assumption Discount rate Expected rate of return on assets Discount rate for the remaining term to maturity of investments Average historic yield on the investment Guaranteed rate of return Year ended March 31, 2019 25,524.4 1,330.0 1,920.9 402.6 2,449.0 288.6 (3,158.0) 28,757.5 25,524.4 2,311.7 11.8 1,330.0 2,449.0 288.6 (3,158.0) 28,757.5 28,757.5 (28,757.5) - 1,330.0 1,920.9 (2,311.7) 390.8 1,330.0 2,323.5 1,423.1 47.49% 45.54% 1.88% 5.09% 7.40% 8.75% 7.46% 8.81% 8.65% ` in million Year ended March 31, 2018 22,596.8 1,233.8 1,512.4 412.4 2,314.8 304.8 (2,850.6) 25,524.4 22,596.8 1,960.4 (35.6) 1,233.8 2,314.8 304.8 (2,850.6) 25,524.4 25,524.4 (25,524.4) - 1,233.8 1,512.4 (1,960.4) 448.0 1,233.8 1,924.8 1,320.2 46.67% 46.57% 2.12% 4.64% 7.60% 8.95% 7.55% 8.90% 8.65% 1. Included in line item ‘Payments to and provision for employees’ of Schedule-16 Operating expenses. 214 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Experience adjustment Particulars Plan assets Defined benefit obligations Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) Surplus/(deficit) Experience adjustment on plan assets Experience adjustment on plan liabilities Year ended March 31, 2019 28,757.5 (28,757.5) Year ended March 31, 2018 25,524.4 (25,524.4) Year ended March 31, 2017 22,596.8 (22,596.8) Year ended March 31, 2016 19,920.6 (19,920.6) ` in million Year ended March 31, 2015 17,746.8 (17,746.8) - - 11.8 402.6 - - (35.6) 412.4 - - (26.8) 252.8 - - 8.7 199.0 - - 346.4 322.3 The Bank has contributed ` 2,067.3 million to provident fund for the year ended March 31, 2019 (year ended March 31, 2018: ` 1,982.2 million), which includes compulsory contribution made towards employee pension scheme under Employees Provident Fund and Miscellaneous Provisions Act, 1952. Superannuation Fund The Bank has contributed ` 224.9 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 207.2 million) to Superannuation Fund for employees who had opted for the scheme. National Pension Scheme (NPS) The Bank has contributed ` 95.2 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 76.8 million) to NPS for employees who had opted for the scheme. Compensated absence The following table sets forth, for the periods indicated, movement in provision for compensated absence. Particulars Cost1 Assumptions Discount rate Salary escalation rate Year ended March 31, 2019 734.9 ` in million Year ended March 31, 2018 675.3 7.40% 7.00% 7.60% 7.00% 1. Included in line item ‘Payments to and provision for employees’ of Schedule-16 Operating expenses. 39. Movement in provision for credit cards/debit cards/savings accounts and direct marketing agents reward points The following table sets forth, for the periods indicated, movement in provision for credit cards/debit cards/savings accounts reward points. Particulars Opening provision for reward points Provision for reward points made during the year Utilisation/write-back of provision for reward points Closing provision for reward points1 Year ended March 31, 2019 1,892.9 1,892.3 (1,699.3) 2,085.9 ` in million Year ended March 31, 2018 1,627.3 1,573.0 (1,307.4) 1,892.9 1. The closing provision is based on the actuarial valuation of accumulated credit cards/debit cards/savings accounts reward points. 215 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, for the periods indicated, movement in provision for reward points to direct marketing agents. Particulars Opening provision for reward points Provision for reward points made during the year Utilisation/write-back of provision for reward points Closing provision for reward points Year ended March 31, 2019 179.6 170.6 (153.3) 196.9 ` in million Year ended March 31, 2018 201.5 101.1 (123.0) 179.6 40. Provisions and contingencies The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in profit and loss account. Particulars Provisions for depreciation of investments Provision towards non-performing and other assets1 Provision towards income tax - Current2 - Deferred Floating provision Other provisions and contingencies3 Total provisions and contingencies Year ended March 31, 2019 3,562.2 168,112.0 ` in million Year ended March 31, 2018 18,773.4 142,445.2 33,606.0 (29,471.4) - 24,937.2 200,746.0 26,618.5 (20,047.2) - 11,851.2 179,641.1 1. 2. Includes provision towards NPA amounting to ` 170,969.1 million (March 31, 2018: ` 163,793.6 million). During the year ended March 31, 2018, the Bank had recognised Minimum Alternate Tax (MAT) credit as an asset amounting to ` 2,178.0 million, as the normal income tax liability related to the year ended March 31, 2017 was less than the MAT computed as per section 115JB of the Income tax Act, 1961. The MAT asset was fully utilised against the normal income tax liability for the year ended March 31, 2018. 3. Includes general provision made towards standard assets, provision on fixed assets acquired under debt-asset swap and non-fund based facilities. The Bank has assessed its obligations arising in the normal course of business, including pending litigations, proceedings pending with tax authorities and other contracts including derivative and long term contracts. In accordance with the provisions of AS 29 on ‘Provisions, Contingent Liabilities and Contingent Assets’, the Bank recognises a provision for material foreseeable losses when it has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. In cases where the available information indicates that the loss on the contingency is reasonably possible or the amount of loss cannot be reasonably estimated, a disclosure to this effect is made as contingent liabilities in the financial statements. The Bank does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. 216 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, for the periods indicated, the movement in provision for legal and fraud cases, operational risk and other contingencies. Particulars Opening provision Movement during the year (net) Closing provision 1. Excludes provision towards sundry expenses. 41. Provision for income tax Year ended March 31, 2019 10,996.6 9,622.1 20,618.7 ` in million Year ended March 31, 2018 7,861.3 3,135.3 10,996.6 The provision for income tax (including deferred tax) for the year ended March 31, 2019 amounted to ` 4,134.6 million (March 31, 2018: ` 6,571.3 million). The Bank has a comprehensive system of maintenance of information and documents required by transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. The Bank is of the opinion that all transactions with international related parties and specified transactions with domestic related parties are primarily at arm's length so that the above legislation does not have material impact on the financial statements. 42. Deferred tax At March 31, 2019, the Bank has recorded net deferred tax assets of ` 104,365.7 million (March 31, 2018: ` 74,770.2 million), which have been included in other assets. The following table sets forth, for the periods indicated, the break-up of deferred tax assets and liabilities into major items. Particulars Deferred tax assets Provision for bad and doubtful debts Foreign currency translation reserve3 Others Total deferred tax assets Deferred tax liabilities Special reserve deduction Depreciation on fixed assets Interest on refund of taxes3 Total deferred tax liabilities Total net deferred tax assets/(liabilities) At March 31, 20191 ` in million At March 31, 20182 132,736.9 282.9 9,276.5 142,296.3 30,482.0 4,816.0 2,632.6 37,930.6 104,365.7 102,010.3 861.2 6,603.6 109,475.1 28,653.2 4,974.6 1,077.1 34,704.9 74,770.2 1. 2. 3. Tax rate of 34.944% is adopted based on Finance Act, 2019. Tax rate of 34.944% is adopted based on Finance Act, 2018. These items are considered in accordance with the requirements of Income Computation and Disclosure Standards (ICDS). As per ICDS and subsequent circular issued by Central Board of Direct Taxes, during the year ended March 31, 2017, the Bank had recognised tax expense and deferred tax asset on closing balance of Foreign Currency Translation Reserve (FCTR) at March 31, 2017. Delhi High Court struck down certain part of ICDS in November 2017. Further, pursuant to amendments in Income tax Act, 1961 through Finance Act, 2018, the movement during the year in FCTR has become taxable effective from April 1, 2016. Accordingly, tax expense of ` 4,159.0 million and equal amount of deferred tax asset on the opening balance of FCTR at April 1, 2016 recognised earlier under ICDS has been reversed during the year ended March 31, 2018. 217 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 43. Details of provisioning pertaining to fraud accounts The following table sets forth, for the periods indicated, the details of provisioning pertaining to fraud accounts. Particulars Number of frauds reported Amount involved in frauds Provision made2 Unamortised provision debited from balance in profit and loss account under ‘Reserves and Surplus’ ` in million, except number of frauds Year ended March 31, 2018 2,938 5,895.7 2,087.5 Year ended March 31, 2019 2,1311 23,165.21 12,207.7 - 199.8 1. Includes three borrower accounts with outstanding of ` 7,948.7 million at March 31, 2018 accounted as fraud during the year ended March 31, 2018. The Bank made a provision of ` 2,894.5 million through profit and loss account and ` 5,054.2 million through balance in profit and loss account under ‘Reserves and Surplus’ during the year ended March 31, 2018. As permitted by RBI, provision made through balance in profit and loss account under ‘Reserves and Surplus’ was reversed and recognised through profit and loss account during the year ended March 31, 2019. 2. Excludes amount written off and interest reversal. 44. Proposed dividend on equity shares The Board of Directors at its meeting held on May 6, 2019 has recommended a dividend of ` 1.00 per equity share for the year ended March 31, 2019 (year ended March 31, 2018: ` 1.50 per equity share). The declaration and payment of dividend is subject to requisite approvals. 45. Dividend distribution tax Dividend received from Indian subsidiaries, on which dividend distribution tax has been paid by them and dividend received from overseas subsidiaries, on which tax has been paid under section 115BBD of the Income Tax Act, 1961, have been reduced from dividend to be distributed by the Bank for the purpose of computation of dividend distribution tax as per section 115-O of the Income Tax Act, 1961. 46. Related party transactions The Bank has transactions with its related parties comprising subsidiaries, associates/joint ventures/other related entities, key management personnel and relatives of key management personnel. I. Related parties Subsidiaries ICICI Bank Canada, ICICI Bank UK PLC, ICICI Home Finance Company Limited, ICICI International Limited, ICICI Investment Management Company Limited, ICICI Lombard General Insurance Company Limited, ICICI Prudential Asset Management Company Limited, ICICI Prudential Life Insurance Company Limited, ICICI Prudential Pension Funds Management Company Limited, ICICI Prudential Trust Limited, ICICI Securities Holdings Inc., ICICI Securities Inc., ICICI Securities Limited, ICICI Securities Primary Dealership Limited, ICICI Trusteeship Services Limited and ICICI Venture Funds Management Company Limited. Associates/joint ventures/other related entities Arteria Technologies Private Limited1, India Advantage Fund-III, India Advantage Fund-IV, India Infradebt Limited, ICICI Merchant Services Private Limited, I-Process Services (India) Private Limited, NIIT Institute of Finance, Banking and Insurance Training Limited, ICICI Strategic Investments Fund2, Comm Trade Services Limited and ICICI Foundation for Inclusive Growth. 1. 2. Identified as related party effective from May 29, 2018. Entity consolidated as per Accounting Standard (AS) 21 on ‘Consolidated Financial Statements’. 218 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Key management personnel Mr. Sandeep Bakhshi1, Ms. Vishakha Mulye, Mr. Vijay Chandok, Mr. Anup Bagchi, Mr. N. S. Kannan2 and Ms. Chanda Kochhar3. 1. 2. 3. Identified as related party effective from June 19, 2018. Ceased to be related party effective close of business hours on June 18, 2018. Ceased to be related party effective from October 4, 2018. Relatives of key management personnel Ms. Mona Bakhshi1, Mr. Shivam Bakhshi1, Ms. Esha Bakhshi1, Ms. Minal Bakhshi1, Mr. Sameer Bakhshi1, Mr. Vivek Mulye, Ms. Vriddhi Mulye, Dr. Gauresh Palekar, Ms. Shalaka Gadekar, Ms. Manisha Palekar, Ms. Poonam Chandok, Ms. Saluni Chandok, Ms. Simran Chandok, Mr. C. V. Kumar, Ms. Shad Kumar, Ms. Sanjana Gulati, Ms. Mitul Bagchi, Mr. Aditya Bagchi, Mr. Shishir Bagchi, Mr. Arun Bagchi , Mr. Animesh Bagchi, Ms. Rangarajan Kumudalakshmi2, Ms. Aditi Kannan2, Ms. Sudha Narayanan2, Mr. Raghunathan Narayanan2, Mr. Rangarajan Narayanan2, Mr. Deepak Kochhar3, Mr. Arjun Kochhar3, Ms. Aarti Kaji3 and Mr. Mahesh Advani3. 1. 2. 3. Identified as related party effective from June 19, 2018. Ceased to be related party effective close of business hours on June 18, 2018. Ceased to be related party effective from October 4, 2018. II. Transactions with related parties The following table sets forth, for the periods indicated, the significant transactions between the Bank and its related parties. Items Interest income Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total interest income Fee, commission and other income Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total fee, commission and other income Commission income on guarantees issued Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total commission income on guarantees issued Income from custodial services Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total income from custodial services Gain/(loss) on forex and derivative transactions (net)2 Year ended March 31, 2019 ` in million Year ended March 31, 2018 240.5 44.4 11.7 0.01 296.6 12,225.7 20.0 0.2 0.01 12,245.9 30.2 0.1 - - 30.3 16.8 - - - 16.8 489.1 29.4 9.0 0.1 527.6 12,080.3 13.9 0.01 0.01 12,094.2 35.2 0.1 - - 35.3 26.8 - - - 26.8 219 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Items Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total gain/(loss) on forex and derivative transactions (net) Dividend income Subsidiaries Associates/joint ventures/others Total dividend income Insurance claims received Subsidiaries Associates/joint ventures/others Total insurance claims received Recovery of lease of premises, common corporate and facilities expenses Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total recovery of lease of premises, common corporate and facilities expenses Payment of lease of premises, common corporate and facilities expenses Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total payment of lease of premises, common corporate and facilities expenses Recovery for secondment of employees (net) Subsidiaries Associates/joint ventures/others Total recovery for secondment of employees (net) Reimbursement of expenses from related parties Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total reimbursement of expenses from related parties Interest expense Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total interest expense Year ended March 31, 2019 665.3 0.1 - - 665.4 ` in million Year ended March 31, 2018 44.5 (0.0)1 - - 44.5 10,779.5 62.9 10,842.4 111.8 - 111.8 1,732.5 59.7 - - 1,792.2 76.9 - - - 76.9 27.7 9.4 37.1 1.3 - - - 1.3 191.3 7.8 4.2 1.7 205.0 12,140.6 62.9 12,203.5 127.5 - 127.5 1,611.1 69.2 - - 1,680.3 73.1 - - - 73.1 11.2 8.7 19.9 1.4 3.3 - - 4.7 303.6 5.4 10.2 3.1 322.3 220 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSItems Remuneration to wholetime directors3 Key management personnel Total remuneration to wholetime directors Reimbursement of expenses to related parties Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total reimbursement of expenses to related parties Insurance premium paid Subsidiaries Associates/joint ventures/others Total insurance premium paid Brokerage, fee and other expenses Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total brokerage, fee and other expenses Donation given Subsidiaries Associates/joint ventures/others Total donation given Dividend paid Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total dividend paid Purchase of investments Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total purchase of investments Investments in the securities issued by related parties Subsidiaries Associates/joint ventures/others Total investments in the securities issued by related parties Sale of investments Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total sale of investments Redemption/buyback of investments Year ended March 31, 2019 ` in million Year ended March 31, 2018 270.5 270.5 45.9 0.1 - - 46.0 5,779.0 - 5,779.0 486.7 9,451.1 - - 9,937.8 - 380.0 380.0 - - 6.6 0.01 6.6 35,839.6 - - - 35,839.6 - 2,740.0 2,740.0 37,759.6 - - - 37,759.6 232.9 232.9 784.5 0.1 - - 784.6 2,869.0 - 2,869.0 503.9 6,833.4 - - 7,337.3 - 560.0 560.0 - - 8.3 0.01 8.3 50,279.2 - - - 50,279.2 - 6,462.0 6,462.0 29,950.3 - - - 29,950.3 221 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSItems Subsidiaries Associates/joint ventures/others Total redemption/buyback of investments Unfunded risk participation Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total unfunded risk participation Sale of loans Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total sale of loans Purchase of fixed assets Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total purchase of fixed assets Sale of fixed assets Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total sale of fixed assets Year ended March 31, 2019 - 175.2 175.2 ` in million Year ended March 31, 2018 5,065.0 190.1 5,255.1 - - - - - 88.7 - - - 88.7 21.3 - - - 21.3 6.1 - 7.2 - 13.3 1,291.6 - - - 1,291.6 1,403.9 - - - 1,403.9 1.2 - - - 1.2 2.2 - - - 2.2 1. 2. Insignificant amount. The Bank undertakes derivative transactions with its subsidiaries, associates, joint ventures and other related entities. The Bank manages its foreign exchange and interest rate risks arising from these transactions by covering them in the market. While the Bank, within its overall position limits covers these transactions in the market, the above amounts represent only the transactions with its subsidiaries, associates, joint ventures and other related entities and not the offsetting/covering transactions. 3. Excludes the perquisite value on employee stock options exercised, contribution to gratuity fund and includes performance bonus paid during the period. III. Material transactions with related parties The following table sets forth, for the periods indicated, the material transactions between the Bank and its related parties. A specific related party transaction is disclosed as a material related party transaction wherever it exceeds 10% of all related party transactions in that category. Particulars ICICI Home Finance Company Limited ICICI Securities Primary Dealership Limited India Infradebt Limited Interest income 1. 2. 3. Fee, commission and other income 1. ICICI Prudential Life Insurance Company Limited 222 Year ended March 31, 2019 ` in million Year ended March 31, 2018 171.6 66.6 41.1 368.5 111.6 29.4 9,822.6 8,818.7 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars ICICI Bank UK PLC ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Prudential Asset Management Company Limited ICICI Bank Canada ICICI Lombard General Insurance Company Limited ICICI Home Finance Company Limited ICICI Securities Primary Dealership Limited ICICI Bank UK PLC ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Asset Management Company Limited 2. 3. Commission income on guarantees issued 1. Income from custodial services ICICI Prudential Asset Management Company Limited 1. 2. ICICI Securities Primary Dealership Limited Gain/(loss) on forex and derivative transactions (net)1 1. 2. 3. 4. 5. 6. Dividend income 1. 2. 3. 4. 5. Insurance claims received ICICI Prudential Life Insurance Company Limited 1. 2. ICICI Lombard General Insurance Company Limited Recovery of lease of premises, common corporate and facilities expenses 1. 2. 3. 4. 5. Payment of lease of premises, common corporate and facilities expenses 1. Recovery for secondment of employees 1. 2. 3. Reimbursement of expenses from related parties ICICI Home Finance Company Limited 1. 2. India Infradebt Limited Interest expense 1. 2. 3. ICICI Home Finance Company Limited ICICI Securities Limited ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Bank UK PLC ICICI Securities Limited ICICI Prudential Life Insurance Company Limited ICICI Bank UK PLC ICICI Securities Limited I-Process Services (India) Private Limited ICICI Prudential Life Insurance Company Limited ICICI Venture Funds Management Company Limited Year ended March 31, 2019 1,440.7 330.6 ` in million Year ended March 31, 2018 1,213.7 1,360.8 28.2 12.7 4.0 1,244.3 (472.6) (177.4) 30.2 16.4 3.2 3,719.6 1,939.6 1,656.5 1,373.6 1,269.2 60.9 50.9 373.5 291.1 289.8 269.4 248.0 68.1 22.7 9.4 5.4 1.3 - 107.6 41.8 39.4 33.3 23.7 3.1 (7.9) (565.1) 535.3 54.0 8.7 14.8 5,435.9 1,771.8 2,268.6 1,092.3 404.6 85.3 42.2 377.5 288.0 232.7 226.4 260.6 66.3 10.1 8.7 1.2 1.4 3.3 87.1 190.0 24.6 223 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSParticulars Year ended March 31, 2019 ` in million Year ended March 31, 2018 ICICI Foundation for Inclusive Growth I-Process Services (India) Private Limited ICICI Merchant Services Private Limited ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Bank UK PLC ICICI Bank Canada ICICI Lombard General Insurance Company Limited ICICI Securities Limited Remuneration to wholetime directors2 1. Mr. Sandeep Bakhshi3 2. Ms. Vishakha Mulye 3. Mr. Vijay Chandok 4. Mr. Anup Bagchi 5. Mr. N. S. Kannan4 6. Ms. Chanda Kochhar5 Reimbursement of expenses to related parties 1. 2. 3. 4. Insurance premium paid 1. 2. Brokerage, fee and other expenses 1. 2. Donation given 1. Dividend paid 1. Mr. Sandeep Bakhshi3 2. Ms. Vishakha Mulye 3. Mr. Vijay Chandok 4. Mr. N. S. Kannan4 5. Ms. Chanda Kochhar5 Purchase of investments 1. 2. Investments in the securities issued by related parties 1. Sale of investments 1. 2. Redemption/buyback of investments India Advantage Fund-III 1. India Advantage Fund-IV 2. 3. ICICI Bank Canada Unfunded risk participation 1. ICICI Bank UK PLC Sale of loans ICICI Home Finance Company Limited 1. 2. ICICI Bank UK PLC Purchase of fixed assets 1. ICICI Prudential Life Insurance Company Limited ICICI Securities Primary Dealership Limited ICICI Securities Primary Dealership Limited ICICI Prudential Life Insurance Company Limited ICICI Prudential Life Insurance Company Limited India Infradebt Limited 224 47.2 50.2 45.5 44.1 9.4 74.1 28.7 12.6 4.5 - 3,876.5 1,902.5 5,327.1 4,112.9 N.A. 43.1 44.1 37.3 45.1 63.3 27.9 6.7 193.6 553.8 1,169.5 1,699.5 4,516.6 2,303.1 380.0 560.0 0.7 1.3 0.06 - 4.6 N.A. 1.5 0.06 1.1 5.7 32,457.9 3,325.9 42,642.3 6,045.6 2,740.0 6,462.0 19,144.6 16,598.0 16,353.3 12,379.0 119.4 55.8 - - 88.7 - 20.7 108.2 81.9 5,065.0 1,291.6 - 1,403.9 - FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSICICI Home Finance Company Limited Particulars 2. Sale of fixed assets 1. 2. 3. Ms. Chanda Kochhar5 ICICI Home Finance Company Limited ICICI Prudential Asset Management Company Limited Year ended March 31, 2019 - ` in million Year ended March 31, 2018 1.1 4.0 - 7.2 - 2.2 - 1. 2. 3. 4. 5. 6. The Bank undertakes derivative transactions with its subsidiaries, associates, joint ventures and other related entities. The Bank manages its foreign exchange and interest rate risks arising from these transactions by covering them in the market. While the Bank, within its overall position limits covers these transactions in the market, the above amounts represent only the transactions with its subsidiaries, associates, joint ventures and other related entities and not the offsetting/covering transactions. Excludes the perquisite value on employee stock options exercised, contribution to gratuity fund and includes performance bonus paid during the period. Identified as related party effective from June 19, 2018. Ceased to be related party effective close of business hours on June 18, 2018. Ceased to be related party effective from October 4, 2018. Insignificant amount. IV. Related party outstanding balances The following table sets forth, for the periods indicated, the balances payable to/receivable from related parties. Items Deposits with the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total deposits with the Bank Investments of related parties in the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total investments of related parties in the Bank Call/term money borrowed by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total call/term money borrowed by the Bank Reverse repurchase Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total reverse repurchase Payables2 Subsidiaries At March 31, 2019 ` in million At March 31, 2018 27,168.2 523.1 63.2 10.3 27,764.8 1,587.3 - 3.1 0.01 1,590.4 - - - - - - - - - - 111.3 7,652.6 1,070.4 146.1 120.8 8,989.9 3,477.6 - 7.9 0.01 3,485.5 - - - - - 23,044.5 - - - 23,044.5 515.1 225 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Items Associates/joint ventures/others Key management personnel Relatives of key management personnel Total payables Deposits made by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total deposits made by the Bank Call/term money lent by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total call/term money lent by the Bank Investments of the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total investments of the Bank Advances by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total advances by the Bank Receivables2 Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total receivables Guarantees/letters of credit/indemnity given by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total guarantees/letters of credit/indemnity given by the Bank Guarantees/letters of credit/indemnity issued by related parties Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total guarantees/letters of credit/indemnity issued by related parties At March 31, 2019 1,789.2 0.01 0.01 1,900.5 ` in million At March 31, 2018 749.8 0.01 0.01 1,264.9 1,415.6 - - - 1,415.6 - - - - - 98,028.5 7,460.0 - - 105,488.5 1,111.5 45.0 254.1 0.4 1,411.0 2,154.5 14.7 - - 2,169.2 11,821.0 11.2 - - 11,832.2 4,399.2 - - - 4,399.2 886.9 - - - 886.9 3,000.0 - - - 3,000.0 98,315.7 4,147.6 - - 102,463.3 4,077.2 - 161.1 0.7 4,239.0 1,608.2 1.9 - - 1,610.1 13,747.5 1.1 - - 13,748.6 1,983.4 - - - 1,983.4 226 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSItems Swaps/forward contracts (notional amount) Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total swaps/forward contracts (notional amount) Unfunded risk participation Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total unfunded risk participation 1. Insignificant amount. At March 31, 2019 ` in million At March 31, 2018 274,720.7 - - - 274,720.7 819.4 - - - 819.4 731,169.6 - - - 731,169.6 1,279.4 - - - 1,279.4 2. 3. 4. Excludes mark-to-market on outstanding derivative transactions. At March 31, 2019, 20,022,000 (March 31, 2018: 38,444,750) employee stock options for key management personnel were outstanding. Excludes stock options granted to key management personnel, which are pending regulatory approvals. During the year ended March 31, 2019, 2,062,000 (year ended March 31, 2018: 408,119) employee stock options with total exercise price of ` 296.3 million (year ended March 31, 2018: ` 60.0 million) were exercised by the key management personnel. V. Related party maximum balances The following table sets forth, for the periods indicated, the maximum balances payable to/receivable from related parties. Items Deposits with the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total deposits with the Bank Investments of related parties in the Bank1 Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total investments of related parties in the Bank Call/term money borrowed by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total call/term money borrowed by the Bank Reverse repurchase Subsidiaries Associates/joint ventures/others Key management personnel Year ended March 31, 2019 ` in million Year ended March 31, 2018 28,243.8 5,479.4 234.6 175.3 34,133.1 1,637.3 - 9.3 0.02 1,646.6 - - - - - 23,044.5 - - 26,475.9 5,613.6 198.2 550.5 32,838.2 3,529.3 - 7.9 0.02 3,537.2 1,000.0 - - - 1,000.0 23,044.5 - - 227 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Items Relatives of key management personnel Total reverse repurchase Payables1,3 Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total payables Deposits made by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total deposits made by the Bank Call/term money lent by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total call/term money lent by the Bank Investments of the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total investments of the Bank Advances by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total advances by the Bank Receivables3 Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total receivables Guarantees/letters of credit/indemnity given by the Bank Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total guarantees/letters of credit/indemnity given by the Bank Year ended March 31, 2019 - 23,044.5 ` in million Year ended March 31, 2018 - 23,044.5 111.3 1,789.2 0.02 0.1 1,900.6 9,298.5 - - - 9,298.5 10,000.0 - - - 10,000.0 98,315.7 8,175.5 - - 106,491.2 7,809.5 45.0 256.2 0.9 8,111.6 3,735.6 115.8 - - 3,851.4 16,184.2 12.7 - - 16,196.9 515.1 1,191.8 0.1 0.1 1,707.1 4,426.2 - - - 4,426.2 8,450.0 - - - 8,450.0 103,222.4 6,099.8 - - 109,322.2 20,158.8 - 203.6 3.1 20,365.5 1,683.7 137.1 - - 1,820.8 14,043.2 9.8 - - 14,053.0 228 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSItems Guarantees/letters of credit/indemnity issued by related parties1 Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total guarantees/letters of credit/indemnity issued by related parties Swaps/forward contracts (notional amount) Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total swaps/forward contracts (notional amount) Unfunded risk participation Subsidiaries Associates/joint ventures/others Key management personnel Relatives of key management personnel Total unfunded risk participation Year ended March 31, 2019 ` in million Year ended March 31, 2018 4,432.1 - - - 4,155.1 - - - 4,432.1 4,155.1 935,892.4 - - - 935,892.4 1,415.7 - - - 1,415.7 853,591.5 - - - 853,591.5 3,562.2 - - - 3,562.2 1. 2. 3. Maximum balance is determined based on comparison of the total outstanding balances at each quarter end during the financial year. Insignificant amount. Excludes mark-to-market on outstanding derivative transactions. VI. Letters of comfort The Bank has issued letters of comfort on behalf of its banking subsidiary ICICI Bank UK PLC to Financial Services Authority, UK (now split into two separate regulatory authorities, the Prudential Regulation Authority and the Financial Conduct Authority) to confirm that the Bank intends to financially support ICICI Bank UK PLC in ensuring that it meets all of its financial obligations as they fall due. The Bank has issued an undertaking on behalf of ICICI Securities Inc. for Singapore dollar 10.0 million (March 31, 2018: Singapore dollar 10.0 million) (equivalent to ` 510.4 million at March 31, 2019 and ` 498.2 million at March 31, 2018) to the Monetary Authority of Singapore (MAS) and has executed six indemnity agreements including one issued during the year on behalf of ICICI Bank Canada to its independent directors for a sum not exceeding Canadian dollar 2.5 million each, aggregating to Canadian dollar 15.0 million (March 31, 2018: Canadian dollar 17.5 million) (equivalent to ` 773.1 million at March 31, 2019 and ` 886.4 million at March 31, 2018). The aggregate amount of ` 1,283.5 million at March 31, 2019 (March 31, 2018: ` 1,384.6 million) is included in the contingent liabilities. The letters of comfort in the nature of letters of awareness that were outstanding at March 31, 2019 issued by the Bank on behalf of its subsidiaries in respect of their borrowings made or proposed to be made, aggregated to ` 7,060.0 million (March 31, 2018: ` 12,363.0 million). In addition to the above, the Bank has also issued letters of comfort in the nature of letters of awareness on behalf of its subsidiaries for other incidental business purposes. These letters of awareness are in the nature of factual statements or confirmation of facts and do not create any financial impact on the Bank. 229 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 47. Details of amount transferred to The Depositor Education and Awareness Fund (the Fund) of RBI The following table sets forth, for the periods indicated, the movement in amount transferred to the Fund. Particulars Opening balance Add: Amounts transferred during the year Less: Amounts reimbursed by the Fund towards claims during the year Closing balance Year ended March 31, 2019 6,654.6 1,776.7 (100.6) 8,330.7 ` in million Year ended March 31, 2018 4,841.2 1,906.2 (92.8) 6,654.6 48. Small and micro enterprises The following table sets forth, for the periods indicated, details relating to enterprises covered under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. Sr. No. Particulars 1. 