Your Directors have pleasure in presenting the Twenty-Fourth AnnualReport of ICICI Bank Limited along with the audited financial statements for the yearended March 31 2018.
The financial performance for fiscal 2018 is summarised in thefollowing table:
|Rs in billion except percentages ||Fiscal 2017 ||Fiscal 2018 ||% change |
|Net interest income and other income ||412.42 ||404.45 ||(1.9)% |
|Operating expenses ||147.55 ||157.04 ||6.4% |
|Provisions & contingencies1 ||152.08 ||173.07 ||13.8% |
|Profit before tax ||112.79 ||74.34 ||(34.1)% |
|Profit after tax ||98.01 ||67.77 ||(30.9)% |
|1Excludes provision for taxes. || || || |
|Rs in billion except percentages ||Fiscal 2017 ||Fiscal 2018 ||% change |
|Consolidated profit before tax and minority interest ||138.09 ||109.78 ||(20.5)% |
|Consolidated profit after tax and minority interest ||101.88 ||77.12 ||(24.3)% |
The profit after tax of the Bank for fiscal 2018 is Rs 67.77 billionafter provisions and contingencies of Rs 173.07 billion provision for taxes of Rs 6.57billion and all expenses. The accumulated profit is Rs 249.97 billion taking into accountthe balance of Rs 187.45 billion brought forward from the previous year and deducting Rs5.25 billion directly from balance in profit and loss account towards provision for fraudson non-retail accounts. Your Bank's dividend policy is based on the profitability andkey financial metrics of the Bank the Bank's capital position and requirements andthe regulations pertaining to the same. Your Bank has a consistent dividend paymenthistory. Given the financial performance for fiscal 2018 and in line with the Bank'sdividend policy and applicable regulations your Directors are pleased to recommend adividend of Rs 1.50 per equity share for the year ended March 31 2018 and haveappropriated the disposable profit as follows:
|Rs billion ||Fiscal 2017 ||Fiscal 2018 |
|To Statutory Reserve making in all Rs 228.97 billion ||24.50 ||16.94 |
|To Special Reserve created and maintained in terms of Section 36(1)(viii) of the Income Tax Act 1961 making in all Rs 89.79 billion ||4.50 ||6.00 |
|To Capital Reserve making in all Rs 128.26 billion1 ||52.93 ||25.66 |
|To Revenue and other reserves making in all Rs 39.59 billion2 ||0.01 ||7.01 |
|Dividend paid during the year || || |
| On equity shares during fiscal 2018 @ Rs 2.50 per share of face value Rs 2.00 each34 ||0.01 ||14.57 |
| On preference shares during fiscal 2018 @ 100.00 per preference shares ( Rs ) ||- ||35000 |
| Corporate dividend tax4 ||(0.07) ||0.09 |
|Leaving balance to be carried forward to the next year ||187.45 ||179.70 |
1. Includes transfer of Rs 24.90 billion on account ofsale of part of a equity investment in the Bank's insurance subsidiary during fiscal2018 ( Rs 42.61 billion for fiscal 2017).
2. Includes transfer of Rs 10.6 million to Reserve Fundfor fiscal 2018 ( Rs 9.8 million for fiscal 2017) in accordance with regulationsapplicable to the Sri Lanka branch.
3. Includes dividend for the prior year paid on shares issuedafter the balance sheet date and prior to the record date.
4. The proposed dividend (including dividend distribution tax)is not accounted as a liability in accordance with the revised AS 4 Contingencies and events occurring after the balance sheet date' from fiscal2017.
The Bank prepares its financial statements in accordance with theapplicable accounting standards Reserve Bank of India (RBI) guidelines and otherapplicable laws/regulations. RBI under its risk-based supervision exercise carries outthe risk assessment of the Bank on an annual basis. This assessment is initiatedsubsequent to the finalisation completion of audit and publication of audited financialstatements for a financial year and typically occurs a few months after the financialyear-end. As a part of this assessment RBI separately reviews asset classification andprovisioning of credit facilities given by the Bank to its borrowers. The divergences ifany in classification or provisioning arising out of the supervisory process are giveneffect to in the financial statements in subsequent periods after conclusion of theexercise.
In terms of the RBI 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 intheir notes to accounts to the financial statements wherever either (a) the additionalprovisioning requirements assessed by RBI exceed 15% of the published net profits aftertax for the reference period or (b) the additional Gross NPAs identified by RBI exceed 15%of the published incremental Gross NPAs for the reference period or both. Based on theabove no disclosure on divergence in asset classification and provisioning for NPAs isrequired with respect to RBI's annual supervisory process for fiscal 2017.
REDEMPTION OF PREFERENCE SHARES
The Board of Directors at their Meeting held on April 2 2018considered and approved the redemption of 350 0.001% Redeemable Non-Cumulative PreferenceShares of Rs 10000000/- each which was due on April 20 2018. Pursuant to the RBIapproval dated April 16 2018 the above mentioned preference shares were redeemed onApril 20 2018. In line with the provisions of Section 61 and other applicable provisionsof the Companies Act 2013 approval of members is being sought in the Notice of theforthcoming Annual General Meeting (AGM) for re-classification of the authorised sharecapital of the Bank from Rs 25000000000 divided into 10000000000 equity shares of Rs2 each 15000000 shares of Rs 100 each and 350 shares of Rs 10000000 each to Rs25000000000 comprising 12500000000 equity shares of Rs 2 each. No objection underSection 49C of the Banking Regulation Act 1949 for the above alteration in the Memorandumof Association and Articles of Association of the Bank has been received from RBI videDBR.PSBD No.11582/16.01.128/2017-18 dated June 25 2018.
DIVIDEND DISTRIBUTION POLICY
In accordance with Regulation 43A of Securities and Exchange Board ofIndia (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 provisionsof Section 186 of Companies Act 2013 except sub-section (1) do not apply to a loanmade guarantee given or security provided by a banking company in the ordinary course ofbusiness. The particulars of investments made by the Bank are disclosed in Schedule 8 ofthe financial statements as per the applicable provisions of Banking Regulation Act 1949.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
The Bank to protect its interests as a lender converts loans orexercises pledge of shares from time to time and hence acquires holding in unrelatedcompanies which is required to be reported as associate under the Companies Act 2013 ifthe holding exceeds 20.0% of the total share capital. Accordingly during fiscal 2018pursuant to conversion of loan Shree Renuka Sugars Limited became an associate company ofthe Bank for the purpose of reporting under the Companies Act 2013. Further pursuant tothe Bank's investments in National Investment and Infrastructure Fund Limited(NIIFL) NIIFL became an associate company of the Bank during the year ended March 312018. The particulars of subsidiary and associate companies as on March 31 2018 have beenincluded in Form MGT-9 which is annexed to this report as Annexure D. Escorts MotorsLimited which was considered as an associate under Section 2(6) of the Companies Act2013 ceased to be an associate of the Bank during fiscal 2018.
HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES AND THEIR CONTRIBUTION TO THE OVERALL PERFORMANCE OF THE COMPANY
The performance of subsidiaries and associates and their contributionto the overall performance of the Bank as on March 31 2018 has been annexed to thisreport as Annexure A. A summary of key financials of the Bank's subsidiaries is alsoincluded in this Annual Report.
The highlights of the performance of key subsidiaries are given as apart of Management's Discussion & Analysis under the section "Consolidatedfinancials as per Indian GAAP".
The Bank will make available separate audited financial statements ofthe subsidiaries to any Member upon request. These documents/details are available on theBank's website (www.icicibank.com) and will also be available for inspection by anyMember or trustee of the holder of any debentures of the Bank at its Registered Office andCorporate Office. As required by Accounting Standard 21 (AS 21) issued by the Institute ofChartered Accountants of India the Bank's consolidated financial statements includedin this Annual Report incorporate the accounts of its subsidiaries and other consolidatingentities.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY AND ITS FUTURE OPERATIONS
There are no significant and/or material orders passed by theregulators or courts or tribunals impacting the going concern status or future operationsof the Bank.
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL
The Board of the Bank at March 31 2018 consisted of 12 Directors outof which six were independent Directors one was a Government Nominee Director and fivewere wholetime Directors. The current composition of the Board consisted of 12 Directorsout of which seven are independent Directors one is a Government Nominee Director andfour are wholetime Directors.
CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS AND OTHER KEYMANAGERIAL PERSONNEL
The Board of Directors at their Meetings held on January 12 2018January 17 2018 May 2 2018 and May 29 2018 approved the appointments of Neelam DhawanUday Chitale Radhakrishnan Nair and M. D. Mallya respectively as additional(independent) Directors for a period of five years subject to the approval of the Members.All the above four Directors hold office upto the date of the forthcoming AGM and areeligible for appointment. Their appointments are being proposed in the Notice of theforthcoming AGM.
Lok Ranjan Joint Secretary Department of Financial Services Ministryof Finance has been nominated by Government of India as a Director on the Board of theBank effective April 5 2018 in place of Amit Agrawal.
Pursuant to completion of their maximum permissible tenure of eightyears as per the provisions of the Banking Regulation Act 1949 Homi Khusrokhan and V.Sridar independent Directors ceased to be Directors on the Board of the Bank effectiveclose of business hours on January 20 2018 and Tushaar Shah independent Director ceasedto be a Director on the Board of the Bank effective close of business hours on May 22018. The Board acknowledges the valuable contribution and guidance provided by the aboveDirectors.
Further the Board at its Meeting held on June 18 2018 recommended tothe Board of Directors of ICICI Prudential Life Insurance Company Limited (ICICILife/Company) to appoint N. S. Kannan as the Managing Director & Chief ExecutiveOfficer (CEO) of the Company subject to regulatory and other approvals. The Board ofDirectors of ICICI Life at its Meeting held on June 18 2018 appointed N. S. Kannan asManaging Director & Chief Executive Officer of the Company with effect from June 192018 subject to approval of Insurance Regulatory Development Authority of India (IRDAI)and Members of the Company. Pursuant to the aforesaid movement N. S. Kannan ceased to bethe Executive Director of the Bank effective close of business hours on June 18 2018. TheBoard acknowledges the valuable contribution and guidance provided by N. S. Kannan duringhis tenure as executive Director of the Bank.
