Your Directors have pleasure in presenting the Twenty-Third Annual Report of ICICI BankLimited along with the audited financial statements for the year ended March 31 2017.
The financial performance for fiscal 2017 is summarised in the following table:
|Rs.in billion except percentages ||Fiscal 2016 ||Fiscal 2017 ||% change |
|Net interest income and other income ||365.46 ||412.42 ||12.8% |
|Operating expenses ||126.83 ||147.55 ||16.3% |
|Provisions & contingencies (including collective contingency and related reserve for fiscal 2016)1 ||116.67 ||152.08 ||30.4% |
|Profit before tax ||121.96 ||112.79 ||(7.5)% |
|Profit after tax ||97.26 ||98.01 ||0.8% |
|1. Excludes provision for taxes. || || || |
|Rs.in billion except percentages ||Fiscal 2016 ||Fiscal 2017 ||% change |
|Consolidated profit before tax and minority interest ||143.04 ||138.09 ||(3.5)% |
|Consolidated profit after tax and minority interest ||101.80 ||101.88 ||0.1% |
The profit after tax of the Bank for fiscal 2017 isRs.98.01 billion after provisionsand contingencies of Rs.152.08 billion provision for taxes of Rs.14.78 billion and allexpenses. The disposable profit isRs.269.33 billion taking into account the balance ofRs.171.32 billion brought forward from the previous year. Your Bank's dividend policy isbased on the profitability and key financial metrics of the Bank the Bank's capitalposition and requirements and the regulations pertaining to the same. Your Bank has aconsistent dividend payment history. Given the financial performance for fiscal 2017 andin line with the Bank's dividend policy your Directors are pleased to recommend adividend of Rs.2.50 per equity share (pre-bonus issue) for the year ended March 31 2017and have appropriated the disposable profit as follows:
|Rs.billion ||Fiscal 2016 ||Fiscal 2017 |
|To Statutory Reserve making in all Rs.212.02 billion ||24.32 ||24.50 |
|To Special Reserve created and maintained in terms of Section 36(1)(viii) of the Income Tax Act 1961 making in all Rs.83.79 billion ||13.50 ||4.50 |
|To Capital Reserve making in all Rs.102.61 billion1 ||23.82 ||52.93 |
|To/(from) Investment Reserve Account making in all Nil || || |
|To Revenue and other reserves making in all Rs.32.00 billion2 ||5.01 ||0.01 |
|Dividend for the year (proposed) || || |
|On equity shares for fiscal 2016 @Rs.5.00 per share of face value Rs.2.00 each34 ||29.11 ||(0.06) |
|On preference shares for fiscal 2016 @Rs.100.00 per preference share (Rs.)4 ||35000 || |
|Corporate dividend tax4 ||2.79 || |
|Leaving balance to be carried forward to the next year ||171.32 ||187.45 |
1. Includes transfer of Rs.42.61 billion on account of sale of part of equityinvestment in the Bank's insurance subsidiary during fiscal 2017 (Rs.19.47 billion forfiscal 2016).
2. Includes transfer of Rs.9.8 million to Reserve Fund for fiscal 2017 (Rs.9.3 millionfor fiscal applicable to the Sri Lanka branch.
3. Includes dividend for the prior year paid on shares issued after the balance sheetdate and prior to the record date.
4. The proposed equity dividend (excluding dividend distribution tax) amounting toRs.14.56 billion and proposed preference dividend (excluding dividend distribution tax)amounting to Rs.35000/- are not accounted as liabilities in fiscal 2017 in accordancewith the revised AS 4 Contingencies and events occurring after the balancesheet date'.
In terms of the Reserve Bank of India circular no. DBR.BP.BC.No.63/21.04.018/2016-17dated April 18 2017 banks are required to disclose the divergences in assetclassification and provisioning consequent to RBI's annual supervisory process in theirnotes to accounts to the financial statements.
The Bank prepares its financial statements in accordance with the applicable accountingstandards RBI guidelines and other applicable laws/regulations. RBI under its risk-basedsupervision exercise carries out the risk assessment of the Bank on an annual basis. Thisassessment is initiated subsequent to the finalisation completion of audit andpublication of audited financial statements for a financial year and typically occurs afew months after the financial of this assessment RBI separately reviews assetclassification and provisioning of credit facilities given by the Bank to its borrowers.The divergences if any in classification or provisioning arising out of the supervisoryprocess are given effect to in the financial statements in subsequent periods afterconclusion of the exercise.
During the supervisory process for FY2016 which was conducted in FY2017 theincremental gross NPAs assessed by RBI amounted to Rs.51.05 billion. The additionalprovisioning assessed by RBI was Rs.10.71 billion with a post-tax impact of Rs.7.00billion on the net profit after tax of the Bank. All these accounts have been classifiedasNPA by the Bank during FY2017. About 40% of the total amount was classifiedas NPA duringthe quarter ended June 30 2016 as per the Bank's application of relevant RBI guidelinesprior to the annual supervisory process of RBI. Out of the incremental gross NPAsamounting to Rs.51.05 billion assessed by RBI about 84% related to accounts internallyrated below investment grade in the key sectors disclosed by the Bank and about 7% wasfrom the restructured asset portfolio.
The Board of Directors at its Meeting held on May 3 2017 approved issue of bonusshares in the proportion of 1:10 i.e. 1 (One) bonus equity share of Rs.2 each for every10 (Ten) fully paid-up equity shares held (including shares underlying ADS) as on therecord date subject to approval by the Members of the Bank. Subsequent to the bonusissue the ratio of ADSs to equity shares will remain unaffected and each ADS after thebonus issue will continue to represent two equity share of par value of Rs.2 per share.The bonus issue of equity shares would inter alia require appropriate adjustments withrespect to all the stock options of the Bank under The Employee Stock Option Scheme 2000.
The Bank is seeking approval of shareholders through postal ballot notice dated May 52017 for increase in the Authorised Share Capital consequential alterations to theMemorandum and Articles of Association of the Bank and issuance of bonus shares. Thepostal ballot notice can be viewed on the Bank's website at the weblinkhttps://www.icicibank.com/ aboutus/notice.page.
DIVIDEND DISTRIBUTION POLICY
In accordance with the Regulation 43A of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the Bank hasformulated a Dividend Distribution Policy and the same is annexed herewith as Annexure F.The Policy is hosted on the website of the Bank and can be viewed(https://www.icicibank.com/managed-assets/docs/investor/policy-for-determining-material-subsidiaries/dividend-distribution-policy.pdf).
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Pursuant to Section 186 (11) of the Companies Act 2013 the provisions of Section 186of Companies Act 2013 except sub-section (1) do not apply to a loan made guaranteegiven or security provided by a banking company in the ordinary course of business. Theparticulars of investments made by the Bank are disclosed in Schedule 8 of the FinancialStatements as per the applicable provisions of Banking Regulation Act 1949.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
Jhagadia Copper Limited and FINO PayTech Limited which were considered as associatesunder Section 2(6) of the Companies Act 2013 ceased to be associates of the Bankeffective June 30 2016 and January 5 2017 respectively. The particulars of subsidiaryand associate companies as on March 31 2017 have been included in Form MGT-9 which isannexed to this report as Annexure D.
HIGHLIGHTS OF PERFORMANCE OF SUBSIDARIES ASSOCIATES AND JOINT VENTURE COMPANIES ANDTHEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY
The performance of subsidiaries and associates and their contribution to the overallperformance of the Bank as on March 31 2017 has been annexed to this report as AnnexureA. A summary of key financials of the Bank's subsidiaries is also included in this Annualreport.
The highlights of the performance of key subsidiaries are given as a part ofManagement's Discussion & Analysis under section "Consolidated financials as perIndian GAAP". The Bank will make available separate audited financial statements ofthe These documents/details are available on the Bank's website (www.icicibank.com) andwill also be available for inspection by any Member or trustee of the holder of anydebentures of the Bank at its Registered Office and Corporate Office. As required byAccounting Standard 21 (AS 21) issued by the Institute of Chartered Accountants of Indiathe Bank's consolidated financial statements included in this Annual Report incorporatethe consolidating entities.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING 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 orTribunals impacting the going concern status or future operations of the Bank.
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL
The Board of the Bank at March 31 2017 consisted of 13 Directors out of which sevenare independent Directors one is a Government Nominee Director and five are wholetimeDirectors.
Changes in the composition of the Board of Directors and other Key Managerial Personnel
The Board of Directors at their Meeting held on April 29 2016 approved the appointmentof Vijay Chandok as a wholetime Director (designated as executive Director) for a periodof five years effective from the date of receipt of RBI approval. The Members at theirMeeting held on July 11 2016 approved the appointment of Vijay Chandok for a period offive years effective the date of receipt of RBI approval. RBI approved the appointment ofVijay Chandok for a period of three years effective from July 28 2016 upto July 27 2019.
The Board of Directors at their Meeting held on October 14 2016 approved theappointment of Anup Bagchi as a wholetime Director (designated as executive Director) fora period of five years effective from February 1 2017 or the date of receipt of approvalfrom RBI whichever is later. RBI approved the appointment of Anup Bagchi for a period ofthree years effective February 1 2017 upto January 31 2020. The said appointment issubject to the approval of Members. Approval of the Members is being sought for AnupBagchi's appointment for five years in the Notice of the forthcoming Annual GeneralMeeting vide item no. 7 and 8.
Amit Agrawal Joint Secretary Department of Financial Services Ministry of Financehas been nominated by Government of India as a Director on the Board of the Bank effectiveJanuary 16 2017 in place of Alok Tandon.
M. S. Ramachandran independent Director ceased to be a Director on the Board of theBank effective close of business hours on April 24 2017 pursuant to completion of hismaximum permissible tenure of eight years as per the provisions of the Banking RegulationAct 1949. The Board placed on record its appreciation of the valuable contribution andguidance provided by Alok Tandon and M. S. Ramachandran to the Bank.
Rajiv Sabharwal executive Director stepped down from his position as an executiveDirector effective close of business hours on January 31 2017 consequent to his decisionto pursue other opportunities. The Board placed on record its appreciation for RajivSabharwal's contribution to the growth of the Bank.
Declaration of Independence
All independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 of the Companies Act 2013 and Regulation 16of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 which have been relied on by the Bank and were placed atthe Board Meeting held on April 6 2017.
Retirement by rotation
In terms of Section 152 of the Companies Act 2013 Vishakha Mulye would retire byrotation at the forthcoming AGM and is eligible for re-appointment. Vishakha Mulye hasoffered herself for re-appointment.
At the AGM held on June 30 2014 the Members approved the appointment of M/s B S R& Co. LLP Chartered Accountants as statutory auditors for a period of four yearscommencing from the Twentieth AGM till the conclusion of the Twenty-Fourth AGM subject tothe annual approval of RBI and ratificationby the Members every year. As recommended bythe Audit Committee the Board has proposed the ratificationof appointment of M/s B S R& Co. LLP Chartered Accountants as statutory auditors for fiscal 2018. Theirappointment for fiscal 2018 has been approved by RBI. The appointment is accordinglyproposed in the Notice of the forthcoming AGM vide item no. 5 for ratification by MembersThere are no qualifications reservation or adverse remarks made by the statutory auditorsin the audit report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Bank with theapproval of its Board appointed M/s. Parikh Parekh & Associates a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Bank for the financial31 2017. The Secretarial Audit Report is annexed herewith asAnnexureB.Therearenoqualificationsreservation or adverse remark or disclaimer made by theauditor in the report save and except disclaimer made by them in discharge of theirprofessional obligation.
The statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is given in an Annexure and forms part of thisreport. In terms of Section 136(1) of the Companies Act 2013 the Report and the Accountsare being sent to the Members excluding the aforesaid Annexure. Any Member interested inobtaining a copy of the Annexure may write to the Company Secretary at the RegisteredOffice of the Bank.
INTERNAL CONTROL AND ITS ADEQUACY
The Bank has adequate internal controls and processes in place with respect to itsfinancial statements which provide reporting andreasonableassuranceregardingthereliabilityoffinancial the preparation of financialstatements. These controls and processes are driven throughvariouspoliciesproceduresandcertifications.The processes and controls are reviewedperiodically. The Bank has a mechanism of testing the controls at regular intervals fortheir design and operating effectiveness to ascertain the reliability and authenticity offinancial information.
DISCLOSURE UNDER FOREIGN EXCHANGE MANAGEMENT ACT 1999
The Bank has obtained a certificate from its statutory auditors that it is incompliance with the Foreign Exchange Management Act 1999 provisions with respect toinvestments made in its consolidated subsidiaries and associates during fiscal 2017.
RELATED PARTY TRANSACTIONS
The Bank undertakes various transactions with related parties in the ordinary course ofbusiness. The Bank has a Board approved policy on Related Party Transactions which hasbeen disclosed on the website of the Bank and can be viewed athttps://www.icicibank.com/managed-assets/docs/personal/general-links/related-party-transactions-policy.pdf.The Bank also has a Board approved Group Arm's Length Policy which requires transactionswith the group companies to be at arm's length. The transactions between the Bank and itsrelated parties during the year ended March 31 2017 were in the ordinary course ofbusiness and based on the principles of arm's length. The details of material relatedparty transactions at an aggregate level for year ended March 31 2017 are given inAnnexure C.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure D.