2. 3. 4. 5. The Principal amount and the interest due thereon remaining unpaid to any supplier The amount of interest paid by the buyer in terms of Section 16, along with the amount of the payment made to the supplier beyond the due date The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the due date during the year) but without adding the interest specified under MSMED Act, 2006 The amount of interest accrued and remaining unpaid The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowed as a deductible expenditure under Section 23 1. Represents insignificant amount. At March 31, 2019 Principal Interest At March 31, 2018 Principal Interest ` in million - - - - - - N.A. N.A. 0.3 0.3 N.A. N.A. - - 0.5 0.5 N.A. 0.01 N.A. - 49. Penalties/fines imposed by RBI and other banking regulatory bodies The penalty imposed by RBI and other banking regulatory bodies during the year ended March 31, 2019 was ` 10.0 million (year ended March 31, 2018: ` 627.2 million). RBI through an order dated February 25, 2019, imposed a monetary penalty of ` 10.0 million on the Bank for delay in compliance with RBI’s directives on “Time-bound implementation & strengthening of SWIFT related controls”. 50. Disclosure on Remuneration Compensation Policy and practices (A) Qualitative Disclosures a) Information relating to the bodies that oversee remuneration. • Name, composition and mandate of the main body overseeing remuneration The Board Governance, Remuneration and Nomination Committee (BGRNC/Committee) is the body which oversees the remuneration aspects. The functions of the Committee include recommending appointments of Directors to the Board, identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down and recommending to the Board their appointment and removal, formulate a criteria for the evaluation of the performance of the wholetime/independent Directors and the Board and to extend or continue 230 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS the term of appointment of independent Director on the basis of the report of performance evaluation of independent Directors, recommending to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees, recommending to the Board the remuneration (including performance bonus and perquisites) to wholetime Directors (WTDs) and senior management, commission and fee payable to non-executive Directors subject to applicable regulations, approving the policy for and quantum of bonus payable to members of the staff including senior management and key managerial personnel, formulating the criteria for determining qualifications, positive attributes and independence of a Director, framing policy on Board diversity, framing guidelines for the Employee Stock Option Scheme (ESOS) and decide on the grant of the Bank’s stock options to employees and WTDs of the Bank and its subsidiary companies. External consultants whose advice has been sought, the body by which they were commissioned, and in what areas of the remuneration process The Bank employed the services of a reputed consulting firm for market benchmarking in the area of compensation, including executive compensation. Scope of the Bank’s remuneration policy (e.g. by regions, business lines), including the extent to which it is applicable to foreign subsidiaries and branches The Compensation Policy of the Bank, as last reviewed by the BGRNC and the Board at their meeting held on May 7, 2018, pursuant to the guidelines issued by RBI, covers all employees of the Bank, including those in overseas branches of the Bank. In addition to the Bank’s Compensation Policy guidelines, the overseas branches also adhere to relevant local regulations. Type of employees covered and number of such employees All employees of the Bank are governed by the Compensation Policy. The total number of permanent employees of the Bank at March 31, 2019 was 84,922. • • • b) Information relating to the design and structure of remuneration processes. • Key features and objectives of remuneration policy The Bank has under the guidance of the Board and the BGRNC, followed compensation practices intended to drive meritocracy within the framework of prudent risk management. This approach has been incorporated in the Compensation Policy, the key elements of which are given below. o o Effective governance of compensation: The BGRNC has oversight over compensation. The Committee defines Key Performance Indicators (KPIs) for WTDs and equivalent positions and the organisational performance norms for bonus based on the financial and strategic plan approved by the Board. The KPIs include both quantitative and qualitative aspects. The BGRNC assesses organisational performance as well as the individual performance for WTDs and equivalent positions. Based on its assessment, it makes recommendations to the Board regarding compensation for WTDs, senior management and equivalent positions and bonus for employees, including senior management and key management personnel. Alignment of compensation philosophy with prudent risk taking: The Bank seeks to achieve a prudent mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and no guaranteed bonuses. Compensation is sought to be aligned to both financial and non-financial indicators of performance including aspects like risk management and customer service. In addition, the Bank has an employee stock option scheme aimed at aligning compensation to long term performance through stock option grants that vest over a period of time. Compensation of staff in financial and risk control functions is independent of the business areas they oversee and depends on their performance assessment. • Whether the remuneration committee reviewed the firm’s remuneration policy during the past year, and if so, an overview of any changes that were made During the year ended March 31, 2019, the Bank’s Compensation Policy was reviewed by the BGRNC and the Board at their meeting held on May 7, 2018. No changes were proposed in the compensation policy. 231 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS c) • Discussion of how the Bank ensures that risk and compliance employees are remunerated independently of the businesses they oversee The compensation of staff engaged in control functions like Risk and Compliance depends on their performance, which is based on achievement of the key results of their respective functions. Their goal sheets do not include any business targets. Description of the ways in which current and future risks are taken into account in the remuneration processes. • into account when implementing Overview of the key risks that the Bank takes remuneration measures The Board approves the risk framework for the Bank and the business activities of the Bank are undertaken within this framework to achieve the financial plan. The risk framework includes the Bank’s risk appetite, limits framework and policies and procedures governing various types of risk. KPIs of WTDs & equivalent positions, as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas such as risk calibrated core operating profit (profit before provisions and tax, excluding treasury income), performance indicators include aspects such as the desired funding profile and asset quality. The BGRNC takes into consideration all the above aspects while assessing organisational and individual performance and making compensation-related recommendations to the Board. Overview of the nature and type of key measures used to take account of these risks, including risk difficult to measure The annual performance targets and performance evaluation incorporate both qualitative and quantitative aspects including asset quality, provisioning, increase in stable funding sources, refinement/improvement of the risk management framework, effective management of stakeholder relationships and mentoring key members of the top and senior management. • • Discussion of the ways in which these measures affect remuneration Every year, the financial plan/targets are formulated in conjunction with a risk framework with limit structures for various areas of risk/lines of business, within which the Bank operates to achieve the financial plan. To ensure effective alignment of compensation with prudent risk taking, the BGRNC takes into account adherence to the risk framework in conjunction with which the financial plan/targets have been formulated. KPIs of WTDs and equivalent positions, as well as employees, incorporate relevant risk management related aspects. For example, in addition to performance targets in areas such as risk calibrated core operating profit, performance indicators include aspects such as the desired funding profile and asset quality. The BGRNC takes into consideration all the above aspects while assessing organisational and individual performance and making compensation-related recommendations to the Board. • Discussion of how the nature and type of these measures have changed over the past year and reasons for the changes, as well as the impact of changes on remuneration. The nature and type of these measures have not changed over the past year and hence, there is no impact on remuneration. d) Description of the ways in which the Bank seeks to link performance during a performance measurement period with levels of remuneration • Overview of main performance metrics for Bank, top level business lines and individuals The main performance metrics include risk calibrated core operating profit (profit before provisions and tax, excluding treasury income), asset quality metrics (such as additions to non-performing loans and recoveries & upgrades), compliance with regulatory norms, refinement of risk management processes and customer service. The specific metrics and weightages for various metrics vary with the role and level of the individual. 232 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS • • Discussion of how amounts of individual remuneration are linked to the Bank-wide and individual performance The BGRNC takes into consideration above mentioned aspects while assessing performance and making compensation-related recommendations to the Board regarding the performance assessment of WTDs and equivalent positions. The performance assessment of individual employees is undertaken based on achievements compared to their goal sheets, which incorporate various aspects/metrics described earlier. Discussion of the measures the Bank will in general implement to adjust remuneration in the event that performance metrics are weak, including the Bank’s criteria for determining ‘weak’ performance metrics The Bank’s Compensation Policy outlines the measures the Bank will implement in the event of a reasonable evidence of deterioration in financial performance. Should such an event occur in the manner outlined in the policy, the BGRNC may decide to apply malus on none, part or all of the unvested deferred variable compensation. Description of the ways in which the Bank seeks to adjust remuneration to take account of the longer term performance • Discussion of the Bank’s policy on deferral and vesting of variable remuneration and, if the fraction of variable remuneration that is deferred differs across employees or groups of employees, a description of the factors that determine the fraction and their relative importance The quantum of bonus for an employee does not exceed a certain percentage (as stipulated in the compensation policy) of the total fixed pay in a year. Within this percentage, if the quantum of bonus exceeds a predefined threshold percentage of the total fixed pay, a part of the bonus is deferred and paid over a period. These thresholds for deferrals are same across employees. • Discussion of the Bank’s policy and criteria for adjusting deferred remuneration before vesting and (if permitted by national law) after vesting through claw back arrangements The deferred portion of variable pay is subject to malus, under which the Bank would prevent vesting of all or part of the variable pay in the event of an enquiry determining gross negligence, breach of integrity or in the event of a reasonable evidence of deterioration in financial performance. In such cases, variable pay already paid out may also be subjected to clawback arrangements, as applicable. Description of the different forms of variable remuneration that the Bank utilises and the rationale for using these different forms • Overview of the forms of variable remuneration offered. A discussion of the use of different forms of variable remuneration and, if the mix of different forms of variable remuneration differs across employees or group of employees, a description of the factors that determine the mix and their relative importance The Bank pays performance linked retention pay (PLRP) to its front-line staff and junior management and performance bonus to its middle and senior management. PLRP aims to reward front line and junior managers, mainly on the basis of skill maturity attained through experience and continuity in role which is a key differentiator for customer service. The Bank also pays variable pay to sales officers and relationship managers in wealth management roles while ensuring that such pay-outs are in accordance with applicable regulatory requirements. The Bank ensures higher proportion of variable pay at senior levels and lower variable pay for front-line staff and junior management levels. e) f) 233 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS (B) Quantitative disclosures The following table sets forth, for the period indicated, the details of quantitative disclosure for remuneration of WTDs (including MD & CEO) and equivalent positions. Particulars Number of meetings held by the BGRNC Remuneration paid to its members during the financial year (sitting fees) Number of employees who received a variable remuneration award Number and total amount of sign-on awards made Number and total amount of guaranteed bonuses awarded Details of severance pay, in addition to accrued benefits Breakdown of amount of remuneration awards for the financial year Fixed1 Variable2 - Deferred - Non-deferred Share-linked instruments Total amount of deferred remuneration paid out during the year Total amount of outstanding deferred remuneration Cash Shares (nos.) Shares-linked instruments3 Other forms Total amount of outstanding deferred remuneration and retained remuneration exposed to ex-post explicit and/or implicit adjustments Total amount of reductions during the year due to ex-post explicit adjustments4 Total amount of reductions during the year due to ex-post implicit adjustments ` in million, except numbers Year ended March 31, 2018 7 Year ended March 31, 2019 12 1.9 - - - - 274.7 - - - - - N.A. - 6,260,597 - - - - 0.3 4 - - - 222.7 - - - 4,526,500 6.1 N.A. - 14,825,250 - - - - 1. 2. 3. 4. Fixed pay includes basic salary, supplementary allowances, superannuation, contribution to provident fund and gratuity fund by the Bank. The amounts mentioned in the above table corresponds to the period of employment of WTDs/President in the Bank during the year ended March 31, 2019. For the years ended March 31, 2019 and March 31, 2018, variable and share-linked instruments represent amounts paid/ options awarded for the years ended March 31, 2018 and March 31, 2017 respectively, as per RBI approvals. Includes stock options granted to MD & CEO and President during their employment with the group company. Excludes ` 74.1 million variable pay to former MD & CEO for past years which has been directed for claw-back. Payment of compensation in the form of profit related commission to the non-executive directors The Board at its meeting held on September 16, 2015 and the shareholders at their meeting held on July 11, 2016 approved the payment of profit related commission of ` 1.0 million per annum to be paid to each non-executive Director of the Bank (excluding government nominee and part-time Chairman) subject to the availability of net profits at the end of each financial year. The Bank accordingly recognised an amount of ` 5.8 million as profit related commission payable to the non-executive Directors during the year ended March 31, 2019, subject to requisite approvals. During the year ended March 31, 2019, the Bank paid ` 5.1 million as profit related commission payable to the non-executive Directors for the year ended March 31, 2018. 234 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 51. Corporate Social Responsibility The gross amount required to be spent by the Bank on Corporate Social Responsibility (CSR) related activities during the year ended March 31, 2019 was ` 1,189.6 million (March 31, 2018: ` 1,702.0 million). The following table sets forth, for the periods indicated, the amount spent by the Bank on CSR related activities. Sr. No. Particulars Construction/acquisition of any asset 1. 2. On purposes other than (1) above ` in million Year ended March 31, 2019 Year ended March 31, 2018 In cash - 787.2 Yet to be paid in cash - 134.9 Total In cash - 922.1 - 1,361.6 Yet to be paid in cash - 342.2 Total - 1,703.8 1. The Bank initiated a pan-India social awareness programme to be conducted beginning March 2019 till March 2020. The total amount earmarked for the social awareness programme is ` 250.0 million. Since the project began towards the end of the year, the amount could not be spent during the year. Accordingly, it was not included in the total CSR spends for the year ended March 31, 2019. The following table sets forth, for the periods indicated, the details of related party transactions pertaining to CSR related activities. Sr. No. 1. Related Party ICICI Foundation Total Year ended March 31, 2019 380.0 380.0 ` in million Year ended March 31, 2018 560.0 560.0 The following table sets forth, for the periods indicated, the details of movement of amounts yet to be paid for CSR related activities Particulars Opening balance Provided during the year Paid during the year Closing balance At March 31, 2019 1,080.0 922.1 (1,728.4) 273.7 ` in million At March 31, 2018 1,363.7 1,703.8 (1,987.5) 1,080.0 52. Disclosure of customer complaints The following table sets forth, for the periods indicated, the movement of the outstanding number of complaints. Complaints relating to the Bank’s customers on the Bank’s ATMs No. of complaints pending at the beginning of the year No. of complaints received during the year No. of complaints redressed during the year No. of complaints pending at the end of the year 1. The above does not include complaints redressed within one working day. Complaints relating to the Bank’s customers on other banks’ ATMs No. of complaints pending at the beginning of the year No. of complaints received during the year No. of complaints redressed during the year No. of complaints pending at the end of the year 1. The above does not include complaints redressed within one working day. Year ended March 31, 2019 75 1,049 1,072 52 Year ended March 31, 2018 29 2,356 2,310 75 Year ended March 31, 2019 3,944 183,159 179,975 7,128 Year ended March 31, 2018 1,763 124,361 122,180 3,944 235 FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ANNUAL REPORT 2018-19 Complaints relating to other than ATM transactions No. of complaints pending at the beginning of the year No. of complaints received during the year No. of complaints redressed during the year No. of complaints pending at the end of the year 1. The above does not include complaints redressed within one working day. Total complaints No. of complaints pending at the beginning of the year No. of complaints received during the year No. of complaints redressed during the year No. of complaints pending at the end of the year Year ended March 31, 2019 2,190 80,518 81,212 1,496 Year ended March 31, 2018 2,480 110,626 110,916 2,190 Year ended March 31, 2019 6,209 264,726 262,259 8,676 Year ended March 31, 2018 4,272 237,343 235,406 6,209 1. The above does not include complaints redressed within one working day. The following table sets forth, for the periods indicated, the details of awards during the year. Particulars No. of unimplemented awards at the beginning of the year No. of awards passed by the Banking Ombudsmen during the year No. of awards implemented during the year No. of unimplemented awards at the end of the year Year ended March 31, 2019 - - - - Year ended March 31, 2018 - - - - 53. Drawdown from reserves The Bank has not drawn any amount from reserves during the year ended March 31, 2019 (year ended March 31, 2018: Nil). 54. Investor Education and Protection Fund The unclaimed dividend amount, due for transfer to the Investor Education and Protection Fund (IEPF) during the year ended March 31, 2019, has been transferred without any delay. Any unexpired demand drafts as on the date of transfer to IEPF get subsequently extinguished after the date of expiry of the relevant instruments. The amounts of such extinguished drafts are credited back to the unclaimed dividend account from time to time as per SEBI circular dated April 20, 2018 and are transferred to IEPF. 55. Comparative figures Figures of the previous year have been re-grouped to conform to the current year presentation. Signatures to Schedules 1 to 18 As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Khushroo B. Panthaky Partner Membership no.: 042423 Place: Mumbai Date: May 6, 2019 236 Girish Chandra Chaturvedi Chairman DIN-00110996 Uday M. Chitale Director DIN-00043268 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Vishakha Mulye Executive Director DIN-00203578 Sandeep Batra President Ajay Mittal Chief Accountant Vijay Chandok Executive Director DIN-01545262 Anup Bagchi Executive Director DIN-00105962 Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Accounts (Contd.) CONSOLIDATED FINANCIAL STATEMENTS INDEPENDENT AUDITORS’ REPORT To the Members of ICICI Bank Limited 1. 2. 3. 4. Report on the Audit of the Consolidated Financial Statements Opinion We have audited the accompanying consolidated financial statements of ICICI Bank Limited (‘the Bank’ or ‘the Holding Company’), and its subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group’) and its associates, which comprise the Consolidated Balance Sheet as at 31 March 2019, the Consolidated Profit and Loss Account, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on separate financial statements and on the other financial information of the subsidiaries and associates, the aforesaid consolidated financial statements give the information required by the section 29 of the Banking Regulation Act, 1949, as well as the Companies Act, 2013 (‘Act’) and circulars and guidelines issued by the Reserve Bank of India, in the manner so required for banking companies and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended), of the consolidated state of affairs of the Group and its associates as at 31 March 2019, their consolidated profit and their consolidated cash flows for the year ended on that date. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Bank, in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’), together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in other matter paragraphs below, is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, and based on the consideration of the reports of the other auditors on separate financial statements and on the other financial information of the subsidiaries and associates, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 238 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 5. We have determined the matters described below to be the key audit matters to be communicated in our report. a. Information Technology (‘IT’) systems and controls impacting financial reporting in relation to the Bank (Refer chapter ‘Key risks impacting the Bank’s business’ under the Integrated Report of the Annual Report) Key Audit Matter How the key audit matter was addressed The IT environment of the Bank is complex and involves a large number of independent and inter- dependent IT systems used in the operations of the Bank for processing and recording a large volume of transactions at numerous locations. As a result, there is a high degree of reliance and dependency on such IT systems for the financial reporting process of the Bank. Appropriate IT general controls and application controls are required to ensure that such IT systems are able to process the data, as required, completely, accurately and consistently for reliable financial reporting. The accuracy and reliability of the financial reporting process depends on the IT systems and the related control environment, including:  IT general controls over user access management and change management across applications, networks, database, and operating systems;  IT automated application controls. In assessing the integrity of the IT systems, we involved our IT experts to obtain an understanding of the IT infrastructure and IT systems relevant to the Bank’s financial reporting process for evaluation and testing of IT general controls and IT automated controls existing in such IT systems. Access rights were tested over applications, operating systems, networks, and databases, which are relied upon for financial reporting. We also assessed the operating effectiveness of controls over granting, removal and periodical review of access rights. We further tested segregation of duties, including preventive controls to ensure that access to change applications, the operating system or databases in the production environment were granted only to authorised personnel. that were assessed under IT Other areas control environment, included password policies, security configurations, and controls around change management. the Due to the importance of the impact of the IT systems and related control environment on the Bank’s financial reporting process, we have identified testing of such IT systems and related control environment as a key audit matter for the current year audit. We also evaluated the design and tested the operating effectiveness of key automated controls within various business processes. This included testing the integrity of system interfaces, the completeness and accuracy of data feeds, and automated calculations. 239 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT b. Identification and provisioning for non-performing assets (‘NPAs’) in relation to the Bank As at 31 March 2019, the Group has reported total loans and advances (net of provisions) of ` 6,469,617 million (2018: ` 5,668,542 million) of which ` 5,866,466 million* (2018: ` 5,123,953 million*) relates to the Bank. (Refer schedule 9) * the amounts relating to the Bank are before inter company eliminations. Key Audit Matter How the key audit matter was addressed The for identification of NPAs and provisioning advances is made in accordance with the extant RBI regulations or host country regulations, in the case of international branches. Based on our risk assessment, the following are significant in assessment of the NPA provisions:  Recognition of defaults, in accordance with the criteria set out in the RBI Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining (IRAC norms) or in accordance with the host country regulations, as applicable. Further, the Bank is also required to apply its judgement to determine the identification of NPAs by applying certain qualitative aspects; to Advances  The measurement of provision under RBI guidelines is dependent on the ageing of overdue balances, secured/unsecured status of advances, stress and liquidity concerns in certain sectors, and valuation of collateral. The provision on NPAs at certain overseas branches requires estimation of amounts and timing of expected future cash flows and exit values. Considering the significance of the above matter to the financial statements, the heightened regulatory inspections, and significant auditor attention required, we have identified this as a key audit matter for the current year audit. We tested the design and operating effectiveness of key controls, including IT based controls, focusing on the following:  Identification and classification of NPAs in line with RBI IRAC norms and certain qualitative aspects;  Periodic internal reviews of asset quality;  Assessment of adequacy of NPA provisions; and  Periodic valuation of collateral for NPAs. To test the identification of loans with default events and other triggers, we selected a sample of performing loans and independently assessed as to whether there was a need to classify such loans as NPAs. With respect to provisions recognised towards NPAs, we selected samples based on high risk industry sectors, such as shipping, rigs, power, mining, and oil and gas exploration. For the samples selected, we re- performed the provision calculations and compared our outcome to that prepared by the management and challenged various assumptions and judgements which were used by the management. We assessed the appropriateness and adequacy of disclosures against the relevant accounting standards and RBI requirements relating to NPAs. 240 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSINDEPENDENT AUDITORS’ REPORT c. Provisions for litigation and taxation and contingent liabilities in relation to the Bank As at 31 March 2019, the Group has reported ‘Claims against the Group not acknowledged as debts’ of ` 65,030 million (2018: ` 72,344 million), of which the following relate to the Bank: Particulars Legal cases Taxes Total claims against the Bank not acknowledged as debts (` in millions) Included under contingent liabilities At 31.03.2018 647 62,013 62,660 At 31.03.2019 1,096 53,913 55,009 (Refer schedule 12) Key Audit Matter As at 31 March 2019, the Bank has ongoing legal and tax cases with varied degrees of complexities. This indicates that a significant degree of management judgement is involved in determining the appropriateness of provisions and related disclosures. judgement is needed in Significant management determining whether an obligation exists and whether a provision should be recognised as at the reporting date, in accordance with the accounting criteria set under Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets (‘AS 29’), or whether it needs to be disclosed as a contingent liability. Further, significant judgements are also involved in measuring such obligations, the most significant of which are:  Assessment of liability: Judgement is involved in the determination of whether an outflow in respect of identified material matters are probable and can be estimated reliably;  Adequacy of provisions: The appropriateness of assumptions and judgements used in the estimation of significant provisions; and  Adequacy of disclosures of provision for liabilities and charges, and contingent liabilities. Considering the significance of the above matter to the financial statements, and significant auditor attention required to test such estimates, we have identified this as a key audit matter for current year audit. How the key audit matter was addressed Our audit procedures included, but were not limited to, the following: We tested the design and operating effectiveness of the Bank’s key controls over the estimation, monitoring and disclosure of provisions and contingent liabilities. For significant legal matters, we sought external confirmations and also reviewed the confirmations obtained by the management from external legal counsels and corroborated with management’s documented conclusions on the assessment of outstanding litigations against the Bank. In respect of taxation matters, we involved our tax specialists to gain an understanding of the current status of the outstanding tax litigations, including understanding of various orders/notices received by the Bank and the management’s grounds of appeals before the relevant appellate authorities, and critically evaluated the likelihood of the liability devolving upon the Bank, in accordance with the principles of AS 29. the management’s assessment of For the significant provisions made, we understood, assessed and challenged the adequacy of provisions recognised by the management. We also reviewed the historical accuracy of the provisions recognised to determine the efficacy of the process of estimation by the management. Further, we assessed whether the disclosures related to significant litigations and taxation matters were fairly presented. 