The Board of Directors at its Meeting held on June 18 2018 approvedthe appointment of Sandeep Bakhshi as a wholetime Director and Chief Operating Officer(Designate) for a period of five years effective from June 19 2018 or the date of receiptof approval from RBI whichever is later. Application has been made to RBI for seekingnecessary approval. The said appointment is subject to the approval of RBI and Members.Approval of the Members is being sought for Sandeep Bakhshi's appointment for fiveyears in the Notice of the forthcoming Annual General Meeting through item nos.13 and 14.The Appointment of Mr. Bakhshi as a Wholetime Director to be designated as Chief OperatingOfficer is subject to the approval of RBI and would be effective from the date of RBIapproval.
Further the Board at its Meeting held on June 29 2018 approved theappointment of Girish Chandra Chaturvedi as an Additional (Independent) Director effectiveJuly 1 2018 for a period of three years subject to the approval of Members. The Boardalso approved the appointment of Girish Chandra Chaturvedi as non-executive part-timeChairman effective from July 1 2018 or the date of receipt of RBI approval for suchappointment whichever is later. RBI vide its letter no DBR. Appt.No.451/08.88.001/ 2018-19dated July 17 2018 has approved the appointment of Mr. Girish Chandra Chaturvedi asNon-executive (part time) Chairman of the Bank effective July 17 2018 till June 30 2021.Approval of the Members is being sought for Girish Chandra Chaturvedi's appointmentfor five years in the Notice of the forthcoming Annual General Meeting through item nos.11and 12.
The Board of Directors at its Meeting held July 27 2018 appointedRanganath Athreya as the Company Secretary and Compliance Officer of the Bank effectiveJuly 28 2018. The Board in the same Meeting noted the cessation of Mr. P. Sanker as theCompany Secretary and Compliance Officer of the Bank effective close of business hours onJuly 27 2018. The Board acknowledges the valuable contribution provided by P. Sankerduring his tenure as the Company Secretary and Compliance Officer of the Bank.
Declaration of Independence
All independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149 of the Companies Act 2013 and asamended by the Companies (Amendment) Act 2017 and Regulation 16 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 which have been relied on by the Bank and were placed at the Board Meetings held onApril 2 2018 and May 29 2018. In the opinion of the Board the independent Directorsfulfil the necessary criteria for independence as stipulated under the statutes.
Retirement by rotation
In terms of Section 152 of the Companies Act 2013 Vijay Chandok wouldretire by rotation at the forthcoming AGM and is eligible for re-appointment. VijayChandok has offered himself for re-appointment.
M/s B S R & Co. LLP Chartered Accountants will retire at theensuing AGM. B S R & Co. LLP Chartered Accountants were appointed as auditors by theMembers at their Twentieth Annual General Meeting (AGM) held on June 30 2014 to holdoffice till conclusion of the Twenty-Fourth AGM. Their appointment was last ratified bythe Members at their Twenty Third Annual General Meeting held on June 30 2017 where theywere appointed as auditors to hold office from the conclusion of the Twenty Third AGMuntil the conclusion of the Twenty-Fourth AGM of the Bank. B S R & Co. LLP have beenauditors of the Company for four consecutive years which is the maximum term forstatutory auditors of banking companies as per the guidelines issued by Reserve Bank ofIndia (RBI). Hence they would be retiring at the conclusion of the forthcoming AnnualGeneral Meeting. The Audit Committee and the Board of Directors have placed on recordtheir appreciation of the professional services rendered by B S R & Co. LLP duringtheir association with the Company as its auditors. As recommended by the Audit Committeethe Board has proposed the appointment of M/s Walker Chandiok & Co LLP as statutoryauditors for the year ending March 31 2019 (fiscal 2019). Their appointment has beenapproved by RBI on May 17 2018. The appointment of the auditors is proposed to theMembers in the Notice of the current AGM through item no. 5. You are requested to considertheir appointment.
There are no qualifications reservation or adverse remarks made by thestatutory auditors in the audit report.
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBank with the approval of its Board appointed M/s. Parikh Parekh & Associates a firmof Company Secretaries in Practice to undertake the Secretarial Audit of the Bank forfiscal 2018. The Secretarial Audit Report is annexed herewith as Annexure B. There are noqualifications reservation or adverse remark or disclaimer made by the auditor in thereport save and except disclaimer made by them in discharge of their professionalobligation.
The Secretarial auditor has drawn reference to the followingobservation in the audit report:
In reference to show cause notice issued by RBI dated September 6 2017and supplementary show cause notice dated November 7 2017 and as mentioned by RBI in itspress release dated March 29 2018 RBI has through an order dated
March 26 2018 imposed a monetary penalty of Rs 589.0 million on ICICIBank for non-compliance with directions/ guidelines issued by RBI. This penalty has beenimposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) readwith Section 46(4)(i) of the Banking Regulation Act 1949.
The statement containing particulars of employees as required underSection 197(12) of the Companies Act 2013 read with rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given in an Annexureand forms part of this report. In terms of Section 136(1) of the Companies Act 2013 theannual report and the accounts are being sent to the Members excluding the aforesaidAnnexure. Any Member interested in obtaining a copy of the Annexure may write to theCompany Secretary at the Registered Office of the Bank.
INTERNAL CONTROL AND ITS ADEQUACY
The Bank has adequate internal controls and processes in place withrespect to its financial statements which provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements. Thesecontrols and processes are driven through various policies procedures and certifications.The processes and controls are reviewed periodically. The Bank has a mechanism of testingthe controls at regular intervals for their design and operating effectiveness toascertain the reliability and authenticity of financial information.
DISCLOSURE UNDER FOREIGN EXCHANGE MANAGEMENT ACT 1999
The Bank has obtained a certificate from its statutory auditors that itis in compliance with the Foreign Exchange Management Act 1999 provisions with respect toinvestments made in its consolidated subsidiaries and associates during fiscal 2018.
RELATED PARTY TRANSACTIONS
The Bank undertakes various transactions with related parties in theordinary course of business. The Bank has a Board approved policy on Related PartyTransactions which has been 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 requirestransactions with the group companies to be at arm's length. The transactions betweenthe Bank and its related parties during fiscal 2018 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 fiscal 2018 are given in Annexure C.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in formMGT-9 is annexed herewith as Annexure D.
BUSINESS RESPONSIBILITY REPORTING
The Business Responsibility Report as stipulated under Regulation 34 ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 has been hosted on the website of the Bank (https://www.icicibank.com/aboutus/annual.html). Any Member interested in obtaining a physical copyof the same may write to the Company Secretary at the Registered Office of the Bank.
RISK MANAGEMENT FRAMEWORK
The Bank's risk management framework is based on a clearunderstanding of various risks disciplined risk assessment and measurement procedures andcontinuous monitoring. The policies and procedures established for this purpose arecontinuously benchmarked with international best practices. The Board of Directors hasoversight on all the risks assumed by the Bank. Specific Committees have been constitutedto facilitate focused oversight of various risks as follows:
The Risk Committee of the Board reviews risk management policiesof the Bank pertaining to credit market liquidity operational and outsourcing risks andbusiness continuity management. The Committee also reviews the Risk Appetite andEnterprise Risk Management frameworks Internal Capital Adequacy Assessment Process(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 non-bankingsubsidiaries. The Committee reviews migration to the advanced approaches under Basel IIand implementation of Basel III risk return profile of the Bank and the activities of theAsset Liability Management Committee. The Committee reviews the level and direction ofmajor risks pertaining to credit market liquidity operational technology compliancegroup management and capital at risk as a part of the risk dashboard. In addition theCommittee has oversight on risks of subsidiaries covered under the Group Risk ManagementFramework. The Risk Committee also reviews the Liquidity Contingency Plan for the Bank andthe various thresholds set out in the Plan.
The Credit Committee of the Board apart from sanctioning creditproposals based on the Bank's credit approval authorisation framework reviewsdevelopments in key industrial sectors and the Bank's exposure to these sectors aswell as to large borrower accounts and borrower groups. The Credit Committee also reviewsmajor credit portfolios non-performing loans accounts under watch overdues andincremental sanctions.
The Audit Committee of the Board provides direction to andmonitors the quality of the internal audit function and also monitors compliance withinspection and audit reports of RBI other regulators and statutory auditors.
The Asset Liability Management Committee provides guidance formanagement of liquidity of the overall Bank and management of interest rate risk in thebanking book within the broad parameters laid down by the Board of Directors/ RiskCommittee.
Summaries of reviews conducted by these Committees are reported to theBoard on a regular basis.
Policies approved from time to time by the Board ofDirectors/Committees of the Board form the governing framework for each type of risk. Thebusiness activities are undertaken within this policy framework. Independent groups andsubgroups have been constituted across the Bank to facilitate independent evaluationmonitoring and reporting of various risks. These groups function independently of thebusiness groups/sub-groups.
The Bank has dedicated groups namely the Risk Management GroupCompliance Group Corporate Legal Group Internal Audit Group and the Financial CrimePrevention & Reputation Risk Management Group with a mandate to identify assess andmonitor all of the Bank's principal risks in accordance with well-defined policiesand procedures. The Risk Management Group is further organised into the Credit RiskManagement Group Market Risk Management Group Operational Risk Management Group andInformation Security Group. The Bank has designated an official in the grade of SeniorGeneral Manager as Chief Risk Officer (CRO) who reports to the Risk Committee constitutedby the Board which reviews risk management policies of the Bank. The CRO foradministrative purpose reports to an President. The above mentioned groups are independentof all business operations and coordinate with representatives of the business units toimplement the Bank's risk management policies and methodologies. The Internal Auditand Compliance groups are responsible to the Audit Committee of the Board.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013
Please refer Principle 3 under Section E of the Business ResponsibilityReport.