BUSINESS RESPONSIBILITY REPORTING
Business Responsibility Report as stipulated under Regulation 34 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 has been hosted on the website of the Bank(http://www.icicibank.com/aboutus/annual.html). Any Member interested in obtaining aphysical copy of the same may write to the Company Secretary at the Registered Office ofthe Bank.
RISK MANAGEMENT FRAMEWORK
The Bank's risk management framework is based on a clear understanding of variousrisks disciplined risk assessment and measurement procedures and continuous monitoring.The policies and procedures established for this purpose are continuously benchmarked withinternational best practices. The Board of Directors has oversight on all the risksassumed by the Bank. Specific Committees have been constituted to facilitate focusedoversight of various risks as follows: The Risk Committee of the Board reviews riskmanagement policies of the Bank pertaining to credit market liquidity operationaloutsourcing risks and business continuity management. The Committee also reviews the RiskAppetite & Enterprise Risk Management frameworks Internal Capital Adequacy AssessmentProcess (ICAAP) and stress testing. The stress testing framework includes a range ofBank-specific market (systemic) and combined scenarios. The ICAAP exercise covers thedomestic and overseas operations of the Bank banking subsidiaries and materialnon-banking subsidiaries. The Committee reviews migration to the advanced approaches underBasel II and implementation of Basel III risk return profile of the Bank and theactivities of the Asset Liability Management reviews the level and direction of majorrisks pertaining to credit market liquidity operational technology compliance groupmanagement and capital at risk as part of risk dashboard. In addition the Committee hasoversight on risks of subsidiaries covered under the Group Risk Management Framework. TheRisk Committee also reviews the Liquidity Contingency Plan for the Bank and the variousthresholds set out in the Plan.
The Credit Committee of the Board apart from sanctioning credit proposals based on theBank's credit authorisation framework reviews developments in key industrial sectors andthe Bank's exposure to these sectors as well as to large borrower accounts and borrowergroups. The Credit Committee also reviews the major credit portfolios non-performingloans accounts under watch overdues and incremental sanctions.
The Audit Committee of the Board provides direction to and monitors the quality of theinternal audit function and also monitors compliance with inspection and audit reports ofReserve Bank of India other regulators and statutory auditors.
The Asset Liability Management Committee provides guidance for management of liquidityof the overall Bank and management of interest rate risk in the banking book within thebroad parameters laid down by the Board of Directors/ Risk Committee.
Summaries of reviews conducted by these Committees are reported to the Board on aregular basis.
Policies approved from time to time by the Board of Directors/Committees of the Boardform the governing framework for each type of risk. The business activities are undertakenwithin this policy framework. Independent groups and subgroups have been constitutedacross the Bank to facilitate independent evaluation monitoring and reporting of variousrisks. These groups function independently of the business groups/sub-groups.
The Bank has dedicated groups namely the Risk Management Group Compliance GroupCorporate Legal Group Internal Audit Group and the Financial Crime Prevention &Reputation Risk Management Group with a mandate to identify assess and monitor all ofthe Bank's principal risks in accordance with well-defined policies and procedures. TheRisk Management Group is further organised into the Credit Risk Management Group MarketRisk Management Group Operational Risk Management Group and Information Security Group.These groups are completely independent of all business operations and coordinate withrepresentatives of the business units to implement the Bank's risk management policies andmethodologies. The Internal Audit and Compliance groups are responsible to the AuditCommittee of the Board.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
Please refer Principle 3 under Section E of the Business Responsibility Report.
The corporate governance framework at ICICI Bank is based on an effective independentBoard the separation of the Board's supervisory role from the executive management andthe constitution of Board Committees which at March 31 2017 comprised majority ofindependent Directors and most of the Committees were chaired by independent Directors tooversee critical areas.
I. Philosophy of Corporate Governance
ICICI Bank's corporate governance philosophy encompasses regulatory and legalrequirements which aims at a high level of business ethics effective supervision andenhancement of value for all stakeholders. The corporate governance framework adopted bythe Bank already encompasses significant portion of the recommendations contained in theCorporate Governance Voluntary Guidelines 2009' issued by the Ministry of CorporateAffairs Government of India.
Whistle Blower Policy
The Bank has formulated a Whistle Blower Policy. The policy comprehensively provides anopportunity for any employee/ Director of the Bank to raise any issue concerning breachesof law accounting policies or any act resulting in financial or reputation loss andmisuse of office or suspected or actual fraud. The policy provides for a mechanism toreport such concerns to the Audit Committee through specified channels. The policy hasbeen 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 stipulatedunder Section 177 of the Companies Act 2013. The details of establishment of the WhistleBlower Policy/Vigil mechanism have been disclosed on the website of the Bank.
Code of Conduct as prescribed under Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015
In accordance with the requirements of the Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015 ICICI Bank has instituted acomprehensive code of conduct to regulate monitor and report trading by its directorsemployees and other connected persons.
Group Code of Business Conduct and Ethics
The Group Code of Business Conduct and Ethics for Directors and employees of the ICICIGroup aims at ensuring consistent standards of conduct and ethical business practicesacross the constituents of the ICICI Group. This Code is reviewed on an annual basis andthe latest Code is available on the website of the Bank (www.icicibank.com). Pursuant toSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 a confirmation from the Managing Director & CEO regardingcompliance with the Code by all the Directors and senior management forms part of theAnnual Report.
In accordance with the requirements of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Bank has formulated aPolicy for determining Material Subsidiaries and the same has been hosted on the websiteof the Bank(https://www.icicibank.com/managed-assets/docs/investor/policy-for-determining-material-subsidiaries/policy-for-determining-material-subsidiaries.pdf).
Familiarisation Programme for independent Directors
Independent Directors are familiarised with their roles rights and responsibilities inthe Bank as well as with the nature of industry and business model of the Bank throughinduction programmes at the time of their appointment as Directors and throughpresentations on economy & industry overview key regulatory developments strategyand performance which are made to the Directors from time to time. The details of thefamiliarisation programmes have been hosted on the website of the Bank and can be accessedon the link:(http://www.icicibank.com/managed-assets/docs/about-us/board-of-directors/familiarisation-programme-for-independent-directors.pdf).
In terms of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the certification by the Managing Director & CEO andChief Financial Officer on the financial statements and internal controls relating tofinancial reporting has been obtained.
Board of Directors
ICICI Bank has a broad-based Board of Directors constituted in compliance with theBanking Regulation Act 1949 the Companies Act 2013 and Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 and inaccordance with good corporate governance practices. The Board functions either as a fullBoard or through various committees constituted to oversee specific operational areas. TheBoard has constituted various committees namely Audit Committee Board GovernanceRemuneration & Nomination Committee Corporate Social Responsibility Committee CreditCommittee Customer Service Committee Fraud Monitoring Committee Information TechnologyStrategy Committee Risk Committee Stakeholders Relationship Committee and ReviewCommittee for Identification of Wilful Defaulters/Non Co-operative Borrowers. At March 312017 independent Directors constituted a majority of these Board Committees and allCommittees except the Credit Committee and Review Committee for Identification of WilfulDefaulters/Non Co-operative Borrowers were chaired by independent Directors.
There were nine Meetings of the Board during fiscal 2017 - on April 29 June 28 July29 September 20 September 26 October 14 November 7 and November 21 in 2016 andJanuary 31in 2017.
At March 31 2017 the Board of Directors consisted of 13 members. There were nointer-se relationships between any of the Directors. The names of the Directors theirattendance at Board Meetings during the year attendance at the last Annual GeneralMeeting (AGM) and the number of other directorships and board committee memberships heldby them at March 31 2017 are set out in the following table.
| || || || |
Number of other directorships
|Name of Director ||Board Meetings attended during the year ||Attendance at last AGM (July 11 2016) ||of Indian public limited companies1 ||of other companies2 ||Number of other committee3 memberships |
|Independent Directors || || || || || |
|M. K. Sharma Chairman (DIN: 00327684) ||9/9 ||Present ||4 ||6 ||4(2) |
|Dileep Choksi* (DIN: 00016322) ||8/9 ||Present ||7 ||3 ||6(4) |
|Homi Khusrokhan (DIN: 00005085) ||8/9 ||Present ||3 ||1 ||2(1) |
|M. S. Ramachandran (DIN: 00943629) ||9/9 ||Present ||6 ||3 ||3(1) |
|Tushaar Shah# (DIN: 03055738) ||6/9 ||Present || || || |
|V. K. Sharma (DIN: 02449088) ||4/9 ||Absent ||7 ||5 || |
|V. Sridar (DIN: 02241339) ||8/9 ||Present ||9 || ||7(5) |
|Government Nominee Director || || || || || |
|Alok Tandon (upto January 16 2017) (DIN: 01841717) ||0/8 ||Absent ||N.A. ||N.A. ||N.A. |
|Amit Agrawal (w.e.f. January 16 2017) (DIN: 07117013) ||0/1 ||N.A. || || || |
|Wholetime/Executive Directors || || || || || |
|Chanda Kochhar (DIN: 00043617) ||9/9 ||Present ||4 ||2 || |
|N. S. Kannan (DIN: 00066009) ||9/9 ||Present ||4 ||2 ||2 |
|K. Ramkumar (upto close of business hours on April 29 2016) (DIN: 00244711) ||1/1 ||N.A. ||N.A. ||N.A.Rs. ||N.A. |
|Rajiv Sabharwal (upto close of business hours on January 31 2017) (DIN: 00057333) ||8/9 ||Present ||N.A. ||N.A. ||N.A. |
|Vishakha Mulye (DIN: 00203578) ||9/9 ||Present ||1 || || |
|Vijay Chandok (w.e.f. July 28 2016) (DIN: 01545262) ||7/7 ||N.A. ||2 ||2 ||1 |
|Anup Bagchi (w.e.f. February 1 2017) (DIN: 00105962) ||0/0 ||N.A. ||3 || ||2 |
* Participated in one Meeting through tele-conference.
# Participated in two Meetings through tele-conference.
1. Comprises public limited companies incorporated in India.
2. Comprises private limited companies incorporated in India foreign companiesstatutory bodies and insurance corporations but excludes Section 8 companies and not forprofit foreign companies.
3. Comprises only Audit Committee and Stakeholders' Relationship Committee of Indianpublic limited companies. Figures in parentheses indicate committee chairpersonships.
Upon completion of his tenure as a non-executive Director M. S. Ramachandran ceased tobe a Director on the Board of the Bank with effect from April 25 2017.
In terms of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the number of Committees (Audit Committee andStakeholders' Relationship Committee) of public limited companies in which a Director is amember/chairman were within the limits provided under listing regulations for all theDirectors of the Bank. The number of directorships of each independent Director is alsowithin the limits prescribed under listing regulations.
The terms of reference of the Board Committees as mentioned earlier their compositionand attendance of the respective Members at the various Committee Meetings held duringfiscal 2017 are set out below:
II. Audit Committee
Terms of Reference
The Audit Committee provides direction to the audit function and monitors the qualityof internal and statutory audit. The responsibilities of the Audit Committee includeexamining the financial statements and auditors' report and overseeing the financialreporting process to ensure fairness sufficiency and credibility of financial statementsreview of the quarterly and annual financial statements before submission to the Boardrecommendation of appointment terms of appointment fixing remuneration and removal ofcentral and branch statutory auditors and chief internal auditor approval of payment tostatutory auditors for other permitted services rendered by them review and monitor withthe management the auditor's independence performance and effectiveness of audit processapproval of transactions with related parties or any subsequent modifications review ofstatement of significant related party transactions review of functioning of WhistleBlower Policy review of the adequacy of internal control systems and the internal auditfunction review of compliance with inspection and audit reports and reports of statutoryauditors review of the findings of internal investigations review of management letters/letters on internal control weaknesses issued by statutory auditors reviewing with themanagement the statement of uses/ application of funds raised through an issue (publicissue rights issue preferential issue etc.) the statement of funds utilised for thepurposes other than those stated in the offer document/prospectus/notice and the reportsubmitted by the monitoring agency monitoring the utilisation of proceeds of a public orrights issue and making appropriate recommendations to the Board to take steps in thismatter discussion on the scope of audit with external auditors examination of reasonsfor substantial defaults if any in payment to stakeholders valuation of undertakings orassets evaluation of risk management systems scrutiny of inter-corporate loans andinvestments. The Audit Committee is also empowered to appoint/oversee the work of anyregistered public accounting firm establish procedures for receipt and treatment ofcomplaints received regarding accounting and auditing matters and engage independentcounsel as also provide for appropriate funding for compensation to be paid to anyfirm/advisors. In addition the Audit Committee also exercises oversight on the regulatorycompliance function of the Bank. The Audit Committee is also empowered to approve theappointment of the CFO (i.e. the wholetime Finance Director or any other person headingthe finance function or discharging that function) after assessing the qualificationsexperience and background etc. of the candidate.
At March 31 2017 the Audit Committee comprised of four independent Directors and waschaired by Homi Khusrokhan an independent Director. There were nine Meetings of theCommittee during the year.
The details of the composition of the Committee and attendance at its Meetings are setout in the following table:
|Name of Member ||Number of meetings attended |
|Homi Khusrokhan Chairman ||8/9 |
|Dileep Choksi Alternate Chairman ||9/9 |
|M. S. Ramachandran ||7/9 |
|V. Sridar* ||8/9 |
* Participated in one Meeting through video - conference.