241 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT d. Valuation of derivatives in relation to the Bank As at 31 March 2019, the Group has reported notional value of derivatives of ` 24,442,124 million (2018: ` 17,335,283 million), of which the following relate to the Bank: Particulars Notional value of derivatives Included under Contingent liabilities (Refer schedule 12) * the amounts relating to the Bank are before intercompany eliminations. At 31.03.2019 17,566,162* (` in millions) At 31.03.2018 11,336,607* Key Audit Matter Derivatives are valued through models with external inputs. The derivatives portfolio of the Bank primarily includes transactions which are carried out on behalf of its clients (and are covered on a back-to-back basis) and transactions to hedge the Bank’s interest and foreign currency risk. A significant degree of management judgement is involved in the application of valuation techniques through which the value of the Bank’s derivatives is determined. The financial statement risk arises particularly with respect to complex valuation models, parameters, and inputs that are used in determining fair values. Considering the significance of the above matter to the financial statements, significant management estimates and judgements, and auditor attention required to test such estimates and judgements, we have identified this as a key audit matter for current year audit. How our audit addressed the key audit matter Our audit procedures included, but were not limited to, the following: We included our valuation experts as a part of our audit team to obtain an understanding, evaluate the design, and test the operating effectiveness of the key controls over the valuation processes, including:  independent price verification performed by a management expert; and  model governance and validation. On a sample basis, our valuation experts performed an independent reassessment of the valuation of derivatives, to ensure compliance with the relevant RBI regulations, reasonableness of the valuation methodology and the inputs used. We also challenged the appropriateness of significant models and methodologies used in valuation. 242 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 6. The joint auditors, Walker Chandiok & Co. LLP, Chartered Accountants, and B S R & Co LLP, Chartered Accountants, of ICICI Prudential Life Insurance Company Limited, vide their audit report dated 24 April 2019, have expressed an unmodified opinion on the financial statements. Based on consideration of their report, we have determined the matters described below to be the key audit matters to be communicated in our report: a. Information technology systems relating to ICICI Prudential Life Insurance Company Limited Key Audit Matter How the key audit matter was addressed The Company’s key financial accounting and reporting processes are highly dependent on information systems including automated controls in systems, such that there exists a risk that gaps in the IT control environment could result in the financial accounting and reporting records being misstated. The Company uses several systems for its overall financial reporting. ‘Information technology systems’ has been identified as a key audit matter because of the high level automation, significant number of systems being used by the management and the complexity of the IT architecture. IT specialists were involved to:  Understand General IT Control (GITC) i.e. Access Controls, Program/System Change, Program Development, Computer Operations (i.e. Job Processing, Data/System Backup Incident Management) over key financial accounting and reporting systems, and supporting control systems (referred to as in-scope systems);  Test the General IT Controls for design and operating effectiveness for the audit period over the in-scope systems;  Understand IT application controls covering: • • user access and roles, segregation of duties; and key interfaces, reports, reconciliations and system processing.  Test the IT application controls for design and operating effectiveness for the audit period;  Test the controls to determine whether these controls remained unchanged during the audit period or were changed following the standard change management process;  Understand IT i.e. operating infrastructure systems and databases supporting the in-scope systems; and  Test controls over the IT infrastructure covering user access (including privilege users), data center and system change (e.g. patches). 243 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT b. Valuation of Investments relating to ICICI Prudential Life Insurance Company Limited As at 31 March 2019, the Group has reported total investments (net of provisions) of ` 3,982,008 million (2018: ` 3,722,077 million) of which ` 1,571,731 million* (2018: ` 1,370,489 million*) relates to ICICI Prudential Life Insurance Company Limited. (Refer schedule 8) * the amounts relating to ICICI Prudential Life Insurance Company Limited are before intercompany eliminations. investment portfolio Key Audit Matter The Company’s represents substantial portion of the Company’s total assets as at March 31, 2019 which are valued in accordance with accounting policy framed as per the extent of the regulatory guidelines. Investment in Non-linked and shareholders’ portfolio All debt securities are valued at amortised cost and investment property is valued in accordance with Company’s valuation policy. The listed equity shares, preference shares, liquid mutual fund and Equity Exchange Traded Funds (ETF) investments are valued using quoted prices as per stock exchanges. These investments are tested for impairment in accordance with the Company’s impairment policy. Investment in unit linked portfolio Government securities are valued at prices provided by CRISIL. Other debt securities are valued on a yield to maturity basis, by using spread over the benchmark rate. The listed equity shares, preference shares, liquid mutual fund and ETF investments are valued using quoted prices as per stock exchanges. The valuation of these investments was considered to be one of the areas which required significant auditor attention and was one of the matter of most significance in the financial statements due to the materiality of total value of investments to the financial statements. How the key audit matter was addressed Key audit procedures for this area included, but were not limited to the following:  Tested the design, implementation and operating effectiveness of key controls over the valuation process, including the Company’s review and approval of the estimates and assumptions used for the valuation including key authorisation and data input controls;  Assessed appropriateness of the valuation methodologies with reference to Investment Regulations issued by Insurance Regulatory and Development Authority of India (‘IRDAI’) and Company’s own valuation policy;  For listed equity shares, preference shares, liquid mutual fund and ETF investments, performed independent price checks using external quoted prices and by agreeing the observable inputs that were used in the Company’s valuation techniques to external data; and  For other investments, critically evaluated the valuation assessment and resulting conclusions by the Company in order to determine the reasonableness of the valuations recorded. This included an evaluation of the methodology and assumptions used in the valuation with reference to the Company’s valuation policy. 244 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSINDEPENDENT AUDITORS’ REPORT 7. The joint auditors of ICICI Lombard General Insurance Company Limited, vide their audit report dated 18 April 2019, have expressed an unmodified opinion on the financial statements. Based on consideration of their report, we have determined the matter described below to be a key audit matter to be communicated in our report: a. Accounting for motor insurance policies relating to ICICI Lombard General Insurance Company Limited As at 31 March 2019, the Group has reported ‘Premium and other operating income from insurance business’ of ` 420,939 million (2018: ` 369,369 million) of which ` 50,356 million* (2018: ` 41,422 million*) relates to premium earned by ICICI Lombard General Insurance Company Limited on motor insurance policies. (Refer schedule 14) * the amounts relating to ICICI Lombard General Insurance Company Limited are before intercompany eliminations. Key Audit Matter During the current year, the Company has introduced Long Term Motor Insurance Policies providing multi- year coverage which constitutes significant portion of the business segment. The Company has designed the scheme of accounting entries for recognition of revenue, advance premium, commissions and related indirect taxes based on relevant regulations. This implementation was a major one-time activity during the year which was prone to interpretation errors/omissions. How the key audit matter was addressed Key audit procedures for this area included, but were not limited to the following:  Obtained a thorough understanding of the the reviewed regulatory prescriptions and process adopted by the Company.  Validated the accounting policies adopted with the relevant regulatory prescriptions.  Verified the premium allocation for sample transactions over policy periods.  Verified the actual scheme of entries for sample period with the designed scheme.  Verified the overall reconciliation of balance sheet amounts with related feed systems. Information other than the Consolidated Financial Statements and Auditor’s Report thereon The Holding Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Management’s Discussion and Analysis, Directors’ Report, including annexures to the Directors’ Report, but does not include the consolidated financial statements and our auditor’s report thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 245 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 8. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Bank, in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act read with rule 7 of the Companies (Accounts) Rules, 2014 (as amended) and provisions of section 29 of the Banking Regulation Act, 1949 and circulars and guidelines issued by Reserve Bank of India (‘RBI’) from time to time. Further, in terms of the Act, the respective Board of Directors of the companies and the trustees of the trusts included in the Group and of its associates covered under the Act, are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding of the assets of the Group and of its associates and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. These financial statements have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid. 9. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 10. The respective Board of Directors of the companies and the trustees of trusts included in the Group are also responsible for overseeing the Group’s financial reporting process. 11. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 12. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for explaining our opinion on whether the Holding Company has adequate internal financial controls system in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 246 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associates to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or its associates to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 13. 14. 15. 16. 17. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report, unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Matters We did not audit the financial statements of 3 international branches of the Bank included in the consolidated financial statements, whose financial statements reflects total assets of ` 657,940 million as at 31 March 2019, and total revenue and net cash outflows of ` 22,507 million and ` 5,168 million respectively for the year ended on that date, as considered in the consolidated financial statements. The financial statements of these branches have been audited by the branch auditors whose reports have been furnished to us by the management, and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of such branches, is based solely on the report of their branch auditors. We did not audit the financial statements of 14 subsidiaries, whose financial statements reflect total assets of ` 1,260,437 million as at 31 March 2019 and total revenue and net cash inflows of ` 194,388 million and ` 8,156 million, respectively, for the year ended on that date. The consolidated financial statements also include the Group’s share of net profit of ` 767 million for the year ended 31 March 2019, in respect of 1 associate, whose financial statements have not been audited by us. These financial statements have been audited by other auditors, whose reports have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and associate, is based solely on the reports of the other auditors. 18. The consolidated financial statements also include the Group’s share of net profit of ` 36 million for the year ended 31 March 2019, in respect of 6 associates, whose financial statements/information have not been audited. These financial statements/information have been furnished to us by the management and our report on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these associates, is based solely on such management certified financial statements/information. In our opinion and according to the information and explanation given to us by the management, these financial statements/information are not material to the Group. 247 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 19. 20. 21. 22. 23. 24. 25. We have jointly audited with another auditor, the financial statements of one subsidiary, whose financial statements reflect total assets of ` 1,629,322 million as at 31 March 2019 and total revenue and net cash inflows of ` 366,993 million and ` 8,084 million, respectively, for the year ended on that date. For the purpose of our opinion on the consolidated financial statements, we have relied upon the work of such other auditors, to the extent of work performed by them. The joint auditors, Walker Chandiok & Co. LLP, Chartered Accountants, and B S R & Co LLP, Chartered Accountants, of ICICI Prudential Life Insurance Company Limited, vide their audit report dated 24 April 2019, have expressed an unmodified opinion and have reported in the ‘Other Matter’ section that, ‘The actuarial valuation of liabilities for life policies in force and policies in respect of which premium has been discontinued but liability exists as at 31 March 2019 is the responsibility of the Company’s Appointed Actuary (the ‘Appointed Actuary’). The actuarial valuation of these liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists as at 31 March 2019, has been duly certified by the Appointed Actuary and in her opinion, the assumptions for such valuation are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India, in concurrence with the Authority’. The joint auditors have relied upon the Appointed Actuary’s certificate in this regard for forming their opinion on the valuation of liabilities for life policies in force and for policies in respect of which premium has been discontinued but liability exists on the financial statements of the Company. The joint auditors of ICICI Lombard General Insurance Company Limited, vide their audit report dated 18 April 2019, have expressed an unmodified opinion and have reported in the ‘Other Matter’ section that, ‘The actuarial valuation of liabilities in respect of Incurred But Not Reported (‘IBNR’), Incurred But Not Enough Reported (‘IBNER’) and Premium Deficiency Reserve (the ‘PDR’) is the responsibility of the Company’s Appointed Actuary (the ‘Appointed Actuary’). The actuarial valuation of these liabilities, that are estimated using statistical methods as at 31 March 2019, has been duly certified by the Appointed Actuary and in his opinion, the assumptions considered by him for such valuation, are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India, in concurrence with IRDAI’. The joint auditors have relied upon the Appointed Actuary’s certificate in this regard for forming their opinion on the valuation of liabilities for outstanding claims reserves and the PDR contained in the financial statements of the Company. The consolidated financial statements of the Bank for the year ended 31 March 2018 were audited by the predecessor auditors, who have expressed an unmodified opinion on those financial statements, vide their audit report dated 7 May 2018. Our opinion above on the consolidated financial statements, and our report on Other Legal and Regulatory requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/financial information certified by the management. Report on Other Legal and Regulatory Requirements The Consolidated Balance Sheet and the Profit and Loss Account have been drawn up in accordance with the provisions of section 29 of the Banking Regulation Act, 1949 and section 133 of the Act, read with rule 7 of the Companies (Rules), 2014 (as amended). As required by section 197(16) of the Act in relation to managerial remuneration and based on the information and explanations give to us and on the consideration of the reports of the other auditors, referred to in other matter paragraphs, on separate financial statements of the subsidiaries, and associates, we report that in cases where the remuneration was paid, the subsidiary companies, and associate company covered under the Act paid remuneration to their respective directors during the year in accordance with the provisions of and the limits laid down under section 197 read with Schedule V to the Act, except in the case of one subsidiary, ICICI Securities Primary Dealership Limited, where the auditors have reported that the remuneration of the MD & CEO of ` 36.29 million (including perquisite value of stock options of ICICI Bank Limited, exercised by the MD & CEO during FY 2019) has exceeded the limits prescribed under section 197 of the Act by ` 8.79 million and is pending the approval of the shareholders’ of ICICI Securities Primary Dealership Limited. Further, since the Holding Company is a banking company, as defined under Banking Regulation Act, 1949, the reporting under section 197(16) in relation to whether the remuneration paid by the Bank is in accordance with the provisions of section 197 of the Act and whether any excess remuneration has been paid in accordance with the aforesaid section, is not applicable. 248 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS INDEPENDENT AUDITORS’ REPORT 26. Further, as required by section 143 (3) of the Act, based on our audit and on the consideration of the reports of the other auditors on separate financial statements and other financial information of the subsidiaries and associates, we report, to the extent applicable, that: a) b) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements; In our opinion, proper books of account as required by law, relating to the presentation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors; c) the consolidated financial statements dealt with by this report are in agreement with the books of account; d) e) f) g) in our opinion, the aforesaid consolidated financial statements comply with Accounting Standards prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended), to the extent they are not inconsistent with the accounting policies prescribed by RBI; on the basis of the written representations received from the directors of the Holding Company as on 31 March 2019 and taken on record by the Board of Directors of the Holding Company and the reports of statutory auditors of its subsidiary companies and associate companies incorporated in India, none of the directors of the Group companies and associate companies are disqualified as on 31 March 2019, from being appointed as a director in terms of section 164(2) of the Act; with respect to the adequacy of the internal financial controls over financial reporting of the Holding Company, its subsidiary companies and associate companies covered under the Act, and the operating effectiveness of such controls, refer to our separate report in ‘Annexure A’; and with respect to the other matters to be included in the Auditor’s Report, in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us: i. ii. iii. iv. the consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group and its associates, as detailed in schedule 18.7 to the consolidated financial statements; provisions have been made in these consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, and on long-term contracts, including derivative contracts, as detailed in schedule 18.7 to the consolidated financial statements; there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, its subsidiary companies, and associate companies during the year ended 31 March 2019; the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these consolidated financial statements. Hence, reporting under this clause is not applicable. . Place: Mumbai Date: 06 May 2019 For Walker Chandiok & Co LLP Chartered Accountants Firm’s Registration No.: 001076N/N500013 Khushroo B. Panthaky Partner Membership No.: 042423 249 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ANNEXURE A to the Independent Auditor’s Report of even date to the members of ICICI Bank Limited on the consolidated financial statements for the year ended 31 March 2019 1. 2. 3. 4. 5. 6. Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’) In conjunction with our audit of the consolidated financial statements of ICICI Bank Limited (‘the Holding Company’ or ‘the Bank’) and its subsidiaries (the Holding Company and its subsidiaries, together referred to as ‘the Group’), and its associates as at and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (‘IFCoFR’) of the Holding Company, its subsidiary companies, and its associate companies, which are companies covered under the Act, as at that date. Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Holding Company, its subsidiary companies, and its associate companies, which are companies covered under the Act, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of 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, as required under the Act. Auditor’s Responsibility Our responsibility is to express an opinion on the IFCoFR of the Holding Company, its subsidiary companies, and its associate companies, as aforesaid, based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI’) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘the Guidance Note’) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph, below are sufficient and appropriate to provide a basis for our audit opinion on the IFCoFR of the Holding Company, its subsidiary companies, and its associate companies as aforesaid. Meaning of Internal Financial Controls over Financial Reporting An enitity’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. An entity’s IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements, in accordance with generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorisations of management and directors of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements. 7. Inherent Limitations of Internal Financial Controls over Financial Reporting Owing to the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 250 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ANNEXURE A (Contd.) 8. 9. 10. 11. 12. 13. 14. Opinion In our opinion and based on the consideration of the reports of the other auditors on IFCoFR of the subsidiary companies, and associate companies, the Holding Company, its subsidiary companies, and its associate companies, which are companies covered under the Act, have in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2019, based on the internal control over financial reporting criteria established by the Group, considering the essential components of internal control stated in the Guidance Note issued by the ICAI. Other matters The auditors of ICICI Prudential Life Insurance Company Limited have reported, ‘The actuarial valuation of liabilities for life policies in force and policies where premium is discontinued but liability exists as at 31 March 2019 has been certified by the Appointed Actuary as per the IRDA Financial Statements Regulations, and has been relied upon by us, as mentioned in para “Other Matters” of our audit report on the standalone financial statements for the year ended 31 March 2019. Accordingly, our opinion on the internal financial controls over financial reporting does not include reporting on the operating effectiveness of the management’s internal controls over the valuation and accuracy of the aforesaid actuarial valuation’. The auditors of ICICI Lombard General Insurance Company Limited have reported, ‘The actuarial valuation of liabilities in respect of Incurred But Not Reported (the “IBNR”), Incurred But Not Enough Reported (the “IBNER”) and Premium Deficiency Reserve (the “PDR”) is the responsibility of the Company’s Appointed Actuary (the “Appointed Actuary”). The actuarial valuation of these liabilities, that are estimated using statistical methods as at 31 March 2019 has been duly certified by the Appointed Actuary and in his opinion, the assumptions considered by him for such valuation are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. The said actuarial valuations of liabilities for outstanding claims reserves and the PDR have been relied upon by us as mentioned in “Other Matters” paragraph in our Audit Report on the standalone financial statements for the year ended 31 March 2019. Accordingly, our opinion on the internal financial controls over financial reporting does not include reporting on the adequacy and operating effectiveness of the internal financial controls over the valuation and accuracy of the aforesaid actuarial liabilities’. We did not audit the IFCoFR in so far as it relates to 11 subsidiaries, which are companies covered under the Act, whose financial statements reflect total assets of ` 652,286 million as at 31 March 2019 and total revenue and net cash inflows of ` 172,552 million and ` 19,603 million, respectively for the year ended on that date. We have jointly audited with another auditor, the IFCoFR of a subsidiary, whose financial statements reflect total assets of ` 1,629,322 million as at 31 March 2019 and total revenue and net cash inflows of ` 366,993 million and ` 8,084 million, respectively, for the year ended on that date. The consolidated financial statements also include the Group’s share of net profit of ` 767 million for the year ended 31 March 2019, in respect of 1 associate, which is a company covered under the Act, whose IFCoFR has not been audited by us. Our report on the adequacy and operating effectiveness of the IFCoFR for the Holding Company, its subsidiary companies, and its associate companies, as aforesaid, under Section 143(3)(i) of the Act in so far as it relates to such subsidiary companies, and associate company, is based solely on the reports of the auditors of such companies. 15. Our opinion is not modified in respect of the above matters with respect to our reliance on the work done by and on the reports of the other auditors. Place: Mumbai Date: 06 May 2019 For Walker Chandiok & Co LLP Chartered Accountants Firm’s Registration No.: 001076N/N500013 Khushroo B. Panthaky Partner Membership No.: 042423 251 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS FINANCIAL STATEMENTS OF ICICI BANK LIMITED BALANCE SHEET at March 31, 2019 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED CONSOLIDATED BALANCE SHEET at March 31, 2019 Schedule At 31.03.2019 ` in ‘000s At 31.03.2018 CAPITAL AND LIABILITIES Capital Employees stock options outstanding Reserves and surplus Minority interest Deposits Borrowings Liabilities on policies in force Other liabilities and provisions TOTAL CAPITAL AND LIABILITIES ASSETS Cash and balances with Reserve Bank of India Balances with banks and money at call and short notice Investments Advances Fixed assets Other assets TOTAL ASSETS 1 2 2A 3 4 5 6 7 8 9 10 11 Contingent liabilities Bills for collection Significant accounting policies and notes to accounts 17 & 18 The Schedules referred to above form an integral part of the Consolidated Balance Sheet. 12 12,894,598 46,755 1,129,592,715 65,805,358 6,813,169,361 2,103,241,208 1,523,787,542 739,401,370 12,387,938,907 12,858,100 55,699 1,093,383,172 60,081,860 5,857,961,125 2,294,018,266 1,314,884,251 609,567,929 11,242,810,402 380,662,784 493,246,169 3,982,007,553 6,469,616,813 96,604,227 965,801,361 12,387,938,907 332,726,026 557,265,307 3,722,076,772 5,668,542,198 94,650,053 867,550,046 11,242,810,402 26,120,719,378 495,791,861 18,910,358,283 287,054,059 As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Girish Chandra Chaturvedi Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Chairman DIN-00110996 Khushroo B. Panthaky Partner Membership no.: 042423 Vishakha Mulye Executive Director DIN-00203578 Uday M. Chitale Director DIN-00043268 Vijay Chandok Executive Director DIN-01545262 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Anup Bagchi Executive Director DIN-00105962 Place: Mumbai Date: May 6, 2019 Sandeep Batra President Ajay Mittal Chief Accountant Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary 252 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSFINANCIAL STATEMENTS OF ICICI BANK LIMITED PROFIT AND LOSS ACCOUNT for the year ended March 31, 2019 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended March 31, 2019 I. INCOME Interest earned Other income TOTAL INCOME II. EXPENDITURE Interest expended Operating expenses Provisions and contingencies (refer note 18.7) TOTAL EXPENDITURE III. PROFIT/(LOSS) Net profit for the year Less: Minority interest Net profit after minority interest Profit brought forward TOTAL PROFIT/(LOSS) IV. APPROPRIATIONS/TRANSFERS Transfer to Statutory Reserve Transfer to Reserve Fund Transfer to Capital Reserve Transfer to Capital Redemption Reserve Transfer to/(from) Investment Reserve Account Transfer to/(from) Investment Fluctuation Reserve Transfer to Special Reserve Transfer to/(from) Revenue and other reserves Dividend paid during the year Corporate dividend tax paid during the year Balance carried over to balance sheet TOTAL Significant accounting policies and notes to accounts Earnings per share (refer note 18.1) Schedule Year ended 31.03.2019 ` in ‘000s Year ended 31.03.2018 13 14 15 16 719,816,540 593,248,453 1,313,064,993 621,623,505 568,067,510 1,189,691,015 391,775,414 642,588,800 221,809,173 1,256,173,387 342,620,468 557,556,292 198,518,808 1,098,695,568 56,891,606 14,349,219 42,542,387 219,991,613 262,534,000 8,409,000 7,569 280,000 3,500,000 - 12,692,000 5,352,000 245,223 9,651,292 1,933,076 220,463,840 262,534,000 17 & 18 90,995,447 13,873,582 77,121,865 215,045,471 292,167,336 16,944,000 10,541 25,654,600 - - - 6,206,000 6,454,526 14,574,649 2,331,407 219,991,613 292,167,336 12.02 11.89 2.00 Basic (`) Diluted (`) Face value per share (`) The Schedules referred to above form an integral part of the Consolidated Profit and Loss Account. 