The corporate governance framework at ICICI Bank is based on aneffective independent Board the separation of the Board's supervisory role from theexecutive management and the constitution of Board Committees to oversee critical areas.At March 31 2018 independent Directors constituted a majority on most of the Committeesand most of the Committees were chaired by independent Directors.
I. Philosophy of Corporate governance
ICICI Bank's corporate governance philosophy encompassesregulatory and legal requirements which aims at a high level of business ethicseffective supervision and enhancement of value for all stakeholders.
Whistle Blower Policy
The Bank has formulated a Whistle Blower Policy. The policycomprehensively provides an opportunity for any employee/ Director of the Bank to raiseany issue concerning breaches of law accounting policies or any act resulting infinancial or reputation loss and misuse of office or suspected or actual fraud. The policyprovides for a mechanism to report such concerns to the Audit Committee through specifiedchannels. The policy has been periodically communicated to the employees and also postedon the Bank's intranet. The Whistle Blower Policy complies with the requirements ofVigil mechanism as stipulated under Section 177 of the Companies Act 2013. The details ofestablishment of the Whistle Blower Policy/Vigil mechanism have been disclosed on thewebsite of the Bank.
Code of Conduct as prescribed under Securities and Exchange Board ofIndia (Prohibition of Insider Trading) Regulations 2015
In accordance with the requirements of the Securities and ExchangeBoard of India (Prohibition of Insider Trading) Regulations 2015 ICICI Bank hasinstituted a comprehensive code of conduct to regulate monitor and report trading by itsdirectors employees and other connected persons.
Group Code of Business Conduct and Ethics
The Group Code of Business Conduct and Ethics for Directors andemployees of the ICICI Group aims at ensuring consistent standards of conduct and ethicalbusiness practices across the constituents of the ICICI Group. This Code is reviewed on anannual basis and the latest Code is available on the website of the Bank(www.icicibank.com). Pursuant to Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a confirmation from ChiefOperating Officer along with one Executive Director regarding compliance with the Code byall the Directors and senior management forms part of the Annual Report. The abovementioned confirmation is as per the letter filed by the Bank with the stock exchanges onJuly 23 2018 and the authorisation for the said confirmation has been granted by theBoard at its Meeting held on July 27 2018.
In accordance with the requirements of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the Bank hasformulated a Policy for determining Material Subsidiaries and the same has been hosted onthe website of the Bank(https://www.icicibank.com/managed-assets/docs/investor/policy-for-determining-material-subsidiaries/policy-for-determining-material-subsidiaries.pdf).Presently no subsidiary of the Bank qualifies as a material unlisted subsidiary as per thecriteria stipulated in the regulations.
Familiarisation Programme for independent Directors
Independent Directors are familiarised with their roles rights andresponsibilities in the Bank as well as with the nature of the industry and the businessmodel of the Bank through induction programmes at the time of their appointment asDirectors and through presentations on economy & industry overview key regulatorydevelopments strategy and performance which are made to the Directors from time to time.The details of the familiarisation programmes have been hosted on the website of the Bankand can be accessed on 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 Obligationsand Disclosure Requirements) Regulations 2015 the certification by the Chief OperatingOfficer along with one Executive Director on the financial statements and internalcontrols relating to financial reporting has been obtained as per the letter filed by theBank with the stock exchanges on July 23 2018 and the authorisation for the saidcertification has been granted by the Board at its Meeting held on July 27 2018.
Board of Directors
ICICI Bank has a broad-based Board of Directors constituted incompliance with the Banking Regulation Act 1949 the Companies Act 2013 and Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 and in accordance with good corporate governance practices. The Board functionseither as a full Board or through various committees constituted to oversee specificoperational areas. The Board has constituted various committees namely Audit CommitteeBoard Governance Remuneration & Nomination Committee Corporate Social ResponsibilityCommittee Credit Committee Customer Service Committee Fraud Monitoring CommitteeInformation Technology Strategy Committee Risk Committee Stakeholders RelationshipCommittee and Review Committee for Identification of Wilful Defaulters/Non Co-operativeBorrowers. At March 31 2018 independent Directors constituted a majority most of theBoard Committees and all Committees except Review Committee for Identification of WilfulDefaulters/Non Co-operative Borrowers were chaired by independent Directors.
There were 13 Meetings of the Board during fiscal 2018 - on April 6-7May 3 June 5 June 28 July 27 September 12 October 27 November 7 and December 11 in2017 and January 12 January 17 January 31 and March 28 in 2018.
At March 31 2018 the Board of Directors consisted of 12 Members.There were no inter-se relationships between any of the Directors. The names of theDirectors their attendance at Board Meetings during the year attendance at the last AGMand the number of other directorships and board committee memberships held by them atMarch 31 2018 are set out in the following table:
| || || ||Number of other directorships || |
|Name of Director ||Board Meetings attended during the year ||Attendance at last agM (June 30 2017) ||of Indian public limited companies1 ||of other companies2 ||Number of other committee3 memberships |
|Independent Directors || || || || || |
|M. K. Sharma Chairman (DIN: 00327684) ||13/13 ||Present ||4 ||4 ||5(3) |
|Uday Chitale (w.e.f. January 17 2018) (DIN: 00043268) ||2/2 ||N.A. ||6 ||1 ||7(1) |
|Dileep Choksi (DIN: 00016322) ||13/13 ||Present ||9 ||2 ||7(4) |
|Neelam Dhawan*(w.e.f. January 12 2018) (DIN: 00871445) ||2/3 ||N.A. ||- ||1 ||- |
|Homi Khusrokhan (upto close of business hours on January 20 2018) (DIN: 00005085) ||11/11 ||Present ||N.A. ||N.A. ||N.A. |
|M. S. Ramachandran (upto close of business hours on April 24 2017) (DIN: 00943629) ||1/1 ||N.A. ||N.A. ||N.A. ||N.A. |
|Tushaar Shah* (DIN: 03055738) ||6/13 ||Present ||- ||- ||- |
|V. K. Sharma (DIN : 02449088) ||4/13 ||Absent ||6 ||7 ||- |
|V. Sridar (upto close of business hours on January 20 2018) (DIN: 02241339) ||10/11 ||Absent ||N.A. ||N.A. ||N.A. |
|Government nominee Director || || || || || |
|Amit Agrawal (DIN:07117013) ||2/13 ||Absent ||- ||- ||- |
|Wholetime/Executive Directors || || || || || |
|Chanda Kochhar (DIN: 00043617) ||12/13 ||Present ||4 ||2 ||- |
|N. S. Kannan (DIN: 00066009) ||12/13 ||Present ||4 ||2 ||3 |
|Vishakha Mulye (DIN: 00203578) ||13/13 ||Present ||1 ||- ||1 |
|Vijay Chandok (DIN: 01545262) ||12/13 ||Present ||1 ||2 ||1 |
|Anup Bagchi (DIN: 00105962) ||9/13 ||Present ||2 ||- ||1 |
* Participated in one Meeting through video-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 ofIndian public limited companies. Figures in parentheses indicate committeechairpersonships.
In terms of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the number of Committees (audit committeeand stakeholders' relationship committee) of public limited companies in which aDirector is a member/chairman were within the limits provided under listing regulationsfor all the Directors of the Bank. The number of directorships of each independentDirector is also within the limits prescribed under listing regulations.
The terms of reference of the Board Committees as mentioned earliertheir composition and attendance of the respective Members at the various CommitteeMeetings held during fiscal 2018 are set out below:
II. Audit Committee
Terms of Reference
The Audit Committee provides direction to the audit function andmonitors the quality of internal and statutory audit. The responsibilities of the AuditCommittee include examining the financial statements and auditors' report andoverseeing the financial reporting process to ensure fairness sufficiency and credibilityof financial statements review of the quarterly and annual financial statements beforesubmission to the Board recommendation of appointment terms of appointment remunerationand removal of central and branch statutory auditors and chief internal auditor approvalof payment to statutory auditors for other permitted services rendered by them reviewingand monitoring with the management the auditor's independence and the performance andeffectiveness of the audit process approval of transactions with related parties or anysubsequent modifications review of statement of significant related party transactionsreview of functioning of the Whistle Blower Policy review of the adequacy of internalcontrol systems and the internal audit function review of compliance with inspection andaudit reports and reports of statutory auditors review of the findings of internalinvestigations review of management letters/letters on internal control weaknesses issuedby statutory auditors reviewing with the management the statement of uses/application offunds raised through an issue (public issue rights issue preferential issue etc.) thestatement of funds utilised for the purposes other than those stated in the offerdocument/prospectus/notice and the report submitted by the monitoring agency monitoringthe utilisation of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take steps in this matter discussion on the scope ofaudit with external auditors examination of reasons for substantial defaults if any inpayment to stakeholders valuation of undertakings or assets evaluation of riskmanagement systems and scrutiny of inter-corporate loans and investments.
The Audit Committee is also empowered to appoint/oversee the work ofany registered 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 Chief Financial Officer (i.e. the wholetime Finance Director or anyother person heading the finance function or discharging that function) after assessingthe qualifications experience and background etc. of the candidate.
At March 31 2018 the Audit Committee consisted three independentDirectors and was chaired by Uday Chitale an independent Director. There were 13 Meetingsof the Committee during the year.
The details of the composition of the Committee and attendance at itsMeetings are set out in the following table:
|Name of Member ||Number of meetings attended |
|Uday Chitale Chairman (w.e.f. January 21 2018) ||4/4 |
|Dileep Choksi Alternate Chairman ||12/13 |
|Tushaar Shah*(w.e.f. January 21 2018) ||2/4 |
|Homi Khusrokhan (upto January 20 2018) ||9/9 |
|M. S. Ramachandran (upto April 24 2017) ||1/1 |
|V. Sridar (upto January 20 2018) ||8/9 |
* Participated in one Meeting through video-conference.