Upon completion of his tenure as a non-executive Director M. S. Ramachandran ceased tobe a Member of the Committee with effect from April 25 2017.
III. Board Governance Remuneration & Nomination Committee
Terms of Reference
The functions of the Committee include recommending appointments of Directors to theBoard identifying persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down and recommending to theBoard their appointment and removal formulate a criteria for the evaluation of theperformance of the Wholetime/independent Directors and the Board and to extend or continuethe term of appointment of independent Director on the basis of the report of performanceevaluation of independent Directors recommending to the Board a policy relating to theremuneration for the Directors key managerial personnel and other employees recommendingto the Board the remuneration (including performance bonus and perquisites) to wholetimeDirectors (WTDs) commission and fee payable to non-executive Directors subject toapplicable regulations approving the policy for and quantum of bonus payable to themembers of the staff including senior management and key managerial personnel formulatingthe criteria for determining qualifications positive attributes and independence on Boarddiversity framing guidelines for the Employees Stock Option Scheme (ESOS) and decide onthe grant of Bank's stock options to employees and WTDs of the Bank and its subsidiarycompanies.
At March 31 2017 the Board Governance Remuneration & Nomination Committeecomprised of three independent Directors and was chaired by Homi Khusrokhan anindependent Director. There were ten Meetings of the Committee during the year. Thedetails of the composition of the Committee and attendance at its Meetings are set out inthe following table:
|Name of Member ||Number of meetings attended |
|Homi Khusrokhan Chairman ||8/10 |
|M. K. Sharma ||9/10 |
|M. S. Ramachandran ||10/10 |
Upon completion of his term as a non-executive Director M. S. Ramachandran ceased to bea Member of the Committee with effect from April 25 2017. The Board at its Meeting heldon April 6-7 2017 reconstituted the Committee pursuant to which V. K. Sharma wasappointed as a Member of the Committee with effect from April 6 2017.
Policy/Criteria for Directors' Appointment
The Bank with the approval of its Board Governance Remuneration & NominationCommittee (Committee) has put in place a policy on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector as well as a policy on Board diversity. The policy has been framed based on thebroad principles as outlined hereinafter. The Committee would evaluate the composition ofthe Board and vacancies arising in the Board from time to time. The Committee whilerecommending candidature of a Director would consider the special knowledge or expertisepossessed by the candidate as required under Banking Regulation Act 1949. The Committeewould assess the fit and proper credentials of the candidate and the companies/entitieswith which the candidate is associated either as a director or otherwise and as to whethersuch association is permissible under RBI guidelines and the internal norms adopted by theBank. For the above assessment the Committee would be guided by the guidelines issued byRBI in this regard.
The Committee will also evaluate the prospective candidate for the position of aDirector from the perspective of the criteria for independence prescribed under CompaniesAct 2013 as well as the Listing Regulations. For a non-executive Director to beclassified as independent he/she must satisfy the criteria of independence as prescribedand sign a declaration of independence. The Committee will review the same and determinethe independence of a Director.
The Committee based on the above assessments will make suitable recommendations on theappointment of Directors to the Board.
Reserve Bank of India (RBI) vide its circular DBOD No. BC. 72/29.67.001/2011-12 datedJanuary 13 2012 has issued guidelines on "Compensation of wholetime Directors/Chiefexecutive Officers/Risk takers and Control function staff etc." for implementation byprivate sector banks and foreign banks from the financial year 2012-13. The Bank adopted aCompensation Policy in January 2012 which is amended from time to time based on regulatoryrequirements. The Compensation Policy of the Bank as adopted in line with the RBI circularis in compliance with the requirements for the Remuneration Policy as prescribed underCompanies Act 2013. Further details with respect to the Compensation Policy are providedunder the section titled "Compensation Policy and Practices".
The remuneration payable to non-executive/independent Directors is governed by theprovisions of the Banking Regulation Act 1949 RBI guidelines issued from time to timeand the provisions of the Companies Act 2013 and related rules to the extent it is notinconsistent with the provisions of the Banking Regulation Act 1949/RBI guidelines. Theremuneration for the non-executive/independent Directors (other than Government nominee)would be sitting fee for attending each Meeting of the Committee/Board as approved by theBoard from time to time within the limits as provided under Companies Act 2013 andrelated rules. RBI vide its guidelines dated June 1 2015 regarding Compensation ofnon-executive Directors (NEDs) (except part-time Chairman) of Private Sector Banks haspermitted payment of profit related commission up to Rs.1000000 per annum fornon-executive Directors (other than non-executive (part-time) Chairman). The Members attheir Meeting held on July 11 2016 approved the payment of profit related commissionuptoRs.1000000 per annum to non-executive Directors (other than the non-executive(part-time) Chairman and the Government Nominee Director) for each year effective fromthe financial year ended March 31 2016. For the non-executive (part-time) Chairman theremuneration in addition to sitting fee includes such fixed payments on such periodicityas may be recommended by the Board and approved by the Members and RBI from time to timemaintaining a Chairman's office at the Bank's expense bearing expenses for travel onofficial visits and participation in various forums (both in India and abroad) as Chairmanof the Bank and bearing travel/halting/other expenses and allowances for attending toduties as Chairman of the Bank and any other modes of remuneration as may be permitted byRBI through any circulars/guidelines as may be issued from time to time.
All the non-executive/independent Directors would be entitled to reimbursement ofexpenses for attending Board/ Committee Meetings official visits and participation invarious forums on behalf of the Bank.
Performance evaluation of the Board Committees and Directors
The Bank with the approval of its Board Governance Remuneration & NominationCommittee has put in place an evaluation framework for evaluation of the Board Directorsand Chairperson. The Board also carries out an evaluation of the working of its AuditCommittee Board Governance Remuneration & Nomination Committee Corporate SocialResponsibility Committee Credit Committee Customer Service Committee Fraud MonitoringCommittee Information Technology Strategy Committee Risk Committee StakeholdersRelationship Committee and Review Committee for identification of wilful defaulters/nonco-operative borrowers. The evaluation of the Committees is based on the assessment of thecompliance with the terms of reference of the Committees.
The evaluations for the Directors the Board and the Chairperson of the Board wereundertaken through circulation of three questionnaires one for the Directors one for theBoard and one for the Chairperson of the Board. The performance of the Board was assessedon select parameters related to roles responsibilities and obligations of the Board andfunctioning of the Committees including assessing the quality quantity and timeliness offlow of information between the company management and the Board that is necessary for theBoard to effectively and reasonably perform their duties. The evaluation criteria for theDirectors was based on their participation contribution and offering guidance to andunderstanding of the areas which were relevant to them in their capacity as members of theBoard. The evaluation criteria for the Chairperson of the Board besides the generalcriteria adopted for assessment of all Directors focused incrementally on leadershipabilities effective management of meetings and preservation of interest of stakeholders.The evaluation process for wholetime Directors is further detailed under the sectiontitled "Compensation Policy and Practices".
Details of Remuneration paid to wholetime Directors
The Board Governance Remuneration & Nomination Committee determines and recommendsto the Board the amount of remuneration including performance bonus and perquisitespayable to the wholetime Directors.
The following table sets out the details of remuneration (including perquisites andretiral benefits) paid to wholetime Directors for fiscal 2017:
| ||Details of Remuneration (Rs.) |
| ||Chanda Kochhar ||N. S. Kannan ||K. Ramkumar1 ||Rajiv Sabharwal4 ||Vishakha Mulye ||Vijay Chandok ||Anup Bagchi |
|Basic ||26670840 ||17619600 ||5778471 ||14683000 ||17619600 ||15930000 ||6637500 |
|Performance bonus for fiscal 20175 ||22028362 ||14766738 ||4854818 ||N.A. ||14766738 ||13539876 ||5601428 |
|Allowances and perquisites6 ||24387366 ||15331842 ||26199599 ||17178774 ||14352803 ||15072215 ||5698078 |
|Contribution to provident fund ||3200496 ||2114354 ||693418 ||1761958 ||2114354 ||1911600 ||796500 |
|Contribution to superannuation fund ||0 ||2642940 ||753712 ||0 ||2642940 ||2389500 ||995625 |
|Contribution to gratuity fund ||2221681 ||1467713 ||481347 ||1223094 ||1467713 ||1326969 ||552904 |
|Stock options7 (Numbers) || || || || || || || |
|Fiscal 20175 ||1375000 ||685000 ||N.A. ||N.A. ||685000 ||685000 ||685000 |
|Fiscal 2016 ||1375000 ||685000 ||685000 ||685000 ||685000 ||495000 ||N.A. |
|Fiscal 2015 ||1450000 ||725000 ||725000 ||655000 ||N.A. ||420000 ||N.A. |
Bank. His last working date was July 29 2016.
2. Vijay Chandok assumed office as executive Director with effect from July 28 2016post approval granted by RBI.
3. Anup Bagchi has joined the services of the Bank on November 1 2016 and he assumedoffice from February 1 2017.
4. Rajiv Sabharwal's last working day with the Bank was January 31 2017.
5. Options and performance bonus for fiscal 2017 are subject to Reserve Bank of
6. Allowances and perquisites exclude stock options exercised during fiscal 2017 whichdoes not constitute remuneration paid to the wholetime Directors for fiscal 2017.
7. The above table excludes special grant of stock options approved by RBI in November2015 aggregating to 2100000 for Chanda
Kochhar; 1000000 each for N. S. Kannan K. Ramkumar and Rajiv Sabharwal and 700000for Vijay Chandok.
Perquisites (evaluated as per Income-tax rules wherever applicable and otherwise atactual cost to the Bank) such as the benefit of the Bank's furnished accommodation gaselectricity water and furnishings club fees group insurance use of car and telephoneat residence or reimbursement of expenses in lieu thereof medical reimbursement leaveand leave travel concession education benefits provident fund superannuation fund andgratuity were provided in accordance with the scheme(s) and rule(s) applicable from timeto time. In line with the staff loan policy applicable to specified grades to availofemployeeswhofulfill loans for purchase of residential property the wholetime Directorsare also eligible for housing loans subject to approval of RBI.
The Members have approved the minimum and maximum ranges for remuneration as well assupplementary allowance for the Wholetime Directors. In terms of the said approvals themonthly basic salary for Chanda Kochhar Managing Director & CEO would be within therange of Rs.1350000 Rs.2600000 N. S. Kannan Vishakha Mulye Vijay Chandok and AnupBagchi executive Directors would be within the range of Rs.950000 Rs.1700000. Themonthly supplementary allowances for the Managing Director & CEO would be within therange of Rs.1000000 - Rs.1800000 for N. S. Kannan Vishakha Mulye Vijay Chandok andAnup Bagchi executive Directors would be within the range of Rs.675000 - Rs.1225000.The Board would determine the actual remuneration/supplementary allowance payable withinthe above ranges from time to time subject to the approval of RBI.
Details of Remuneration paid to non-executive Directors
As provided under Article 132 of the Articles of Association of the Bank the feespayable to a non-executive Director (other than to the nominee of Government of India) forattending a Meeting of the Board or Committee thereof are decided by the Board ofDirectors from time to time within the limits prescribed by the Companies Act 2013 andthe rules thereunder. The Board of Directors have approved the payment of Rs.100000 assitting fee for each Meeting of the Board and Rs.20000 as sitting fee for each Meeting ofthe Committee attended.
The Board of Directors at its Meeting held on June 9 2015 and subsequently Membersthrough a postal ballot resolution dated April 22 2016 approved a remuneration range ofRs.3000000 Rs.5000000 per annum for M. K. Sharma Chairman of the Board with theremuneration for each year to be determined by the Board within this range. The Boardapproved remuneration of Rs.3000000 per annum effective July 1 2015 to be paid to M.K.Sharmaforthefirstyear of his tenure. RBI while approving the appointment of M. K. Sharmafor the period July 1 2015 to June 30 2018 also approved the above remuneration. TheBoard at its Meeting held on June 28 2016 approved the revision in remuneration for M. K.Sharma to Rs.3500000 per annum for the period July 1 2016 to June 30 2017. The samehas been approved by RBI.
Information on the total sitting fees paid to each non-executive Director during fiscal2017 for attending Meetings of the Board and its Committees is set out in the followingtable:
|Name of Director ||Amount (Rs.) |
|M. K. Sharma ||1220000 |
|Dileep Choksi ||1180000 |
|Homi Khusrokhan ||2060000 |
|M. S. Ramachandran (ceased w.e.f. April 25 2017) ||2000000 |
|Tushaar Shah ||620000 |
|V. K. Sharma ||460000 |
|V. Sridar ||1480000 |
|Amit Agarwal1 || |
|Total ||9020000 |
1. Being a Government Nominee Director not entitled to receive sitting fees.
The details of shares and convertible instruments of the Bank held by thenon-executive Directors as at March 31 2017 are set out in the following table:
|Name of Director ||Instrument ||No. of shares held |
|M. K. Sharma ||Equity ||50000 |
|Dileep Choksi ||Equity ||2500 |
|Homi Khusrokhan ||Equity ||35001 |
|M. S. Ramachandran ||Equity ||1300 |
|Tushaar Shah || || |
|V. K. Sharma || || |
|V. Sridar || || |
|Amit Agarwal || || |
1. Shares held jointly with relatives.
Remuneration disclosures as required under RBI guidelines
The RBI circular DBOD No. BC. 72/29.67.001/2011-12 on "Compensation of wholetimeDirectors/Chief Executive Officers/ Risk takers and Control function staff etc."requires the Bank to make following disclosures on remuneration on an annual basis intheir Annual Report:
COMPENSATION POLICY AND PRACTICES
(A) Qualitative disclosures a) Information relating to the bodies that overseeremuneration.