6.61 6.53 2.00 As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Girish Chandra Chaturvedi Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Chairman DIN-00110996 Khushroo B. Panthaky Partner Membership no.: 042423 Vishakha Mulye Executive Director DIN-00203578 Uday M. Chitale Director DIN-00043268 Vijay Chandok Executive Director DIN-01545262 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Anup Bagchi Executive Director DIN-00105962 Place: Mumbai Date: May 6, 2019 Sandeep Batra President Ajay Mittal Chief Accountant Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary 253 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED CONSOLIDATED CASH FLOW STATEMENT for the year ended March 31, 2019 Cash flow from/(used in) operating activities Profit before taxes Adjustments for: Depreciation and amortisation Net (appreciation)/depreciation on investments1 Provision in respect of non-performing and other assets General provision for standard assets Provision for contingencies & others (Profit)/loss on sale of fixed assets Employees stock options grants Adjustments for: (Increase)/decrease in investments (Increase)/decrease in advances Increase/(decrease) in deposits (Increase)/decrease in other assets Increase/(decrease) in other liabilities and provisions Refund/(payment) of direct taxes Net cash flow from/(used in) operating activities (i)+(ii)+(iii) Cash flow from/(used in) investing activities Purchase of fixed assets Proceeds from sale of fixed assets (Purchase)/sale of held to maturity securities Net cash flow from/(used in) investing activities Cash flow from/(used in) financing activities Proceeds from issue of share capital (including ESOPs) Proceeds from long-term borrowings Repayment of long-term borrowings Net proceeds/(repayment) of short-term borrowings Dividend and dividend tax paid Net cash flow from/(used in) financing activities Effect of exchange fluctuation on translation reserve Net increase/(decrease) in cash and cash equivalents (A) + (B) + (C) + (D) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 1. Year ended 31.03.2019 ` in ‘000s Year ended 31.03.2018 59,733,445 95,911,046 10,453,730 57,889 176,113,934 2,414,407 22,498,491 22,012 79,246 271,373,154 33,463,685 (972,978,394) 955,208,236 (31,691,451) 314,897,698 298,899,774 (83,562,401) 486,710,527 10,390,761 (21,343,283) 147,516,047 2,960,374 9,763,944 (29,027) 131,128 245,300,990 (147,368,884) (687,502,223) 732,088,482 (80,169,309) 175,987,900 (6,964,034) (44,507,633) 193,829,323 (11,481,488) 468,831 (290,459,494) (301,472,151) (10,421,438) 265,828 (495,578,927) (505,734,537) 3,486,300 262,388,237 (304,162,713) (149,997,897) (11,688,270) (199,974,343) (1,346,413) 3,939,495 430,554,398 (404,339,556) 383,766,528 (17,161,116) 396,759,749 228,112 (i) (ii) (iii) (A) (B) (C) (D) 85,082,647 804,908,686 889,991,333 For the year ended March 31, 2019, includes gain on sale of a part of equity investment in a subsidiary, ICICI Prudential Life Insurance Company Limited, through an offer for sale on stock exchanges (year ended March 31, 2018: includes gain on sale of a part of equity investment in the subsidiaries, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited, through initial public offers). Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice. (16,082,380) 889,991,333 873,908,953 2. As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Girish Chandra Chaturvedi Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Chairman DIN-00110996 Khushroo B. Panthaky Partner Membership no.: 042423 Place: Mumbai Date: May 6, 2019 254 Vishakha Mulye Executive Director DIN-00203578 Sandeep Batra President Ajay Mittal Chief Accountant Uday M. Chitale Director DIN-00043268 Vijay Chandok Executive Director DIN-01545262 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Anup Bagchi Executive Director DIN-00105962 Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSCONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Consolidated Balance Sheet SCHEDULE 1 - CAPITAL Authorised capital 12,500,000,000 equity shares of ` 2 each1 (March 31, 2018: 10,000,000,000 equity shares of ` 2 each, 15,000,000 shares of ` 100 each2 and 350 preference shares of ` 10.0 million each) Equity share capital Issued, subscribed and paid-up capital 6,427,990,776 equity shares of ` 2 each (March 31, 2018: 5,824,476,135 equity shares) Add: 18,248,8773 equity shares of ` 2 each (March 31, 2018: 603,514,6413,4 equity shares) issued during the period At 31.03.2019 ` in ‘000s At 31.03.2018 25,000,000 25,000,000 12,855,981 11,648,952 36,498 12,892,479 2,119 12,894,598 1,207,029 12,855,981 2,119 12,858,100 Add: Forfeited equity shares5 TOTAL CAPITAL 1. 2. Pursuant to the approval of shareholders, the Bank has re-classified its authorised share capital during the year ended March 31, 2019. These shares were of such class and with such rights, privileges, conditions or restrictions as may be determined by the Bank in accordance with the Articles of Association of the Bank and subject to the legislative provisions in force for the time being in that behalf. Represents equity shares issued pursuant to exercise of employee stock options during the year ended March 31, 2019 (year ended March 31, 2018: 20,530,097 equity shares). For the year ended March 31, 2018, includes 582,984,544 equity shares issued as bonus shares pursuant to approval by the shareholders of the Bank through postal ballot on June 12, 2017. On account of forfeiture of 266,089 equity shares of ` 10 each. 3. 4. 5. SCHEDULE 2 - RESERVES AND SURPLUS I. Statutory reserve Opening balance Additions during the year Deductions during the year Closing balance II. Special Reserve Opening balance Additions during the year Deductions during the year Closing balance III. Securities premium Opening balance Additions during the year1 Deductions during the year2 Closing balance IV. Investment reserve account Opening balance Additions during the year Deductions during the year Closing balance At 31.03.2019 ` in ‘000s At 31.03.2018 228,968,519 8,409,000 - 237,377,519 94,387,700 5,352,000 - 99,739,700 326,802,474 3,530,743 - 330,333,217 - - - - 212,024,519 16,944,000 - 228,968,519 88,181,700 6,206,000 - 94,387,700 323,932,017 4,036,426 (1,165,969) 326,802,474 - - - - 255 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS V. Investment fluctuation reserve Opening balance Additions during the year3 Deductions during the year Closing balance VI. Unrealised investment reserve4 Opening balance Additions during the year Deductions during the year Closing balance VII. Capital reserve Opening balance Additions during the year5 Deductions during the year Closing balance6 VIII. Capital redemption reserve (refer note 18.6) Opening balance Additions during the year7 Deductions during the year Closing balance IX. Foreign currency translation reserve Opening balance Additions during the year Deductions during the year Closing balance X. Revaluation reserve (refer note 18.16) Opening balance Additions during the year8 Deductions during the year9 Closing balance XI. Reserve fund Opening balance Additions during the year10 Deductions during the year Closing balance XII. Revenue and other reserves Opening balance Additions during the year Deductions during the year11 Closing balance12,13,14 XIII. Balance in profit and loss account15,16 TOTAL RESERVES AND SURPLUS 1. 2. Includes ` 3,451.5 million (March 31, 2018: ` 3,905.3 million) on exercise of employee stock options. Represents amount utilised on account of issuance of bonus shares during the year ended March 31, 2018. 256 At 31.03.2019 - 12,692,000 - 12,692,000 187,932 11,439 (84,598) 114,773 ` in ‘000s At 31.03.2018 - - - - 160,445 36,647 (9,160) 187,932 128,505,616 280,000 - 128,785,616 102,851,016 25,654,600 - 128,505,616 - 3,500,000 - 3,500,000 19,351,116 308,432 (1,654,845) 18,004,703 30,276,392 1,038,994 (615,400) 30,699,986 66,399 7,569 - 73,968 - - - - 19,123,004 241,842 (13,730) 19,351,116 30,651,113 263,895 (638,616) 30,276,392 55,858 10,541 - 66,399 50,099,364 970,707 (2,999,924) 48,070,147 220,201,086 1,129,592,715 42,581,179 8,533,984 (1,015,799) 50,099,364 214,737,660 1,093,383,172 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Represents an amount transferred by the Bank to Investment Fluctuation Reserve (IFR) on net profit on sale of AFS and HFT investments during the year. As per the RBI circular, from the year ended March 31, 2019, an amount not less than the lower of net profit on sale of AFS and HFT category investments during the year or net profit for the year less mandatory appropriations is required to be transferred to IFR, until the amount of IFR is at least 2% of the HFT and AFS portfolio. Represents unrealised profit/(loss) pertaining to the investments of venture capital funds. Includes appropriations made by the Bank for profit on sale of investments in held-to-maturity category, net of taxes and transfer to Statutory Reserve and profit on sale of land and buildings, net of taxes and transfer to Statutory Reserve. Includes capital reserve on consolidation amounting to ` 79.1 million (March 31, 2018: ` 79.1 million). Represents amount transferred by the Bank from accumulated profit on account of Redeemable Non-Cumulative Preference Shares (350 RNCPS) of ` 10.0 million each redeemed at par on April 20, 2018. The Bank has created Capital redemption reserve, as required under the Companies Act, 2013, out of surplus profits available for previous years. Represents gain on revaluation of premises carried out by the Bank and ICICI Home Finance Company Limited. Represents amount transferred from Revaluation Reserve to General Reserve on account of incremental depreciation charge on revaluation amounting to ` 589.5 million (year ended March 31, 2018: ` 572.4 million) and revaluation surplus on assets sold amounting to ` 25.9 million (year ended March 31, 2018: ` 66.2 million) for the year ended March 31, 2019. Includes appropriations made to Reserve Fund in accordance with regulations applicable to Sri Lanka branch. Includes ` 2,209.4 million towards reduction in fair value change account of ICICI Lombard General Insurance Company Limited (March 31, 2018: addition of ` 316.7 million). Includes unrealised profit/(loss), net of tax, of ` (536.3) million (March 31, 2018: ` (530.3) million) pertaining to the investments in the available-for-sale category of ICICI Bank UK PLC. Includes restricted reserve of ` 3.8 million (March 31, 2018: ` 4.4 million) primarily relating to lapsed contracts of the life insurance subsidiary. Includes debenture redemption reserve amounting to ` 135.5 million (March 31, 2018: ` 58.1 million) of ICICI Lombard General Insurance Company Limited. During the year ended March 31, 2018, the Bank made provision amounting to ` 5,254.0 million for frauds on non-retail accounts through reserves and surplus, as permitted by RBI. During the year ended March 31, 2019, the entire provision has been recognised in profit and loss account and equivalent debit has been reversed in reserves and surplus as required by RBI. Includes impact of ` 263.0 million (equivalent to CAD 5.1 million) on account of adoption of International Financial Reporting Standards (IFRS) 9– Financial instruments by ICICI Bank Canada. Refer note 18.19 - Adoption of IFRS 9 by ICICI Bank Canada. SCHEDULE 2A - MINORITY INTEREST Opening minority interest Subsequent increase/(decrease) during the year CLOSING MINORITY INTEREST SCHEDULE 3 - DEPOSITS A. I. Demand deposits i) From banks ii) From others Savings bank deposits II. III. Term deposits i) From banks ii) From others TOTAL DEPOSITS B. Deposits of branches in India I. II. Deposits of branches/subsidiaries outside India TOTAL DEPOSITS At 31.03.2019 60,081,860 5,723,498 65,805,358 At 31.03.2019 ` in ‘000s At 31.03.2018 48,653,128 11,428,732 60,081,860 ` in ‘000s At 31.03.2018 74,141,205 893,908,957 2,355,305,786 65,794,398 847,859,874 2,092,910,102 165,000,950 3,324,812,463 6,813,169,361 115,526,501 2,735,870,250 5,857,961,125 6,447,910,340 365,259,021 6,813,169,361 5,552,574,768 305,386,357 5,857,961,125 257 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 4 - BORROWINGS I. Borrowings in India Reserve Bank of India i) ii) Other banks iii) Other institutions and agencies a) Government of India b) Financial institutions Borrowings in the form of a) Deposits b) Commercial paper c) Bonds and debentures (excluding subordinated debt) iv) v) Application money-bonds vi) Capital instruments a) Innovative Perpetual Debt Instruments (IPDI) (qualifying as additional Tier 1 capital) b) Hybrid debt capital instruments issued as bonds/debentures At 31.03.2019 ` in ‘000s At 31.03.2018 66,551,500 98,446,218 141,737,000 82,624,079 - 279,488,963 - 298,463,118 10,506,425 19,095,340 220,533,206 - 2,313,944 12,901,469 252,991,640 - 101,200,000 94,800,000 (qualifying as Tier 2 capital) 33,800,000 84,035,112 c) Redeemable Non-Cumulative Preference Shares (RNCPS) (350 RNCPS of ` 10.0 million each issued to preference share holders of erstwhile ICICI Limited on amalgamation, redeemed at par on April 20, 2018) d) Unsecured redeemable debentures/bonds (subordinated debt included in Tier 2 capital) TOTAL BORROWINGS IN INDIA II. Borrowings outside India i) Capital instruments Unsecured redeemable debentures/bonds (subordinated debt included in Tier 2 capital) ii) Bonds and notes iii) Other borrowings TOTAL BORROWINGS OUTSIDE INDIA TOTAL BORROWINGS 1. 437,325,520 730,234,379 1,177,321,797 2,294,018,266 Secured borrowings in I and II above amount to ` 158,484.7 million (March 31, 2018: ` 167,214.3 million) other than the borrowings under collateralised borrowing and lending obligation, market repurchase transactions (including tri-party repo) with banks and financial institutions and transactions under liquidity adjustment facility and marginal standing facility. 443,701,483 671,805,278 1,130,952,416 2,103,241,208 - 3,500,000 142,667,140 143,330,107 972,288,792 1,116,696,469 15,445,655 9,761,898 At 31.03.2019 86,191,837 717,556 36,648,114 336,952,875 31,496,087 247,394,901 739,401,370 ` in ‘000s At 31.03.2018 73,070,858 976,360 35,896,541 279,328,231 28,572,331 191,723,608 609,567,929 SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS Bills payable I. Inter-office adjustments (net) II. III. Interest accrued IV. Sundry creditors V. General provision for standard assets VI. Others (including provisions)1,2 TOTAL OTHER LIABILITIES AND PROVISIONS 1. 2. 258 Includes specific provision for standard loans of the Bank amounting to ` 4,769.0 million (March 31, 2018: ` 7,967.1 million). Includes corporate dividend tax payable amounting to ` 128.3 million (March 31, 2018: ` 381.8 million). CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 6 - CASH AND BALANCES WITH RESERVE BANK OF INDIA Cash in hand (including foreign currency notes) I. Balances with Reserve Bank of India in current accounts II. TOTAL CASH AND BALANCES WITH RESERVE BANK OF INDIA SCHEDULE 7 - BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE I. In India i) Balances with banks a) b) In current accounts In other deposit accounts ii) Money at call and short notice a) With banks b) With other institutions TOTAL II. Outside India In current accounts i) ii) In other deposit accounts iii) Money at call and short notice TOTAL TOTAL BALANCES WITH BANKS AND MONEY AT CALL AND SHORT NOTICE At 31.03.2019 ` in ‘000s At 31.03.2018 89,113,817 291,548,967 380,662,784 At 31.03.2019 82,118,828 250,607,198 332,726,026 ` in ‘000s At 31.03.2018 4,526,342 27,100,732 3,592,062 23,227,230 89,457,750 25,216,743 146,301,567 162,722,416 48,959,266 135,262,920 346,944,602 493,246,169 190,613,750 5,783,189 223,216,231 200,772,076 43,495,469 89,781,531 334,049,076 557,265,307 259 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS At 31.03.2019 ` in ‘000s At 31.03.2018 1,876,580,127 - 133,554,527 391,443,021 1,109,458,136 1,803,209,154 - 127,550,060 339,631,755 975,019,684 348,419,946 3,859,455,757 372,350,812 3,617,761,465 62,208,341 60,343,455 122,551,796 3,982,007,553 55,945,624 48,369,683 104,315,307 3,722,076,772 3,888,123,653 28,667,896 3,859,455,757 3,631,283,280 13,521,815 3,617,761,465 SCHEDULE 8 - INVESTMENTS I. Investments in India [net of provisions] i) Government securities ii) Other approved securities iii) Shares (includes equity and preference shares)1 iv) Debentures and bonds v) Assets held to cover linked liabilities of life insurance business vi) Others (commercial paper, mutual fund units, pass through certificates, security receipts, certificate of deposits and other related investments) TOTAL INVESTMENTS IN INDIA II. Investments outside India [net of provisions] i) ii) Others (equity shares, bonds and certificate of deposits) Government securities TOTAL INVESTMENTS OUTSIDE INDIA TOTAL INVESTMENTS B. A. Investments in India Gross value of investments2 Less: Aggregate of provision/depreciation/(appreciation) Net investments Investments outside India Gross value of investments Less: Aggregate of provision/depreciation/(appreciation) Net investments TOTAL INVESTMENTS 1. 111,536,033 7,220,726 104,315,307 3,722,076,772 Includes cost of investment in associates amounting to ` 7,293.5 million (March 31, 2018: ` 4,981.0 million), goodwill on consolidation of associates amounting to ` 163.1 million (March 31, 2018: ` 58.1 million). Includes net appreciation amounting to ` 110,501.1 million (March 31, 2018: ` 100,750.7 million) on investments held to cover linked liabilities of life insurance business. 124,604,590 2,052,794 122,551,796 3,982,007,553 2. 260 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 9 - ADVANCES [net of provisions] A. Bills purchased and discounted1 Cash credits, overdrafts and loans repayable on demand i) ii) iii) Term loans TOTAL ADVANCES Secured by tangible assets (includes advances against book debts) Covered by bank/government guarantees B. i) ii) iii) Unsecured TOTAL ADVANCES I. C. Advances in India Priority sector i) ii) Public sector iii) Banks iv) Others TOTAL ADVANCES IN INDIA II. Advances outside India i) Due from banks ii) Due from others Bills purchased and discounted a) b) Syndicated and term loans c) Others TOTAL ADVANCES OUTSIDE INDIA TOTAL ADVANCES 1. Net of bills re-discounted amounting to Nil (March 31, 2018: Nil). At 31.03.2019 ` in ‘000s At 31.03.2018 367,577,735 1,471,378,348 4,630,660,730 6,469,616,813 298,198,152 1,312,537,092 4,057,806,954 5,668,542,198 4,640,335,848 116,401,740 1,712,879,225 6,469,616,813 4,224,797,621 83,969,085 1,359,775,492 5,668,542,198 1,696,365,965 146,431,801 3,253,967 3,526,902,944 5,372,954,677 929,701,682 197,704,530 777,335 3,449,858,940 4,578,042,487 22,387,781 19,294,596 166,989,637 558,394,839 348,889,879 1,096,662,136 6,469,616,813 103,993,215 626,140,089 341,071,811 1,090,499,711 5,668,542,198 261 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 10 - FIXED ASSETS I. Premises Gross block At cost at March 31 of preceding year Additions during the year1 Deductions during the year Closing balance Less: Depreciation to date2 Net block3 II. Other fixed assets (including furniture and fixtures) Gross block At cost at March 31 of preceding year Additions during the year Deductions during the year Closing balance Less: Depreciation to date4 Net block III. Assets given on lease At 31.03.2019 ` in ‘000s At 31.03.2018 89,546,213 2,896,928 (801,842) 91,641,299 (18,131,632) 73,509,667 88,093,455 3,498,313 (2,045,555) 89,546,213 (16,523,586) 73,022,627 71,014,065 9,171,004 (7,222,207) 72,962,862 (52,282,900) 20,679,962 63,839,400 8,946,032 (1,771,367) 71,014,065 (51,801,248) 19,212,817 Gross block At cost at March 31 of preceding year Additions during the year Deductions during the year Closing balance Less: Depreciation to date, accumulated lease adjustment and provisions5 Net block 16,904,628 - (189,999) 16,714,629 (14,300,020) 2,414,609 94,650,053 Includes revaluation gain amounting to ` 1,039.0 million (March 31, 2018: ` 263.9 million) on account of revaluation carried out by the Bank and its housing finance subsidiary. Includes depreciation charge amounting to ` 2,096.6 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 2,003.5 million), including depreciation charge on account of revaluation of ` 589.5 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 576.8 million). Includes assets of ` 22.2 million of the Bank (March 31, 2018: ` 37.4 million) which are held for sale. Includes depreciation charge amounting to ` 7,361.8 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 7,217.9 million). The depreciation charge/ lease adjustment/ provisions is an insignificant amount for the year ended March 31, 2019 (year ended March 31, 2018: insignificant amount). 16,714,629 - - 16,714,629 (14,300,031) 2,414,598 96,604,227 TOTAL FIXED ASSETS 1. 2. 3. 4. 5. 262 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS At 31.03.2019 ` in ‘000s At 31.03.2018 SCHEDULE 11 - OTHER ASSETS Inter-office adjustments (net) I. II. Interest accrued III. Tax paid in advance/tax deducted at source (net) IV. Stationery and stamps V. Non-banking assets acquired in satisfaction of claims1,2 VI. Advance for capital assets VII. Deposits VIII. Deferred tax asset (net) (refer note 18.10) IX. Deposits in Rural Infrastructure and Development Fund X. Others3,4 TOTAL OTHER ASSETS 1. - 89,296,089 66,655,117 130,676 19,748,594 1,892,601 18,025,278 78,182,968 269,249,912 324,368,811 867,550,046 During the year ended March 31, 2019, the Bank has not acquired any assets (year ended March 31, 2018: ` 952.6 million) in satisfaction of claims under debt-asset swap transactions. No assets were sold during the year ended March 31, 2019 (year ended March 31, 2018: ` 279.1 million). Represents balance net of provision held by the Bank amounting to ` 22,147.3 million (March 31, 2018: ` 13,184.2 million). For the year ended March 31, 2018, includes receivable amounting to ` 3,988.7 million pertaining to a non-performing loan sold during the year ended March 31, 2018, which was received by the Bank on April 2, 2018. Includes goodwill on consolidation amounting to ` 1,097.0 million (March 31, 2018: ` 1,117.5 million). - 98,043,710 101,872,667 66,696 10,040,166 2,219,891 17,221,877 109,372,947 292,545,621 334,417,786 965,801,361 2. 3. 4. Claims against the Group not acknowledged as debts Liability for partly paid investments SCHEDULE 12 - CONTINGENT LIABILITIES I. II. III. Liability on account of outstanding forward exchange contracts1 IV. Guarantees given on behalf of constituents a) In India b) Outside India Interest rate swaps, currency options and interest rate futures1 V. Acceptances, endorsements and other obligations VI. Currency swaps1 VII. VIII. Other items for which the Group is contingently liable TOTAL CONTINGENT LIABILITIES 1. 2. At 31.03.2019 ` in ‘000s At 31.03.2018 65,029,948 12,455 4,889,593,918 72,343,905 12,455 4,461,284,115 851,493,764 218,124,554 433,839,126 426,896,157 19,125,634,207 110,095,249 26,120,719,378 746,315,695 207,158,854 409,964,977 417,771,418 12,456,227,130 139,279,734 18,910,358,283 Represents notional amount. There has been a Supreme Court (SC) judgement dated February 28, 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the Employees Provident Fund (EPF) Act. There are interpretative aspects related to the Judgement including the effective date of application. The Bank will continue to assess any further developments in this matter for the implications on financial statements, if any. 263 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Balance Sheet (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Consolidated Profit and Loss Account SCHEDULE 13 - INTEREST EARNED Interest/discount on advances/bills I. Income on investments II. Interest on balances with Reserve Bank of India and other inter-bank funds III. IV. Others1,2 TOTAL INTEREST EARNED 1. 2. Includes interest on income tax refunds amounting to ` 4,904.1 million (March 31, 2018: ` 2,802.2 million). Includes interest and amortisation of premium on non-trading interest rate swaps and foreign currency swaps. Year ended 31.03.2019 508,848,307 181,022,872 9,271,072 20,674,289 719,816,540 ` in ‘000s Year ended 31.03.2018 432,528,240 161,256,201 8,104,078 19,734,986 621,623,505 Year ended 31.03.2019 ` in ‘000s Year ended 31.03.2018 SCHEDULE 14 - OTHER INCOME Commission, exchange and brokerage I. Profit/(loss) on sale of investments (net)1 II. III. Profit/(loss) on revaluation of investments (net) IV. Profit/(loss) on sale of land, buildings and other assets (net)2 V. Profit/(loss) on exchange/derivative transactions (net) VI. Premium and other operating income from insurance business VII. Miscellaneous income (including lease income)3 TOTAL OTHER INCOME 1. 112,628,543 72,499,841 (4,429,497) 29,027 15,856,263 369,369,032 2,114,301 568,067,510 For the year ended March 31, 2019, includes gain on sale of a part of equity investment in a subsidiary, ICICI Prudential Life Insurance Company Limited, through an offer for sale on stock exchanges (year ended March 31, 2018: includes gain on sale of a part of equity investment in the subsidiaries, ICICI Lombard General Insurance Company Limited and ICICI Securities Limited, through initial public offers (IPO). Refer note 18.14 - Sale of equity shareholding in subsidiaries. Includes profit/(loss) on sale of assets given on lease. Includes share of profit/(loss) from associates of ` 803.2 million (March 31, 2018: ` 515.2 million). 126,056,742 24,897,889 1,079,594 (22,012) 17,837,857 420,938,652 2,459,731 593,248,453 2. 3. Interest on deposits Interest on Reserve Bank of India/inter-bank borrowings SCHEDULE 15 - INTEREST EXPENDED I. II. III. Others (including interest on borrowings of erstwhile ICICI Limited) TOTAL INTEREST EXPENDED Year ended 31.03.2019 269,951,782 24,717,716 97,105,916 391,775,414 ` in ‘000s Year ended 31.03.2018 237,396,889 15,506,754 89,716,825 342,620,468 264 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Payments to and provisions for employees Rent, taxes and lighting1 Printing and stationery Advertisement and publicity Depreciation on property SCHEDULE 16 - OPERATING EXPENSES I. II. III. IV. V. VI. Depreciation (including lease equalisation) on leased assets VII. Directors' fees, allowances and expenses VIII. Auditors' fees and expenses IX. X. XI. Repairs and maintenance XII. XIII. Direct marketing agency expenses XIV. Claims and benefits paid pertaining to insurance business XV. Other expenses pertaining to insurance business2 XVI. Other expenditure3 TOTAL OPERATING EXPENSES 1. 2. Law charges Postages, courier, telephones, etc. Insurance Year ended 31.03.2019 94,252,552 14,347,677 2,392,372 23,542,134 9,458,399 13 117,683 294,854 2,120,159 5,601,896 17,785,647 5,898,349 19,569,165 77,540,597 314,145,809 55,521,494 642,588,800 ` in ‘000s Year ended 31.03.2018 83,335,270 13,090,545 2,077,493 12,479,424 9,221,415 12 90,476 258,748 1,604,643 5,207,606 17,203,371 5,031,155 17,714,553 65,636,309 270,737,611 53,867,661 557,556,292 3. Includes lease expense amounting to ` 11,425.5 million (March 31, 2018: ` 10,990.8 million). Includes commission expenses and reserves for actuarial liabilities (including the investible portion of the premium on the unit- linked policies). During the year ended March 31, 2019, in accordance with the directions of Securities and Exchange Board of India (SEBI) with respect to certain investments by schemes of ICICI Prudential Mutual Fund (the Schemes), ICICI Prudential Asset Management Company Limited (IPAMC) has paid ` 1,094.5 million to the Schemes and their investors. Further, IPAMC has settled the proceedings on this matter with SEBI and paid an amount of ` 9.0 million towards settlement terms. 265 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Profit and Loss Account (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of Consolidated Accounts SCHEDULE 17 SIGNIFICANT ACCOUNTING POLICIES Overview ICICI Bank Limited, together with its subsidiaries, joint ventures and associates (collectively, the Group), is a diversified financial services group providing a wide range of banking and financial services including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services. ICICI Bank Limited (the Bank), incorporated in Vadodara, India is a publicly held banking company governed by the Banking Regulation Act, 1949. Principles of consolidation The consolidated financial statements include the financials of ICICI Bank, its subsidiaries, associates and joint ventures. Entities, in which the Bank holds, directly or indirectly, through subsidiaries and other consolidating entities, more than 50.00% of the voting rights or where it exercises control, over the composition of board of directors/governing body, are fully consolidated on a line-by-line basis in accordance with the provisions of AS 21 on ‘Consolidated Financial Statements’. Investments in entities where the Bank has the ability to exercise significant influence are accounted for under the equity method of accounting and the pro-rata share of their profit/(loss) is included in the consolidated profit and loss account. Assets, liabilities, income and expenditure of jointly controlled entities are consolidated using the proportionate consolidation method. Under this method, the Bank’s share of each of the assets, liabilities, income and expenses of the jointly controlled entity is reported in separate line items in the consolidated financial statements. The Bank does not consolidate entities where the significant influence/control is intended to be temporary or entities which operate under severe long-term restrictions that impair their ability to transfer funds to parent/investing entity. All significant inter-company accounts and transactions are eliminated on consolidation. Basis of preparation The accounting and reporting policies of the Group used in the preparation of the consolidated financial statements conform to Generally Accepted Accounting Principles in India (Indian GAAP), the guidelines issued by the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), National Housing Bank (NHB) from time to time and the Accounting Standards notified under Section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014, as applicable to relevant companies and practices generally prevalent in the banking industry in India. In the case of the foreign subsidiaries, Generally Accepted Accounting Principles as applicable to the respective foreign subsidiaries are followed. The Group follows the accrual method of accounting except where otherwise stated, and the historical cost convention. In case the accounting policies followed by a subsidiary or joint venture are different from those followed by the Bank, the same have been disclosed in the respective accounting policy. The preparation of consolidated financial statements requires management to make estimates and assumptions that are considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the consolidated financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the consolidated financial statements are prudent and reasonable. Actual results could differ from these estimates. The impact of any revision in these estimates is recognised prospectively from the period of change. The consolidated financial statements include the results of the following entities in addition to the Bank. 266 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSCONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITED SCHEDULES forming part of the Consolidated Accounts (Contd.) Sr. No. 1. 2. 3. 4. 5. 6. 7. Name of the entity ICICI Bank UK PLC ICICI Bank Canada ICICI Securities Limited Country of incorporation United Kingdom Canada India Nature of relationship Subsidiary Nature of business Ownership interest Banking Subsidiary Banking Subsidiary Securities broking and ICICI Securities Holdings Inc.1 ICICI Securities Inc.1 ICICI Securities Primary Dealership Limited USA USA India Subsidiary Subsidiary Subsidiary ICICI Venture Funds Management Company Limited India Subsidiary merchant banking Holding company Securities broking Securities investment, trading and underwriting Private equity/ venture capital fund management ICICI Home Finance Company Limited ICICI Trusteeship Services Limited 8. 9. 10. ICICI Investment Management Company Limited 11. ICICI International Limited 12. ICICI Prudential Pension Funds Management Company Limited2 India India India Mauritius India 13. ICICI Prudential Life Insurance Company Limited India 14. ICICI Lombard General Insurance Company Limited 15. ICICI Prudential Asset Management Company Limited 16. ICICI Prudential Trust Limited 17. ICICI Strategic Investments Fund 18. I-Process Services (India) Private Limited3 India India India India India 100.00% 100.00% 79.22% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 52.87% 51.00% 50.80% 100.00% 19.00% 18.79% Subsidiary General insurance 55.87% Subsidiary Housing finance Subsidiary Trusteeship services Subsidiary Subsidiary Subsidiary Subsidiary Asset management Asset management Pension fund management Life insurance Subsidiary Subsidiary Consolidated as per AS 21 Associate Asset management Trusteeship services Venture capital fund Services related to back end operations Education and training in banking, finance and insurance Merchant acquiring and servicing Infrastructure finance Venture capital fund Venture capital fund Software company 19. NIIT Institute of Finance Banking and Insurance India Associate Training Limited3 20. ICICI Merchant Services Private Limited3 India Associate 21. India Infradebt Limited3 22. India Advantage Fund-III3 23. India Advantage Fund-IV3 24. Arteria Technologies Private Limited3 1. 