Upon completion of his tenure as a Director Tushaar Shah ceased to bea Member of the Committee with effect from May 3 2018. The Board at its Meetingheld on May 2 2018 reconstituted the Committee pursuant to which Radhakrishnan Nair anindependent Director was inducted as a Member of the Committee with effect from May 32018.
III. Board governance Remuneration & nomination Committee
Terms of Reference
The functions of the Committee include recommending appointments ofDirectors to the Board identifying persons who are qualified to become Directors and whomay be appointed in senior management in accordance with the criteria laid down andrecommending to the Board their appointment and removal formulate a criteria for theevaluation of the performance of the wholetime/independent Directors and the Board and toextend or continue the term of appointment of independent Directors on the basis of thereport of performance evaluation of independent Directors recommending to the Board apolicy relating to the remuneration for the Directors key managerial personnel and otheremployees recommending to the Board the remuneration (including performance bonus andperquisites) to wholetime Directors commission and fee payable to non-executive Directorssubject to applicable regulations approving the policy for and quantum of bonus payableto the members of the staff including senior management and key managerial personnelformulating the criteria for determining qualifications positive attributes andindependence of a Director framing policy on Board diversity framing guidelines for theEmployees Stock Option Scheme (ESOS) and decide on the grant of stock options to employeesand wholetime Directors of the Bank and its subsidiary companies.
At March 31 2018 the Board Governance Remuneration & NominationCommittee consisted three independent Directors and was chaired by Tushaar Shah anindependent Director. There were seven 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 |
|Tushaar Shah Chairman (w.e.f. January 21 2018) ||N.A. |
|Homi Khusrokhan (upto January 20 2018) ||7/7 |
|M. S. Ramachandran (upto April 24 2017) ||1/1 |
|M. K. Sharma ||7/7 |
|V. K. Sharma (w.e.f. April 6 2017) ||2/6 |
Upon completion of his tenure as a Director Tushaar Shah ceased to bea Member of the Committee with effect from May 3 2018. The Board at its Meeting held onMay 2 2018 reconstituted the Committee pursuant to which Dileep Choksi an independentDirector was inducted as a Member as well as appointed as the Chairman of the Committeewith effect from May 3 2018.
Upon completion of his tenure as a Director M. K. Sharma ceased to bea Member of the Committee with effect from July 1 2018. The Board at its Meeting held onJune 27 2018 reconstituted the Committee pursuant to which Neelam Dhawan an independentDirector was inducted as a Member as well as appointed as the Chairperson of theCommittee with effect from July 1 2018. The Board at its Meeting held on July 27 2018further reconstituted the Committee pursuant to which Girish Chandra Chaturvedi anindependent Director was inducted as a Member of the Committee with immediate effect.
Policy/Criteria for Directors' appointment
The Bank with the approval of its Board Governance Remuneration &Nomination Committee (Committee) has put in place a policy on Directors' appointmentand remuneration including criteria for determining qualifications positive attributesand independence of a Director as well as a policy on Board diversity. The policy has beenframed based on the broad principles as outlined hereinafter. The Committee would evaluatethe composition of the Board and vacancies arising in the Board from time to time. TheCommittee while recommending candidature of a Director would consider the specialknowledge or expertise possessed by the candidate as required under Banking RegulationAct 1949. The Committee would assess the fit and proper credentials of the candidate andthe companies/entities with which the candidate is associated either as a director orotherwise and as to whether such association is permissible under RBI guidelines and theinternal norms adopted by the Bank. For the above assessment the Committee would beguided by the guidelines issued by RBI in this regard.
The Committee will also evaluate the prospective candidate for theposition of a Director from the perspective of the criteria for independence prescribedunder Companies Act 2013 as well as the listing regulations. For a non-executive Directorto be classified as independent he/she must satisfy the criteria of independence asprescribed and sign a declaration of independence. The Committee will review the same anddetermine the independence of a Director.
The Committee based on the above assessments will make suitablerecommendations on the appointment of Directors to the Board.
Reserve Bank of India (RBI) vide its circular DBOD No. BC.72/29.67.001/2011-12 dated January 13 2012 has issued guidelines on "Compensation ofwholetime Directors/Chief executive Officers/Risk takers and Control function staffetc." for implementation by private sector banks and foreign banks from the financialyear 2012-13. The Bank adopted a Compensation Policy in January 2012 which is amended fromtime to time based on regulatory requirements. The Compensation Policy of the Bank is inline with the RBI circular dated January 13 2012 and is in compliance with therequirements for the Remuneration Policy as prescribed under the Companies Act 2013. ThePolicy is divided into the segments Part A Part B and Part C where Part A covers therequirements for wholetime Directors & employees pursuant to RBI guidelines Part Brelates to compensation to non-executive Directors (except part-time non-executiveChairman) and Part C relates to compensation to part-time non-executive Chairman. TheCompensation/Remuneration Policy is available on the website of the Bank under the linkhttps://www.icicibank.com/aboutus/other-policies.page. Further details with respect to theCompensation Policy are provided under the section titled "Compensation Policy andPractices".
The remuneration payable to non-executive/independent Directors isgoverned by the provisions of the Banking Regulation Act 1949 RBI guidelines issued fromtime to time and the provisions of the Companies Act 2013 and related rules to the extentit is not inconsistent with the provisions of the Banking Regulation Act 1949/RBIguidelines. The remuneration for the non-executive/independent Directors (other thanGovernment nominee) would be sitting fee for attending each Meeting of the Committee/Boardas approved by the Board from time to time within the limits as provided under CompaniesAct 2013 and related rules. RBI vide its guidelines dated June 1 2015 regardingCompensation of non-executive Directors (NEDs) (except part-time Chairman) of PrivateSector Banks has permitted payment of profit related commission up to Rs 1000000 perannum for non-executive Directors (other than part-time Chairman). The Members at theirMeeting held on July 11 2016 approved the payment of profit related commission upto Rs1000000 per annum to non-executive Directors (other than the non-executive Chairman andthe Government Nominee Director) for each year effective from the financial year endedMarch 31 2016. For the non-executive Chairman the remuneration in addition to sittingfee includes such fixed payments on such periodicity as may be recommended by the Boardand approved by the Members and RBI from time to time maintaining a Chairman'soffice at the Bank's expense bearing expenses for travel on official visits andparticipation in various forums (both in India and abroad) as Chairman of the Bank andbearing travel/halting/other expenses and allowances for attending to duties as Chairmanof the Bank and any other modes of remuneration as may be permitted by RBI through anycirculars/guidelines as may be issued from time to time.
All the non-executive/independent Directors would be entitled toreimbursement of expenses for attending Board/ Committee Meetings official visits andparticipation in various forums on behalf of the Bank.
Performance evaluation of the Board Committees and Directors
The Bank with the approval of its Board Governance Remuneration &Nomination Committee has put in place an evaluation framework for evaluation of the BoardDirectors Chairperson and Committees.
The evaluations for the Directors the Board Chairman of the Board andthe Committees is carried out through circulation of four different questionnaires forthe Directors for the Board for the Chairperson of the Board and the Committeesrespectively. The performance of the Board is assessed on select parameters related toroles responsibilities and obligations of the Board relevance of Board discussionsattention to strategic issues performance on key areas providing feedback to executivemanagement and assessing the quality quantity and timeliness of flow of informationbetween the company management and the Board that is necessary for the Board toeffectively and reasonably perform their duties. The evaluation criteria for the Directorsis based on their participation contribution and offering guidance to and understandingof the areas which were relevant to them in their capacity as members of the Board. Theevaluation criteria for the Chairperson of the Board besides the general criteria adoptedfor assessment of all Directors focuses incrementally on leadership abilities effectivemanagement of meetings and preservation of interest of stakeholders. The evaluation of theCommittees is based on assessment of the clarity with which the mandate of the Committeeis defined effective discharge of terms and reference of the Committees and assessment ofeffectiveness of contribution of the Committee's deliberation/recommendations to thefunctioning/decisions of the Board.
The evaluation process for wholetime Directors is further detailedunder the section titled "Compensation Policy and Practices".
Details of Remuneration paid to wholetime Directors
The Board Governance Remuneration & Nomination Committeedetermines and recommends to the Board the amount of remuneration including performancebonus and perquisites payable to the wholetime Directors.
The following table sets out the details of remuneration (includingperquisites and retiral benefits) paid to wholetime Directors in fiscal 2018:
| ||Details of Remuneration ( Rs ) |
| ||Chanda Kochhar ||N. S. Kannan ||Vishakha Mulye ||Vijay Chandok ||Anup Bagchi |
|Basic ||30671520 ||20262600 ||20262600 ||18319560 ||18319560 |
|Performance bonus paid in fiscal 2018 1 ||2068811 ||1386781 ||- ||1271214 ||- |
|Allowances and perquisites 2 ||26831413 ||17999637 ||17425454 ||22293290 ||16803746 |
|Contribution to provident fund ||3680579 ||2431512 ||2431512 ||2198349 ||2198349 |
|Contribution to superannuation fund ||- ||3039393 ||3039393 ||- ||- |
|Contribution to gratuity fund ||2554938 ||1687875 ||1687875 ||1526019 ||1526019 |
|Stock options 13 ( n umbers) || || || || || |
|Fiscal 2018 ||1512500 ||753500 ||753500 ||753500 ||753500 |
|Fiscal 2017 ||1512500 ||753500 ||753500 ||544500 ||NA |
|Fiscal 2016 4 ||1595000 ||797500 ||NA ||462000 ||NA |
1 Represents amounts paid/ options granted during the year asper RBI approvals. The bonus amounts are the deferred portion of bonus approved in earlieryears that was paid during fiscal 2018 and the comparable amounts for fiscal 2017 were Rs4.5 million for Chanda Kochhar Rs 3.0 million for N. S. Kannan Rs 2.6million for Vijay Chandok. Vishakha Mulye and Anup Bagchi had Nil deferred payouts infiscal 2017 & fiscal 2018 as they were transferred to the Bank from group companies inFY2016 and FY2017 respectively. The consolidated details of variable pay and share-linkedinstruments for the year ended March 31 2018 approved by the Board/Board GovernanceRemuneration & Nomination Committee which are pending regulatory approvals aredisclosed in the footnote under the segment titled Quantitative disclosures underCompensation Policy and Practices.