Name composition and mandate of the main body overseeing remuneration.
The Board Governance Remuneration & Nomination Committee (BGRNC/ Committee) is thebody which oversees the remuneration aspects. The functions of the Committee includerecommending appointments of Directors to the Board identifying persons who are qualifiedto become Directors and who may be appointed in senior management in accordance with thecriteria laid down and recommending to the Board their appointment and removal formulatea criteria for the evaluation of the performance of the whole time/ independent Directorsand the Board and to extend or continue the term of appointment of independent Director onthe basis of the report of performance evaluation of independent Directors recommendingto the Board a policy relating to the remuneration for the Directors Key ManagerialPersonnel and other employees recommending to the Board the remuneration (includingperformance bonus and perquisites) to wholetime Directors (WTDs) commission and feepayable to non- executive Directors subject to applicable regulations approving thepolicy for and quantum of bonus payable to members of the staff including seniormanagement and key managerial personnel formulating the criteria for determiningqualifications positive attributes and independence of a Director framing policy onBoard diversity framing guidelines for the Employee Stock Option Scheme (ESOS) and decideon the grant of the Bank's stock options to employees and WTDs of the Bank and itssubsidiary companies.
External consultants whose advice has been sought the body by which they werecommissioned and in what areas of the remuneration process.
The Bank did not take advice from an external consultant on any area of remunerationduring the year ended March 31 2017.
Scope of the Bank's remuneration policy (eg. by regions business lines) includingthe extent to which it is applicable to foreign subsidiaries and branches.
The Compensation Policy of the Bank as last amended during FY2017 and approved by theBGRNC and the Board at its Meeting held on April 28 2016 pursuant to the guidelinesissued by RBI covers all employees of the Bank including those in overseas branches ofthe Bank. In addition to the Bank's Compensation Policy guidelines the overseas branchesalso 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 ofpermanent employees governed by the compensation policy of the Bank at March 31 2017 was81129. 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 compensationpractices intended to drive meritocracy within the framework of prudent risk management.This approach has been incorporated in the Compensation Policy the key elements of whichare given below.
Effective governance of compensation:
The BGRNC has oversight over compensation. The Committee defines Key PerformanceIndicators (KPIs) for WTDs and equivalent positions and the organisational performancenorms for bonus based on the financial and strategic plan approved by the Board. The KPIsinclude both quantitative and qualitative aspects. The BGRNC assesses organisationalperformance as well as the individual performance for WTDs and equivalent positions. Basedon its assessment it makes recommendations to the Board regarding compensation for WTDsand equivalent positions and bonus for employees including senior management and keymanagement personnel.
Alignment of compensation philosophy with prudent risk taking:
The Bank seeks to achieve a prudent mix of fixed and variable pay with a higherproportion of variable pay at senior levels and no guaranteed bonuses. Compensation issought to be aligned to both financial and non-financial indicators of performanceincluding aspects like risk management and customer service. In addition the Bank has anemployee stock option scheme aimed at aligning compensation to long term performancethrough stock option grants that vest over a period of time. Compensation to staff infinancial and risk control functions is independent of the business areas they oversee anddepends on their performance assessment.
Whether the Remuneration Committee reviewed the firm's remuneration policy duringthe past year and if so an overview of any changes that were made
During FY2017 the Bank's Compensation Policy was reviewed by the BGRNC and the Boardon April 28 2016. The disclosures were reviewed pursuant to RBI circular on Disclosuresin Financial Statements.
Discussion of how the Bank ensures that risk and compliance employees areremunerated independently of the businesses they oversee.
The compensation of staff engaged in control functions like Risk and Compliance dependson their performance which is based on achievement of the key results of their respectivefunctions. Their goal sheets do not include any business targets. c) Description of theways in which current and future risks are taken into account in the remunerationprocesses.
Overview of the key risks that the Bank takes into account when implementingremuneration measures.
The Board approves the risk framework for the Bank and the business activities of theBank are undertaken within this framework to achieve the financial plan. The riskframework includes the Bank's risk appetite limits framework and policies and proceduresgoverning various types of risk. KPIs of WTDs & equivalent positions as well asemployees incorporate relevant risk management related aspects. For example in additionto performance targets in areas such as growth and profits performance indicators includeaspects such as the desired funding profile and asset quality. The BGRNC takes intoconsideration all the above assessing organisational and individual performance and makingcompensation-related recommendations to the Board.
Overview of the nature and type of key measures used to take account of these risksincluding risk difficult to measure
The annual performance targets and performance evaluation incorporate both qualitativeand quantitative aspects including asset quality provisioning increase in stable fundingsources refinement/improvement of the risk management framework effective management ofstakeholder 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 riskframework with limit structures for various areas of risk/ lines of business within whichthe Bank operates to achieve the financial ensure effective alignment of compensation withprudent risk taking the BGRNC takes into account adherence to the risk framework inconjunction with which the financial plan/ targets have been formulated. KPIs of WTDs& equivalent positions as well as employees incorporate relevant risk managementrelated aspects. For example in addition to performance targets in areas such as growthand profits performance indicators include aspects such as the desired funding profileand asset quality. The BGRNC takes into consideration all the above aspects whileassessing organisational and individual performance and making compensation-relatedrecommendations to the Board.
Discussion of how the nature and type of these measures have changed over the pastyear 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 hencethere is no impact on remuneration.
d) Description of the ways in which the Bank seeks to link performance during aperformance measurement period with levels of remuneration.
Overview of main performance metrics for Bank top level business lines andindividuals.
The main performance metrics include profits loan growth deposit growth risk metrics(such as quality of assets) compliance with regulatory norms refinementof riskmanagement processes and customer service. The specific metrics and weightages for variousmetrics vary with the role and level of the individual.
Discussion of how amounts of individual remuneration are linked to the Bank-wide andindividual performance.
The BGRNC takes into consideration all the above aspects while assessing organisationaland individual performance and making compensation-related recommendations to the Boardregarding the level of performance bonus for employees and the performance assessment ofWTDs and equivalent positions. The performance assessment of individual employees isundertaken based on achievements vis-a-vis their goal sheets which incorporate thevarious aspects/ metrics described earlier.
Discussion of the measures the Bank will in general implement to adjust remunerationin the event that performance metrics are weak including the Bank's criteria fordetermining weak' performance metrics.
The Bank's Compensation Policy outlines the measures the Bank will implement in theevent of a reasonable evidence of deterioration in financial performance. Should such anevent occur in the manner outlined in the policy the BGRNC may decide to apply malus onnone part or all of the unvested deferred variable compensation.
e) Description of the ways in which the Bank seeks to adjust remuneration to takeaccount of the longer term performance.
Discussion of the Bank's policy on deferral and vesting of variable remunerationand if the fraction of variable remuneration that is deferred differs across employees orgroups of employees a description of the factors that determine the fraction and theirrelative importance.
The quantum of bonus for an employee does not exceed a certain percentage (asstipulated in the compensation policy) of the total fixed pay in a year. Within thispercentage if the quantum of bonus exceeds a predefined threshold percentage of the totalfixed pay a part of the bonus is deferred and paid over a period. These thresholds fordeferrals are same across employees.
Discussion of the Bank's policy and criteria for adjusting deferred remunerationbefore vesting and (if permitted by national law) after vesting through claw backarrangements.
The deferred portion of variable pay is subject to malus under which the Bank wouldprevent vesting of all or part of the variable pay in the event of an enquiry determininggross negligence breach of integrity or in the event of a reasonable evidence ofdeterioration in financial performance. In such cases variable pay already paid out mayalso be subjected to clawback arrangements as applicable.
f) Description of the different forms of variable remuneration that the Bank utilisesand the rationale for using these different forms.
Overview of the forms of variable remuneration offered. A discussion of the use ofdifferent forms of variable remuneration and if the mix of different forms of variableremuneration differs across employees or group of employees a description of the factorsthat determine the mix and their relative importance.
The Bank pays performance linked retention pay (PLRP) to its front-line staff andjunior management and performance bonus to its middle and senior management. PLRP aims toreward front line and junior managers mainly on the basis of skill maturity attainedthrough experience and continuity in role which is a key differentiator for customerservice. The Bank also pays variable pay to sales officers and relationship managers inwealth management roles while ensuring that such pay-outs are in accordance withapplicable regulatory requirements.
The Bank ensures higher proportion of variable pay at senior levels and lower variablepay for front-line staff and junior management levels.
(B) Quantitative disclosures
The following table sets forth for the period indicated the details of quantitativedisclosure for remuneration of wholetime Directors (including MD & CEO) and equivalentpositions.
|Particulars ||At March 31 2016 ||At March 31 2017 |
|Number of meetings held by the BGRNC during the financialyear ||8 ||10 |
|Remuneration paid to its members during the financial year ( Rs.in million) (sitting fees) ||0.5 ||0.5 |
|Number of employees having received a variable remuneration award during the financial year ||Nil ||6 |
|Number and total amount of sign-on awards made during the financial year ||Nil ||Nil |
|Number and total amount of guaranteed bonuses awarded during the financial year ||Nil ||Nil |
|Details of severance pay in addition to accrued benefits ||Nil ||Nil |
|Breakdown of amount of remuneration awards for the financial year ( Rs.in million) || || |
|Fixed1 ||201.7 ||231.5 |
|Variable2 ||Nil ||75.6 |
|Deferred || || |
|Non-deferred || ||75.6 |
|Share-linked instruments ||46100003 ||4115000 |
|Total amount of deferred remuneration paid out in the financial year ||26.9 ||16.0 |
|Total amount of outstanding deferred remuneration Cash (Rs.in million) ||23.4 ||6.1 |
|Shares (nos.) ||Nil ||Nil |
|Shares-linked instruments4 ||16725000 ||13406500 |
|Other forms ||Nil ||Nil |
|Total amount of outstanding deferred remuneration and retained remuneration exposed ex-post explicit and/or implicit adjustments ||23.4 ||6.1 |
|Total amount of reductions during the year due to ex-post explicit adjustments ||Nil ||Nil |
|Total amount of reductions during the year due to ex-post implicit adjustments ||Nil ||Nil |
1. Fixed pay includes basic salary supplementary allowances superannuationcontribution to provident fund and gratuity fund by the Bank. The amount contains partyear payouts for a retired and a resigned WTD and a newly appointed WTD for fiscal 2017.
2. Variable Pay and Share-linked instruments for the year ended March 31 2017 aresubject to approval from RBI.
3. Excludes special grant of stock options approved by RBI in November 2015aggregating to 5.8 million & grant of 1.0 million options for Vishakha Mulye.
4. The amount contains special grants including grant to Vishakha Mulye.
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 remunerationand such other details in terms of Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 and as amended from time to time.
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|Chanda Kochhar Managing Director & CEO ||112:1 |
|N. S. Kannan ||75:1 |
|Vishakha Mulye ||75:1 |
|Vijay Chandok* ||69:1 |
|Anup Bagchi* ||69:1 |
*The ratios are annualised as remuneration in the capacity of a Director is effectivefrom July 28 2016 for Vijay Chandok and from February 1 2017 for Anup Bagchi.
Note: K. Ramkumar and Rajiv Sabharwal ceased to be directors during the financial yearand are hence not included in the above table.
(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer and Company Secretary ranged between 12.0% and 15.0%.
(iii) The percentage increase in the median remuneration of employees in the financialyear;
The percentage increase in the median remuneration of employees in the financial yearwas around 12.0%.
(iv) The number of permanent employees on the rolls of company;
The number of employees as mentioned in the section on Management's Discussion& Analysis' is 82841. Out of this the employees on permanent rolls of the company is81129 including employees in overseas locations.
(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
The average percentage increase made in the salaries of total employees other than theKey Managerial Personnel for fiscal 2017 was around 10.0% while the average increase inthe remuneration of the Key Managerial Personnel was in the range of 12.0% to 15.0%.
(vi) Affirmation that the remuneration is as per the remuneration policy of thecompany.
IV. Corporate Social Responsibility Committee
Terms of Reference
The functions of the Committee include review of corporate social responsibility (CSR)initiatives undertaken by the ICICI Group and the ICICI Foundation for Inclusive Growthformulation and recommendation to the Board of a CSR Policy indicating the activities tobe undertaken by the Company and recommendation of the amount of expenditure to beincurred on such activities reviewing and recommending the annual CSR plan to the Boardmaking recommendations to the Board with respect to the CSR initiatives policies andpractices of the ICICI
Group monitoring the CSR activities implementation and compliance with the CSR Policyand reviewing and implementing if required any other matter related to CSR initiativesas recommended/suggested by RBI or any other body.
At March 31 2017 the Corporate Social Responsibility Committee comprised threeDirectors including two independent Directors and the Managing Director & CEO and waschaired by M. S. Ramachandran an independent Director. There were three Meetings of theCommittee during the year. The details of the composition of the Committee and attendanceat its Meetings are set out in the following table:
|Name of Member ||Number of meetings attended |
|M. S. Ramachandran Chairman ||3/3 |
|Tushaar Shah* ||1/3 |
|Alok Tandon (upto January 16 2017) ||0/3 |
|Chanda Kochhar ||3/3 |
* Participated in one Meeting through video-conference.