19.01% 42.33% 24.10% 47.14% 19.98% ICICI Securities Holding Inc. is a wholly owned subsidiary of ICICI Securities Limited. ICICI Securities Inc. is a wholly owned subsidiary of ICICI Securities Holding Inc. ICICI Prudential Pension Funds Management Company Limited is a wholly owned subsidiary of ICICI Prudential Life Insurance Company Limited. These entities have been accounted as per the equity method as prescribed by AS 23 on ‘Accounting for Investments in Associates in Consolidated Financial Statements’. Associate Associate Associate Associate India India India India 2. 3. Comm Trade Services Limited has not been consolidated under AS 21, since the investment is temporary in nature. Falcon Tyres Limited, in which the Bank holds 26.39% equity shares has not been accounted as per equity method under AS 23, since the investment is temporary in nature. 267 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTSSIGNIFICANT ACCOUNTING POLICIES 1. Transactions involving foreign exchange The consolidated financial statements of the Group are reported in Indian rupees (`), the national currency of India. Foreign currency income and expenditure items of domestic operations are translated at the exchange rates prevailing on the date of the transaction. Income and expenditure items of integral foreign operations (representative offices) are translated at daily closing rates, and income and expenditure items of non-integral foreign operations (foreign branches, offshore banking units, foreign subsidiaries) are translated at quarterly average closing rates. Monetary foreign currency assets and liabilities of domestic and integral foreign operations are translated at closing exchange rates notified by Foreign Exchange Dealers’ Association of India (FEDAI) relevant to the balance sheet date and the resulting gains/losses are included in the profit and loss account. Both monetary and non-monetary foreign currency assets and liabilities of non-integral foreign operations are translated at relevant closing exchange rates notified by FEDAI at the balance sheet date and the resulting gains/losses from exchange differences are accumulated in the foreign currency translation reserve until the disposal of the net investment in the non-integral foreign operations. Pursuant to RBI guideline, the Bank does not recognise the cumulative/proportionate amount of such exchange differences as income or expenses, which relate to repatriation of accumulated retained earnings from overseas operations. The premium or discount arising on inception of forward exchange contracts in domestic operations that are entered into to establish the amount of reporting currency required or available at the settlement date of a transaction is amortised over the life of the contract. All other outstanding forward exchange contracts are revalued based on the exchange rates notified by FEDAI for specified maturities and at interpolated rates for contracts of interim maturities. The contracts of longer maturities where exchange rates are not notified by FEDAI are revalued based on the forward exchange rates implied by the swap curves in respective currencies. The resultant gains or losses are recognised in the profit and loss account. Contingent liabilities on account of guarantees, endorsements and other obligations denominated in foreign currency are disclosed at the closing exchange rates notified by FEDAI relevant to the balance sheet date. 2. Revenue recognition a) Interest income is recognised in the profit and loss account as it accrues except in the case of non-performing assets (NPAs) where it is recognised upon realisation, as per the income recognition and asset classification norms of RBI/ NHB/ other applicable guidelines. b) Income from finance leases is calculated by applying the interest rate implicit in the lease to the net investment outstanding on the lease over the primary lease period. c) Income on discounted instruments is recognised over the tenure of the instrument. d) Dividend income is accounted on an accrual basis when the right to receive the dividend is established. e) Loan processing fee is accounted for upfront when it becomes due except in the case of foreign banking subsidiaries, where it is amortised over the period of the loan. f) Project appraisal/structuring fee is accounted for on the completion of the agreed service. g) Arranger fee is accounted for as income when a significant portion of the arrangement/syndication is completed. h) Commission received on guarantees issued is amortised on a straight-line basis over the period of the guarantee. i) j) Fund management and portfolio management fees are recognised on an accrual basis. The annual/renewal fee on credit cards and debit cards are amortised on a straight line basis over one year. k) All other fees are accounted for as and when they become due. 268 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS l) The Bank deals in bullion business on a consignment basis. The difference between price recovered from customers and cost of bullion is accounted for at the time of sales to the customers. The Bank also deals in bullion on a borrowing and lending basis and the interest paid/received is accounted on accrual basis. m) Fees paid/received for priority sector lending certificates (PSLC) is amortised on straight- line basis over the period of the certificate. n) o) p) Income from securities brokerage activities is recognised as income on the trade date of the transaction. Brokerage income in relation to public or other issuances of securities is recognised based on mobilisation and terms of agreement with the client. Life insurance premium for non-linked policies is recognised as income when due from policyholders. For unit linked business, premium is recognised when the associated units are created. Premium on lapsed policies is recognised as income when such policies are reinstated. Top-up premiums paid by unit linked policyholders’ are considered as single premium and recognised as income when the associated units are created. Income from unit linked policies, which includes fund management charges, policy administration charges, mortality charges and other charges, if any, are recovered from the linked funds in accordance with the terms and conditions of the policy and are recognised when due. In case of general insurance business, premium including reinsurance accepted (net of Goods & Services Tax) other than for long-term (with term more than one year) motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018 is recorded on receipt of complete information, for the policy period at the commencement of risk. For crop insurance, the premium is accounted based on management estimates that are progressively actualised on receipt of information. For installment cases, premium is recorded on installment due dates. Reinstatement premium is recorded as and when such premiums are recovered. Premium earned including reinstatement premium and re-insurance accepted is recognised as income over the period of risk or the contract period based on 1/365 method, whichever is appropriate on a gross basis. Any subsequent revisions to premium as and when they occur are recognised over the remaining period of risk or contract period, as applicable. In case of long-term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018, premium received (net of Goods & Services Tax) for third party liability coverage is recognised equally over the policy period at the commencement of risk on 1/n basis where ‘n’ denotes the term of the policy in years and premium received for own damage coverage is recognised as per the annual premium allocation determined at the inception of the policy in accordance with the product parameters filed with IRDAI, on receipt of complete information. Reinstatement premium is recorded as and when such premiums are recovered. Premium allocated for the year is recognised as income earned based on 1/365 method, on a gross basis. Reinstatement premium is allocated on the same basis as the original premium over the balance term of the policy. Any subsequent revisions to premium as and when they occur are recognised on the same basis as the original premium over the balance term of the policy. Adjustments to premium income arising on cancellation of policies are recognised in the period in which the policies are cancelled. Adjustments to premium income for corrections to area covered under crop insurance are recognised in the period in which the information is confirmed by the concerned government/nodal agency. Commission on reinsurance ceded is recognised as income in the period of ceding the risk. Profit commission under reinsurance treaties, wherever applicable, is recognised as income in the year of final determination of profits as confirmed by reinsurers and combined with commission on reinsurance ceded. q) In case of life insurance business, reinsurance premium ceded is accounted in accordance with the terms of the relevant treaty with the reinsurer. Profit commission on reinsurance ceded is netted off against premium ceded on reinsurance. r) In case of general insurance business, insurance premium on ceding of the risk other than for long-term motor insurance policies for new cars and new two wheelers sold on or after September 1, 2018 is recognised 269 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS simultaneously along with the insurance premium in accordance with reinsurance arrangements with the reinsurers. In case of long-term motor insurance policies for new cars and new two-wheelers sold on or after September 1, 2018, reinsurance premium is recognised on the insurance premium allocated for the year simultaneously along with the recognition of the insurance premium in accordance with the reinsurance arrangements with the reinsurers. Any subsequent revision to premium ceded is recognised in the period of such revision. Adjustment to reinsurance premium arising on cancellation of policies is recognised in the period in which the policies are cancelled. Adjustments to reinsurance premium for corrections to area covered under crop insurance are recognised simultaneously along with related premium income. s) In the case of general insurance business, premium deficiency is recognised when the sum of expected claim costs and related expenses and maintenance costs exceed the reserve for unexpired risks and is computed at a segmental revenue account level. The expected claim cost is calculated and duly certified by the Appointed Actuary. 3. Stock based compensation The following entities within the group have granted stock options to their employees: • • • • ICICI Bank Limited ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Securities Limited The Employees Stock Option Scheme (the Scheme) of the Bank provides for grant of options on the Bank’s equity shares to wholetime directors and employees of the Bank and its subsidiaries. The Scheme provides that employees are granted an option to subscribe to equity shares of the Bank that vest in a graded manner. The options may be exercised within a specified period. ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance Company and ICICI Securities Limited have also formulated similar stock option schemes for their employees for grant of equity shares of their respective companies. The Group, except the overseas banking subsidiaries, follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date and amortised over the vesting period. The fair market price is the latest closing price, immediately prior to the grant date, which is generally the date of the meeting of the Board Governance, Remuneration & Nomination Committee or other relevant committee in which the options are granted, on the stock exchange on which the shares of the Bank, ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance Company and ICICI Securities Limited are listed. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date is considered. The banking subsidiaries namely, ICICI Bank UK and ICICI Bank Canada account for the cost of the options granted to employees by ICICI Bank using the fair value method based on binomial tree model. 4. Income taxes Income tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Group. The current tax expense and deferred tax expense is determined in accordance with the provisions of the Income Tax Act, 1961 and as per Accounting Standard 22 - Accounting for Taxes on Income respectively. Deferred tax adjustments comprise changes in the deferred tax assets or liabilities during the year. Deferred tax assets and liabilities are recognised by considering the impact of timing differences between taxable income and accounting income for the current year, and carry forward losses. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. The impact of changes in the deferred tax assets and liabilities is recognised in the profit and loss account. Deferred tax assets are recognised and re-assessed at each reporting date, based upon the management’s judgement as to whether their realisation is considered as reasonably certain. However, in case of domestic companies, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. 270 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  In the consolidated financial statements, deferred tax assets and liabilities are computed at an individual entity level and aggregated for consolidated reporting. Minimum Alternate Tax (MAT) credit is recognised as an asset to the extent there is convincing evidence that the Group will pay normal income tax during specified period, i.e., the period for which MAT credit is allowed to be carried forward as per prevailing provisions of the Income Tax Act, 1961. In accordance with the recommendation contained in the guidance note issued by ICAI, MAT credit is to be recognised as an asset in the year in which it becomes eligible for set off against normal income tax. The Group reviews MAT credit entitlements at each balance sheet date and writes down the carrying amount to the extent there is no longer convincing evidence to the effect that the Group will pay normal income tax during the specified period. 5. Claims and benefits paid In the case of general insurance business, claims incurred comprise claims paid, estimated liability for outstanding claims made following a loss occurrence reported and estimated liability for claims incurred but not reported (IBNR) and claims incurred but not enough reported (IBNER). Further, claims incurred also include specific claim settlement costs such as survey/legal fees and other directly attributable costs. Claims (net of amounts receivable from re-insurers/co-insurers) are recognised on the date of intimation based on management estimates or on estimates from surveyors/insured in the respective revenue account. Estimated liability for outstanding claims at the balance sheet date is recorded net of claims recoverable from/payable to co-insurers/re-insurers and salvage to the extent there is certainty of realisation. Salvaged stock is recognised at estimated net realisable value based on independent valuer’s report. Estimated liability for outstanding claim is determined by the entity on the basis of ultimate amounts likely to be paid on each claim based on the past experience/ actuarial valuation. These estimates are progressively revalidated on availability of further information. Claims IBNR represent that amount of claims that may have been incurred during the accounting period but have not been reported or claimed. The claims IBNR provision also includes provision, if any, required for claims IBNER. Estimated liability for claims IBNR/claims IBNER is based on an actuarial estimate duly certified by the appointed actuary of the entity. In the case of life insurance business, benefits paid comprise policy benefits and claim settlement costs, if any. Death and rider claims are accounted for on receipt of intimation. Survival and maturity benefits are accounted when due. Withdrawals and surrenders under non linked policies are accounted on the receipt of intimation. Claim settlement cost, legal and other fees should also form part of claim cost wherever applicable. Reinsurance claims receivable are accounted for in the period in which the claim is intimated. Repudiated claims and other claims disputed before the judicial authorities are provided for on prudent basis as considered appropriate by the management. 6. Liability for life policies in force In the case of life insurance business, the liabilities for life policies in force are calculated in accordance with accepted actuarial practice, requirements of Insurance Act, 1938 (amended by Insurance Laws (Amendment) Act, 2015) and regulations notified by the Insurance Regulatory and Development Authority of India and Actuarial Practice Standards of the Institute of Actuaries of India. 7. Reserve for unexpired risk Reserve for unexpired risk is recognised net of re-insurance ceded and represents premium written that is attributable to, and is to be allocated to succeeding accounting periods. For fire, marine, cargo and miscellaneous business it is calculated on a daily pro-rata basis, except in the case of marine hull business which is computed at 100.00% of net premium written on all unexpired policies at balance sheet date. 8. Actuarial method and valuation In the case of life insurance business, the actuarial liability on both participating and non-participating policies is calculated using the gross premium method, using assumptions for interest, mortality, morbidity, expense and inflation, and in the case of participating policies, future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as prudent estimates at the date of valuation with allowances for adverse deviations. 271 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The liability for the unexpired portion of the risk for the non-unit liabilities of linked business and attached riders is the higher of liability calculated using discounted cash flows and unearned premium reserves. The unit liability in respect of linked business has been taken as the value of the units standing to the credit of policyholders, using the Net Asset Value (NAV) prevailing at the valuation date. An unexpired risk reserve and a reserve in respect of claims incurred but not reported are created, for one year renewable group term insurance. The interest rates used for valuing the liabilities are in the range of 4.44% to 6.48% per annum (previous year – 4.66% to 6.13% per annum). Mortality rates used are based on the published "Indian Assured Lives Mortality (2006 - 2008) Ult". mortality table for assurances and LIC 96-98 table for annuities, adjusted to reflect expected experience while morbidity rates used are based on CIBT 93 table, adjusted for expected experience, or on risk rates supplied by reinsurers. Expenses are provided for at current levels, in respect of renewal expenses, with no allowance for future improvements but with an allowance for any expected worsening. Per policy renewal expenses for regular premium policies are assumed to inflate at 4.19% (previous year – 4.38%). 9. Acquisition costs for insurance business Acquisition costs are those costs that vary with and are primarily related to the acquisition of insurance contracts and are expensed in the period in which they are incurred. 10. Employee benefits Gratuity The Group pays gratuity, a defined benefit plan, to employees who retire or resign after a minimum prescribed period of continuous service and in case of employees at overseas locations as per the rules in force in the respective countries. The Group makes contribution to trusts which administer the funds on their own account or through insurance companies. The actuarial gains or losses arising during the year are recognised in the profit and loss account. Actuarial valuation of the gratuity liability is determined by an actuary appointed by the Group. Actuarial valuation of gratuity liability is determined based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. Superannuation Fund and National Pension Scheme The Bank contributes 15.0% of the total annual basic salary of certain employees to superannuation funds, a defined contribution plan, managed and administered by insurance companies. Further, the Bank contributes 10.00% of the total basic salary of certain employees to National Pension Scheme (NPS), a defined contribution plan, which is managed and administered by pension fund management companies. The Bank also gives an option to its employees allowing them to receive the amount in lieu of such contributions along with their monthly salary during their employment. The amounts so contributed/paid by the Bank to the superannuation fund and NPS or to employees during the year are recognised in the profit and loss account. ICICI Prudential Life Insurance Company, ICICI Prudential Asset Management Company and ICICI Venture Funds Management Company have accrued for superannuation liability based on a percentage of basic salary payable to eligible employees for the period of service. Pension The Bank provides for pension, a defined benefit plan covering eligible employees of erstwhile Bank of Madura, erstwhile Sangli Bank and erstwhile Bank of Rajasthan. The Bank makes contribution to a trust which administers the funds on its own account or through insurance companies. The plan provides for pension payment including 272 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS dearness relief on a monthly basis to these employees on their retirement based on the respective employee’s years of service with the Bank and applicable salary. Actuarial valuation of the pension liability is determined by an actuary appointed by the Bank. Actuarial valuation of pension liability is calculated based on certain assumptions regarding rate of interest, salary growth, mortality and staff attrition as per the projected unit credit method. The actuarial gains or losses arising during the year are recognised in the profit and loss account. Employees covered by the pension plan are not eligible for employer’s contribution under the provident fund plan. Provident fund The Group is statutorily required to maintain a provident fund, a defined benefit plan, as a part of retirement benefits to its employees. Each employee contributes a certain percentage of his or her basic salary and the Group contributes an equal amount for eligible employees. The Group makes contribution as required by The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 to Employees’ Pension Scheme administered by the Regional Provident Fund Commissioner and the balance contributions are transferred to funds administered by trustees. The funds are invested according to the rules prescribed by the Government of India. Actuarial valuation for the interest rate guarantee on the provident fund balances is determined by an actuary appointed by the Group. The actuarial gains or losses arising during the year are recognised in the profit and loss account. The overseas branches of the Bank and its eligible employees contribute a certain percentage of their salary towards respective government schemes as per local regulatory guidelines. The contribution made by the overseas branches is recognised in profit and loss account at the time of contribution. Compensated absences The Group provides for compensated absences based on actuarial valuation conducted by an independent actuary. 11. Provisions, contingent liabilities and contingent assets The Group estimates the probability of any loss that might be incurred on outcome of contingencies on the basis of information available upto the date on which the consolidated financial statements are prepared. A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on management estimates of amounts required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. In cases where the available information indicates that the loss on the contingency is reasonably possible but the amount of loss cannot be reasonably estimated, a disclosure to this effect is made in the consolidated financial statements. In case of remote possibility, neither provision nor disclosure is made in the consolidated financial statements. The Group does not account for or disclose contingent assets, if any. The Bank estimates the probability of redemption of customer loyalty reward points using an actuarial method by employing an independent actuary and accordingly makes provision for these reward points. Actuarial valuation is determined based on certain assumptions regarding mortality rate, discount rate, cancellation rate and redemption rate. 12. Cash and cash equivalents Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice. 273 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 13. Investments i) Investments of the Bank are accounted for in accordance with the extant RBI guidelines on investment classification and valuation as given below. a) b) c) d) e) f) g) All investments are classified into ‘Held to Maturity’, ‘Available for Sale’ and ‘Held for Trading’. Reclassifications, if any, in any category are accounted for as per the RBI guidelines. Under each classification, the investments are further categorised as (a) government securities, (b) other approved securities, (c) shares, (d) bonds and debentures and (e) others. ‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. Any premium over the face value of fixed rate and floating rate securities acquired is amortised over the remaining period to maturity on a constant yield basis and straight line basis respectively. ‘Available for Sale’ and ‘Held for Trading’ securities are valued periodically as per RBI guidelines. Any premium over the face value of fixed rate and floating rate investments in government securities, classified as ‘Available for Sale’, is amortised over the remaining period to maturity on constant yield basis and straight line basis respectively. Quoted investments are valued based on the closing quotes on the recognised stock exchanges or prices declared by Primary Dealers Association of India (PDAI) jointly with Fixed Income Money Market and Derivatives Association (FIMMDA)/Financial Benchmark India Private Limited (FBIL), periodically. The market/fair value of unquoted government securities which are in the nature of Statutory Liquidity Ratio (SLR) securities included in the ‘Available for Sale’ and ‘Held for Trading’ categories is as per the rates published by FIMMDA/FBIL. The valuation of other unquoted fixed income securities, including Pass Through Certificates, wherever linked to the Yield-to-Maturity (YTM) rates, is computed with a mark-up (reflecting associated credit risk) over the YTM rates for government securities published by FIMMDA. The Sovereign foreign securities and non-INR India linked bonds are valued on the basis of prices published by the Sovereign regulator or counterparty quotes. Unquoted equity shares are valued at the break-up value, if the latest balance sheet is available or at ` 1, as per RBI guidelines. Securities are valued scrip-wise. Depreciation/appreciation on securities, other than those acquired by way of conversion of outstanding loans, is aggregated for each category. Net appreciation in each category under each investment classification, if any, being unrealised, is ignored, while net depreciation is provided for. The depreciation on securities acquired by way of conversion of outstanding loan is fully provided for. Non-performing investments are identified based on the RBI guidelines. Treasury bills, commercial papers and certificate of deposits being discounted instruments, are valued at carrying cost. The units of mutual funds are valued at the latest repurchase price/net asset value declared by the mutual fund. Costs including brokerage and commission pertaining to investments, paid at the time of acquisition, are charged to the profit and loss account. Cost of investments is computed based on the First-In-First-Out (FIFO) method. Profit/loss on sale of investments in the ‘Held to Maturity’ category is recognised in the profit and loss account and profit is thereafter appropriated (net of applicable taxes and statutory reserve requirements) to Capital Reserve. Profit/loss on sale of investments in ‘Available for Sale’ and ‘Held for Trading’ categories is recognised in the profit and loss account. 274 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS h) Market repurchase, reverse repurchase and transactions with RBI under Liquidity Adjustment Facility (LAF) are accounted for as borrowing and lending transactions in accordance with the extant RBI guidelines. i) j) k) l) Broken period interest (the amount of interest from the previous interest payment date till the date of purchase/sale of instruments) on debt instruments is treated as a revenue item. At the end of each reporting period, security receipts issued by the asset reconstruction companies are valued in accordance with the guidelines applicable to such instruments, prescribed by RBI from time to time. Accordingly, in cases where the cash flows from security receipts issued by the asset reconstruction companies are limited to the actual realisation of the financial assets assigned to the instruments in the concerned scheme, the Bank reckons the net asset value obtained from the asset reconstruction company from time to time, for valuation of such investments at each reporting period end. The security receipts which are outstanding and not redeemed as at the end of the resolution period are treated as loss assets and are fully provided for. The Bank follows trade date method of accounting for purchase and sale of investments, except for government of India and state government securities where settlement date method of accounting is followed in accordance with RBI guidelines. The Bank undertakes short sale transactions in dated central government securities in accordance with RBI guidelines. The short positions are categorised under HFT category and are marked-to-market. The mark-to-market loss is charged to profit and loss account and gain, if any, is ignored as per RBI guidelines. ii) iii) iv) v) The Bank’s consolidating venture capital fund carries investments at fair values, with unrealised gains and temporary losses on investments recognised as components of investors’ equity and accounted for in the unrealised investment reserve account. The realised gains and losses on investments and units in mutual funds and unrealised gains or losses on revaluation of units in mutual funds are accounted for in the profit and loss account. Provisions are made in respect of accrued income considered doubtful. Such provisions as well as any subsequent recoveries are recorded through the profit and loss account. Subscription to/purchase of investments are accounted at the cost of acquisition inclusive of brokerage, commission and stamp duty. The Bank’s primary dealership and securities broking subsidiaries classify the securities held with the intention of holding for short-term and trading as stock-in-trade which are valued at lower of cost or market value. The securities classified by primary dealership subsidiary as held-to-maturity, as permitted by RBI, are carried at amortised cost. Appropriate provision is made for other than temporary diminution in the value of investments. Commission earned in respect of securities acquired upon devolvement is reduced from the cost of acquisition. The Bank’s housing finance subsidiary classifies its investments as current investments and long-term investments. Investments that are readily realisable and intended to be held for not more than a year are classified as current investments, which are carried at the lower of cost and net realisable value. All other investments are classified as long-term investments, which are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. Any premium over the face value of the securities acquired is amortised over the remaining period to maturity on a constant yield basis. However, a provision for diminution in value is made to recognise any other than temporary decline in the value of such long-term investments. The Bank’s overseas banking subsidiaries account for unrealised gain/loss, net of tax, on investment in ‘Available for Sale’/’Fair Value Through Other Comprehensive Income’ (FVOCI) category directly in their reserves. Further unrealised gain/loss on investment in ‘Held for Trading’/‘Fair Value Through Profit and Loss’ (FVTPL) category is accounted directly in the profit and loss account. Investments in ‘Held to Maturity’/’amortised cost’ category are carried at amortised cost. vi) In the case of life and general insurance businesses, investments are made in accordance with the Insurance Act, 1938 (amended by the Insurance Laws (Amendment) Act, 2015), the IRDA (Investment) Regulations, 2016, and various other circulars/notifications issued by the IRDAI in this context from time to time. 275 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  In the case of life insurance business, valuation of investments (other than linked business) is done on the following basis: a) All debt securities and redeemable preference shares are considered as ‘held to maturity’ and accordingly stated at historical cost, subject to amortisation of premium or accretion of discount over the period of maturity/holding on a constant yield basis. b) Listed equity shares are stated at fair value being the last quoted closing price on the National Stock Exchange (NSE) (or BSE, in case the investments are not listed on NSE). c) Mutual fund units are valued based on the previous day’s net asset value. Unrealised gains/losses arising due to changes in the fair value of listed equity shares and mutual fund units are taken to ’Revenue and other reserves’ and ‘Liabilities on policies in force’ in the balance sheet for Shareholders’ fund and Policyholders’ fund respectively for life insurance business. In the case of general insurance business, valuation of investments is done on the following basis: a) b) All debt securities including government securities and non-convertible preference shares are considered as ‘held to maturity’ and accordingly stated at amortised cost determined after amortisation of premium or accretion of discount on a constant yield basis over the holding/maturity period. Listed equities and convertible preference shares at the balance sheet date are stated at fair value, being the last quoted closing price on the NSE and in case these are not listed on NSE, then based on the last quoted closing price on the BSE. c) Mutual fund investments (other than venture capital fund) are stated at fair value, being the closing net asset value at balance sheet date. d) Investments other than mentioned above are valued at cost. Unrealised gains/losses arising due to changes in the fair value of listed equity shares, convertible preference shares and mutual fund units are taken to ’Revenue and other reserves’ in the balance sheet for general insurance business. Insurance subsidiaries assess at each balance sheet date whether there is any indication that any investment may be impaired. If any such indication exists, the carrying value of such investment is reduced to its recoverable amount and the impairment loss is recognised in the revenue(s)/profit and loss account. The total proportion of investments for which subsidiaries have applied accounting policies different from the Bank as mentioned above, is approximately 22.44% of the total investments at March 31, 2019. 