2 Allowances and perquisites exclude stock options exercisedduring fiscal 2018 which does not constitute remuneration paid to the wholetime Directorsfor fiscal 2018.
3 Pursuant to the issuance of bonus shares by the Bank on June24 2017 stock options were also adjusted with increase of one option for every 10outstanding options. Accordingly the numbers for fiscal 2018 2017 and 2016 have beenrestated.
4 Excludes special grant of stock options approved by RBI inNovember 2015.
Perquisites (evaluated as per Income-tax rules wherever applicable andotherwise at actual cost to the Bank) such as the benefit of the Bank's furnishedaccommodation gas electricity water and furnishings club fees group insurance use ofcar and telephone at residence or reimbursement of expenses in lieu thereof medicalreimbursement leave and leave travel concession education benefits provident fundsuperannuation fund and gratuity were provided in accordance with the scheme(s) andrule(s) applicable from time to time. In line with the staff loan policy applicable tospecified grades of employees who fulfil prescribed eligibility criteria to avail loansfor purchase of residential property the wholetime Directors are also eligible forhousing loans subject to approval of RBI.
The Board at its Meeting held on June 18 2018 approved the appointmentof Sandeep Bakhshi as wholetime Director and Chief Operating Officer (Designate) for aperiod of five years effective June 19 2018 or the date of RBI approval whichever islater. The Board based on the recommendation of the Board Governance Remuneration &Nomination Committee has approved a basic salary of 2381000 p.m. and supplementaryallowance of 1632500 p.m. Approval for the appointment and terms of remuneration of Mr.Bakhshi is being sought for the Members through item No. 12 and 13 of the Notice. Membersare requested to consider the same.
Details of Remuneration paid to non-executive Directors
As provided under Article 132 of the Articles of Association of theBank the fees payable to a non-executive Director (other than to the nominee ofGovernment of India) for attending a Meeting of the Board or Committee thereof are decidedby the Board of Directors from time to time within the limits prescribed by the CompaniesAct 2013 and the rules thereunder. The Board had approved the payment of Rs 100000 assitting fees for each Meeting of the Board and Rs 20000 as sitting fees for each Meetingof the Committee attended. The Board at its Meeting held on April 2 2018 approvedrevision in sitting fee payable to the non-executive Directors (other than the Governmentnominee) from Rs 20000 to Rs 100000 for attending each Meeting of the AuditCommittee and to Rs 50000 for attending each Meeting of Committees other than the AuditCommittee with effect from April 1 2018.
The Board of Directors at its Meeting held on June 9 2015 andsubsequently the Members through a postal ballot resolution dated April 22 2016 approveda remuneration range of Rs 3000000 Rs 5000000 per annum for M. K. SharmaChairman of the Board with the remuneration for each year to be determined by the Boardwithin this range. The remuneration for M. K. Sharma is Rs 3500000 per annum as approvedby the Board and RBI.
Information on the total sitting fees paid to each non-executiveDirector during fiscal 2018 for attending Meetings of the Board and its Committees is setout in the following table:
|Name of Director ||Amount ( Rs ) |
|M. K. Sharma ||2080000 |
|Uday Chitale (w.e.f. January 17 2018) ||360000 |
|Dileep Choksi ||1920000 |
|Neelam Dhawan (w.e.f. January 12 2018) ||240000 |
|Homi Khusrokhan (ceased w.e.f. January 21 2018) ||2200000 |
|M. S. Ramachandran (ceased w.e.f. April 25 2017) ||180000 |
|Tushaar Shah ||900000 |
|V. K. Sharma ||440000 |
|V. Sridar (ceased w.e.f. January 21 2018) ||1600000 |
|Amit Agrawal1 ||- |
|Total ||9920000 |
1. Being a Government Nominee Director not entitled to receivesitting fees.
The details of shares and convertible instruments of the Bank held bythe non-executive Directors as at March 31 2018 are set out in the following table:
|Name of Director ||Instrument ||No. of shares held |
|M. K. Sharma ||Equity ||55000 |
|Uday Chitale ||- ||- |
|Dileep Choksi ||Equity ||2750 |
|Neelam Dhawan ||- ||- |
|Tushaar Shah ||- ||- |
|V. K. Sharma ||- ||- |
|Amit Agrawal ||- ||- |
Remuneration disclosures as required under RBI guidelines
The RBI circular DBOD No. BC. 72/29.67.001/2011-12 on"Compensation of wholetime Directors/Chief Executive Officers/ Risk takers andControl function staff etc." requires the Bank to make following disclosures onremuneration on an annual basis in their Annual Report:
COMPENSATION POLICY AND PRACTICES
(a) Qualitative Disclosures a) Information relating to the bodiesthat oversee remuneration.
Name composition and mandate of the main body overseeingremuneration
The Board Governance Remuneration & Nomination Committee (BGRNC/Committee) is the body which oversees the remuneration aspects. The functions of theCommittee include recommending appointments of Directors to the Board identifying personswho are qualified to become Directors and who may be appointed in senior management inaccordance with the criteria laid down and recommending to the Board their appointment andremoval formulating a criteria for the evaluation of the performance of thewholetime/independent Directors and the Board and to extend or continue the term ofappointment of independent Director on the basis of the report of performance evaluationof independent Directors recommending to the Board a policy relating to the remunerationfor the Directors Key Managerial Personnel and other employees recommending to the Boardthe remuneration (including performance bonus and perquisites) to wholetime Directors(WTDs) commission and fee payable to non- executive Directors subject to applicableregulations approving the policy for and quantum of bonus payable to members of the staffincluding senior management and key managerial personnel formulating the criteria fordetermining qualifications positive attributes and independence of a Director framingpolicy on Board diversity framing guidelines for the Employee Stock Option Scheme (ESOS)and decide on the grant of the Bank's stock options to employees and WTDs of the Bankand its subsidiary companies.
External consultants whose advice has been sought thebody by which they were commissioned and in what areas of the remuneration process
The Bank did not take advice from an external consultant on any area ofremuneration during fiscal 2018.
Scope of the Bank's remuneration policy (eg. byregions business lines) including the extent to which it is applicable to foreignsubsidiaries and branches
The Compensation Policy of the Bank as last amended during fiscal 2018and approved by the BGRNC and the Board at their meeting held on May 3 2017 pursuant tothe guidelines issued by RBI covers all employees of the Bank including those inoverseas branches of the Bank. In addition to the Bank's Compensation Policyguidelines the overseas branches also adhere to relevant local regulations.
Type of employees covered and number of such employees
All employees of the Bank are governed by the Compensation Policy. Thetotal number of permanent employees of the Bank at March 31 2018 was 81548.
b) Information relating to the design and structure of remunerationprocesses.
Key features and objectives of remuneration policy
The Bank has under the guidance of the Board and the BGRNC followedcompensation practices intended to drive meritocracy within the framework of prudent riskmanagement. This approach has been incorporated in the Compensation Policy the keyelements of which are given below.
Effective governance of compensation:
The BGRNC has oversight over compensation. The Committee defines KeyPerformance Indicators (KPIs) for WTDs and equivalent positions and the organisationalperformance norms for bonus based on the financial and strategic plan approved by theBoard. The KPIs include both quantitative and qualitative aspects. The BGRNC assessesorganisational performance as well as the individual performance for WTDs and equivalentpositions. Based on its assessment it makes recommendations to the Board regardingcompensation for WTDs and equivalent positions and bonus for employees including seniormanagement and key management personnel.
alignment of compensation philosophy with prudent risktaking:
The Bank seeks to achieve a prudent mix of fixed and variable pay witha higher proportion of variable pay at senior levels and no guaranteed bonuses.Compensation is sought to be aligned to both financial and non-financial indicators ofperformance including aspects like risk management and customer service. In addition theBank has an employee stock option scheme aimed at aligning compensation to long termperformance through stock option grants that vest over a period of time. Compensation ofstaff in financial and risk control functions is independent of the business areas theyoversee and depends on their performance assessment.
Whether the remuneration committee reviewed thefirm's remuneration policy during the past year and if so an overview of anychanges that were made
During FY2018 the Bank's Compensation Policy was reviewed by theBGRNC and the Board at their meeting held on May 3 2017. The disclosures were reviewedpursuant to RBI circular on Disclosures in Financial Statements.
Discussion of how the Bank ensures that risk andcompliance employees are remunerated independently of the businesses they oversee
The compensation of staff engaged in control functions like Risk andCompliance depends on their performance which is based on achievement of the key resultsof their respective functions. Their goal sheets do not include any business targets.
c) Description of the ways in which current and future risks are takeninto account in the remuneration processes.
Overview of the key risks that the Bank takes intoaccount when implementing remuneration measures
The Board approves the risk framework for the Bank and the businessactivities of the Bank are undertaken within this framework to achieve the financial plan.The risk framework includes the Bank's risk appetite limits framework and policiesand procedures governing various types of risk. KPIs of WTDs & equivalent positionsas well as employees incorporate relevant risk management related aspects. For examplein addition to performance targets in areas such as growth and profits performanceindicators include aspects such as the desired funding profile and asset quality. TheBGRNC takes into consideration all the above aspects while assessing organisational andindividual performance and making compensation-related recommendations to the Board.