Upon completion of his term as a non-executive Director M. S. Ramachandran ceased to bethe Chairman and Member of the Committee with effect from April 25 2017. The Board at itsMeeting held on April 6-7 2017 reconstituted the Committee pursuant to which DileepChoksi and Amit Agrawal were inducted as Members of the Committee with effect from April6 2017 and Tushaar Shah was appointed as the Chairman of the Committee with effect fromApril 25 2017.
Details about the policy developed and implemented by the company on corporate socialresponsibility initiatives taken during the year
The CSR policy has been hosted on the website of the Companyhttps://www.icicibank.com/managed-assets docs/about-us/ICICI-Bank-CSR-Policy.pdf.
The Annual Report on CSR activities is annexed herewith as Annexure E.
V. Credit Committee
Terms of Reference
The functions of the Committee include review of developments in key industrialsectors major credit portfolios and approval of credit proposals as per the authorisationapproved by the Board.
At March 31 2017 the Credit Committee comprised three Directors including twoindependent Directors and the Managing Director & CEO and was chaired by the ManagingDirector & CEO. There were 28 Meetings of the Committee during the year. The detailsof the composition of the Committee and attendance at its Meetings are set out in thefollowing table:
|Name of Member ||Number of meetings attended |
|Chanda Kochhar Chairperson ||28/28 |
|Homi Khusrokhan ||26/28 |
|M. S. Ramachandran* ||28/28 |
* Participated in one Meeting through video-conference.
Upon completion of his term as a non-executive Director M. S. Ramachandran ceased to bethe Member of the Committee with effect from April 25 2017. The Board at its Meeting heldon April 6-7 2017 re-constituted the Committee with effect from April 6 2017 pursuantto which M. K. Sharma was inducted as a Member as well as appointed as the Chairman of theCommittee.
VI. Customer Service Committee
Terms of Reference
The functions of this Committee include review of customer service initiativesoverseeing the functioning of the Customer Service Council and evolving innovativemeasures for enhancing the quality of customer service and improvement in the overallsatisfaction level of customers.
At March 31 2017 the Customer Service Committee comprised three Directors includingtwo independent Directors and the Managing Director & CEO and was chaired by M. S.Ramachandran an independent Director. There were six Meetings of the Committee during theyear. The details of the composition of the Committee and attendance at its Meetings areset out in the following table:
|Name of Member ||Number of meetings attended |
|M. S. Ramachandran Chairman ||6/6 |
|V. Sridar* ||5/6 |
|Alok Tandon (upto January 16 2017) ||0/5 |
|Chanda Kochhar ||5/6 |
*Participated in one Meeting through tele-conference.
Upon completion of his term as a non-executive Director M. S. Ramachandran ceased tobe the Chairman and Member of the Committee with effect from April 25 2017. Alok Tandonceased to be a member of the Committee consequent to the withdrawal of his nomination as aGovernment Nominee Director effective January 16 2017. The Board at its meeting held onApril 6-7 2017 re-constituted the Committee pursuant to which Tushaar Shah and AnupBagchi were appointed as the Members of the Committee with effect from April 6 2017 andV. Sridar was appointed as the Chairman of the Committee with effect from April 25 2017.
VII. Fraud Monitoring Committee
Terms of Reference
The Committee monitors and reviews all the frauds involving an amount of Rs.10.0million and above with the objective of identifying the systemic lacunae if any thatfacilitated perpetration of the fraud and put in place measures to rectify the same. Thefunctions of this Committee include identifying the reasons for delay in detection ifany and reporting to top management of the Bank and RBI on the same. The progress ofinvestigation and recovery position is also monitored by the Committee. The Committee alsoensures that staff accountability is examined at all levels in all the cases of frauds andaction if required is completed quickly without loss of time. The role of the Committeeis also to review the efficacy of the remedial action taken to prevent recurrence offrauds such as strengthening of internal controls and put in place other measures as maybe considered relevant to strengthen preventive measures against frauds.
At March 31 2017 the Fraud Monitoring Committee comprised five Directors includingfour independent Directors and the Managing Director & CEO and was chaired by V.Sridar an independent Director. There were seven Meetings of the Committee during theyear. The details of the composition of the Committee and attendance at its Meetings areset out in the following table:
|Name of Member ||Number of meetings attended |
|V. Sridar Chairman# ||6/7 |
|Dileep Choksi ||6/7 |
|Homi Khusrokhan ||6/7 |
|V. K. Sharma ||2/7 |
|Chanda Kochhar ||6/7 |
|Rajiv Sabharwal (upto close of business hours on January 31 2017) ||3/7 |
# Participated in one Meeting through tele-conference and one through video-conference.
The Board at its meeting held on April 6-7 2017 re-constituted the Committee and tooknote of the cessation of V. K. Sharma as a member of the committee owing to his increasedcommitment and approved the appointment of Anup Bagchi as a Member of the Committee witheffect from April 6 2017.
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 IT strategy is aligned with business strategy review ITrisks ensure proper balance of IT investments for sustaining the Bank's growth overseethe aggregate funding of IT at Bank-level ascertain if the management has resources toensure the proper management of IT risks and review contribution of IT to business.
At March 31 2017 the IT Strategy Committee comprised three Directors including twoindependent Directors and the Managing Director & CEO and was chaired by HomiKhusrokhan an independent Director. There were five Meetings of the Committee held duringthe year. The details of the composition of the Committee and attendance at its Meetingsare set out in the following table:
|Name of Member ||Number of meetings attended |
|Homi Khusrokhan Chairman ||5/5 |
|V. Sridar* ||5/5 |
|Chanda Kochhar ||5/5 |
*Participated in one Meeting through video-conference.
IX. Risk Committee
Terms of Reference
The functions of the Committee are to review ICICI Bank's risk management policiespertaining to credit market liquidity operational outsourcing reputation risksbusiness continuity plan and disaster recovery plan. The functions of the Committee alsoinclude review of the Enterprise Risk Management (ERM) framework risk appetite framework(RAF) stress testing framework Internal Capital Adequacy Assessment Process (ICAAP) andframework for capital allocation; review of the status of Basel II and Basel IIIimplementation risk return profile of the Bank risk dashboard covering various risksoutsourcing activities and the activities of the Asset Liability Management Committee. TheCommittee also has oversight on risks of subsidiaries covered under the Group RiskManagement Framework.
At March 31 2017 the Risk Committee comprised six Directors including fiveindependent Directors and the Managing Director & CEO and was chaired by M. K.Sharma an independent Director. There were seven Meetings of the Committee during theyear. The details of the composition of the Committee and attendance at its Meetings areset out in the following table:
|Name of Member ||Number of meetings attended |
|M. K. Sharma Chairman ||7/7 |
|Dileep Choksi ||4/7 |
|Homi Khusrokhan ||6/7 |
|V. K. Sharma ||1/7 |
|V. Sridar* ||6/7 |
|Alok Tandon (upto January 16 2017) ||0/5 |
|Chanda Kochhar ||7/7 |
*Participated in one Meeting through video-conference.
X. Stakeholders Relationship Committee
Terms of Reference
The functions and powers of the Committee include approval and rejection of transfer ortransmission of equity shares preference shares bonds debentures and securities issueof duplicate certificates allotment of shares and securities issued from time to timereview redressal and resolution of grievances of shareholders debenture holders and othersecurity holders delegation of authority for opening and operation of bank accounts forpayment of interest dividend and redemption of securities and the listing of securitieson stock exchanges.
At March 31 2017 the Stakeholders Relationship Committee comprised three Directorsincluding two independent Directors and was chaired by Homi Khusrokhan an independentDirector. There were four Meetings of the Committee during the year. The details of thecomposition of the Committee and attendance at its Meetings are set out in the followingtable:
|Name of Member ||Number of meetings attended |
|Homi Khusrokhan Chairman ||3/4 |
|V. Sridar* ||4/4 |
|N. S. Kannan ||4/4 |
*Participated in one Meeting through video-conference.
P. Sanker Senior General Manager (Legal) is the Company Secretary of the Bank and actsas the Compliance Officer of the Bank in accordance with the requirements of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. 103 shareholder complaints received in fiscal 2017 were processed. AtMarch 31 2017 no complaints were pending.
XI. Review Committee for Identification of Wilful Defaulters/Non Co-operative
Terms of Reference
The function of the Committee is to review the order of the Committee foridentification of wilful defaulters/ non co-operative borrowers (a Committee comprisingwholetime Directors and senior executives of the Bank to examine the facts and record thefact of the borrower being a wilful defaulter/non co-operative borrower) and confirm thesame for the order to be considered final.
The Managing Director & CEO is the Chairperson of this Committee and any twoindependent Directors will comprise the remaining members. There was one Meeting of theCommittee during the year and details of the same is set out in the following table:
|Name of Member ||Number of meetings attended |
|Chanda Kochhar Chairperson ||1/1 |
|Homi Khusrokhan ||1/1 |
|M. S. Ramachandran ||1/1 |
In addition to the above the Board has from time to time constituted variouscommittees namely Committee of Executive Directors Executive Investment CommitteeAsset Liability Management Committee Committee for Identification of WilfulDefaulters/non co-operative borrowers Committee of Senior Management (comprising certainwholetime Directors and executives) and Committee of Executives Compliance CommitteeProduct & Process Approval Committee Regional Committees for India and overseasoperations Outsourcing Committee Operational Risk Management Committee and otherCommittees (all comprising executives). These committees are responsible for specificoperational areas like asset liability management approval/renewal of credit proposalsapproval of products and processes and management of operational risk underauthorisation/supervision of the Board and its Committees.
XIII. 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-Second AGM ||Monday July 11 2016 ||12:00 noon ||Sir Sayajirao Nagargruh Vadodara |
|Twenty-First AGM ||Monday June 29 2015 ||12:00 noon ||Mahanagar Seva Sadan Near GEB Colony Old Padra Road Akota |
|Twentieth AGM ||Monday June 30 2014 ||1:00 p.m. ||Vadodara 390 020 |
The details of the Special Resolutions passed in the Annual General Meetings held inthe previous three years are given below:
|General Body Meeting ||Day Date ||Resolution |
|Annual General Meeting ||Monday July 11 2016 ||Private placement of securities under Section 42 of the Companies Act 2013 |
|Annual General Meeting ||Monday June 29 2015 ||Private placement of securities under Section 42 of the Companies Act 2013 |
|Annual General Meeting ||Monday June 30 2014 ||1. Amendment to Articles of Association of the Bank pursuant to The Banking Laws (Amendment) Act 2012 |
| || ||2. Borrowing limits under Section 180(1)(c) of the Companies Act 2013 |
| || ||3. Private placement of securities under Section 42 of the Companies Act 2013 |
During FY2017 no postal ballot notice was issued. In line with the provisions ofSection 110 of the Companies Act 2013 the Bank vide its Postal Ballot Notice dated May5 2017 is seeking approval of the Members for the following Special Resolutions: (i)Alteration of Articles of Association (ii) Amendment to the Employee Stock Option SchemeThe Bank follows the procedure as prescribed under the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 as amended from time to time andthe Secretarial Standards. Members are provided the facility to cast their votes throughelectronic voting (e-voting) or through postal ballot. The Board of Directors of the Bankappoints Scrutinizer(s) for conducting the postal ballot voting process. The Scrutinizersubmits his report to the Chairman after the completion of the scrutiny of the postalballots (including e-voting). Considering the combined results of the Postal Ballot viapostal ballot forms and e-voting facility the resolution is considered approved. Theresults are declared and communicated to the stock exchanges and displayed on the Bank'swebsite www.icicibank.com.
1. There are no materially significant transactions with related parties i.e.directors or relatives conflicting with the Bank's interests. The Bank has no promoter.
2. No penalties or strictures have been imposed on the Bank by any of the stockexchanges the Securities & Exchange Board of India (SEBI) or any other statutoryauthority for any non-compliance on any matter relating to capital markets during thelast three years.
3. In terms of the Whistle Blower Policy of the Bank no employee of the Bank has beendenied access to the Audit Committee.
XV. Means of Communication
It is ICICI Bank's belief that all stakeholders should have access to completeinformation regarding its position to enable them to accurately assess its futurepotential. ICICI Bank disseminates information on its operations and initiatives on aregular basis. ICICI Banks website (www.icicibank.com) serves as a key awarenessfacility for all its stakeholders allowing them to access information at theirconvenience. It provides comprehensive information on ICICI Bank's strategy financialperformance operational performance and the latest ICICI Bank's investor relationspersonnel respond to specific queries and play a proactive role in disseminatinginformation to both analysts and investors. In accordance with SEBI and SecuritiesExchange Commission (SEC) guidelines all information which could have a material bearingon ICICI Bank's share price is released through leading domestic and global wire agencies.The information is also disseminated to the National Stock Exchange of India Limited(NSE) the Bombay Stock Exchange Limited (BSE) New York Stock Exchange (NYSE) SecuritiesExchange Commission (SEC) Singapore Stock Exchange Japan Securities Dealers Associationand SIX Swiss Exchange Ltd from time to time.
The financial and other information and the various compliances as required/prescribedunder the Listing Regulations are filed electronically with NSE/BSE through NSE ElectronicApplication Processing (NEAP) System and through BSE Listing Centre and are also availableon their respective websites in addition to the Bank's website. Additionally informationis also disseminated to BSE/NSE where required by email or fax.