14. Provisions/write-offs on loans and other credit facilities i) Loans and other credit facilities of the Bank are accounted for in accordance with the extant RBI guidelines as given below: a) The Bank classifies its loans and investments, including at overseas branches and overdues arising from crystallised derivative contracts, into performing and NPAs in accordance with RBI guidelines. Loans and advances held at the overseas branches that are identified as impaired as per host country regulations for reasons other than record of recovery, but which are standard as per the extant RBI guidelines, are classified as NPAs to the extent of amount outstanding in the host country. Further, NPAs are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. In the case of corporate loans and advances, provisions are made for sub-standard and doubtful assets at rates prescribed by RBI. Loss assets and the unsecured portion of doubtful assets are provided/written-off as per the extant RBI guidelines. For loans and advances booked in overseas branches, which are standard as per the extant RBI guidelines but are classified as NPAs based on host country guidelines, provisions are 276 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS made as per the host country regulations. For loans and advances booked in overseas branches, which are NPAs as per the extant RBI guidelines and as per host country guidelines, provisions are made at the higher of the provisions required under RBI regulations and host country regulations. Provisions on homogeneous retail loans and advances, subject to minimum provisioning requirements of RBI, are assessed on the basis of the ageing of the loans in the non-performing category. As per RBI guidelines, in respect of non-retail loans reported as fraud to RBI and classified in doubtful category, the entire amount, without considering the value of security, is provided for over a period not exceeding four quarters starting from the quarter in which fraud has been detected. In respect of non-retail loans where there has been delay in reporting the fraud to the RBI or which are classified as loss accounts, the entire amount is provided immediately. In case of fraud in retail accounts, the entire amount is provided immediately. In respect of borrowers classified as non-cooperative borrowers or willful defaulters, the Bank makes accelerated provisions as per extant RBI guidelines. The Bank holds specific provisions against non-performing loans and advances, and against certain performing loans and advances in accordance with RBI directions, including RBI direction for provision on accounts referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016. The assessment of incremental specific provisions is made after taking into consideration the existing specific provision held. The specific provisions on retail loans and advances held by the Bank are higher than the minimum regulatory requirements. b) Provision due to diminution in the fair value of restructured/rescheduled loans and advances is made in accordance with the applicable RBI guidelines. Non-performing and restructured loans are upgraded to standard as per the extant RBI guidelines. c) d) e) Amounts recovered against debts written-off in earlier years and provisions no longer considered necessary in the context of the current status of the borrower are recognised in the profit and loss account. The Bank maintains general provision on performing loans and advances in accordance with the RBI guidelines, including provisions on loans to borrowers having unhedged foreign currency exposure, provisions on loans to specific borrowers in specific stressed sector, provision on exposures to step-down subsidiaries of Indian companies and provision on incremental exposure to borrowers identified as per RBI’s large exposure framework. For performing loans and advances in overseas branches, the general provision is made at higher of host country regulations requirement and RBI requirement. In addition to the provisions required to be held according to the asset classification status, provisions are held for individual country exposures including indirect country risk (other than for home country exposure). The countries are categorised into seven risk categories namely insignificant, low, moderately low, moderate, moderately high, high and very high, and provisioning is made on exposures exceeding 180 days on a graded scale ranging from 0.25% to 25.00%. For exposures with contractual maturity of less than 180 days, provision is required to be held at 25.00% of the rates applicable to exposures exceeding 180 days. The indirect exposure is reckoned at 50.00% of the exposure. If the country exposure (net) of the Bank in respect of each country does not exceed 1.00% of the total funded assets, no provision is required on such country exposure. f) The Bank makes floating provision as per the Board approved policy, which is in addition to the specific and general provisions made by the Bank. The floating provision is utilised, with the approval of Board and RBI, in case of contingencies which do not arise in the normal course of business and are exceptional and non-recurring in nature and for making specific provision for impaired loans as per the requirement of extant RBI guidelines or any regulatory guidance/instructions. The floating provision is netted-off from advances. ii) In the case of the Bank’s housing finance subsidiary, loans and other credit facilities are classified as per the NHB guidelines into performing and non-performing assets. Further, NPAs are classified into sub-standard, doubtful and loss assets based on criteria stipulated by NHB. Additional provisions are made against specific 277 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS iii) iv) non-performing assets over and above what is stated above, if in the opinion of the management, increased provisions are necessary. In the case of the Bank’s UK subsidiary, loans are stated net of allowance for credit losses. Loans are classified as impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition on the loan (a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the loans that can be reliably estimated. An allowance for impairment losses is maintained at a level that management considers adequate to absorb identified credit related losses as well as losses that have occurred but have not yet been identified. The Bank’s Canadian subsidiary measures impairment loss on all financial assets using Expected Credit Loss (ECL) model based on a three-stage approach. The ECL for financial assets that are not credit-impaired and for which there is no significant increase in credit risk since origination, is computed using 12-month probability of default (PD), and represents the lifetime cash shortfalls that will result if a default occurs in next 12 months. The ECL for financial assets, that are not credit-impaired but have experienced a significant increase in credit risk since origination, is computed using a life time PD, and represents lifetime cash shortfalls that will result if a default occurs during the expected life of financial assets. A financial asset is considered credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. The allowance for credit losses for impaired financial assets is computed based on individual assessment of expected cash flows from such assets. The total proportion of loans for which subsidiaries have applied accounting policies different from the Bank as mentioned above, is approximately 9.34% of the total loans at March 31, 2019. 15. Transfer and servicing of assets The Bank transfers commercial and consumer loans through securitisation transactions. The transferred loans are de-recognised and gains/losses are accounted for, only if the Bank surrenders the rights to benefits specified in the underlying securitised loan contract. Recourse and servicing obligations are accounted for net of provisions. In accordance with the RBI guidelines for securitisation of standard assets, with effect from February 1, 2006, the Bank accounts for any loss arising from securitisation immediately at the time of sale and the profit/premium arising from securitisation is amortised over the life of the securities issued or to be issued by the special purpose vehicle to which the assets are sold. With effect from May 7, 2012, the RBI guidelines require the profit/premium arising from securitisation to be amortised over the life of the transaction based on the method prescribed in the guidelines. In accordance with RBI guidelines, in case of non-performing/special mention account-2 loans sold to Securitisation Company (SC)/Reconstruction Company (RC), the Bank reverses the excess provision in profit and loss account in the year in which amounts are received. Any shortfall of sale value over the net book value on sale of such assets is recognised by the Bank in the year in which the loan is sold. The Canadian subsidiary has entered into securitisation arrangements in respect of its originated and purchased mortgages. ICICI Bank Canada either retains substantially all the risk and rewards or retains control over these mortgages, hence these arrangements do not qualify for de-recognition accounting under their local accounting standards. It continues to recognise the mortgages securitised as “Loans and Advances” and the amounts received through securitisation are recognised as “Other borrowings”. 16. Fixed assets Fixed assets, other than premises of the Bank and its housing finance subsidiary are carried at cost less accumulated depreciation and impairment, if any. In case of the Bank and its housing finance subsidiary, premises are carried at revalued amount, being fair value at the date of revaluation less accumulated depreciation. Cost includes freight, duties, taxes and incidental expenses related to the acquisition and installation of the asset. Depreciation is charged over the estimated useful life of fixed assets on a straight-line basis. The useful life of the groups of fixed assets for domestic group companies is based on past experience and expectation of usage, which for some categories of fixed assets, is different from the useful life as prescribed in Schedule II to the Companies Act, 2013. 278 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  Assets purchased/sold during the year are depreciated on a pro-rata basis for the actual number of days the asset has been capitalised. In case of the Bank, items individually costing up to ` 5,000/- are depreciated fully over a period of 12 months from the date of purchase. Further, profit on sale of premises by the Bank is appropriated to capital reserve, net of transfer to Statutory Reserve and taxes, in accordance with RBI guidelines. In case of revalued/impaired assets, depreciation is provided over the remaining useful life of the assets with reference to revised asset values. In case of premises, which are carried at revalued amounts, the depreciation on the excess of revalued amount over historical cost is transferred from Revaluation Reserve to General Reserve annually. Non-banking assets Non-Banking Assets (NBAs) acquired in satisfaction of claims are carried at lower of net book value and net realisable value. Further, the Bank creates provision on non-banking assets as per specific RBI directions. 17. Accounting for derivative contracts The Group enters into derivative contracts such as interest rate and currency options, interest rate and currency futures, interest rate and currency swaps, credit default swaps and cross currency interest rate swaps. The swap contracts entered to hedge on-balance sheet assets and liabilities are structured such that they bear an opposite and offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments is correlated with the movement of underlying assets and liabilities and accounted pursuant to the principles of hedge accounting. Hedge swaps are accounted for on an accrual basis and are not marked to market unless their underlying transaction is marked to market, except in the case of the Bank’s overseas banking subsidiaries. In overseas subsidiaries, in case of fair value hedge, the hedging transactions and the hedged items (for the risks being hedged) are measured at fair value with changes recognised in the profit and loss account and in case of cash flow hedges, changes in the fair value of effective portion of the cash flow hedge are taken to ‘Revenue and other reserves’ and ineffective portion, if any, are recognised in the profit and loss account. Foreign currency and rupee derivative contracts entered into for trading purposes are marked to market and the resulting gain or loss is accounted for in the profit and loss account. Pursuant to RBI guidelines, any receivables under derivative contracts which remain overdue for more than 90 days and mark-to-market gains on other derivative contracts with the same counter-parties are reversed through the profit and loss account. 18. Impairment of assets The immovable fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is treated as impaired when its carrying amount exceeds its recoverable amount. The impairment is recognised by debiting the profit and loss account and is measured as the amount by which the carrying amount of the impaired assets exceeds their recoverable value. The Bank and its housing finance subsidiary follows revaluation model of accounting for its premises and the recoverable amount of the revalued assets is considered to be close to its revalued amount. Accordingly, separate assessment for impairment of premises is not required. 19. Lease transactions Lease payments for assets taken on operating lease are recognised as an expense in the profit and loss account over the lease term on straight line basis. 20. Earnings per share Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if contracts to issue equity shares were exercised or converted during the year. Diluted earnings per equity share is computed using the weighted average number of equity shares and dilutive potential equity shares issued by the group outstanding during the year, except where the results are anti-dilutive. 279 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS SCHEDULE 18 NOTES FORMING PART OF THE ACCOUNTS The following additional disclosures have been made taking into account the requirements of Accounting Standards (ASs) and Reserve Bank of India (RBI) guidelines in this regard. 1. Earnings per share Basic and diluted earnings per equity share are computed in accordance with AS 20 - Earnings per share. Basic earnings per equity share is computed by dividing net profit attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed using the weighted average number of equity shares and weighted average number of dilutive potential equity shares outstanding during the year. The following table sets forth, for the periods indicated, the computation of earnings per share. Basic Weighted average no. of equity shares outstanding Net profit attributable to equity share holders Basic earnings per share (`) Diluted Weighted average no. of equity shares outstanding Net profit attributable to equity share holders Diluted earnings per share (`)1 Nominal value per share (`) 1. The dilutive impact is due to options granted to employees by the Group. 2. Related party transactions ` in million, except per share data Year ended March 31, 2018 Year ended March 31, 2019 6,435,966,473 42,542.4 6.61 6,417,180,759 77,121.8 12.02 6,509,276,099 42,474.9 6.53 2.00 6,482,375,300 77,098.8 11.89 2.00 The Group has transactions with its related parties comprising associates/other related entities and key management personnel and relatives of key management personnel. I. Related parties Associates/other related entities Arteria Technologies Private Limited1, India Advantage Fund-III, India Advantage Fund-IV, India Infradebt Limited, ICICI Merchant Services Private Limited, I-Process Services (India) Private Limited, NIIT Institute of Finance, Banking and Insurance Training Limited, Comm Trade Services Limited and ICICI Foundation for Inclusive Growth. 1. Identified as related party effective from May 29, 2018. Key management personnel Mr. Sandeep Bakhshi1, Ms. Vishakha Mulye, Mr. Vijay Chandok, Mr. Anup Bagchi, Mr. N. S. Kannan2 and Ms. Chanda Kochhar3. 1. 2. 3. Identified as related party effective from June 19, 2018. Ceased to be related party effective close of business hours on June 18, 2018. Ceased to be related party effective from October 4, 2018. Relatives of key management personnel Ms. Mona Bakhshi1, Mr. Shivam Bakhshi1, Ms. Esha Bakhshi1, Ms. Minal Bakhshi1, Mr. Sameer Bakhshi1, Mr. Vivek Mulye, Ms. Vriddhi Mulye, Dr. Gauresh Palekar, Ms. Shalaka Gadekar, Ms. Manisha Palekar, Ms. Poonam Chandok, Ms. Saluni Chandok, Ms. Simran Chandok,Mr. C. V. Kumar, Ms. Shad Kumar, Ms. Sanjana Gulati, Ms. Mitul Bagchi, Mr. Aditya Bagchi, Mr. Shishir Bagchi, Mr. Arun Bagchi, Mr. Animesh Bagchi, Ms. Rangarajan Kumudalakshmi2, Ms. Aditi Kannan2, Ms. Sudha Narayanan2, Mr. Raghunathan Narayanan2, Mr. Rangarajan Narayanan2, Mr. Deepak Kochhar3, Mr. Arjun Kochhar3, Ms. Aarti Kaji3 and Mr. Mahesh Advani3. 1. 2. 3. Identified as related party effective from June 19, 2018. Ceased to be related party effective close of business hours on June 18, 2018. Ceased to be related party effective from October 4, 2018. 280 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS II. Transactions with related parties The following table sets forth, for the periods indicated, the significant transactions between the Group and its related parties. Particulars Interest income Associates/others Key management personnel Relatives of key management personnel Total interest income Fee, commission and other income Associates/others Key management personnel Relatives of key management personnel Total fee, commission and other income Commission income on guarantees issued Associates/others Key management personnel Relatives of key management personnel Total commission income on guarantees issued Insurance premium received Associates/others Key management personnel Relatives of key management personnel Total insurance premium received Gain/(loss) on forex and derivative transactions (net)2 Associates/others Key management personnel Relatives of key management personnel Total gain/(loss) on forex and derivative transactions (net) Dividend income Associates/others Total dividend income Reimbursement of expenses to the Group Associates/others Key management personnel Relatives of key management personnel Total reimbursement of expenses to the Group Recovery of lease of premises, common corporate and facilities expenses Associates/others Key management personnel Relatives of key management personnel Total recovery of lease of premises, common corporate and facilities expenses Year ended March 31, 2019 ` in million Year ended March 31, 2018 264.7 11.7 0.01 276.4 58.3 1.2 0.2 59.7 0.1 - - 0.1 24.5 1.1 3.4 29.0 0.1 - - 0.1 63.8 63.8 - - - - 59.7 - - 59.7 212.6 9.0 0.1 221.7 25.1 0.5 0.01 25.6 0.1 - - 0.1 34.0 2.6 4.6 41.2 (0.0)1 - - (0.0)1 63.8 63.8 3.3 - - 3.3 69.2 - - 69.2 281 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Recovery of secondment of employees Associates/others Total recovery of secondment of employees Interest expense Associates/others Key management personnel Relatives of key management personnel Total interest expense Remuneration to wholetime directors3 Key management personnel Total remuneration to wholetime directors Reimbursement of expenses to related parties Associates/others Key management personnel Relatives of key management personnel Total reimbursement of expenses to related parties Insurance claims paid Associates/others Key management personnel Relatives of key management personnel Total insurance claims paid Brokerage, fee and other expenses Associates/others Key management personnel Relatives of key management personnel Total brokerage, fee and other expenses Donation given Associates/others Total donation given Dividend paid Associates/others Key management personnel Relatives of key management personnel Total dividend paid Investments in the securities issued by related parties Associates/others Total investments in the securities issued by related parties Redemption/buyback of investments Associates/others Total redemption/buyback of investments Sale of fixed assets Associates/joint ventures/others Key management personnel Relatives of key management personnel Total sale of fixed assets 282 Year ended March 31, 2019 ` in million Year ended March 31, 2018 9.4 9.4 7.8 4.2 1.7 13.7 270.5 270.5 0.1 - - 0.1 - 0.1 - 0.1 9,649.2 - - 9,649.2 1,031.0 1,031.0 - 10.5 3.1 13.6 10,000.0 10,000.0 534.7 534.7 - 7.2 - 7.2 8.7 8.7 5.4 10.2 3.1 18.7 232.9 232.9 0.1 - - 0.1 0.1 - 0.4 0.5 7,030.4 - - 7,030.4 1,182.2 1,182.2 - 8.5 0.01 8.5 12,907.0 12,907.0 647.2 647.2 - - - - CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS1. Insignificant amount. 2. The Bank undertakes derivative transactions with its subsidiaries, associates, joint ventures and other related entities. The Bank manages its foreign exchange and interest rate risks arising from these transactions by covering them in the market. While the Bank within its overall position limits covers these transactions in the market, the above amounts represent only the transactions with its subsidiaries, associates, joint ventures and other related entities and not the offsetting/covering transactions. 3. Excludes the perquisite value on employee stock options exercised, contribution to gratuity fund and includes performance bonus paid during the period. III. Material transactions with related parties The following table sets forth, for the periods indicated, the material transactions between the Group and its related parties. A specific related party transaction is disclosed as a material related party transaction wherever it exceeds 10% of all related party transactions in that category. Particulars Year ended March 31, 2019 ` in million Year ended March 31, 2018 NIIT Institute of Finance Banking and Insurance Training Limited India Infradebt Limited India Infradebt Limited India Infradebt Limited India Infradebt Limited ICICI Foundation for Inclusive Growth ICICI Foundation for Inclusive Growth Arteria Technologies Private Limited3 ICICI Merchant Services Private Limited India Infradebt Limited Interest income 1 Fee, commission and other income 1 Commission income on guarantees issued 1 Insurance premium received 1 2 Mr. Vivek Mulye Gain/(loss) on forex and derivative transactions (net)2 1 2 3 Dividend income 1 Reimbursement of expenses to the Group 1 Recovery of lease of premises, common corporate and facilities expenses 1 Recovery of secondment of employees 1 Interest expense 1 2 3 4 Ms. Chanda Kochhar4 Remuneration to wholetime directors5 1 Mr. Sandeep Bakhshi6 2 Ms. Vishakha Mulye 3 Mr. Vijay Chandok 4 Mr. Anup Bagchi 5 Mr. N. S. Kannan7 6 Ms. Chanda Kochhar4 Reimbursement of expenses to related parties 1 Insurance claims paid 1 2 Mr. Anup Bagchi 3 Mr. Deepak Kochhar4 ICICI Foundation for Inclusive Growth India Infradebt Limited Arteria Technologies Private Limtited3 I-Process Services (India) Private Limited I-Process Services (India) Private Limited NIIT Institute of Finance Banking and Insurance Training Limited 261.4 58.3 0.1 20.5 3.1 0.1 - - 63.8 - 56.2 9.4 2.3 2.2 1.6 3.0 47.2 50.2 45.5 44.1 9.4 74.1 0.1 - 0.1 - 212.6 23.4 0.1 30.0 3.2 N.A. (0.0)1 (0.0)1 63.8 3.3 63.6 8.7 2.4 1.7 N.A. 9.5 N.A. 43.1 44.1 37.3 45.1 63.3 0.1 0.1 - 0.4 283 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Year ended March 31, 2019 ` in million Year ended March 31, 2018 1,182.2 1,031.0 4,600.8 2,415.9 5,463.4 4,174.7 India Infradebt Limited 3.2 2.6 0.01 0.1 - 4.6 1.6 ICICI Foundation for Inclusive Growth I-Process Services (India) Private Limited ICICI Merchant Services Private Limited Brokerage, fee and other expenses 1 2 Donation given 1 Dividend paid 1 Mr. Sandeep Bakhshi6 2 Ms. Vishakha Mulye 3 Mr. Vijay Chandok 4 Mr. Anup Bagchi 5 Mr. N. S. Kannan7 6 Ms. Chanda Kochhar4 7 Mr. Shivam Bakhshi6 Investments in the securities issued by related parties 1 Redemption/buyback of investments 1 2 Sale of fixed assets 1 Ms. Chanda Kochhar4 Insignificant amount. 1. The Bank undertakes derivative transactions with its subsidiaries, associates, joint ventures and other related entities. The Bank 2. manages its foreign exchange and interest rate risks arising from these transactions by covering them in the market. While the Bank within its overall position limits covers these transactions in the market, the above amounts represent only the transactions with its subsidiaries, associates, joint ventures and other related entities and not the offsetting/covering transactions. Identified as related party effective from May 29, 2018. Ceased to be related party effective from October 4, 2018. Excludes the perquisite value on employee stock options exercised, contribution to gratuity fund and includes performance bonus paid during the period. Identified as related party effective from June 19, 2018. Ceased to be related party effective close of business hours on June 18, 2018. India Advantage Fund-III India Advantage Fund-IV N.A. 1.7 0.01 0.01 1.1 5.7 N.A. 260.8 386.4 272.7 262.0 10,000.0 12,907.0 3. 4. 5. 6. 7. 7.2 - IV. Related party outstanding balances The following table sets forth, for the periods indicated, the outstanding balances payable to/receivable from related parties. Items Deposits with the Group Associates/others Key management personnel Relatives of key management personnel Total deposits with the Group Payables Associates/others Key management personnel Relatives of key management personnel Total payables Investments of the Group Associates/others Key management personnel 284 At March 31, 2019 ` in million At March 31, 2018 522.9 63.2 13.5 599.6 1,797.1 0.01 0.01 1,797.1 10,777.0 - 1,069.6 146.1 120.8 1,336.5 761.0 0.01 0.01 761.0 6,939.3 - CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Items Relatives of key management personnel Total investments of the Group Investments of related parties in the Group Associates/others Key management personnel Relatives of key management personnel Total investments of related parties in the Group Advances by the Group Associates/others Key management personnel Relatives of key management personnel Total advances by the Group Receivables Associates/others Key management personnel Relatives of key management personnel Total receivables Guarantees issued by the Group Associates/others Key management personnel Relatives of key management personnel Total guarantees issued by the Group 1. 2. Items Deposits with the Group Key management personnel Relatives of key management personnel Payables1 Key management personnel Relatives of key management personnel Investments of related parties in the Group1 Key management personnel Relatives of key management personnel Advances by the Group Key management personnel Relatives of key management personnel 1. 2. At March 31, 2019 - 10,777.0 ` in million At March 31, 2018 - 6,939.3 - 6.5 9.5 16.0 45.0 254.1 0.4 299.5 123.0 - - 123.0 11.2 - - 11.2 - 10.7 0.01 10.7 - 161.1 0.7 161.8 85.7 - - 85.7 1.1 - - 1.1 Year ended March 31, 2019 ` in million Year ended March 31, 2018 234.6 175.3 0.02 0.1 21.5 9.5 198.2 550.5 0.1 0.1 10.7 0.02 Insignificant amount. At March 31, 2019, 20,022,000 (March 31, 2018: 38,444,750) employee stock options for key management personnel were outstanding. Excludes stock options granted to key management personnel, which are pending regulatory approvals. During the year ended March 31, 2019, 2,062,000 (year ended March 31, 2018: 408,119), employee stock options with total exercise price of ` 296.3 million (year ended March 31, 2018: ` 60.0 million) were exercised by the key management personnel. 3. V. Related party maximum balances The following table sets forth, for the periods indicated, the maximum balances payable to/receivable from related parties. 203.6 3.1 Maximum balance is determined based on comparison of the total outstanding balances at each quarter end during the financial year. Insignificant amount. 