Overview of the nature and type of key measures used totake account of these risks including risk difficult to measure
The annual performance targets and performance evaluation incorporateboth qualitative and quantitative aspects including asset quality provisioning increasein stable funding sources refinement/improvement of the risk management frameworkeffective management of stakeholder relationships and mentoring key members of the top andsenior management.
Discussion of the ways in which these measures affectremuneration
Every year the financial plan/targets are formulated in conjunctionwith a risk framework with limit structures for various areas of risk/lines of businesswithin which the Bank operates to achieve the financial plan. To ensure effectivealignment of compensation with prudent risk taking the BGRNC takes into account adherenceto the risk framework in conjunction with which the financial plan/targets have beenformulated. KPIs of WTDs and equivalent positions as well as employees incorporaterelevant risk management related aspects. For example in addition to performance targetsin areas such as growth and profits performance indicators include aspects such as thedesired funding profile and asset quality. The BGRNC takes into consideration all theabove aspects while assessing organisational and individual performance and makingcompensation-related recommendations to the Board.
Discussion of how the nature and type of these measureshave changed over the past year and reasons for the changes as well as the impact ofchanges on remuneration.
The nature and type of these measures have not changed over the pastyear and hence there is no impact on remuneration.
d) Description of the ways in which the Bank seeks to link performanceduring a performance measurement period with levels of remuneration
Overview of main performance metrics for Bank top levelbusiness lines and individuals
The main performance metrics include profits loan growth depositgrowth risk metrics (such as quality of assets) compliance with regulatory normsrefinement of risk management processes and customer service. The specific metrics andweightages for various metrics vary with the role and level of the individual.
Discussion of how amounts of individual remuneration arelinked to the Bank-wide and individual performance
The BGRNC takes into consideration above mentioned aspects whileassessing performance and making compensation-related recommendations to the Boardregarding the performance assessment of WTDs and equivalent positions. The performanceassessment of individual employees is undertaken based on achievements compared to theirgoal sheets which incorporate various aspects/metrics described earlier.
Discussion of the measures the Bank will in generalimplement to adjust remuneration in the event that performance metrics are weak includingthe Bank's criteria for determining weak' performance metrics
The Bank's Compensation Policy outlines the measures the Bank willimplement in the event of a reasonable evidence of deterioration in financial performance.Should such an event occur in the manner outlined in the policy the BGRNC may decide toapply malus on none part or all of the unvested deferred variable compensation.
e) Description of the ways in which the Bank seeks to adjustremuneration to take account of the longer term performance
Discussion of the Bank's policy on deferral andvesting of variable remuneration and if the fraction of variable remuneration that isdeferred differs across employees or groups of employees a description of the factorsthat determine the fraction and their relative importance
The quantum of bonus for an employee does not exceed a certainpercentage (as stipulated in the compensation policy) of the total fixed pay in a year.Within this percentage if the quantum of bonus exceeds a predefined threshold percentageof the total fixed pay a part of the bonus is deferred and paid over a period. Thesethresholds for deferrals are same across employees.
Discussion of the Bank's policy and criteria foradjusting deferred remuneration before vesting and (if permitted by national law) aftervesting through claw back arrangements
The deferred portion of variable pay is subject to malus under whichthe Bank would prevent vesting of all or part of the variable pay in the event of anenquiry determining gross negligence breach of integrity or in the event of a reasonableevidence of deterioration in financial performance. In such cases variable pay alreadypaid out may also be subjected to clawback arrangements as applicable.
f) Description of the different forms of variable remuneration that theBank utilises and the rationale for using these different forms
Overview of the forms of variable remuneration offered. adiscussion of the use of different forms of variable remuneration and if the mix ofdifferent forms of variable remuneration differs across employees or group of employees adescription of the factors that determine the mix and their relative importance
The Bank pays performance linked retention pay (PLRP) to its front-linestaff and junior management and performance bonus to its middle and senior management.PLRP aims to reward front line and junior managers mainly on the basis of skill maturityattained through experience and continuity in role which is a key differentiator forcustomer service. The Bank also pays variable pay to sales officers and relationshipmanagers in wealth management roles while ensuring that such pay-outs are in accordancewith applicable regulatory requirements.
The Bank ensures higher proportion of variable pay at senior levels andlower variable pay for front-line staff and junior management levels.
(B) Quantitative disclosures
The following table sets forth for the period indicated the detailsof quantitative disclosure for remuneration of wholetime Directors (including MD &CEO) and equivalent positions.
| ||Rs in million except numbers |
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2018 |
|Number of meetings held by the BGRNC ||10 ||7 |
|Remuneration paid to its members during the financial year (sitting fees) ||0.5 ||0.3 |
|Number of employees who received a variable remuneration award1 ||6 ||4 |
|Number and total amount of sign-on awards made ||- ||- |
|Number and total amount of guaranteed bonuses awarded ||- ||- |
|Details of severance pay in addition to accrued benefits ||- ||- |
|Breakdown of amount of remuneration awards for the financial year || || |
| ||Rs in million except numbers |
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2018 |
|Fixed2 ||231.5 ||222.7 |
|Variable3 ||- ||- |
|- Deferred ||- ||- |
|- Non-deferred ||- ||- |
|Share-linked instruments34 ||5071000 ||4526500 |
|Total amount of deferred remuneration paid out during the year ||16 ||6.1 |
|Total amount of outstanding deferred remuneration || || |
|Cash ||6.1 ||na |
|Shares (nos.) ||- ||- |
|Shares-linked instruments4 ||14747150 ||14825250 |
|Other forms ||- ||- |
|Total amount of outstanding deferred remuneration and retained remuneration exposed to ex-post explicit and/or implicit adjustments ||6.1 ||- |
|Total amount of reductions during the year due to ex-post explicit adjustments ||- ||- |
|Total amount of reductions during the year due to ex-post implicit adjustments ||- ||- |
1. Includes deferred remuneration paid during the year toretired WTDs.
2. Fixed pay includes basic salary supplementary allowancessuperannuation contribution to provident fund and gratuity fund by the Bank.
3. For the years ended March 31 2018 and March 31 2017variable pay and share-linked instruments represent amounts paid/ options awarded for theyears ended March 31 2017 and March 31 2016 respectively as per RBI approvals. For theyear ended March 31 2018 Rs 90.4 million of variable pay (FY2017: Rs 75.6million) and 4307500 share-linked instruments (FY2017: 4526500 option) are subject toRBI approval.
4. Pursuant to the issuance of bonus shares by the Bank on June24 2017 the share-linked instruments have been adjusted with increase of one option forevery 10 outstanding options.
Disclosures required with respect to Section 197(12) of the Companiesact 2013
The ratio of the remuneration of each Director to the medianemployee's remuneration and such other details in terms of Section 197(12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and as amended from time to time.
(i) The ratio of the remuneration of each director to the medianremuneration of the employees of the company for the financial year;
|Chanda Kochhar Managing Director & CEO ||131:1 |
|N. S. Kannan ||88:1 |
|Vishakha Mulye ||88:1 |
|Vijay Chandok ||80:1 |
|Anup Bagchi ||80:1 |
(ii) The percentage increase in remuneration of each director ChiefFinancial Officer Chief Executive Officer Company Secretary or Manager if any in thefinancial year;
The percentage increase in remuneration of each Director ChiefFinancial Officer Chief Executive Officer and Company Secretary ranges between 12% and15%.
(iii) The percentage increase in the median remuneration of employeesin the financial year;
The percentage increase in the median remuneration of employees in thefinancial year was around 10%.
(iv) The number of permanent employees on the rolls of company;
The number of employees as mentioned in the section onManagement's Discussion & Analysis' is 82724. Out of this theemployees on permanent rolls of the company is 81548 including employees in overseaslocations.
(v) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration;
The average percentage increase made in the salaries of total employees other than theKey Managerial Personnel for fiscal 2018 was around 9 % while the average increase in theremuneration of the Key Managerial Personnel was in the range of 12% to 15%.
(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 socialresponsibility (CSR) initiatives undertaken by the ICICI Group and the ICICI Foundationfor Inclusive Growth formulation and recommendation to the Board of a CSR Policyindicating the activities to be undertaken by the Company and recommendation of the amountof expenditure to be incurred on such activities reviewing and recommending the annualCSR plan to the Board making recommendations to the Board with respect to the CSRinitiatives policies and practices of the ICICI Group monitoring the CSR activitiesimplementation and compliance with the CSR Policy and reviewing and implementing ifrequired any other matter related to CSR initiatives as recommended/suggested by RBI orany other body.
At March 31 2018 the Corporate Social Responsibility Committeeconsisted four Directors including two independent Directors the Government NomineeDirector and the Managing Director & CEO and was chaired by Tushaar Shah anindependent Director. There were three 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 |
|Tushaar Shah Chairman (Chairman w.e.f. April 25 2017) ||3/3 |
|Dileep Choksi (w.e.f. April 6 2017) ||3/3 |
|M. S. Ramachandran (upto April 24 2017) ||1/1 |
|Amit Agrawal (w.e.f. April 6 2017) ||1/3 |
|Chanda Kochhar ||3/3 |
Amit Agrawal ceased to be a member of the Committee pursuant to hiscessation as the Government Nominee Director with effect from April 5 2018. Uponcompletion of his tenure as a Director Tushaar Shah ceased to be a Member of theCommittee with effect from May 3 2018. The Board at its Meeting held on May 2 2018appointed Dileep Choksi as the Chairman of the Committee and inducted Radhakrishnan Nairan independent Director as a Member of the Committee with effect from May 3 2018.
The Board at its Meeting held on June 27 2018 further reconstitutedthe Committee pursuant to which Anup Bagchi Executive Director was inducted as a Memberand Radhakrishnan Nair an independent Director was appointed as the Chairperson of theCommittee with effect from July 1 2018.