ICICI Bank's quarterly financial results are published either in the Financial Express(Mumbai Pune Ahmedabad New Delhi Lucknow Chandigarh Kolkata Chennai BengaluruHyderabad and Kochi editions) or the Business Standard (Ahmedabad BengaluruBhubaneshwar Chandigarh Chennai Hyderabad Kochi Kolkata Lucknow Mumbai New Delhiand Pune editions) and Vadodara Samachar (Vadodara). The financial results official newsreleases analyst call transcripts and presentations are also available on the Bank'swebsite.
The Management's Discussion & Analysis forms part of the Annual Report.
General Shareholder Information
|Annual General Meeting ||Day Date & Time ||Venue |
|Twenty-Third AGM ||Friday June 30 2017 12:00 noon ||Professor Chandravadan Mehta Auditorium General Education Centre Opposite D.N. Hall Ground The Maharaja Sayajirao University Pratapgunj Vadodara 390 002 |
|Financial Year ||April 1 2016 to March 31 2017 |
|Book Closure ||June 22 2017 to June 24 2017 |
|Dividend Payment Date ||July 1 2017 |
Listing of equity shares/ADSs/Bonds on Stock Exchanges
|Stock Exchange ||Code for ICICI Bank |
|BSE Limited (BSE) (Equity) ||532174 |
|Phiroze Jeejeebhoy Towers ||& |
|Dalal Street Mumbai 400 001 ||6321741 |
|National Stock Exchange of India Limited (NSE) (Equity) Exchange Plaza Bandra-Kurla Complex Bandra (East) Mumbai 400 051 ||ICICIBANK |
|New York Stock Exchange (ADSs)2 11 Wall Street New York NY 10005 United States of America ||IBN |
1. FII segment of BSE.
2. Each ADS of ICICI Bank represents two underlying equity shares.
The Bonds issued in domestic market comprised of privately placed bonds and also bondsissued via public issues which are listed on BSE/NSE.
ICICI Bank has paid annual listing fees for the relevant periods to BSE and NSE whereits 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. Thelisted bonds are traded on Singapore Exchange Securities Trading Limited 2 Shenton Way#02-02 SGX Centre 1 Singapore 068804 or SIX
Swiss Exchange Ltd Sales & Product Management Selnaustrasse 30 CH-8021 Zurich orTokyo 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 Banktraded during fiscal 2017 on BSE and NSE are set out in the following table:
|Month ||BSE ||NSE ||Total Volume on |
| ||High Rs. ||Low Rs. ||Volume ||High Rs. ||Low Rs. ||Volume ||BSE and NSE |
|April 2016 ||254.10 ||220.15 ||25410291 ||254.05 ||220.30 ||426467139 ||451877430 |
|May 2016 ||245.20 ||214.75 ||33018129 ||244.65 ||214.45 ||457573408 ||490591537 |
|June 2016 ||257.60 ||231.05 ||21692145 ||257.65 ||230.95 ||310507526 ||332199671 |
|July 2016 ||272.10 ||240.40 ||27029799 ||272.00 ||240.35 ||250869449 ||277899248 |
|August 2016 ||257.70 ||239.30 ||25899934 ||258.00 ||239.35 ||312782813 ||338682747 |
|September 2016 ||278.15 ||251.00 ||35928019 ||278.15 ||250.35 ||348360812 ||384288831 |
|October 2016 ||289.10 ||241.20 ||34369153 ||289.25 ||241.15 ||385243401 ||419612554 |
|November 2016 ||292.55 ||255.35 ||43192196 ||292.60 ||255.30 ||454292361 ||497484557 |
|December 2016 ||268.35 ||248.40 ||20744718 ||268.45 ||248.15 ||230907955 ||251652673 |
|January 2017 ||272.05 ||251.10 ||18891478 ||272.00 ||251.10 ||361184175 ||380075653 |
|February 2017 ||290.35 ||276.40 ||28492952 ||290.30 ||276.35 ||344530054 ||373023006 |
|March 2017 ||286.75 ||265.60 ||74079245 ||287.25 ||265.00 ||337097624 ||411176869 |
|Fiscal 2017 ||292.55 ||214.75 ||388748059 ||292.60 ||214.45 ||4219816717 ||4608564776 |
The reported high and low closing prices and volume of ADRs of ICICI Bank traded duringfiscal 2017 on the NYSE are given below:
| || || || |
|Month ||High (USD) ||Low (USD) ||Number of ADS traded |
| || || || |
|April 2016 ||7.85 ||6.59 ||230394449 |
|May 2016 ||7.19 ||6.38 ||244522998 |
|June 2016 ||7.80 ||6.65 ||221250327 |
|July 2016 ||8.01 ||7.20 ||191163670 |
|August 2016 ||7.67 ||7.17 ||177275674 |
|September 2016 ||8.37 ||7.41 ||194469484 |
|October 2016 ||8.70 ||7.15 ||277754078 |
|November 2016 ||8.62 ||7.46 ||207498832 |
|December 2016 ||7.98 ||7.40 ||121055688 |
|January 2017 ||8.10 ||7.45 ||156884115 |
|February 2017 ||8.64 ||8.20 ||152351871 |
|March 2017 ||8.78 ||8.15 ||182984082 |
|Fiscal 2017 ||8.78 ||6.38 ||2357605268 |
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 April1 2016 to March 31 2017 is given in the following chart:
Share Transfer System
ICICI Bank's investor services are handled by 3i Infotech Limited (3i Infotech). 3iInfotech 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 toR&T services provides a wide range of technology & technology-enabled productsand services. ICICI Bank's equity shares are traded mainly in dematerialised form. Duringthe year 1464735 equity shares of face value Rs.2/- each involving 3031 certificateswere dematerialised. At March 31 2017 99.50% of paid-up equity share capital (includingequity shares represented by ADS constituting 25.30% of the paid-up equity share capital)are held in dematerialised form.
Physical share transfer requests are processed and the share certificates are returnednormally within a period of seven days from the date of receipt if the documents arecorrect 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:
| ||Fiscal 2015 ||Fiscal 2016 ||Fiscal 2017 |
| ||Shares of face value Rs.10 ||Shares of face value Rs.2 ||Shares of face value Rs.2 ||Shares of face value Rs.2 |
|Number of transfer deeds ||706 ||564 ||1114 ||414 |
|Number of shares transferred ||38382 ||153150 ||314890 ||109155 |
As required under Regulation 40(9) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 a certificate isobtained every six months Company Secretary that all transfers have been completed withinthe stipulated time. The certificates are filed with BSE and NSE.
In terms of SEBI circular no. D&CC/FITTC/CIR-16 dated December 31 2002 as amendedvide circular no. CIR/ MRD/DP/30/2010 dated September 6 2010 an audit is conducted on aquarterly basis by a firm of Chartered Accountants for the purpose of inter aliareconciliation of the total admitted equity share capital with the depositories and in thephysical form with the total issued/paid up equity share capital of ICICI Bank.Certificates issued in this regard are placed before the Stakeholders RelationshipCommittee and filed with BSE and NSE where the equity shares of ICICI Bank are listed.
Physical Share Disposal Scheme
With a view to mitigate the difficulties experienced by physical shareholders indisposing off their shares ICICI
Bank in the interest of investors holding shares in physical form (upto 250 shares offace value of Rs.2 each) has instituted a Physical Share Disposal Scheme. The scheme wasstarted in November 2008 and continues to remain open. Interested shareholders may contactthe R&T Agent 3i Infotech Limited for further details.
Registrar and Transfer Agents
The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited. Investorservices related queries/requests/ complaints may be directed to R. C. D'souza at theaddress 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 8021 Fax No. : +91-22-7123 8098 E-mail : email@example.com
Queries relating to the operational and financial performance of ICICI Bank may beaddressed to:
Rakesh Jha/Anindya Banerjee/Sonal Bagaria
ICICI Bank Limited ICICI Bank Towers
Bandra-Kurla Complex Mumbai 400 051 Tel No. : +91-22-2653 6124 Fax No. : +91-22-26531175 E-mail : firstname.lastname@example.org
Pursuant to Regulation 53 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the names and contact detailsof the debenture trustees for the public issue bonds and privately placed bonds of theBank are given below:
|Bank of Maharashtra ||Axis Trustee Services Limited ||IDBI Trusteeship Services Limited |
|Legal Dept.Head Office ||Axis House ||Asian Building Ground Floor |
|Lokmangal "1501" ||Bombay Dyeing Mill Compound ||17 R Kamani Marg |
|Shivaji Nagar ||Pandurang Budhkar Marg ||Ballard Estate |
|Pune - 411 005 ||Worli Mumbai - 400 025 ||Mumbai 400 001 |
|Tel. No: +91-020-2553 6256 ||Tel No: +91- 22- 62260050/54 ||Tel No: +91 -22 - 4080 7001 |
|email@example.com ||firstname.lastname@example.org ||email@example.com |
The details are available on the website of the Bank at the linkhttp://www.icicibank.com/Personal-Banking/investments/icici-bank-bonds/index.page.
Information on Shareholding
Shareholding pattern of ICICI Bank at March 31 2017
|Shareholder Category ||Shares ||% holding |
|Deutsche Bank Trust Company Americas (Depositary for ADS holders) ||1473304334 ||25.30 |
|FIIs NRIs Foreign Banks Foreign Companies OCBs and Foreign Nationals ||2066832356 ||35.48 |
|Insurance Companies ||886918475 ||15.23 |
|Bodies Corporate (including Government Companies) ||145843449 ||2.51 |
|Banks & Financial Institutions ||5913981 ||0.10 |
|Mutual Funds ||871787797 ||14.97 |
|Individuals HUF and Trusts ||339786970 ||5.83 |
|NBFC Registered with RBI ||1122769 ||0.02 |
|Provident Fund / Pension Fund ||32812592 ||0.56 |
|Alternative Investment Fund ||153412 ||0.00 |
|Total ||5824476135 ||100.00 |
Shareholders of ICICI Bank with more than one percent holding at March 31 2017
| || || |
|Name of the Shareholder ||No. of shares ||% to total no. of shares |
| || || |
|Deutsche Bank Trust Company Americas (Depositary for ADS holders) ||1473304334 ||25.30 |
|Life Insurance Corporation of India ||608927224 ||10.45 |
|Dodge and Cox International Stock Fund ||364368485 ||6.26 |
|Government of Singapore ||63125358 ||1.08 |
|Government Pension Fund Global ||59371058 ||1.02 |
|Total ||2569096459 ||44.11 |
Distribution of shareholding of ICICI Bank at March 31 2017
|Range Shares ||No. of Folios ||% ||No. of Shares ||% |
|Upto 1000 ||478953 ||51.02 ||21024666 ||0.36 |
|1001 5000 ||329141 ||35.06 ||88889355 ||1.53 |
|5001 10000 ||77377 ||8.24 ||56232091 ||0.96 |
|10001 50000 ||45941 ||4.89 ||89096647 ||1.53 |
|50001 & above ||7414 ||0.79 ||5569233376 ||95.62 |
|Total ||938826 ||100.00 ||5824476135 ||100.00 |
Disclosure with respect to shares lying in suspense account
The Bank had 100950 equity shares held by 508 shareholders lying in suspense accountat the beginning of the fiscal 2017. The Bank has been transferring the shares lyingunclaimed to the eligible shareholders as and when the request for the same has beenreceived after proper verification. During the year the Bank had received requests from16 shareholders holding 2815 shares for claiming these shares out of which 1775 sharesheld by 10 shareholders were transferred from the suspense account. As on March 31 201799175 shares held by 498 shareholders remained unclaimed in the suspense account.
The voting rights on the shares lying in suspense account are frozen till the rightfulowner of such shares claims the shares.
Outstanding GDRs/ADSs/Warrants or any Convertible Debentures conversion date andlikely impact on equity
ICICI Bank has 736.65 million ADS (equivalent to 1473.30 million equity shares)outstanding which constituted 25.30% of ICICI Bank's total equity capital at March 312017. Currently there are no convertible debentures outstanding.
Commodity price risk or foreign exchange risk and hedging activities
The foreign exchange risk position including bullion is managed within the Rs.10.00billion net overnight open position (NOOP) limit approved by the Board of Directors. TheBank does not undertake positions in commodities. The Bank primarily has floating ratelinked assets. Wholesale liability raising takes place in US dollar or other currenciesvia bond issuances bilateral loans syndicated/club loans as well as refinance fromAgencies (ECA)whichmaybe fixedrate or floating rate linked. In case of fixed ratefund raising in US dollars the interest rate risk is hedged via interest rate swapswherein the Bank moves to a floating rate index in order to match the asset profile. Incase of fund raising in non US dollar currencies the foreign exchange risk is hedged viaforeign exchange swaps or currency interest rate swaps.
Plant Locations Not applicable Address for Correspondence
Senior General Manager (Legal) & Company Secretary or Ranganath Athreya
General Manager & Joint Company Secretary
ICICI Bank Limited ICICI Bank Towers
Bandra-Kurla Complex Mumbai 400 051 Tel No. : +91-22-2653 8900 Fax No. : +91-22-26531230
E-mail : firstname.lastname@example.org
The Bank is in compliance with requirements specified in Regulations 17 to 27 andclauses 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 aseparate office for the Chairman at the Bank's expense ensuring financial statements withunmodifiedaudit opinion separation of posts of Chairman and Chief Executive Officer andreporting of internal auditor directly to the Audit Committee.