256.2 0.9 285 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 3. Employee Stock Option Scheme (ESOS) ICICI Bank: In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial year shall not exceed 0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of all such options granted to the eligible employees shall not exceed 10% of the aggregate number of the issued equity shares of the Bank on the date(s) of the grant of options in line with SEBI Regulations. Under the stock option scheme, eligible employees are entitled to apply for equity shares. In April 2016, exercise period was modified from 10 years from the date of grant or five years from the date of vesting, whichever is later, to 10 years from the date of vesting of options. In June 2017, exercise period was further modified to not exceed 10 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee to be applicable for future grants. In May 2018, exercise period was further modified to not exceed 5 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee to be applicable for future grants. Options granted after March 2014, vest in a graded manner over a three-year period with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 12 months from the date of grant other than certain options granted in April 2014 which vested to the extent of 50% on April 30, 2017 and the balance vested on April 30, 2018 and option granted in September 2015 which vested to the extent of 50% on April 30, 2018 and balance 50% would vest on April 30, 2019. However, for the options granted in September 2015, if the participant’s employment terminates due to retirement (including pursuant to any early/voluntary retirement scheme), all the unvested options would lapse. Options granted in January 2018 would vest at the end of four years from the date of grant. Certain options granted in May 2018, would vest to the extent of 50% on May 7, 2021 and balance 50% would vest on May 7, 2022 and any unvested options would lapse upon termination of employment due to retirement (including pursuant to early/voluntary retirement scheme). Options granted prior to March 2014 except mentioned below, vested in a graded manner over a four-year period, with 20%, 20%, 30% and 30% of the grants vesting in each year, commencing from the end of 12 months from the date of grant. Options granted in April 2009 vested in a graded manner over a five-year period with 20%, 20%, 30% and 30% of grant vesting each year, commencing from the end of 24 months from the date of grant. Options granted in September 2011 vested in a graded manner over a five-year period with 15%, 20%, 20% and 45% of grant vesting each year, commencing from the end of 24 months from the date of the grant. The exercise price of the Bank’s options, except mentioned below, is the last closing price on the stock exchange, which recorded highest trading volume preceding the date of grant of options. In February 2011, the Bank granted 16,692,500 options to eligible employees and wholetime Directors of the Bank and certain of its subsidiaries at an exercise price of ` 175.82. This exercise price was the average closing price on stock exchange during the six months ended October 28, 2010. Of these options granted, 50% vested on April 30, 2014 and the balance 50% vested on April 30, 2015. Based on intrinsic value of options, no compensation cost was recognised during the year ended March 31, 2019 (year ended March 31, 2018: Nil). If the Bank had used the fair value of options based on binomial tree model, compensation cost in the year ended March 31, 2019 would have been higher by ` 3,179.0 million (year ended March 31, 2018: ` 3,526.6 million) and proforma profit after tax would have been ` 30,454.0 million (year ended March 31, 2018: ` 64,247.6 million). On a proforma basis, the Bank’s basic and diluted earnings per share would have been ` 4.73 (year ended March 31, 2018: ` 10.01) and ` 4.68 (March 31, 2018: ` 9.91) respectively for the year ended March 31, 2019. 286 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, for the periods indicated, the key assumptions used to estimate the fair value of options granted. Particulars Risk-free interest rate Expected life Expected volatility Expected dividend yield Year ended March Year ended 31, 2018 March 31, 2019 7.06% to 7.59% 7.32% to 8.31% 3.64 to 6.64 years 3.90 to 6.90 years 30.79% to 32.22% 31.71% to 32.92% 0.73% to 1.81% 0.43% to 0.80% The weighted average fair value of options granted during the year ended March 31, 2019 was ` 107.22 (year ended March 31, 2018: ` 86.43). Risk free interest rates over the expected term of the option are based on the government securities yield in effect at the time of the grant. The expected term of an option is estimated based on the vesting term as well as expected exercise behaviour of the employees who receive the option. Expected exercise behaviour is estimated based on the historical stock option exercise pattern of the Bank. Expected volatility during the estimated expected term of the option is based on historical volatility determined based on observed market prices of the Bank's publicly traded equity shares. Expected dividends during the estimated expected term of the option are based on recent dividend activity. The following table sets forth, for the periods indicated, the summary of the status of the Bank’s stock option plan. Particulars Stock options outstanding ` except number of options Outstanding at the beginning of the year Add: Granted during the year1 Less: Lapsed during the year, net of re-issuance Less: Exercised during the year Outstanding at the end of the year Options exercisable 1. Year ended March 31, 2019 Year ended March 31, 2018 Number of options Weighted average exercise price Number of options Weighted average exercise price 235,672,250 35,419,900 20,415,499 18,248,877 232,427,774 152,151,329 224.19 283.91 229.88 191.04 235.40 222.84 226,715,682 35,137,770 217.12 251.05 5,114,174 21,067,028 235,672,250 136,428,736 248.30 187.00 224.19 208.44 Includes stock options granted to WTDs which are pending regulatory approvals. The following table sets forth, the summary of stock options outstanding at March 31, 2019 Range of exercise price (` per share) 60-99 100-199 200-299 300-399 Number of shares arising out of options 1,602,975 33,771,457 196,076,442 976,900 Weighted average exercise price (` per share) 79.15 166.66 248.04 329.56 Weighted average remaining contractual life (number of years) 3.84 4.23 8.11 8.64 287 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS The following table sets forth, the summary of stock options outstanding at March 31, 2018. Range of exercise price (` per share) 60-99 100-199 200-299 300-399 Number of shares arising out of options Weighted average exercise price (` per share) 1,849,150 47,665,539 185,857,561 300,000 79.12 165.43 240.57 309.50 Weighted average remaining contractual life (number of years) 4.91 4.85 9.43 13.79 The options were exercised regularly throughout the period and weighted average share price as per National Stock Exchange price volume data during the year ended March 31, 2019 was ` 326.37 (year ended March 31, 2018: ` 296.94) ICICI Life: ICICI Prudential Life Insurance Company has formulated ESOS for their employees. There is no compensation cost for the year ended March 31, 2019 based on the intrinsic value of options. If the entity had used the fair value approach for accounting of options, there would have been an incremental compensation cost of ` 316.8 million for the year ended March 31, 2019 (for the year ended March 31, 2018: ` 39.7 million). The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI Prudential Life Insurance Company. Particulars Stock options outstanding ` except number of options Year ended March 31, 2019 Year ended March 31, 2018 Number of shares Weighted average exercise price Number of shares Weighted average exercise price Outstanding at the beginning of the year Add: Granted during the year Less: Forfeited/lapsed during the year Less: Exercised during the year Outstanding at the end of the year Options exercisable 2,820,888 7,304,150 2,115,950 285,771 7,723,317 273,037 382.70 387.62 399.14 164.40 390.92 355.79 2,398,838 656,300 82,650 151,600 2,820,888 2,193,488 352.49 468.60 410.92 261.08 382.70 358.13 The following table sets forth, summary of stock options outstanding of ICICI Prudential Life Insurance Company at March 31, 2019. Range of exercise price (` per share) 100-299 300-399 400-499 Number of shares arising out of options 90,967 7,025,450 606,900 Weighted average exercise price (` per share) 130.00 387.58 468.60 Weighted average remaining contractual life (number of years) 1.1 7.1 10.4 288 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS  The following table sets forth, summary of stock options outstanding of ICICI Prudential Life Insurance Company at March 31, 2018. Range of exercise price (` per share) 100-299 300-400 401-500 Number of shares arising out of options Weighted average exercise price (` per share) 340,113 1,853,375 627,400 130.00 400.00 468.60 Weighted average remaining contractual life (number of years) 2.1 0.1 11.4 ICICI General: ICICI Lombard General Insurance Company has formulated ESOS for their employees. There is no compensation cost for the year ended March 31, 2019 based on the intrinsic value of options. If the entity had used the fair value approach for accounting of options, there would have been an incremental compensation cost of ` 176.2 million for the year ended March 31, 2019 (for the year ended March 31, 2018: Nil). The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI Lombard General Insurance Company. Particulars Stock options outstanding ` except number of options Outstanding at the beginning of the year Add: Granted during the year Less: Forfeited/lapsed during the year Less : Exercised during the year Outstanding at the end of the year Options exercisable Year ended March 31, 2019 Year ended March 31, 2018 Number of shares 495,140 2,529,700 17,700 361,640 2,645,500 2,645,500 Weighted average exercise price 103.28 715.15 715.15 102.50 684.37 684.37 Number of shares 3,180,324 - 21,250 2,663,934 495,140 495,140 Weighted average exercise price 125.83 - 113.06 130.13 103.28 103.28 The following table sets forth, summary of stock options outstanding of ICICI Lombard General Insurance Company at March 31, 2019. Range of exercise price (` per share) 35-99 100-200 700-799 Number of shares arising out of options 16,000 117,500 2,512,000 Weighted average exercise price (` per share) 60.00 111.45 715.15 Weighted average remaining contractual life (number of years) 1.1 1.6 4.3 The following table sets forth, summary of stock options outstanding of ICICI Lombard General Insurance Company at March 31, 2018. Range of exercise price (` per share) 35 to 99 100 to 200 Number of shares arising out of options Weighted average exercise price (` per share) 147,140 348,000 80.89 112.74 Weighted average remaining contractual life (number of years) 1.34 2.31 289 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS ICICI Securities: ICICI Securities Limited has formulated ESOS for their employees. There is no compensation cost for the year ended March 31, 2019 based on the intrinsic value of options. If the entity had used the fair value approach for accounting of options, there would have been an incremental compensation cost of ` 4.1 million for the year ended March 31, 2019 (for the year ended March 31, 2018: Nil). The following table sets forth, for the periods indicated, a summary of the status of the stock option plan of ICICI Securities Limited. ` except number of options Particulars Stock options outstanding Outstanding at the beginning of the year Add: Granted during the year Less: Forfeited/lapsed during the year Less: Exercised during the year Outstanding at the end of the year Options exercisable Year ended March 31, 2019 Year ended March 31, 2018 Number of shares - 176,700 - - 176,700 - Weighted average exercise price - 256.55 - - 256.55 - Number of shares - - - - - - Weighted average exercise price - - - - - - The following table sets forth, summary of stock options outstanding of ICICI Securities Limited at March 31, 2019. Range of exercise price (` per share) 200-299 Number of shares arising out of options 176,700 Weighted average exercise price (` per share) 256.55 Weighted average remaining contractual life (number of years) 6.55 The following table sets forth, summary of stock options outstanding of ICICI Securities Limited at March 31, 2018. Range of exercise price (` per share) Number of shares arising out of options Weighted average exercise price (` per share) Weighted average remaining contractual life (number of years) Nil If the Group had used the fair value of options based on the binomial tree model, the compensation cost for the year ended March 31, 2019 would have been higher by ` 3,368.9 million (March 31, 2018: ` 3,417.2 million) and proforma consolidated profit after tax would have been ` 39,173.5 million (March 31, 2018: ` 73,704.6 million). On a proforma basis, the Group’s basic earnings per share would have been ` 6.09 (March 31, 2018: ` 11.49) and diluted earnings per share would have been ` 6.01 (March 31, 2018: ` 11.37). 4. Fixed assets The following table sets forth, for the periods indicated, the movement in software acquired by the Group, as included in fixed assets. Particulars At cost at March 31 of preceding year Additions during the year Deductions during the year Depreciation to date Net block 290 At March 31, 2019 ` in million At March 31, 2018 24,306.2 3,060.7 (3,760.5) (17,933.7) 5,672.7 20,348.6 4,062.4 (104.8) (18,678.7) 5,627.5 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 5. Assets on lease 5.1 Assets taken under operating lease The following table sets forth, for the periods indicated, the details of future rentals payable on operating leases. Particulars At March 31, 2019 ` in million At March 31, 2018 Not later than one year Later than one year and not later than five years Later than five years Total The terms of renewal are those normally prevalent in similar agreements and there are no undue restrictions in the agreements. 673.4 1,786.2 507.3 2,966.9 510.1 1,628.9 664.1 2,803.1 5.2 Assets under finance lease The following table sets forth, for the periods indicated, the details of finance leases. Particulars Future minimum lease receipts Present value of lease receipts Unmatured finance charges Sub total Less: collective provision Total Maturity profile of future minimum lease receipts - Not later than one year - Later than one year and not later than five years - Later than five years Sub total Less: collective provision Total At March 31, 2019 ` in million At March 31, 2018 1,417.8 89.1 1,506.9 (2.8) 1,504.1 406.5 951.3 149.1 1,506.9 (2.8) 1,504.1 1,136.8 77.5 1,214.3 (3.0) 1,211.3 281.8 788.7 143.8 1,214.3 (3.0) 1,211.3 Maturity profile of present value of lease rentals The following table sets forth, for the periods indicated, the details of maturity profile of present value of finance lease receipts. Particulars Maturity profile of future present value of finance lease receipts - Not later than one year - Later than one year and not later than five years - Later than five years Sub total Less: collective provision Total At March 31, 2019 ` in million At March 31, 2018 372.7 897.4 147.7 1,417.8 (2.8) 1,415.0 256.4 740.2 140.2 1,136.8 (3.0) 1,133.8 291 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 6. Preference shares During the year ended March 31, 2019, the Bank redeemed preference shares of ` 3,500.0 million after obtaining requisite approval from RBI. The Bank has created capital redemption reserve of ` 3,500.0 million as required under the Companies Act, 2013, out of surplus profits available for previous years. 7. Provisions and contingencies The following table sets forth, for the periods indicated, the break-up of provisions and contingencies included in the profit and loss account. Particulars Provision for depreciation of investments Provision towards non-performing and other assets Provision towards income tax - Current1 - Deferred Other provisions and contingencies2 Total provisions and contingencies 1. Year ended March 31, 2019 ` in million Year ended March 31, 2018 3,591.3 176,113.9 48,082.8 (30,891.8) 24,913.0 221,809.2 19,489.3 147,516.1 40,782.1 (21,992.9) 12,724.2 198,518.8 During the year ended March 31, 2018, the Bank has recognised Minimum Alternate Tax (MAT) credit as an asset amounting to ` 2,178.0 million, as the normal income tax liability related to the year ended March 31, 2017 was less than the MAT computed as per Section 115JB of the Income tax Act, 1961. The MAT asset was fully utilised against the normal income tax liability for the year ended March 31, 2018. Includes general provision made towards standard assets, provision on fixed assets acquired under debt-asset swap and non-fund based facilities. 2. The Group has assessed its obligations arising in the normal course of business, including pending litigations, proceedings pending with tax authorities and other contracts including derivative and long term contracts. In accordance with the provisions of Accounting Standard - 29 on ‘Provisions, Contingent Liabilities and Contingent Assets’, the Group recognises a provision for material foreseeable losses when it has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. In cases where the available information indicates that the loss on the contingency is reasonably possible or the amount of loss cannot be reasonably estimated, a disclosure to this effect is made as contingent liabilities in the financial statements. The Group does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. For insurance contracts booked in its life insurance subsidiary, reliance has been placed on the Appointed Actuary for actuarial valuation of ‘liabilities for policies in force’. The Appointed Actuary has confirmed that the assumptions used in valuation of liabilities for policies in force are in accordance with the guidelines and norms issued by the IRDAI and the Institute of Actuaries of India in concurrence with the IRDAI. 8. Staff retirement benefits Pension The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for pension benefits. Particulars Opening obligations Service cost Interest cost Actuarial (gain)/loss Liabilities extinguished on settlement 292 Year ended March 31, 2019 15,391.1 232.2 1,123.7 1,803.8 (1,833.7) ` in million Year ended March 31, 2018 16,686.9 275.0 1,113.1 (1,162.8) (1,399.0) CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Benefits paid Obligations at the end of year Opening plan assets, at fair value Expected return on plan assets Actuarial gain/(loss) Assets distributed on settlement Contributions Benefits paid Closing plan assets, at fair value Fair value of plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Amount not recognised as an asset (limit in Para 59(b) of AS 15 on ‘employee benefits’) Asset/(liability) Cost1 Service cost Interest cost Expected return on plan assets Actuarial (gain)/loss Curtailments & settlements (gain)/loss Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ Net cost Actual return on plan assets Expected employer’s contribution next year Investment details of plan assets Insurer managed funds Government of India securities Corporate bonds Equity securities in listed companies Others Assumptions Discount rate Salary escalation rate: On Basic pay On Dearness relief Estimated rate of return on plan assets 1. Year ended March 31, 2019 (176.8) 16,540.3 16,303.7 1,381.1 (125.9) (2,037.4) 94.1 (176.8) 15,438.8 15,438.8 (16,540.3) ` in million Year ended March 31, 2018 (122.1) 15,391.1 16,888.1 1,433.4 (449.6) (1,554.5) 108.4 (122.1) 16,303.7 16,303.7 (15,391.1) - (1,101.5) 232.2 1,123.7 (1,381.1) 1,929.7 203.7 (310.1) 1,798.1 1,255.2 1,000.0 1.00% 49.63% 44.91% 3.55% 0.91% 7.05% (310.1) 602.5 275.0 1,113.1 (1,433.4) (713.2) 155.5 241.8 (361.2) 983.8 3,000.0 0.88% 48.98% 43.48% 6.00% 0.66% 7.45% 1.50% 7.00% 8.00% 1.50% 7.00% 8.00% Included in line item ‘Payments to and provision for employees’ of Schedule 16- Operating expenses. Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations. 293 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Experience adjustment Particulars Plan assets Defined benefit obligations Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) Surplus/(deficit) Experience adjustment on plan assets Experience adjustment on plan liabilities Year ended March 31, 2019 15,438.8 (16,540.3) Year ended March 31, 2018 16,303.7 (15,391.1) Year ended March 31, 2017 16,888.1 (16,686.9) Year ended March 31, 2016 13,191.6 (14,191.6) ` in million Year ended March 31, 2015 10,103.4 (12,999.9) - (1,101.5) (310.1) 602.5 (125.9) (449.6) (68.4) 132.8 589.5 - (1,000.0) - (2,896.5) (4.1) 104.7 1,038.6 290.1 (80.0) 1,503.4 1,271.2 Gratuity The following table sets forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for gratuity benefits of the Group. Particulars Opening obligations Add: Adjustment for exchange fluctuation on opening obligation Adjusted opening obligations Service cost Interest cost Actuarial (gain)/loss Past service cost Obligations transferred from/to other companies Benefits paid Obligations at the end of the year Opening plan assets, at fair value Expected return on plan assets Actuarial gain/(loss) Contributions Assets transferred from/to other companies Benefits paid Closing plan assets, at fair value Fair value of plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Unrecognised past service cost Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) Asset/(liability) Cost for the year1 Year ended March 31, 2019 11,846.6 3.0 11,849.6 1,248.2 919.1 473.9 - (7.4) (1,166.3) 13,317.1 10,972.1 873.5 (62.0) 1,502.5 (7.4) (1,166.3) 12,112.4 12,112.4 (13,317.1) 0.0 ` in million Year ended March 31, 2018 11,172.6 0.4 11,173.0 1,178.2 775.8 (316.3) 16.1 33.4 (1,013.6) 11,846.6 10,443.4 830.2 (124.7) 803.4 33.4 (1,013.6) 10,972.1 10,972.1 (11,846.6) - - (1,204.7) - (874.5) 294 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Particulars Service cost Interest cost Expected return on plan assets Actuarial (gain)/loss Past service cost Losses/(gains) on "Acquisition/Divestiture" Exchange fluctuation loss/(gain) Effect of the limit in para 59(b) of AS 15 on ‘employee benefits’ Net cost Actual return on plan assets Expected employer’s contribution next year Investment details of plan assets Insurer managed funds Government of India securities Corporate bonds Special Deposit schemes Equity Others Assumptions Discount rate Salary escalation rate Estimated rate of return on plan assets 1. Year ended March 31, 2019 1,248.2 919.1 (873.5) 535.9 - - 3.0 - 1,832.6 811.5 1,138.0 ` in million Year ended March 31, 2018 1,178.2 775.8 (830.2) (191.6) 16.1 - 0.4 - 948.7 705.5 1,838.0 18.91% 24.24% 35.28% 2.40% 10.45% 8.71% 18.15% 22.50% 39.86% 2.66% 12.85% 3.98% 6.90%-7.80% 7.00%-10.00% 7.50%-8.00% 7.30%-7.85% 7.00%-10.00% 7.50%-8.00% Included in line item ‘Payments to and provision for employees’ of Schedule 16- Operating expenses. Estimated rate of return on plan assets is based on the expected average long-term rate of return on investments of the Fund during the estimated term of the obligations. Experience adjustment Particulars Plan assets Defined benefit obligations Amount not recognised as an asset (limit in para 59(b) of AS 15 on ‘employee benefits’) Surplus/(deficit) Experience adjustment on plan assets Experience adjustment on plan liabilities Year ended March 31, 2019 12,112.4 (13,317.1) Year ended March 31, 2018 10,972.1 (11,846.6) Year ended March 31, 2017 10,443.4 (11,172.6) Year ended March 31, 2016 8,361.6 (9,389.8) ` in million Year ended March 31, 2015 7,862.7 (8,470.2) - (1,204.7) - (874.5) - (729.2) - (1,028.2) - (607.5) (62.0) (124.7) 542.2 (398.1) 699.4 243.7 261.8 269.8 171.4 70.6 The estimates of future salary increases, considered in actuarial valuation, take into consideration inflation, seniority, promotion and other relevant factors. 295 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Provident Fund (PF) As there is no liability towards interest rate guarantee on exempt provident fund on the basis of actuarial valuation, the Group has not made any provision for the year ended March 31, 2019 (year ended March 31, 2018: Nil). The following tables set forth, for the periods indicated, movement of the present value of the defined benefit obligation, fair value of plan assets and other details for provident fund of the Group. Particulars Opening obligations Service cost Interest cost Actuarial (gain)/loss Employees contribution Obligations transferred from/to other companies Benefits paid Obligations at end of the year Opening plan assets Expected return on plan assets Actuarial gain / (loss) Employer contributions Employees contributions Assets transfer from/to other companies Benefits paid Closing plan assets Plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Asset/(liability) Cost for the year1 Service cost Interest cost Expected return on plan assets Actuarial (gain)/loss Net cost Actual return on plan assets Expected employer's contribution next year Investment details of plan assets Government of India securities Corporate Bonds Special deposit scheme Others Assumptions Discount rate Expected rate of return on assets Discount rate for the remaining term to maturity of investments Average historic yield on the investment Guaranteed rate of return 1. Year ended March 31, 2019 29,587.9 1,499.0 2,221.5 447.4 2,798.8 217.5 (3,489.7) 33,282.4 29,587.9 2,656.0 13.0 1,499.0 2,798.8 217.4 (3,489.7) 33,282.4 33,282.4 (33,282.4) - ` in million Year ended March 31, 2018 26,198.8 1,380.7 1,757.2 501.7 2,619.1 354.5 (3,224.1) 29,587.9 26,198.8 2,274.0 (15.1) 1,380.7 2,619.1 354.5 (3,224.1) 29,587.9 29,587.9 (29,587.9) - 1,499.0 2,221.5 (2,656.0) 434.4 1,498.9 2,669.0 1,605.8 48.63% 44.12% 1.63% 5.63% 1,380.7 1,757.2 (2,274.0) 516.8 1,380.7 2,258.8 1,479.1 47.65% 45.17% 1.84% 5.34% 6.95%-7.40% 8.21%-8.75% 7.30%-7.65% 8.48%-8.91% 8.65%-8.65% 7.35%-7.60% 8.18%-8.95% 7.55%-8.05% 8.28%-8.95% 8.55%-8.65% Included in line item ‘Payments to and provision for employees’ of Schedule 16- Operating expenses 296 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Experience adjustment Particulars Plan assets Defined benefit obligations Amount not recognised as an asset (limit in para 59(b)) AS 15 on‘employee benefits’) Surplus/(deficit) Experience djustment on plan assets Experience adjustment on plan liabilities Year ended March 31, 2019 33,282.4 (33,282.4) Year ended March 31, 2018 29,587.9 (29,587.9) Year ended March 31, 2017 26,198.8 (26,198.8) ` in million Year ended March 31, 2016 23,209.5 (23,209.5) - - 13.0 447.4 - - (15.1) 501.6 - - (8.3) 310.5 - - 27.1 252.5 The Group has contributed ` 2,842.6 million to provident fund including Government of India managed employees provident fund for the year ended March 31, 2019 (year ended March 31, 2018: ` 2,663.0 million), which includes compulsory contribution made towards employee pension scheme under Employees Provident Fund and Miscellaneous Provisions Act, 1952. Superannuation Fund The Group has contributed ` 240.2 million for the year ended March 31, 2019 (year ended March 31, 2018: ` 219.8 million) to Superannuation Fund for employees who had opted for the scheme. National Pension Scheme (NPS) The Group has contributed ` 132.6 million for the year ended March 31, 2019 (March 31, 2018: ` 114.0 million) to NPS for employees who had opted for the scheme. Compensated absence The following table sets forth, for the periods indicated, cost for compensated absence. Particulars Cost1 Assumptions Discount rate Salary escalation rate 1. Year ended March 31, 2019 888.6 ` in million Year ended March 31, 2018 799.9 6.90%-7.80% 7.00%-10.00% 7.30%-7.85% 7.00%-10.00% Included in line item ‘Payments to and provision for employees’ of schedule- 16 Operating expenses. 9. Provision for income tax The provision for income tax (including deferred tax) for the year ended March 31, 2019 amounted to ` 17,191.0 million (March 31, 2018: ` 18,789.2 million). The Group has a comprehensive system of maintenance of information and documents required by transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. The management is of the opinion that all transactions with international related parties and specified transactions with domestic related parties are primarily at arm's length so that the above legislation does not have material impact on the financial statements. 297 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 10. Deferred tax At March 31, 2019, the Group has recorded net deferred tax asset of ` 109,372.9 million (March 31, 2018: ` 78,183.0 million), which have been included in other assets. The following table sets forth, for the periods indicated, the break-up of deferred tax assets and liabilities into major items. Particulars Deferred tax assets Provision for bad and doubtful debts Foreign currency translation reserve1 Others Total deferred tax assets Deferred tax liabilities Special reserve deduction Mark-to-market gains1 Depreciation on fixed assets Interest on refund of taxes1 Others Total deferred tax liabilities Total net deferred tax assets/(liabilities) 1. At March 31, 2019 ` in million At March 31, 2018 134,571.6 283.0 14,529.5 149,384.1 31,535.8 543.4 4,905.5 2,632.6 393.9 40,011.2 109,372.9 103,939.1 861.2 9,863.4 114,663.7 29,671.7 346.5 5,084.3 1,077.1 301.1 36,480.7 78,183.0 These items are considered in accordance with the requirements of Income Computation and Disclosure Standards (ICDS). 11. Information about business and geographical segments A. Business Segments The business segments of the Group have been presented as follows: i. ii. iii. iv. Retail banking includes exposures of the Bank which satisfy the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures laid down in Basel Committee on Banking Supervision document ”International Convergence of Capital Measurement and Capital Standards: A Revised Framework“. This segment also includes income from credit cards, debit cards, third party product distribution and the associated costs. Wholesale banking includes all advances to trusts, partnership firms, companies and statutory bodies, by the Bank which are not included under Retail banking. Treasury includes the entire investment and derivative portfolio of the Bank and ICICI Strategic Investments Fund. Other banking includes leasing operations and other items not attributable to any particular business segment of the Bank. Further, it includes the Bank’s banking subsidiaries i.e. ICICI Bank UK PLC and ICICI Bank Canada. v. Life insurance represents results of ICICI Prudential Life Insurance Company Limited. 298 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS vi. General insurance represents results of ICICI Lombard General Insurance Company Limited. vii. Others includes ICICI Home Finance Company Limited, ICICI Venture Funds Management Company Limited, ICICI International Limited, ICICI Securities Primary Dealership Limited, ICICI Securities Limited, ICICI Securities Holdings Inc., ICICI Securities Inc., ICICI Prudential Asset Management Company Limited, ICICI Prudential Trust Limited, ICICI Investment Management Company Limited, ICICI Trusteeship Services Limited and ICICI Prudential Pension Funds Management Company Limited. Income, expenses, assets and liabilities are either specifically identified with individual segments or are allocated to segments on a systematic basis. All liabilities of the Bank are transfer priced to a central treasury unit, which pools all funds and lends to the business units at appropriate rates based on the relevant maturity of assets being funded after adjusting for regulatory reserve requirements. The transfer pricing mechanism of the Bank is periodically reviewed. The segment results are determined based on the transfer pricing mechanism prevailing for the respective reporting periods. The results of reported segments for the year ended March 31, 2019 are not comparable with that of reported segments for the year ended March 31, 2018 to the extent new entities have been consolidated and entities that have been discontinued from consolidation. 299 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 3 . 3 9 6 , 6 7 1 , 2 1 ) 9 . 3 3 5 , 7 4 1 ( 5 . 9 0 9 , 4 1 3 5 . 4 0 5 , 9 2 3 2 . 9 9 9 , 6 2 6 , 1 5 . 1 5 2 , 5 6 7 7 . 9 4 0 , 1 3 3 , 3 5 . 4 5 9 , 4 8 8 , 2 3 . 8 5 5 , 1 7 0 , 3 6 . 5 4 2 , 1 1 2 9 . 8 3 9 , 7 8 3 , 2 1 - 9 . 8 3 9 , 7 8 3 , 2 1 4 . 8 5 4 , 9 9 . 8 2 0 , 1 1 - ) 4 . 6 1 ( 3 . 0 7 9 1 . 5 3 4 3 . 8 0 6 3 . 9 5 1 , 1 2 . 7 6 5 1 . 5 4 2 , 1 3 . 1 5 2 8 . 3 9 1 - 4 . 0 4 . 6 6 9 , 1 0 . 1 1 1 , 2 5 . 6 3 4 , 5 0 . 9 5 5 , 5 9 . 8 3 9 , 7 8 3 , 2 1 4 ) 9 . 3 3 5 , 7 4 1 ( 4 7 . 2 1 0 , 8 1 3 4 4 . 8 1 0 , 4 3 3 4 7 . 1 2 3 , 9 2 6 , 1 4 4 . 7 5 8 , 7 8 6 4 4 . 8 1 7 , 1 0 8 , 2 2 . 4 8 7 , 4 7 8 , 1 0 . 0 6 7 , 9 8 8 , 4 l a t o T n o i l l i m n i ` - r e t n I t n e m g e s s t n e m t s u d a j e c n a r u s n i - 6 . 2 8 0 , 4 7 0 . 1 9 1 , 7 1 6 . 1 9 8 , 6 5 6 . 2 8 0 , 4 7 ) 4 . 3 9 7 , 2 1 ( 0 . 5 6 0 , 3 1 3 , 1 ) 4 . 0 0 3 , 8 3 7 ( 7 . 5 9 9 , 0 6 7 . 2 4 1 , 0 2 2 . 4 8 9 , 5 1 0 . 4 2 6 , 1 1 8 . 6 2 5 , 1 1 1 7 . 7 8 9 , 6 6 3 s r e h t O l a r e n e G e c n a r u s n i e f i L r e h t O y r u s a e r T e l a s e l o h W l i a t e R . 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f s t l u s e r t n e m g e s s s e n i s u b e h t , h t r o f s t e s l e b a t g n w o i l l o f e h T 300 s r a l u c i t r a P . r S . o N g n i k n a b s s e n i s u b 3 . 6 1 9 , 5 1 . 5 2 4 , 7 3 0 . 1 0 4 , 3 5 8 . 1 2 0 , 1 4 5 ) 4 . 3 2 4 , 2 0 1 ( 2 . 1 3 2 , 2 8 0 . 5 8 6 , 1 4 3 3 . 3 2 7 , 1 9 5 g n i k n a b g n i k n a b / ) t e n ( s e s n e p x e x a t e m o c n I ) t i d e r c x a t d e r r e f e d t e n ( 1 ) 3 ( – ) 2 ( t i f o r p g n i t a r e p O s e s n e p x e d e t a c o l l a n U 1 s t l u s e r t n e m g e S e u n e v e R ) 5 ( – ) 4 ( 2 t i f o r p t e N n o i t a m r o f n i r e h t O s t e s s a t n e m g e S ) 8 ( + ) 7 ( s t e s s a l a t o T 3 s t e s s a d e t a c o l l a n U s e i t i l i b a i l t n e m g e S s e i t i l i b a i l d e t a c o l l a n U ) 1 1 ( + ) 0 1 ( s e i t i l i b a i l l a t o T e r u t i d n e p x e l a t i p a C i n o i t a c e r p e D 1 2 3 4 5 6 7 8 9 0 1 1 1 2 1 3 1 4 1 . 