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 Companyhttp://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 2018 the Credit Committee consisted three Directorsincluding two independent Directors and the Managing Director & CEO and was chaired byM. K. Sharma an independent Director. There were 25 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 (w.e.f. April 6 2017) ||25/25 |
|Homi Khusrokhan (upto January 20 2018) ||19/19 |
|M. S. Ramachandran (upto April 24 2017) ||1/2 |
|Tushaar Shah* (w.e.f. January 21 2018) ||4/6 |
|Chanda Kochhar ||24/25 |
* Participated in three Meetings through video-conference.
Upon completion of his tenure as a Director Tushaar Shah ceased to bea Member of the Committee with effect from May 3 2018. The Board at its Meetings held onMay 2 2018 and May 29 2018 reconstituted the Committee pursuant to which RadhakrishnanNair and M. D. Mallya independent Directors were inducted as Members of the Committeewith effect from May 3 2018 and May 29 2018 respectively.
Upon completion of his tenure as a Director M. K. Sharma ceased to bea Member of the Committee with effect from July 1 2018. The Board at its Meeting held onJune 27 2018 further reconstituted the Committee pursuant to which Vishakha MulyeExecutive Director was inducted as a Member of the Committee with effect from July 12018. Further the Board approved that the Chairperson would be an Executive Director asdetermined at each meeting.
VI. Customer Service Committee
Terms of Reference
The functions of this Committee include review of customer serviceinitiatives overseeing the functioning of the Customer Service Council and evolvinginnovative measures for enhancing the quality of customer service and improvement in theoverall satisfaction level of customers.
At March 31 2018 the Customer Service Committee consisted fourDirectors including two independent Directors the Managing Director & CEO and anExecutive Director and was chaired by Tushaar Shah an independent Director. There weresix Meetings of the Committee during the year. The details of the composition of theCommittee and attendance at its Meetings are set out in the following table:
|Name of Member ||Number of meetings attended |
|Tushaar Shah Chairman (Member w.e.f. April 6 2017 and Chairman w.e.f. January 21 2018) ||5/6 |
|Uday Chitale (w.e.f. January 21 2018) ||2/2 |
|M. S. Ramachandran (upto April 24 2017) ||N.A. |
|V. Sridar (upto January 20 2018) ||4/4 |
|Chanda Kochhar ||6/6 |
|Anup Bagchi (w.e.f. April 6 2017) ||6/6 |
Upon completion of his tenure as a Director Tushaar Shah ceased to bea Member of the Committee with effect from May 3 2018. The Board at its Meeting held onMay 2 2018 appointed Uday Chitale as the Chairman of the Committee and inducted NeelamDhawan as a Member of the Committee with effect from May 3 2018.
The Board at its Meeting held on June 27 2018 further reconstitutedthe Committee pursuant to which M. D. Mallya an independent Director was inducted as aMember as well as appointed as the Chairman of the Committee with effect from July 12018.
VII. Fraud Monitoring Committee
Terms of Reference
The Committee monitors and reviews all the frauds involving an amountof Rs 10.0 million and above with the objective of identifying the systemic lacunae ifany that facilitated perpetration of the fraud and put in place measures to rectify thesame. The functions of this Committee include identifying the reasons for delay indetection if any and reporting to top management of the Bank and RBI on the same. Theprogress of investigation and recovery position is also monitored by the Committee. TheCommittee also ensures that staff accountability is examined at all levels in all thecases of frauds and action if required is completed quickly without loss of time. Therole of the Committee is also to review the efficacy of the remedial action taken toprevent recurrence of frauds such as strengthening of internal controls and put in placeother measures as may be considered relevant to strengthen preventive measures againstfrauds.
At March 31 2018 the Fraud Monitoring Committee consisted fiveDirectors including three independent Directors the Managing Director & CEO and anExecutive Director and was chaired by Dileep Choksi an independent Director. There weresix Meetings of the Committee during the year. The details of the composition of theCommittee and attendance at its Meetings are set out in the following table:
|Name of Member ||Number of meetings attended |
|Dileep Choksi Chairman (Chairman w.e.f. January 21 2018) ||5/6 |
|Uday Chitale (w.e.f. January 21 2018) ||1/1 |
|Neelam Dhawan#(w.e.f. January 21 2018) ||1/1 |
|Homi Khusrokhan (upto January 20 2018) ||5/5 |
|V. K. Sharma (upto April 5 2017) ||N.A. |
|V. Sridar (upto January 20 2018) ||5/5 |
|Chanda Kochhar ||6/6 |
|Anup Bagchi (w.e.f. April 6 2017) ||6/6 |
# Participated in one Meeting through video-conference.
VIII. Information Technology Strategy Committee
Terms of Reference
The functions of the Committee are to approve strategy for InformationTechnology (IT) and policy documents ensure that IT strategy is aligned with businessstrategy review IT risks ensure proper balance of IT investments for sustaining theBank's growth oversee the aggregate funding of IT at Bank-level ascertain if themanagement has resources to ensure the proper management of IT risks review contributionof IT to business and oversee the activities of Digital Council.
At March 31 2018 the IT Strategy Committee consisted three Directorsincluding two independent Directors and the Managing Director & CEO and was chaired byNeelam Dhawan an independent Director. There were four Meetings of the Committee heldduring the year. The details of the composition of the Committee and attendance at itsMeetings are set out in the following table:
|Name of Member ||Number of meetings attended |
|Neelam Dhawan Chairperson (w.e.f. January 21 2018) ||1/1 |
|Dileep Choksi (w.e.f. January 21 2018) ||1/1 |
|Homi Khusrokhan (upto January 20 2018) ||3/3 |
|V. Sridar (upto January 20 2018) ||3/3 |
|Chanda Kochhar ||4/4 |
The Board at its Meeting held on June 27 2018 reconstituted theCommittee pursuant to which Anup Bagchi Executive Director was inducted as a Member ofthe Committee with effect from July 1 2018.
IX. Risk Committee
Terms of Reference
The functions of the Committee are to review ICICI Bank's riskmanagement policies pertaining to credit market liquidity operational outsourcingreputation risks business continuity plan and disaster recovery plan. The functions ofthe Committee also include review of the Enterprise Risk Management (ERM) framework RiskAppetite Framework (RAF) stress testing framework Internal Capital Adequacy AssessmentProcess (ICAAP) and framework for capital allocation; review of the status of Basel II andBasel III implementation risk return profile of the Bank risk dashboard covering variousrisks outsourcing activities and the activities of the Asset Liability ManagementCommittee. The Committee also has oversight on risks of subsidiaries covered under theGroup Risk Management Framework.
At March 31 2018 the Risk Committee consisted four Directorsincluding three independent Directors and the Managing Director & CEO and was chairedby M. K. Sharma an independent Director. There were seven Meetings of the Committeeduring the year. The details of the composition of the Committee and attendance at itsMeetings are set out in the following table:
|Name of Member ||Number of meetings attended |
|M. K. Sharma Chairman ||7/7 |
|Dileep Choksi ||6/7 |
|Homi Khusrokhan (upto January 20 2018) ||5/5 |
|V. K. Sharma ||0/7 |
|V. Sridar (upto January 20 2018) ||5/5 |
|Chanda Kochhar ||7/7 |
Upon completion of his tenure as a Director M. K. Sharma ceased to bea Member of the Committee with effect from July 1 2018. The Board at its Meeting held onJune 27 2018 further reconstituted the Committee pursuant to which M. D. Mallya anIndependent Director was inducted as a Member and Dileep Choksi an independent Directorwas appointed as the Chairperson of the Committee with effect from July 1 2018.
X. Stakeholders Relationship Committee
Terms of Reference
The functions and powers of the Committee include approval andrejection of transfer or transmission of equity shares preference shares bondsdebentures and securities issue of duplicate certificates allotment of shares andsecurities issued from time to time review redressal and resolution of grievances ofshareholders debenture holders and other security holders delegation of authority foropening and operation of bank accounts for payment of interest dividend and redemption ofsecurities and the listing of securities on stock exchanges.
At March 31 2018 the Stakeholders Relationship Committee consistedthree Directors including two Executive Directors and was chaired by Uday Chitale anindependent Director. There were five 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 |
|Uday Chitale Chairman (w.e.f. January 21 2018) ||1/1 |
|Homi Khusrokhan (upto January 20 2018) ||4/4 |
|V. Sridar (upto January 20 2018) ||3/4 |
|N. S. Kannan ||5/5 |
|Anup Bagchi (w.e.f. January 21 2018) ||1/1 |
Pursuant to his appointment as the Managing Director & CEO of ICICIPrudential Life Insurance Company Limited N. S. Kannan ceased to be the ExecutiveDirector of the Bank. Consequently N. S. Kannan ceased to be a Member of the StakeholdersRelationship Committee effective June 19 2018.
The Board at its Meeting held on June 27 2018 further reconstitutedthe Committee pursuant to which M. D. Mallya an independent Director was inductedas a Member as well as appointed as the Chairman of the Committee with effect from July 12018.
The Company Secretary of the Bank acts as the Compliance Officer inaccordance with the requirements of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. 196 shareholder complaintsreceived in fiscal 2018 were processed. At March 31 2018 no complaints were pending.
XI. Review Committee for Identification of Wilful Defaulters/nonCo-operative Borrowers
Terms of Reference
The function of the Committee is to review the order of the Committeefor identification 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 Committeeand any two independent Directors will comprise the remaining members. There were fiveMeetings of the Committee during the year and details of the same is set out in thefollowing table:
|Name of Member ||Number of meetings attended |
|Chanda Kochhar Chairperson ||5/5 |
|Dileep Choksi ||4/4 |
|Homi Khusrokhan ||3/3 |
|V. Sridar ||2/2 |
|Tushaar Shah ||1/1 |
XII. Separate Meeting of Independent Directors to review matters asprescribed by statute
The Independent Directors met on May 3 2017 and May 3 2018 to reviewthe matters as statutorily prescribed under the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
XIII. Other Committees
In addition to the above the Board has from time to time constitutedvarious committees namely Committee of Executive Directors Executive InvestmentCommittee Asset 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 VigilanceCommittee Product Governance Committee and other Committees (all comprising Executives).These committees are responsible for specific operational areas like asset liabilitymanagement approval/renewal of credit proposals approval of products and processes andmanagement of operational risk under authorisation/supervision of the Board and itsCommittees.