ANALYSIS OF CUSTOMER COMPLAINTS
a) Customer complaints in fiscal 2017
|No. of complaints pending at the beginning of the year ||3400 |
|No. of complaints received during the year ||217473 |
|No. of complaints redressed during the year ||216601 |
|No. of complaints pending at the end of the year ||4272 |
Note: The above does not include complaint redressed within 1 working day.
b) Awards passed by the Banking Ombudsman in fiscal 2017
|Number of unimplemented awards at the beginning of the year ||Nil |
|Number of awards passed by the Banking Ombudsman during the year ||Nil |
|Number of awards implemented during the year ||Nil |
|Number of unimplemented awards at the end of the year ||Nil |
COMPLIANCE CERTIFICATE OF THE AUDITORS
ICICI Bank has annexed to this report a certificateobtained from the statutoryauditors M/s B S R & Co. LLP Chartered Accountants regarding compliance ofconditions of Corporate Governance as stipulated in Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015.
EMPLOYEE STOCK OPTION SCHEME
The Bank has an Employee Stock Option Scheme (ESOS/Scheme) which was fiscal2000 toenable the instituted in employees and wholetime Directors of ICICI Bank and itssubsidiaries to participate in future growth and financial success of the Bank. The ESOSaims at achieving the twin objectives of (i) aligning employee interest to that of theshareholders; and (ii) retention of talent. Through employee stock option grants the Bankseeks to foster a culture of long-term sustainable value creation. The Scheme is incompliance with the SEBI (Share Based Employee Benefits) Regulations 2014 and the belowdisclosures are available at www.icicibank.com/aboutus/annual.page. Pursuant to SEBI(Share Based Employee 2014 options are granted by the Board Governance Remuneration& Nomination Committee Benefits) (BGRNC/Committee) and noted by the Board.
The Scheme was initially approved by the Members at their meeting held on February 212000 and thereafter further amended through resolutions at the General Meetings held onSeptember 20 2004 and June 25 2012 and vide a postal ballot resolution passed on April22 2016. The Bank has upto May 3 2017 granted 446.46 million stock options from time totime aggregating to 7.66% of the issued equity capital of the Bank at May 3 2017. As perthe ESOS as amended from time to time the maximum number of options granted to anyemployee/Director in a year is limited to 0.05% of ICICI Bank's issued equity shares atthe time of the grant and the aggregate of all such options is limited to 10% of ICICIBank's issued equity shares on the date of the grant (equivalent to 582.56 million sharesof face value Rs.2 each at May 3 2017). Options granted after April 1 2014 vest in agraded manner over a three year period with 30% 30% and 40% of the grant vesting in eachyear commencing from the end of 12 months from the date of the grant other than thefollowing: 250000 options granted in April 2014 50% vested on April 30 2017 and balance50% would vest on April 30 2018 Options granted in September 2015 would vest in equalproportions on April 30 2018 and April 30 2019. The unvested options would lapse upontermination of employment due to retirement (including pursuant to early/voluntaryretirement scheme) Options granted prior to April 1 2014 vested in a graded manner over afour-year period with 20% 20% 30% and 30% of the grants vesting in each year commencingfrom the end of 12 months from the date of grant other than the following: Optionsgranted in April 2009 vested in a graded manner over a five year period with 20% 20% 30%and 30% of the grant vesting in each year commencing from the end of 24 months from thedate of the grant The grant approved by the Board at its Meeting held on October 29 2010(for which RBI approval for grant to wholetime Directors was received in January 2011)vested 50% on April 30 2014 and the balance 50% vested on April 30 2015 Options grantedin September 2011 vested in a graded manner over a five year period with 15% 20% 20% and45% of the grant vesting in each year commencing from end of 24 months from the date ofgrant The price for options granted (except for grants approved on October 29 2010 wherethe grant price was the average closing price of the ICICI Bank stock on the stockexchange during the six months upto October 28 2010) is equal to the closing price on thestock exchange which recorded the highest trading volume preceding the date of grant ofoptions in line with the SEBI regulations.
The BGRNC at its Meeting held on July 11 2016 amended the scheme to state that in theevent of an Participant's employment terminating due to retirement the Options shall vestby such period as stipulated in the Award Confirmation subject to the Participantdemonstrating compliance with the Code of Conduct including Undertaking of Continued GoodConduct with a proviso that at the sole discretion of the Committee it may allow thewhole of the options or part thereof to vest at one time or at various points of time.
Further the Committee at its meeting held on May 3 2017 approved the amendment to thedefinitionof Exercise Period as given below: "Exercise Period means the periodcommencing from the date of vesting and will expire on completion of such period notexceeding ten years from the date of vesting of Options as may be determined by the BoardGovernance Remuneration & Nomination Committee ("BGRNC") for eachgrant".
The above amendment was also approved by the Board at its Meeting held on the same daysubject to the approval of the shareholders. The amendment is intended to cover onlyfuture grants to be made and would come into effect only after approval by Members andwill not cover grants already made. There is no incremental Exercise Period being grantedor proposed. The present definition provides for a fixed term Exercise Period of ten yearsand does not allow flexibility to align the Exercise Period of future grants to reflectthe time horizon of short term and long term strategies of the Bank. The amendment wouldenable grants to be made with appropriate Exercise Period(s) for each grant after vestingto better align (i) employee efforts to the articulated strategy; and (ii) thecompensation payout schedules for senior management to the time horizon of risks. Approvalof the shareholders for the above amendment is being sought through postal ballot noticedated May 5 2017.
The BGRNC at its Meeting held on May 3 2017 also approved a grant of approximately 33million options for fiscal 2017 to eligible employees and wholetime Directors of ICICIBank and its subsidiaries (options granted to wholetime Directors of ICICI Bank beingsubject to RBI approval). Each option confers on the employee a right to apply for oneequity share of face value of Rs.2 of ICICI Bank at Rs.275.60 which was closing price onthe stock exchange which recorded the highest trading volume in ICICI Bank shares on May2 2017. The grant price iscalculated as per the SEBI regulations.
Particulars of options granted by ICICI Bank upto May 3 2017 are given below:
|Options granted till May 3 2017 (excluding options forfeited/lapsed) ||446459925 |
|Options forfeited/lapsed ||71626600 |
|Options vested ||364814425 |
|Options exercised ||210565925 |
|Total number of options in force ||235894000 |
|Number of shares allotted pursuant to exercise of options ||210565925 |
|Extinguishment or modification of options ||Nil |
|Amount realised by exercise of options (Rs.) ||16661600441 |
For details on option movement during the year refer Financials-Schedule 18-EmployeeStock Option Scheme. 31107650 options vested during FY2017 and Rs.1772579808 wasrealised by exercise of options during FY2017.
The following Key Managerial Personnel (other than wholetime Directors) and SeniorManagement Personnel (SMP) were granted ESOPs upto a maximum of 332500 optionsaggregating to 4156000 in May 2017. Additionally 850000 joining ESOPs were granted to aSMP.
|Sr. No. ||Name ||Grade |
|1 ||Rakesh Jha ||Group Executive (Chief Financial Officer) |
|2 ||B Madhivanan ||Group Executive |
|3 ||Balachander Prasanna ||Group Executive |
|4 ||Sanjay Chougule ||Senior General Manager |
|5 ||Anita Pai ||Senior General Manager |
|6 ||G Srinivas ||Senior General Manager |
|7 ||T K Srirang ||Senior General Manager |
|8 ||Kumar Ashish ||Senior General Manager |
|9 ||Anuj Bhargava ||Senior General Manager |
|10 ||Prathit Bhobe ||Senior General Manager |
|11 ||Partha Dey ||Senior General Manager |
|12 ||Sujit Ganguli ||Senior General Manager |
|13 ||Ajay Gupta ||Senior General Manager |
|14 ||Anirudh Kamani ||Senior General Manager |
|15 ||Anil Kaul ||Senior General Manager |
|16 ||Loknath Mishra ||Senior General Manager |
|17 ||Narayanan N R ||Senior General Manager |
|18 ||Amit Palta ||Senior General Manager |
|19 ||Murali Ramakrishnan ||Senior General Manager |
|20 ||Kusal Roy ||Senior General Manager |
|21 ||Anup Kumar Saha ||Senior General Manager |
|22 ||Avijit Saha ||Senior General Manager |
|23 ||Sanker Parameswaran ||Senior General Manager (Company Secretary) |
|24 ||Supritha Shirish Shetty ||Senior General Manager |
|25 ||Saurabh Singh ||Senior General Manager |
No employee was granted options during any one year equal to or exceeding 0.05% of theissued equity shares of ICICI Bank at the time of the grant.
The diluted earnings per share (EPS) pursuant to issue of shares on exercise of optionscalculated in accordance with AS-20 was Rs.16.77 in fiscal 2017 compared to basic EPSofRs.16.84. Based on the intrinsic value of options no compensation cost was recognisedduring fiscal 2017. However if the Bank had used the fair value of options based on thebinomial tree model compensation cost in fiscal 2017 would have been higher byRs.5.11billion including additional cost of Rs.1.39 billion due to change in exercise period(approved by shareholders vide postal ballot on April 22 2016) and proforma profit aftertax would have been Rs.92.90 billion. Additional cost of Rs.1.39 billion at the date ofmodification reflects the difference between fair value of option calculated as perrevised exercise period and fair value of option calculated as per original exerciseperiod. On a proforma basis the Bank's basic and diluted earnings per share would havebeenRs.15.97 and Rs.15.90 respectively. The key assumptions used to estimate the fairvalue of options granted during fiscal 2017 are given below:
|Risk-free interest rate ||7.43% to 7.77% |
|Expected life ||3.89 to 5.89 years |
|Expected volatility ||32.03% to 33.31% |
|Expected dividend yield ||2.04% to 2.15% |
The weighted average fair value of options granted during fiscal 2017 is Rs.84.39(Rs.100.50 during fiscal 2016).
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The Bank has undertaken various initiatives for energy conservation at its premisesfurther details are given under Principle 6 of Section E of the Business ResponsibilityReport. The Bank has used information technology extensively in its operations for moredetails please refer the section on Information Technology under Business Overview.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
In line with the 'Green Initiative' since the last five years the Bank has effectedelectronic delivery of Notice of Annual General Meeting and Annual Report to those Memberswhose e-mail IDs were registered with the respective Depository Participants anddownloaded from the depositories viz. National Securities Depository Limited/CentralDepository Services (India) Limited. The Companies Act 2013 and the underlying rules aswell as Regulation 36 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 permit the dissemination offinancialstatements and annual report in electronic mode to the Members. Your Directors arethankful to the Members for actively participating in the Green Initiative and seek yourcontinued support for implementation of the green initiative.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm:
1. that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures; 2. thatthey have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Bank at the end of the financial year and of theprofit of the Bank for thatperiod; 3. that they have taken proper and sufficientcare forthe maintenance of adequate accounting records in accordance with the provisions of theBanking Regulation Act 1949 and the Companies Act 2013 for safeguarding the assets ofthe Bank and for preventing and detecting fraud and other irregularities;
4. that they have prepared the annual accounts on a going concern basis;
5. that they have laid down internal financial controls to be followed by the Bank andthat such internal financial controls are adequate and were operating effectively; and 6.that they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
ICICI Bank is grateful to the Government of India Reserve Bank of India Securitiesand Exchange Board of India Insurance Regulatory and Development Authority of India andoverseas regulators for their continued co-operation support and guidance. ICICI Bankwishes to thank its investors the domestic and international banking community ratingagencies and stock exchanges for their support.
ICICI Bank would like to take this opportunity to express sincere thanks to its valuedclients and customers for their continued patronage. The Directors express their deepsense of appreciation to all the employees whose outstanding professionalism commitmentand initiative has made the organisation's growth and success possible and continues todrive its progress. Finally the Directors wish to express their gratitude to the Membersfor their trust and support.
| ||For and on behalf of the Board |
| ||M. K. Sharma |
|May 15 2017 ||Chairman |
Compliance with the Group Code of Business Conduct and Ethics
I confirm that all Directors and members of the senior management have affirmedcompliance with Group Code of Business Conduct and Ethics for the year ended March 312017.