1 . 2 . 3 . 4 . ) t e n ( s t e s s a x a t d e r r e f e d d n a ) t e n ( e c r u o s t a d e t c u d e d x a t / e c n a v d a n i i d a p x a t s e d u l c n I l . s u p r u s d n a s e v r e s e r d n a l a t i p a c e r a h s s e d u l c n I l . s r e d o h e r a h s y t i r o n m i f o t i f o r p t e n f o e r a h s s e d u l c n I . t s e r e t n i i y t i r o n m d n a x a t e r o f e b t i f o r P CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS n o i l l i m n i ` - r e t n I l a t o T t n e m g e s s r e h t O s t n e m t s u d a j l a r e n e G e f i L e c n a r u s n i e c n a r u s n i r e h t O g n i k n a b s s e n i s u b y r u s a e r T e l a s e l o h W l i a t e R g n i k n a b g n i k n a b s r a l u c i t r a P . r S . o N - 6 . 4 8 7 , 9 0 1 2 . 9 8 7 , 8 1 4 . 5 9 9 , 0 9 6 . 4 8 7 , 9 0 1 ) 8 . 7 6 1 , 2 1 ( 0 . 1 9 6 , 9 8 1 , 1 ) 6 . 4 3 6 , 0 4 6 ( 7 . 9 4 2 , 9 5 8 . 0 4 0 , 1 2 7 . 4 4 2 , 5 9 3 . 2 6 9 , 1 1 3 . 1 9 1 , 7 1 4 . 5 0 7 , 5 4 . 1 5 4 , 7 7 ) 0 . 3 1 8 , 2 8 ( 2 . 4 1 4 , 1 7 3 . 5 3 2 , 5 2 3 7 . 4 3 1 , 1 3 5 . 5 9 8 , 5 1 5 3 . 0 4 9 , 0 0 3 4 . 5 2 6 , 2 0 5 3 . 2 7 9 , 7 9 0 , 1 1 ) 3 . 8 5 7 , 4 5 1 ( 1 . 4 2 8 , 3 1 3 6 . 2 3 6 , 4 9 2 1 . 9 2 1 , 5 1 4 , 1 1 . 5 0 8 , 0 8 6 1 . 2 4 2 , 4 0 3 , 3 2 . 2 1 7 , 7 5 6 , 2 4 . 5 8 3 , 6 8 5 , 2 - 1 . 8 3 8 , 4 4 1 4 . 0 1 8 , 2 4 2 , 1 1 4 . 0 1 8 , 2 4 2 , 1 1 4 ) 3 . 8 5 7 , 4 5 1 ( 4 7 . 3 9 2 , 6 1 3 4 3 . 6 0 4 , 7 9 2 4 7 . 8 3 2 , 7 1 4 , 1 4 3 . 8 7 8 , 1 1 6 4 6 . 5 4 0 , 7 4 9 , 2 4 . 2 8 6 , 2 7 6 , 1 7 . 3 2 0 , 5 3 1 , 4 4 . 0 1 8 , 2 4 2 , 1 1 4 . 1 2 2 , 9 4 . 0 8 1 , 2 1 - ) 5 . 6 1 ( 3 . 1 6 4 0 . 6 6 3 1 . 8 7 4 5 . 6 4 5 8 . 6 3 4 6 . 0 3 4 , 2 6 . 9 8 5 . 3 2 1 3 . 4 2 7 . 7 1 8 . 2 0 3 , 1 8 . 1 8 0 , 1 7 . 3 9 3 , 7 6 . 5 6 6 , 6 / ) t e n ( s e s n e p x e x a t e m o c n I ) t i d e r c x a t d e r r e f e d t e n ( 1 ) 3 ( – ) 2 ( t i f o r p g n i t a r e p O s e s n e p x e d e t a c o l l a n U 1 s t l u s e r t n e m g e S e u n e v e R ) 5 ( – ) 4 ( 2 t i f o r p t e N n o i t a m r o f n i r e h t O s t e s s a t n e m g e S ) 8 ( + ) 7 ( s t e s s a l a t o T 3 s t e s s a d e t a c o l l a n U s e i t i l i b a i l t n e m g e S s e i t i l i b a i l d e t a c o l l a n U ) 1 1 ( + ) 0 1 ( s e i t i l i b a i l l a t o T e r u t i d n e p x e l a t i p a C i n o i t a c e r p e D . ) t e n ( s t e s s a x a t d e r r e f e d d n a ) t e n ( e c r u o s t a d e t c u d e d x a t / e c n a v d a n i i d a p x a t s e d u l c n I l . s u p r u s d n a s e v r e s e r d n a l a t i p a c e r a h s s e d u l c n I l . s r e d o h e r a h s y t i r o n m i f o t i f o r p t e n f o e r a h s s e d u l c n I . t s e r e t n i i y t i r o n m d n a x a t e r o f e b t i f o r P 1 2 3 4 5 6 7 8 9 0 1 1 1 2 1 3 1 4 1 . 1 . 2 . 3 . 4 301 . 8 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f s t l u s e r t n e m g e s s s e n i s u b e h t , h t r o f s t e s l e b a t g n w o i l l o f e h T CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS B. Geographical segments The Group has reported its operations under the following geographical segments. • Domestic operations comprise branches and subsidiaries/joint ventures in India. • Foreign operations comprise branches and subsidiaries/joint ventures outside India and offshore banking units in India. The Group conducts transactions with its customers on a global basis in accordance with their business requirements, which may span across various geographies. The following tables set forth, for the periods indicated, the geographical segment results. Revenue Domestic operations Foreign operations Total Assets Year ended March 31, 2019 1,248,986.2 64,078.8 1,313,065.0 At March 31, 2019 10,719,652.3 1,457,041.0 12,176,693.3 ` in million Year ended March 31, 2018 1,133,473.4 56,217.6 1,189,691.0 ` in million At March 31, 2018 9,632,242.3 1,465,730.0 11,097,972.3 Domestic operations Foreign operations Total Note: Segment assets do not include tax paid in advance/tax deducted at source (net) and deferred tax assets (net). The following table sets forth, for the periods indicated, capital expenditure and depreciation thereon for the geographical segments. Capital expenditure incurred during the ` in million Depreciation provided during the Year ended March 31, 2019 10,704.5 324.4 11,028.9 Year ended March 31, 2018 11,954.1 226.3 12,180.4 Year ended March 31, 2019 9,273.8 184.6 9,458.4 Year ended March 31, 2018 9,072.2 149.2 9,221.4 Domestic operations Foreign operations Total 12. Penalties/fines imposed by banking regulatory bodies The penalty imposed by RBI and other banking regulatory bodies during the year ended March 31, 2019 was ` 10.0 million (year ended March 31, 2018: ` 627.2 million). RBI through an order dated February 25, 2019, imposed a monetary penalty of ` 10.0 million on the Bank for delay in compliance with RBI’s directives on “Time-bound implementation & strengthening of SWIFT related controls”. 302 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 13. Additional information to consolidated accounts Additional information to consolidated accounts at March 31, 2019 (Pursuant to Schedule III of the Companies Act, 2013) Name of the entity Parent ICICI Bank Limited Subsidiaries Indian ICICI Securities Primary Dealership Limited ICICI Securities Limited ICICI Home Finance Company Limited ICICI Trusteeship Services Limited ICICI Investment Management Company Limited ICICI Venture Funds Management Company Limited ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Trust Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Pension Funds Management Company Limited Foreign ICICI Bank UK PLC ICICI Bank Canada ICICI International Limited ICICI Securities Holdings Inc. ICICI Securities Inc. Other consolidated entities Indian ICICI Strategic Investments Fund Foreign NIL Minority Interests in all subsidiaries Associates Indian I-Process Services (India) Private Limited NIIT Institute of Finance Banking and Insurance Training Limited ICICI Merchant Services Private Limited India Infradebt Limited India Advantage Fund III India Advantage Fund IV Arteria Technologies Private Limited Net assets1 % of total net assets Amount ` in million Share in profit or loss % of total net profit Amount 94.9% 1,083,680.4 79.1% 33,633.0 0.9% 0.9% 1.4% 0.0%2 0.0%2 0.2% 6.2% 5.0% 0.0%2 9,915.6 10,212.2 16,428.2 7.0 113.4 2,315.3 70,474.5 56,588.8 14.9 1.4% 11.5% 0.7% 0.0%2 0.0%2 1.6% 26.8% 24.7% 0.0%2 606.5 4,911.8 279.9 0.4 3.8 690.7 11,406.5 10,492.6 1.6 1.0% 11,184.4 16.1% 6,866.7 0.0%2 346.1 (0.0%)2 (17.2) 2.7% 2.6% 0.0%2 0.0%2 0.0%2 31,419.3 29,443.6 108.2 128.9 217.7 (8.7%) 6.6% 0.0%2 0.0%2 0.1%2 (3,696.6) 2,792.3 9.8 1.7 36.5 0.0%2 255.1 0.0%2 12.3 - (5.8%) - (65,805.4) - (33.7%) - (14,349.2) - - - - - - - - - - - - - - - - 0.0%2 0.0%2 1.8% 0.1%2 0.0%2 0.0% 4.7 1.1 766.6 39.6 1.6 2.8 303 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Name of the entity Foreign NIL Joint Ventures NIL Inter-company adjustments Total net assets/net profit 1. Total assets minus total liabilities. 2. Insignificant. Net assets1 % of total net assets Amount ` in million Share in profit or loss % of total net profit Amount - - - - - (10.0%) 100.0% - (114,514.1) 1,142,534.1 - (28.1%) 100.0% - (11,957.1) 42,542.4 Additional information to consolidated accounts at March 31, 2018 (Pursuant to Schedule III of the Companies Act, 2013) Name of the entity Parent ICICI Bank Limited Subsidiaries Indian ICICI Securities Primary Dealership Limited ICICI Securities Limited ICICI Home Finance Company Limited ICICI Trusteeship Services Limited ICICI Investment Management Company Limited ICICI Venture Funds Management Company Limited ICICI Prudential Life Insurance Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Trust Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Pension Funds Management Company Limited Foreign ICICI Bank UK PLC ICICI Bank Canada ICICI International Limited ICICI Securities Holdings Inc. ICICI Securities Inc. Other consolidated entities Indian ICICI Strategic Investments Fund Foreign NIL 304 Net assets1 Share in profit or loss % of total net assets Amount % of total net profit Amount ` in million 95.1% 1,051,589.4 87.9% 67,774.2 0.9% 0.7% 1.5% 0.0%2 0.0%2 0.2% 6.2% 4.8% 0.0%2 9,742.6 8,250.9 16,133.2 6.5 109.6 2,179.8 68,852.6 52,750.4 14.6 1.4% 7.2% 0.8% 0.0%2 0.0%2 0.1% 21.0% 11.2% 0.0%2 1,116.3 5,533.6 642.5 0.6 0.7 111.8 16,198.3 8,617.8 1.9 0.7% 8,233.3 8.1% 6,255.5 0.0%2 263.3 (0.0%)2 (6.6) 3.0% 2.5% 0.0%2 0.0%2 0.0%2 33,027.6 27,670.1 92.8 127.2 181.2 (2.1%) 2.9% 0.0%2 0.0%2 0.1% (1,646.7) 2,222.6 4.6 0.1 43.6 0.0%2 231.3 0.0%2 13.3 - - - - CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS Name of the entity Minority interests Associates Indian I-Process Services (India) Private Limited NIIT Institute of Finance Banking and Insurance Training Limited ICICI Merchant Services Private Limited India Infradebt Limited India Advantage Fund III India Advantage Fund IV Foreign NIL Joint Ventures NIL Inter-company adjustments Total net assets/net profit 1. 2. Total assets minus total liabilities. Insignificant Net assets1 Share in profit or loss % of total net assets (5.4%) Amount (60,081.9) % of total net profit (18.0%) Amount (13,873.6) ` in million - - - - - - - - - - - - - - - 0.0%2 - 0.6% 0.0%2 0.0%2 - 2.9 - 432.5 10.9 (7.9) - - - (10.2%) 100.0% - (113,077.5) 1,106,297.0 - (21.2%) 100.0% - (16,327.0) 77,121.9 14. Sale of equity shareholding in subsidiaries During the year ended March 31, 2019, the Bank sold 2.00% of its shareholding in ICICI Prudential Life Insurance Limited and made a net gain of ` 10,059.3 million on this sale. During the year ended March 31, 2018, the Bank sold approximately 7.00% of its shareholding in ICICI Lombard General Insurance Company Limited in the initial public offer (IPO) and made a net gain of ` 17,113.2 million on this sale. Further, the Bank sold approximately 20.78% of its shareholding in ICICI Securities Limited in the IPO and made a net gain of ` 32,081.6 million on this sale. 15. Divergence in asset classification and provisioning for NPAs In terms of the RBI circular no. //DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI’s annual supervisory process in their notes to accounts to the financial statements, wherever either (a) the additional provisioning requirements assessed by RBI exceed 10% of the reported net profits before provisions and contingencies (15% of the published net profits after tax for the year ended March 31, 2017) or (b) the additional gross NPAs identified by RBI exceed 15% of the published incremental gross NPAs for the reference period, or both. Based on the condition mentioned in RBI circular, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI’s supervisory process for the year ended March 31, 2018 and for the year ended March 31, 2017. 16. Revaluation of fixed assets The Bank and its housing finance subsidiary follow the revaluation model for their premises (land and buildings) other than improvements to leasehold property as per AS 10 – ‘Property, Plant and Equipment’. The Bank had initially revalued its premises at March 31, 2016 and its housing finance subsidiary revalued its premises at March 31, 2017. In accordance with the policy, annual revaluation is carried out through external valuers, using methodologies such as direct comparison method and income generation method and the incremental amount has been taken to revaluation reserve. The revalued amount at March 31, 2019 was ` 57,631.2 million (March 31, 2018: ` 57,416.0 million) as compared to the historical cost less accumulated depreciation of ` 26,926.8 million (March 31, 2018: ` 27,144.0 million). The revaluation reserve is not available for distribution of dividend. 305 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULESforming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS 17. Proposed dividend on equity and preference shares The Board of Directors at its meeting held on May 6, 2019 has recommended a dividend of ` 1 per equity share for the year ended March 31, 2019 (year ended March 31, 2018: ` 1.50 per equity share). The declaration and payment of dividend is subject to requisite approvals. 18. Dividend distribution tax Dividend received from Indian subsidiaries, on which dividend distribution tax has been paid by them and dividend received from overseas subsidiaries, on which tax has been paid under Section 115BBD of the Income Tax Act, 1961, have been reduced from dividend to be distributed by the Bank for the purpose of computation of dividend distribution tax as per section 115-O of the Income Tax Act, 1961. 19. Adoption of IFRS-9 by ICICI Bank Canada ICICI Bank Canada has adopted International Financial Reporting Standards (IFRS) 9- Financial Instruments for preparation of its financial statements from January 1, 2018. Accordingly, for financial statements of ICICI Bank Canada included in the consolidated financial statements, IFRS 9 has been adopted from April 1, 2018. The impact of ` 263.0 million (CAD 5.1 million) on first time adoption of IFRS 9 has been adjusted and shown in Schedule 2- Reserves and Surplus under balance in profit and loss account in the financials for the year ended March 31, 2019. 20. Additional disclosure Additional statutory information disclosed in the separate financial statements of the Bank and subsidiaries having no material bearing on the true and fair view on the consolidated financial statements and the information pertaining to the items which are not material have not been disclosed in the consolidated financial statements. 21. Comparative figures Figures of the previous year have been re-grouped to conform to the current year presentation. Signatures to Schedules 1 to 18 As per our Report of even date. For and on behalf of the Board of Directors For Walker Chandiok & Co LLP Girish Chandra Chaturvedi Chartered Accountants ICAI Firm Registration no.: 001076N/N500013 Chairman DIN-00110996 Khushroo B. Panthaky Partner Membership no.: 042423 Vishakha Mulye Executive Director DIN-00203578 Uday M. Chitale Director DIN-00043268 Vijay Chandok Executive Director DIN-01545262 Sandeep Bakhshi Managing Director & CEO DIN-00109206 Anup Bagchi Executive Director DIN-00105962 Place: Mumbai Date: May 6, 2019 Sandeep Batra President Ajay Mittal Chief Accountant Rakesh Jha Group Chief Financial Officer Ranganath Athreya Company Secretary 306 CONSOLIDATED FINANCIAL STATEMENTS OF ICICI BANK LIMITEDSCHEDULES forming part of the Consolidated Accounts (Contd.)ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS STATEMENT PURSUANT TO SECTION 129 OF COMPANIES ACT, 2013 n o i l l i m n i ` I C C I I I C C I I I C C I I k n a B I I C C I I C C I I I C C I I I C C I I I C C I I e r u t n e V C C I I I I C C I I I C C I I e m o H I C C I I I C C I I I C C I I I C C I I I C C I I l a i t n e d u r P l a i t n e d u r P l a i t n e d u r P 5 , 4 a d a n a C K U k n a B l a n o i t a n r e t n I d r a b m o L l a i t n e d u r P s d n u F t n e m t s e v n I i p h s e e t s u r T e c n a n i F s e i t i r u c e S s e i t i r u c e S s e i t i r u c e S s e i t i r u c e S I E T A C O S S A , I I I I S E R A D S B U S F O S T N E M E T A T S L A C N A N I F E H T F O S E R U T A E F T N E I L A S G N N A T N O C T N E M E T A T S I I I S E R U T N E V T N O J D N A S E N A P M O C I s e i r a i d i s b u S : ” A “ t r a P y n a p m o C 2 d e t i m L i t n e m e g a n a M y n a p m o C s d n u F n o i s n e P t e s s A t s u r T t n e m e g a n a M d e t i m L i 3 C L P 3 d e t i m L i l a r e n e G e f i L t n e m e g a n a M t n e m e g a n a M s e c i v r e S y n a p m o C 2 , 1 . c n I i s g n d o H l d e t i m L i d e t i m L i y n a p m o C y n a p m o C d e t i m L i d e t i m L i e c n a r u s n I e c n a r u s n I y n a p m o C y n a p m o C d e t i m L i 2 d e t i m L i 2 , 1 . c n I 2 d e t i m L i y r a m i r P 2 d e t i m L i i p h s r e l a e D s r a l u c i t r a P 1 d e t i m L i l i r p A 9 0 0 2 , 2 2 0 . 0 9 3 ) 9 . 3 4 ( 5 . 7 5 3 t s u g u A 5 0 0 2 , 6 2 t s u g u A r e b o t c O t s u g u A y r a u r b e F 5 0 0 2 , 6 2 3 0 0 2 , 3 1 3 0 0 2 , 9 1 8 9 9 1 , 7 2 l y u J 1 0 0 2 , 1 r e b o t c O 0 0 0 2 , 1 h c r a M 8 9 9 1 , 5 2 h c r a M 0 0 0 2 , 9 r e b m e t p e S r e b m e v o N e n u J e n u J h c r a M r e b m e t p e S e c n i s e t a d e h T 9 9 9 1 , 1 9 9 9 1 , 1 0 0 0 2 , 3 1 0 0 0 2 , 2 1 5 9 9 1 , 9 3 9 9 1 , 5 1 i y r a d i s b u s n e h w d e r i u q c a s a w 5 . 6 7 1 0 . 1 2 . 7 5 0 , 4 2 7 . 1 5 0 , 9 2 2 . 2 6 1 . 3 4 5 , 4 8 . 7 5 3 , 4 1 0 . 0 1 0 . 0 0 1 5 . 0 5 . 7 8 9 , 0 1 7 . 1 7 5 2 . 8 2 7 7 . 0 1 6 , 1 4 . 3 6 5 , 1 e r a h s p u - d a P i 3 . 5 0 6 , 1 1 9 . 8 5 8 , 3 1 9 . 3 1 3 . 5 1 2 . 7 9 7 , 5 6 . 7 6 3 , 2 0 . 6 4 7 . 5 4 0 , 2 5 5 . 9 0 1 , 6 5 3 . 5 0 3 , 2 5 . 4 7 0 , 1 4 3 3 . 6 6 5 , 5 6 2 2 . 9 0 1 2 . 6 2 0 , 4 3 3 3 . 3 0 9 , 0 3 6 , 1 4 . 1 7 0 , 3 4 . 3 1 2 . 4 1 1 5 . 6 8 . 7 7 . 0 4 8 , 5 ) 9 . 3 5 3 ( ) 3 . 9 9 5 ( 4 . 3 3 7 , 8 6 . 6 2 4 , 8 & s e v r e s e R l s u p r u S 6 l a t i p a c 6 . 5 8 2 , 9 3 1 9 . 8 3 3 0 . 9 2 1 6 . 2 6 4 , 6 4 7 . 3 9 6 , 6 1 1 s t e s s a l a t o T s e i t i l i b a i l l a t o T 4 . 1 1 1 . 7 7 0 , 2 4 . 0 1 . 0 2 2 , 1 1 3 0 . 7 4 1 , 4 3 2 0 . 1 4 . 7 3 4 , 7 7 2 9 . 5 3 4 , 0 6 5 , 1 1 . 6 5 7 8 . 0 8 . 0 4 . 7 5 4 , 2 2 1 2 . 1 2 1 2 . 0 5 . 8 1 1 , 6 3 7 . 3 0 7 , 6 0 1 ) s e v r e s e r d n a s t n e m t s e v n I l a t i p a c g n d u c x e ( l i 5 . 3 0 3 0 . 0 9 1 , 0 1 3 . 3 1 4 . 8 8 0 , 6 2 7 . 2 6 6 , 2 6 # 2 . 8 0 3 , 2 2 2 4 . 5 8 0 , 0 9 5 , 1 0 . 3 5 3 , 1 1 . 8 7 6 . 3 7 . 9 8 9 l i N 5 . 4 9 3 . 4 1 7 , 2 6 . 2 6 0 , 3 0 1 7 . 2 5 . 9 2 0 , 0 2 2 . 5 4 . 7 9 8 , 0 1 3 . 5 3 6 , 9 9 . 0 3 1 . 2 9 8 , 7 4 1 7 . 7 9 2 , 9 0 3 7 . 1 5 5 ) 2 . 7 1 ( 5 . 7 8 4 , 0 1 2 . 2 9 . 5 8 5 , 3 ) 8 . 5 2 1 , 4 ( 8 . 9 2 . 4 8 9 , 5 1 6 . 9 2 6 , 1 1 2 . 7 0 7 l i N 7 . 6 5 6 , 3 ) 2 . 7 1 ( 8 . 0 3 8 , 6 6 . 0 6 . 1 1 . 4 6 9 ) 7 . 9 6 4 ( l i N 6 . 1 9 4 , 5 1 . 3 2 2 5 . 6 1 8 . 1 2 6 , 2 ) 1 . 6 5 6 , 3 ( 8 . 9 6 . 2 9 4 , 0 1 5 . 6 0 4 , 1 1 7 . 0 9 6 l i N 0 . 5 2 . 1 8 . 3 5 . 0 6 . 0 2 . 0 4 . 0 4 . 0 8 5 , 1 1 6 . 0 0 2 l i N 0 . 2 4 0 , 7 1 7 . 0 6 1 , 1 1 9 . 0 3 6 4 . 9 1 0 . 2 0 . 1 5 5 , 7 3 . 2 3 0 , 1 n o i t a x a t e r o f e b 0 . 0 9 1 ) 1 . 7 1 ( 3 . 0 8 . 1 8 6 , 2 0 . 6 7 3 9 . 0 4 4 5 . 6 3 7 . 1 2 . 9 6 8 , 4 3 . 6 5 6 r e t f a ) s s o l ( / t i f o r P n o i t a x a t r o f n o i s i v o r P n o i t a x a t i l g n d u c n i ( d n e d v D i i e t a r o p r o c s s o r G ( r e v o n r u T n i t n e m t s e v n i i 7 ) s e i r a d i s b u s m o r f e m o c n i ) s n o i t a r e p o ) s s o l ( / t i f o r P i g n d u c n i ( l l i N 6 . 5 1 9 , 3 4 . 1 1 . 6 0 1 , 1 l i N l i N 7 . 6 3 7 , 2 2 . 0 8 4 , 8 5 . 5 5 5 l i N l i N l i N l i N l i N 1 . 1 5 9 , 2 5 . 3 3 4 % 0 0 . 0 0 1 % 0 0 . 1 5 % 0 8 . 0 5 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 7 8 . 5 5 % 7 8 . 2 5 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 0 0 . 0 0 1 % 2 2 . 9 7 % 0 0 . 0 0 1 8 ) x a t d n e d v d i i f o % i l g n d o h e r a h s s d n u F n o i s n e P l a i t n e d u r P I C C I I . c n I i l s g n d o H s e i t i r u c e S I I C C I i f o y r a d i s b u s d e n w o y l l o h w a s i . c n I s e i t i r u c e S I C C I I . d e t i m L i s e i t i r u c e S I C C I I i f o y r a d i s b u s d e n w o y l l o h w a s i . c n I i l s g n d o H s e i t i r u c e S I I C C I . 0 5 5 1 . 9 6 ` = D S U 1 f o 9 1 0 2 , 1 3 h c r a M t a e t a r g n i s o l c e h t t a s e e p u R n a d n i I o t n i d e t a l s n a r t n e e b s a h d e t i m L i l a n o i t a n r e t n I I C C I I d n a C L P K U k n a B I C C I I f o n o i t a m r o f n i l a i c n a n i f e h T . s e i t i t n e e s e h t y b S A d n I o t n o i t a r g m o t i t n a u s r u p s t n e m e t a t s l a i c n a n i f S A d n I y t i t n e e v i t c e p s e r r e p s a r e b m u N . 0 0 4 2 . 1 5 ` = D A C 1 f o 8 1 0 2 , 1 3 r e b m e c e D t a e t a r g n i s o l c e h t t a s e e p u R n a d n i I o t n i d e t a l s n a r t n e e b s a h a d a n a C k n a B I C C I I f o n o i t a m r o f n i l a i c n a n i f e h T . r a e y l a i c n a n i f r i e h t g n e b i , 8 1 0 2 , 1 3 r e b m e c e D o t 8 1 0 2 , 1 y r a u n a J d o i r e p e h t r o f s i a d a n a C k n a B I C C I I f o n o i t a m r o f n i l a i c n a n i f e h T e n o N : s n o i t a r e p o e c n e m m o c o t t e y e r a h c i h w s e i r a d i s b u s i f o s e m a N . y e n o m n o i t a c i l p p a e r a h s e d u l c n i t o n s e o d l a t i p a c e r a h s p u - d a P i . r a e y e h t g n i r u d d a p s e r a h s i y t i u q e n o d n e d i v i d s t n e s e r p e R . e d a r t n i k c o t s l s a d e h s e i t i r u c e s e d u l c n i s t n e m t s e v n I . d e t i m L i y n a p m o C e c n a r u s n I e f i L l a i t n e d u r P I C C I I i f o y r a d i s b u s d e n w o y l l o h w a s i d e t i m L i y n a p m o C t n e m e g a n a M . 1 . 2 . 3 . 4 . 5 . 6 . 7 . 8 . 9 e n o N : r a e y e h t g n i r u d d o s l r o d e t a d u q i i l n e e b e v a h h c i h w s e i r a d i s b u s i f o s e m a N . 0 1 307 n o i l l i m 1 . 0 n a h t s s e l t n u o m a # : s e t o N ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS STATEMENT PURSUANT TO SECTION 129 OF COMPANIES ACT, 2013 l i N % 9 3 . 6 2 4 e t o N 5 e t o N . A N . . A N . . A N . 7 7 1 , 5 4 4 , 0 2 8 9 9 , 1 6 . 9 8 % 8 9 . 9 1 3 e t o N . A N . 6 . 6 1 8 . 2 3 . 1 1 4 . 8 2 0 , 7 % 3 3 . 2 4 4 e t o N . A N . 8 . 6 9 9 , 6 6 . 6 6 7 3 . 2 3 1 , 1 2 . 1 0 4 % 1 0 . 9 1 3 e t o N . A N . 7 . 8 5 5 1 . 1 8 . 2 4 6 0 . 6 3 % 9 7 . 8 1 3 e t o N . A N . 6 . 4 2 7 . 4 1 . 0 2 7 0 0 , 1 6 3 , 7 6 3 0 0 0 , 2 8 5 , 5 7 0 0 0 , 0 0 9 , 1 l i N 0 8 8 , 9 % 0 0 . 9 1 3 e t o N . A N . ) 5 . 0 1 ( l i N 6 . 6 4 t e e h s l e c n a a b d e t i d u a t s e t a l i r e p s a g n d o h e r a h s o t l l e b a t u b i r t t a h t r o w t e N e r u t n e v t n o i j i / e t a c o s s a e h t f o n o i t a d i l o s n o c - n o n f o n o s a e R e c n e u l f n i t n a c i f i n g i s f o n o i t p i r c s e D 9 1 0 2 , 1 3 h c r a M d e d n e r a e y e h t r o f ) s s o l ( / t i f o r P n o i t a d i l o s n o c n i d e r e d i s n o c t o N n o i t a d i l o s n o c n i d e r e d i s n o C 2 s e r u t n e v i i t n o j / s e n a p m o c i e t a c o s s a n i t n e m t s e v n i f o t n u o m A s e r a h s y t i u q e f o r e b m u N 9 1 0 2 ) % i l ( g n d o h f o t n e t x E 8 1 0 2 , 1 3 h c r a M 9 1 0 2 , 1 3 h c r a M 8 1 0 2 , 1 3 h c r a M 8 1 0 2 , 1 3 h c r a M 8 1 0 2 , 1 3 h c r a M e t a d t e e h s l e c n a a b d e t i d u a t s e t a L 8 1 0 2 , 9 2 y a M 2 1 0 2 , 7 2 r e b m e v o N 9 0 0 2 , 1 3 r e b m e c e D 6 0 0 2 , 7 t s u g u A 5 0 0 2 , 4 r e b o t c O d e r i u q c a r o d e t a c o s s a i s a w e r u t n e V i t n o J i r o e t a c o s s A e h t h c h w n o e t a D i , 1 3 h c r a M t a p u o r G I I C C I y b d l e h s e r u t n e v i t n o j / s e i n a p m o c e t a i c o s s a f o s e r a h S 1 2 3 4 5 6 7 i i i : s e t o N d e r e t r a h C f o e t u t i t s n I e h t y b d e u s s i , s t n e m e t a t S l i a i c n a n F d e t a d i l o s n o C n i s e t a i c o s s A n i s t n e m t s e v n I r o f g n i t n u o c c A - 3 2 ) S A ( d r a d n a t S g n i t n u o c c A l f o s e p i c n i r p e h t n o d e s a b d e r a p e r p n e e b s a h t n e m e t a t s e v o b a e h T . 1 l a t o t f o % 0 0 . 0 2 n a h t l e r o m s d o h p u o r g e h t h g u o h t l a , 3 2 S A r e d n u d e n i f e d s a e c n e u l f n i t n a c i f i n g i s y n a e v a h t o n s e o d p u o r G I I C C I e r e h w s e n a p m o c i e h t e d u l c n i t o n s e o d e r o f e r e h t d n a , ) I A C I ( i a d n I f o s t n a t n u o c c A . y n a p m o c e e t s e v n i e h t f o s r o t c e r i d f o d r a o B e h t n o n o i t a t n e s e r p e r d n a r e w o p g n i t o v s t i h g u o r h t e c n e u l f n i t n a c i f i n g i s e v a h o t d e m e e d s i p u o r G I C C I I , I A C I y b d e u s s i , 3 2 S A f o s m r e t n I i . s e n a p m o c e s o h t n i l a t i p a c e r a h s l . e u a v g n i y r r a c s t n e s e r p e R . y n a p m o c e e t s e v n i e h t n i r e w o p g n i t o v e h t f o % 0 0 . 0 2 n a h t i e r o m g n e b g n d o h s t i l i o t e u d e c n e u l f n i t n a c i f i n g i s e v a h o t d e m e e d s i p u o r G I C C I I , I A C I y b d e u s s i , 3 2 S A f o s m r e t n I e n o N : s n o i t a r e p o e c n e m m o c o t t e y e r a h c i h w s e r u t n e v t n o i j r o s e t a i c o s s a f o s e m a N . e r u t a n n i y r a r o p m e t s i d e t i m L i s e r y T n o c l a F n i t n e m t s e v n i e h T s r o t c e r i D f o d r a o B e h t f o f l a h e b n o d n a r o F e n o N : r a e y e h t g n i r u d d o s l r o d e t a d u q i i l n e e b e v a h h c i h w s e r u t n e v t n o i j r o s e t a i c o s s a f o s e m a N . 2 . 3 . 4 . 5 . 6 . 7 O E C & r o t c e r i D g n g a n a M i i h s h k a B p e e d n a S 6 0 2 9 0 1 0 0 - N D I e l a t i h C . M y a d U r o t c e r i D 8 6 2 3 4 0 0 0 - N D I i d e v r u t a h C a r d n a h C h s i r i G 6 9 9 0 1 1 0 0 - N D I n a m r i a h C r o t c e r i D e v i t u c e x E 2 6 9 5 0 1 0 0 - N D I i h c g a B p u n A r o t c e r i D e v i t u c e x E k o d n a h C y a j i V 2 6 2 5 4 5 1 0 - N D I r o t c e r i D e v i t u c e x E e y l u M a h k a h s i V 8 7 5 3 0 2 0 0 - N D I a y e r h t A h t a n a g n a R y r a t e r c e S y n a p m o C r e c i f f O l i a c n a n F i a h J h s e k a R i f e h C p u o r G a r t a B p e e d n a S t n e d i s e r P t n a t n u o c c A i f e h C l a t t i M y a j A 9 1 0 2 , 6 y a M i a b m u M : e c a P l : e t a D n o i l l i m n i ` d e t i m L i s e r y T n o c l a F 5 1 0 2 , 1 3 h c r a M 4 1 0 2 , 4 r e b m e c e D a i r e t r A l s e i g o o n h c e T d e t i i m L e t a v i r P d e t i m L i t b e d a r f n I a i d n I d e t i m L i t n a h c r e M I C C I I e t a v i r P s e c i v r e S e c n a r u s n I d n a f o e t u t i t s n I T I I N g n i k n a B e c n a n i F d e t i i m L g n n i a r T i d e t i m L i e t a v i r P ) a i d n I ( s e c i v r e S s s e c o r P - I s e r u t n e v i t n o j / s e i n a p m o c e t a i c o s s a f o e m a N s e r u t n e v t n o i j d n a s e i n a p m o c e t a i c o s s A : " B " t r a P 308 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS BASEL PILLAR 3 DISCLOSURES at March 31, 2019 Pillar 3 disclosures at March 31, 2019 as per Basel III guidelines of RBI have been disclosed separately on the Bank’s website under ‘Regulatory Disclosures Section’ on the home page. The link to this section is http://www.icicibank.com/regulatory-disclosure.page. The section contains the following disclosures: • Qualitative and quantitative disclosures at March 31, 2019 • Scope of application • Capital adequacy • Credit risk • Securitisation exposures • Market risk • Operational risk • Interest rate risk in the banking book (IRRBB) • Liquidity risk • Counterparty credit risk • Risk management framework of non-banking group companies • Disclosure requirements for remuneration • Equities – Disclosure for banking book positions • Leverage ratio • Composition of capital • Composition of capital – reconciliation requirements • Main features of regulatory capital instruments • Full terms and conditions of regulatory capital instruments 309 ANNUAL REPORT 2018-19INTEGRATED REPORTFINANCIAL STATEMENTSSTATUTORY REPORTS GLOSSARY OF TERMS ANNUAL REPORT 2018-19 Average of advances as reported in Form A to RBI For the purpose of performance analysis, represents averages of daily balances, except averages of foreign branches which are fortnightly averages for the period till September 2014. From October 2014, averages of foreign branches are also averages of daily balances Cost of interest bearing liabilities Average of deposits as reported in Form A to RBI Quarterly average of equity share capital and reserves For the purpose of business ratio, represents averages of total assets as reported in Form X to RBI Yield on interest earning assets Total of average deposits plus average advances as reported in Form A to RBI Average deposits plus average advances divided by number of employees Share capital plus reserves divided by outstanding number of equity shares Capital includes share capital, reserves and surplus (revaluation reserve and foreign currency translation reserve are considered at discounted amount), capital instruments and general provisions as per the RBI Basel III guidelines Capital (for CRAR) divided by Risk Weighted Assets (RWAs) Net profit after tax divided by weighted average number of equity shares outstanding during the year Stock of liquid assets which can be readily sold at little or no loss of value or used as collateral to obtain funds Interest income divided by working funds Average yield less average cost of funds Stock of unencumbered high quality liquid assets divided by total net cash outflows estimated for the next 30 calendar days Total interest earned less total interest expended Total interest earned less total interest expended divided by average interest earning assets Net profit after tax divided by number of employees Non-interest income divided by working funds Quarterly average of number of employees. The number of employees includes sales executives, employees on fixed term contracts and interns Profit before provisions and contingencies Operating profit divided by working funds Provision non-performing advances Net profit after tax divided by average total assets Net profit after tax divided by average assets Net profit after tax divided by average equity RWAs are computed by assigning risk weights as per the RBI Basel III guidelines to various on-balance sheet exposure, off-balance sheet exposures and undrawn exposures Average of total assets as reported in Form X to RBI non-performing advances divided gross for by Average advances Average assets Average cost of funds Average deposits Average equity Average total assets Average yield Business Business per employee Book value per share Capital (for CRAR) Capital to risk weighted assets ratio (CRAR) Earnings per share High quality liquid assets Interest income to working funds Interest spread Liquidity coverage ratio Net interest income Net interest margin Net profit per employee Non-interest income to working funds Number of employees Operating profit Operating profit to working funds Provision coverage ratio Return on assets Return on average assets Return on average equity Risk weighted assets (RWAs) Working funds 310 REGISTERED OFFICE ICICI Bank Tower, STATUTORY AUDITORS Walker Chandiok & Co LLP Near Chakli Circle, Old Padra Road, 16th Floor, Tower II, Vadodara 390 007 Tel: +91-265-6722239 Indiabulls Finance Centre, S B Marg, Elphinstone (W), Mumbai CIN: L65190GJ1994PLC021012 Maharashtra 400 013 CORPORATE OFFICE ICICI Bank Towers, Bandra-Kurla Complex, Mumbai 400 051 Tel: +91-22-33667777 Fax: +91-22-26531122 REGISTRAR AND TRANSFER AGENTS 3i Infotech Limited, International Infotech Park, Tower 5, 3rd Floor, Vashi Railway Station Complex, Vashi, Navi Mumbai 400 703 NOTES Over 400,000 people trained under our skill development programmes iMobile Your bank in an app. Offers more than 250 services for banking, payments, investments and shopping Mera iMobile The multilingual mobile banking app for our rural customers. Get banking services, current mandi prices and real-time weather information in 11 languages Eazypay Designed for merchants to receive payments from customers digitally through cards, internet banking, UPI and more Pockets ICICI Bank’s e-wallet for easy recharges, bill payments, shopping and offers Money2India A convenient and secure remittances app that helps our NRI customers to quickly send money to their loved ones back home A N N U A L R E P O R T 2 0 1 8 - 1 9 X P AYMENTS A T & I N SURANCE F M HO P P ING OFFE R S S R A NSFER S T D N U F INSTA F D INSTA LOA N S ICICI Bank Limited, ICICI Bank Towers, Bandra-Kurla Complex, Mumbai 400 051 | www.icicibank.com facebook.com/icicibank twitter.com/icicibank linkedin.com/company/icici-bank youtube.com/icicibank instagram.com/icicibank DIGITAL BANKING SOLUTIONS CONVENIENT FAST SAFE PAYM E N T S SS_2019_APR_ICICI BANK LIMITED_CORPORATE_11169034_ICICI BROCHURE_SIZE 8.25(W) x 10.75(H)_INCH_CLOSE SIZE 

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