Managing Director & CEO
May 15 2017
Performance and financial position of subsidiaries and associates of the Bank as onMarch 31 2017
| || || || ||Rs.in million |
| || |
Share in profit or loss
|Name of the entity Parent ||% of total net assets ||Amount ||% of total net profit ||Amount |
|ICICI Bank Limited ||95.5% ||999510.7 ||96.2% ||98010.9 |
|Subsidiaries || || || || |
|Indian || || || || |
|ICICI Securities Primary Dealership Limited ||0.9% ||9435.2 ||4.0% ||4116.0 |
|ICICI Securities Limited ||0.5% ||4850.5 ||3.3% ||3376.1 |
|ICICI Home Finance Company Limited ||1.5% ||16071.7 ||1.8% ||1832.6 |
|ICICI Trusteeship Services Limited ||0.0%2 ||5.9 ||0.0%2 ||0.6 |
|ICICI Investment Management Company Limited ||0.0%2 ||108.9 ||(0.0%)2 ||(6.6) |
|ICICI Venture Funds Management Company Limited ||0.2% ||2068.3 ||0.1% ||92.7 |
|ICICI Prudential Life Insurance Company Limited ||6.1% ||64080.4 ||16.5% ||16822.3 |
|ICICI Lombard General Insurance Company Limited ||4.2% ||44025.4 ||6.9% ||7018.8 |
|ICICI Prudential Trust Limited ||0.0%2 ||13.0 ||0.0%2 ||0.5 |
|ICICI Prudential Asset Management Company Limited ||0.7% ||7331.7 ||4.7% ||4804.7 |
|ICICI Prudential Pension Funds Management Company Limited ||0.0%2 ||269.9 ||(0.0%)2 ||(5.7) |
|Foreign || || || || |
|ICICI Bank UK PLC ||3.3% ||34580.0 ||(1.1%) ||(1078.8) |
|ICICI Bank Canada ||2.9% ||30459.7 ||(1.7%) ||(1686.4) |
|ICICI International Limited ||0.0%2 ||87.7 ||(0.0%)2 ||(4.2) |
|ICICI Securities Holdings Inc. ||0.0%2 ||127.0 ||(0.0%)2 ||(0.0)2 |
|ICICI Securities Inc. ||0.0%2 ||135.9 ||0.0%2 ||10.2 |
|Other consolidated entities || || || || |
|Indian || || || || |
|ICICI Strategic Investments Fund ||0.0%2 ||227.2 ||0.1% ||95.5 |
|Foreign || || || || |
|NIL || || || || |
|Minority interests ||(4.6%) ||(48653.1) ||(11.3%) ||(11519.4) |
|Associates || || || || |
|Indian || || || || |
|Fino PayTech Limited3 || || ||(0.0%)2 ||(14.9) |
|I-Process Services (India) Private Limited || || ||(0.0%)2 ||(5.0) |
|NIIT Institute of Finance Banking and Insurance Training Limited || || ||(0.0%)2 ||(4.2) |
|ICICI Merchant Services Private Limited || || || || |
|India Infradebt Limited || || ||0.1% ||149.1 |
|India Advantage Fund III || || ||(0.1%) ||(91.0) |
|India Advantage Fund IV || || ||(0.1%) ||(75.8) |
|Foreign || || || || |
|NIL || || || || |
|Joint Ventures || || || || |
|NIL || || || || |
|Inter-company adjustments ||(11.2%) ||(118416.0) ||(19.4%) ||(19954.2) |
|Total ||100.0% ||1046320.0 ||100.0% ||101883.8 |
1. Total assets minus total liabilities.
3. FINO PayTech Limited ceased to be an associate of the Bank effective January 52017.
FORM NO. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of section 188 of the Companies Act 2013 including certain arm's lengthtransactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm's lengthbasis
2. Details of material contracts or arrangement or transactions at arm's lengthbasis
|Sr. No. ||Name of the related party ||Nature of relationship ||Nature of contracts/ transactions ||Duration of contracts ||Salient terms of contracts/ transactions ||Rs.in million |
|1 ||ICICI Lombard General Insurance Company Limited ||Subsidiary ||Term deposits placed with the Bank ||Various maturities ||Interest at applicable coupon rates ||13480.0 |
| ||India Infradebt Limited ||Associate || || || ||3100.0 |
| ||ICICI Home Finance Company Limited ||Subsidiary || || || ||750.0 |
|2 ||ICICI Prudential Life Insurance Company Limited ||Subsidiary ||Investment in bonds/ debentures of ICICI Bank ||7 years ||Issued in line with prevailing market rates ||3250.0 |
| ||ICICI Bank UK PLC ||Subsidiary || ||3 years || ||1018.9 |
| ||ICICI Securities Primary Dealership Limited ||Subsidiary || ||10 years || ||750.0 |
|3 ||India Infradebt Limited ||Associate ||Investment in bonds/ debentures of related party ||5 years ||Issued in line with prevailing market rates ||3950.0 |
|4 ||ICICI Securities Primary Dealership Limited ||Subsidiary ||Short-term lending by the Bank ||Various maturities ||Interest at competitive market rates ||183150.0 |
|5 ||ICICI Bank UK PLC ||Subsidiary ||Guarantee given by the Bank ||Various maturities ||Commission on guarantee at negotiated rates ||1916.7 |
|6 ||ICICI Bank UK PLC ||Subsidiary ||Standby letters of credit given by the Bank ||Various maturities ||Commission on guarantee at negotiated rates ||2131.7 |
|7 ||ICICI Prudential Life Insurance Company Limited ||Subsidiary ||Purchases of investment securities of third parties || ||At market price ||3028.8 |
| ||ICICI Securities Primary Dealership Limited ||Subsidiary || || || ||1818.0 |
|8 ||ICICI Prudential Life Insurance Company Limited ||Subsidiary ||Sale of investment securities of third parties || ||At market price ||7524.2 |
| ||ICICI Securities Primary Dealership Limited ||Subsidiary || || || ||1499.0 |
| ||ICICI Lombard General Insurance Company Limited ||Subsidiary || || || ||1449.4 |
|9 ||India Infradebt Limited ||Associate ||Investment in equity shares of related party || ||In line with terms of right issue ||1829.5 |
|10 ||ICICI Bank UK PLC ||Subsidiary ||Risk participation ||5 years ||At market competitive rates ||2075.2 |
|11 ||ICICI Securities Primary Dealership Limited ||Subsidiary ||Principal amounts of derivatives such as swaps and forwards ||Various maturities ||At market rates ||220250.0 |
| ||ICICI Bank UK PLC ||Subsidiary ||contracts || || ||122828.8 |
| ||ICICI Securities Limited ||Subsidiary || || || ||11723.2 |
| ||ICICI Prudential Life Insurance Company Limited ||Subsidiary || || || ||2178.5 |
| ||ICICI Prudential Asset Management Company Limited ||Subsidiary || || || ||814.9 |
|12 ||ICICI Bank UK PLC ||Subsidiary ||Current account deposits by the Bank || ||Outstanding balance at March 31 2017 in current account deposits maintained for normal banking transactions ||522.1 |
|13 ||Life Insurance Corporation of India India Infradebt Limited ||Others ||Current account deposits with the Bank || ||Outstanding balance at March 31 2017 in current account deposits maintained for normal banking transactions ||6256.3 |
| || ||Associate || || || ||2006.4 |
| ||ICICI Prudential Life Insurance Company Limited ||Subsidiary || || || ||1502.3 |
| ||ICICI Lombard General Insurance Company Limited ||Subsidiary || || || ||1121.4 |
| ||ICICI Securities Limited ||Subsidiary || || || ||1030.4 |
|14 ||Life Insurance Corporation of India ||Others ||Interest expenses || ||Interest on bonds at applicable rates ||17990.8 |
|15 ||ICICI Home Finance Company Limited ||Subsidiary ||Interest income || ||Interest on loans and advances at applicable rates ||557.5 |
|16 ||ICICI Lombard General Insurance Company Limited ||Subsidiary ||Insurance premium paid || ||Staff welfare insurance at market competitive rates ||860.8 |
|17 ||ICICI Prudential Life Insurance Company Limited ||Subsidiary ||Administration publicity and marketing support income ||6 years ||Charges for publicity and advertisements at branches and ATMs ||5726.9 |
|18 ||ICICI Prudential Life Insurance Company Limited ||Subsidiary ||Commission income on insurance products ||Ongoing ||Commission for corporate agency services to solicit and procure the sale and distribution of the policies ||3902.2 |
| ||ICICI Lombard General Insurance Company Limited ||Subsidiary || ||3 years || ||877.7 |
|19 ||I-Process Services (India) Private Limited ||Associate ||Expenses towards service provider arrangements ||1 year ||Outsourcing of services and resources ||3572.8 |
| ||ICICI Merchant Services Private Limited ||Associate || ||10 years ||Merchant management fee ||2221.0 |
|20 ||ICICI Prudential Life Insurance Company Limited ||Subsidiary ||Reimbursement of expenses paid || ||On actual basis ||509.9 |
Dividend distribution policy
ICICI Bank Limited (the Bank or ICICI Bank) is a public company incorporated under theCompanies Act 1956 and licensed as a bank under the Banking Regulation Act 1949. TheBank has been making profits since inception and has been paying equity share dividends inaccordance with the guidelines of Reserve Bank of India (RBI) and Securities and ExchangeBoard of India (SEBI) Companies Act 1956 Companies Act 2013 and Banking RegulationAct 1949. This policy documents the guidelines on payment of dividends and sets out thekey considerations for arriving at the dividend payment decision. The Board will have theflexibility to determine the level of dividend based on the considerations laid out in thepolicy and other relevant developments.
2. Regulatory framework
The Bank while proposing equity share dividend will ensure compliance with the RBIguidelines relating to declaration of dividend capital conservation requirements underguidelines on Basel III norms issued by RBI provisions of the Banking Regulation Act1949 the Securities and Exchange Board of India (SEBI) (Listing Obligations andDisclosure Requirements) Regulations 2015 provisions of the Companies Act 2013 andguidelines provided under the section titled "Dividends" in the Articles ofAssociation (AOA) of the Bank.
3. Approval process
The Board of Directors of the Bank would take into account the following aspects whiledeciding on the proposal for dividend: a) profitability and key financial metrics; b) theinterim dividend paid if any; c) the auditors' qualifications pertaining to the statementof accounts if any; d) whether dividend/coupon payments for non-equity capitalinstruments (including preference shares) have been made; e) the Bank's capital positionand requirements as per Internal Capital Adequacy Assessment Process (ICAAP) projectionsand regulatory norms; and f) the applicable regulatory requirements The dividend decisionwould be subject to consideration of anyother relevant factors including for example:External factors including state of the domestic and global economy capital marketconditions and dividend policy of competitors; Tax implications including applicabilityand rate of dividend distribution tax; Shareholder expectations The decision regardingdividend shall be taken only by the Board at its Meeting and not by a Committee of theBoard or by way of a Resolution passed by circulation.
Final dividend shall be paid only after approval at an Annual General Meeting (AGM) ofthe Bank. Shareholder approval is not required for payment of interim dividend.
4. Utilisation of retained earnings
The Bank would utilise the retained earnings for general corporate purposes includingorganic and inorganic growth investments in subsidiaries/associates and/orappropriations/drawdowns as per the regulatory framework. The Board may decide to employthe retained earnings in ensuring maintenance of an optimal level of capital adequacymeeting the Bank's future growth/expansion plans other strategic purposes and/ordistribution 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 anyother class of equity shares and/or equity shares with differential voting rights theentire distributable profit for the purpose of declaration of dividend is considered forthe equity shareholders. The Bank has preference shares on which a fixed rate of dividendis appropriated out of profits.
6. 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 dividendbased on the regulatory eligibility criteria for recommendation of dividend including anyregulatory restriction placed on the Bank on declaration of dividend. There may also beobligations that the Bank could have undertaken under the terms of perpetualnon-cumulative preference shares or debt capital instruments pursuant to applicableregulations which might prohibit the Bank from declaring dividend in certaincircumstances.
The Board of the Bank may vary the level of dividend or not recommend any dividendbased on the capital and reserves position of the Bank. The Board may recommend lower orno dividends if it is of the view that there is a need to conserve capital. The Board mayrecommend higher dividends subject to applicable regulations if the capital and reservesposition supports a higher distribution to the shareholders.
The dividend policy of the Bank would be reviewed annually or earlier if materialchanges take place in the applicable regulations.
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE
The Members of ICICI Bank Limited
We have examined the compliance of conditions of Corporate Governance by ICICI BankLimited (the Bank') for the year ended 31 March 2017 as per regulations 17 to 27clauses (b) to (i) of sub-regulation (2) of regulation 46 and paragraphs C D and E ofSchedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (the Listing Regulations').
The compliance of conditions of Corporate Governance is the responsibility ofmanagement. Our examination was limited to procedures and implementation thereof adoptedby the Bank for ensuring the compliance of the conditions of Corporate Governance. It isneither an audit nor an expression of opinion on the financial statements of the Bank.
We conducted our examination in accordance with the Guidance Note on Reports orCertificates for Special Purposes (Revised 2016) issued by the Institute of CharteredAccountants of India (the ICAI'). The Guidance Note requires that we comply with theethical requirements of the Code of Ethics issued by the ICAI. We have complied with therelevant applicable requirements of the Standard on Quality Control (SQC') 1Quality Control for Firms that Perform Audits and Reviews of Historical FinancialInformation and Other Assurance and Related Services Engagements.
In our opinion and to the best of our information and according to the explanationsgiven to us we certify that the Bank hascompliedwiththeconditionsofCorporateGovernanceasspecifiedin regulations 17 to 27 clauses(b) to (i) of sub-regulation (2) of regulation 46 and paragraphs C D and E of Schedule Vof the Listing Regulations as applicable. We state that such compliance is neither anassurance as to the future viability of the Bank nor as to the efficiency effectivenesswith which management has conducted the affairs of the Bank.
Restrictions on use
This certificate is issued solely for the purpose of complying with the aforesaidRegulations and may not any other purpose.
| ||For B S R & Co. LLP |
| ||Chartered Accountants |
| ||Firm's Registration No: 101248W/W-100022 |
| ||Venkataramanan Vishwanath |
|Mumbai ||Partner |
|May 15 2017 ||Membership No: 113156 |