XIV.General Body Meetings
The details of General Body Meetings held in the last three years aregiven below:
|General Body 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 |
|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 Vadodara 390 020 |
The details of the Special Resolutions passed in the Annual GeneralMeetings held in the previous three years are given below:
|General Body Meeting ||Day Date ||Resolution |
|Annual General Meeting ||Friday June 30 2017 ||Private placement of securities under Section 42 of the Companies Act 2013 |
|Annual General Meeting ||Monday July 11 2016 ||Private placement of securities under Section 42 of the Companies Act 2013 |
|Annual General Meeting ||Monday June 29 2015 ||Private placement of securities under Section 42 of the Companies Act 2013 |
Special Resolution was passed through postal ballot during fiscal 2018 videPostal Ballot Notice dated May 5 2017 under Section 110 of the Companies Act 2013for the following:
(i) Alteration of Articles of Association
(ii) Amendment to the Employee Stock Option Scheme
The Bank followed the procedure as prescribed under Companies(Management and Administration) Rules 2014 as amended and the Secretarial Standard 2issued by the Institute of Company Secretaries of India. The Members were provided thefacility to cast their votes through electronic voting (e-voting) or through postalballot. The Board of Directors of the Company appointed Mr. Alwyn D'souza of AlwynD'souza & Co. Company Secretaries as the Scrutinizer for conducting the postalballot voting process. The scrutinizer submitted his report to the Chairman after thecompletion of the scrutiny of the postal ballots (including e-voting). Considering thecombined results of the Postal Ballot via postal ballot forms and e-voting facility theresolution was approved on June 12 2017. The results were declared on June 13 2017 andcommunicated to the stock exchanges and displayed on the Bank's websitewww.icicibank.com. The details of the voting pattern is given below:
|Resolution ||Total number of votes polled ||% of votes polled on outstanding shares ||Votes cast in favour of the Resolution ||Votes cast against the Resolution ||% of Votes in favour on votes polled ||% of votes against on votes polled ||Invalid votes |
|Alteration of Articles of Association ||3925563565 ||67.38 ||3923926748 ||1636817 ||99.96 ||0.04 ||98459 |
|Amendment to the Employee Stock Option Scheme ||3925116014 ||67.38 ||3827914727 ||97201287 ||97.52 ||2.48 ||157285 |
At present no special resolution is proposed to be passed throughpostal ballot.
1. There are no materially significant transactions with relatedparties i.e. directors management subsidiaries or relatives conflicting with theBank's interests. The Bank has no promoter.
2. Penalties or strictures 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 detailed as hereunder: In reference to Show cause notice issued by RBIdated September 6 2017 and supplementary show cause notice dated November 07 2017 and asmentioned by RBI in its press release dated March 29 2018 RBI has through an order datedMarch 26 2018 imposed a monetary penalty of Rs 589.0 million on ICICI Bank fornon-compliance with directions/guidelines issued by RBI. This penalty has been imposed inexercise of powers vested in RBI under the provisions of Section 47A(1)(c) read withSection 46(4)(i) of the Banking Regulation Act 1949.
3. In terms of the Whistle Blower Policy of the Bank no employee ofthe Bank has been denied access to the Audit Committee.
XVI. Means of Communication
It is ICICI Bank's belief that all stakeholders should have accessto complete information regarding its position to enable them to accurately assess itsfuture potential. ICICI Bank disseminates information on its operations and initiatives ona regular 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 strategyfinancial performance operational performance and the latest press releases.
ICICI Bank's investor relations personnel respond to specificqueries and play a proactive role in disseminating information to both analysts andinvestors. In accordance with SEBI and Securities Exchange Commission (SEC) guidelinesall information which could have a material bearing on ICICI Bank's share price isreleased through leading domestic and global wire agencies. The information is alsodisseminated to the National Stock Exchange of India Limited (NSE) the BSE Limited (BSE)New York Stock Exchange (NYSE) Securities Exchange Commission (SEC) Singapore StockExchange Japan Securities Dealers Association and SIX Swiss Exchange Ltd from time totime.
The financial and other information and the various compliances asrequired/prescribed under the Listing Regulations are filed electronically with NSE/BSEthrough NSE Electronic Application Processing (NEAP) System and through BSE Listing Centreand are also available on their respective websites in addition to the Bank'swebsite. Additionally information is also disseminated to BSE/NSE where required by emailor fax.
ICICI Bank's quarterly financial results are published either inthe Financial Express (Mumbai Pune Ahmedabad New Delhi Lucknow Chandigarh KolkataChennai Bengaluru Hyderabad and Kochi editions) or the Business Standard (AhmedabadBengaluru Bhubaneshwar Chandigarh Chennai Hyderabad Kochi Kolkata Lucknow MumbaiNew Delhi and Pune editions) and Vadodara Samachar (Vadodara). The financial resultsofficial news releases analyst call transcripts and presentations are also available onthe Bank's website.
The Management's Discussion & Analysis forms part of theAnnual Report.
General Shareholder Information
|Annual general ||Day Date & Time ||Venue |
|Meeting || || |
|Twenty-Fourth AGM ||Wednesday September ||Sir Sayajirao Nagargruh Vadodara Mahanagar Seva |
| ||12 2018 ||Sadan Near GEB Colony Old Padra Road Akota |
| ||11.30 a.m. ||Vadodara 390 020 |
|Financial Year ||: April 1 2017 to March 31 2018 |
|Book Closure ||: August 28 2018 to September 12 2018 |
|Dividend Payment Date ||: September 13 2018 |
|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) ||ICICIBANK |
|Exchange Plaza Bandra-Kurla Complex || |
|Bandra (East) Mumbai 400 051 || |
|New York Stock Exchange (ADSs)2 ||IBN |
|11 Wall Street New York NY 10005 United States of America || |
|1. FII segment of BSE. || |
|2. Each ADS of ICICI Bank represents two underlying equity shares. || |
The bonds issued in domestic market comprised of privately placed bondsas well bonds issued via public issues which are listed on BSE/NSE.
ICICI Bank has paid annual listing fees for the relevant periods to BSEand NSE where its equity shares/bonds are listed and NYSE where its ADSs are listed.
Listing of other securities
The bonds issued overseas are issued either in public or privateplacement format. The listed bonds are traded on Singapore Exchange Securities TradingLimited 2 Shenton Way #02-02 SGX Centre 1 Singapore 068804 or SIX Swiss Exchange LtdP.O. Box 1758 CH-8021 Zurich Switzerland or Tokyo Stock Exchange 2-1 NihombashiKabutocho Chuo-ku Tokyo 103-8220 Japan.
Market Price Information
The reported high and low closing prices and volume of equity shares ofICICI Bank traded during fiscal 2018 on BSE and NSE are set out in the following table:
| ||BSE ||NSE ||Total Volume on |
|Month ||High Rs ||Low Rs ||Volume ||High Rs ||Low Rs ||Volume ||BSE and NSE |
|April 2017 ||260.68 ||244.27 ||28050514 ||260.64 ||244.23 ||294766486 ||322817000 |
|May 2017 ||296.64 ||247.95 ||56314696 ||296.77 ||247.95 ||686787972 ||743102668 |
|June 2017 ||295.23 ||286.18 ||18471010 ||295.18 ||286.23 ||316970253 ||335441264 |
|July 2017 ||310.20 ||289.45 ||35513452 ||310.35 ||289.50 ||273787529 ||309300981 |
|August 2017 ||302.20 ||287.10 ||22735367 ||302.60 ||286.95 ||230083569 ||252818936 |
|September 2017 ||298.20 ||275.55 ||13762764 ||298.30 ||275.95 ||265346113 ||279108877 |
|October 2017 ||305.60 ||257.85 ||26856926 ||305.70 ||257.85 ||484037908 ||510894834 |
|November 2017 ||325.10 ||305.80 ||22375693 ||325.10 ||305.50 ||338858264 ||361233957 |
|December 2017 ||317.50 ||299.40 ||32923892 ||318.15 ||299.50 ||223570224 ||256494116 |
|January 2018 ||362.05 ||309.25 ||41681148 ||362.30 ||309.50 ||364937744 ||406618892 |
|February 2018 ||345.75 ||313.50 ||34926534 ||346.20 ||313.25 ||291549305 ||326475839 |
|March 2018 ||306.35 ||275.80 ||27704791 ||306.05 ||275.55 ||369766992 ||397471783 |
|Fiscal 2018 ||362.05 ||244.27 ||361316787 ||362.30 ||244.23 ||4140462360 ||4501779147 |
The Bank issued one bonus share for every 10 equity shares effectiveJune 24 2017. Share prices and volumes in the table have been adjusted accordingly.
The reported high and low closing prices and volume of ADRs of ICICIBank traded during fiscal 2018 on the NYSE are given below:
|Month ||High (USD) ||Low (USD) ||Number of ADS traded |
|April 2017 ||8.00 ||7.50 ||112908164 |
|May 2017 ||9.02 ||7.71 ||241530664 |
|June 2017 ||9.17 ||8.78 ||152262176 |
|July 2017 ||9.72 ||8.90 ||136531827 |
|August 2017 ||9.45 ||8.79 ||174370358 |
|September 2017 ||9.40 ||8.46 ||117338640 |
|October 2017 ||9.15 ||7.91 ||272236040 |
|November 2017 ||9.89 ||9.34 ||164074945 |
|December 2017 ||9.81 ||9.33 ||91013566 |
|January 2018 ||11.22 ||9.71 ||154597739 |
|February 2018 ||10.78 ||9.50 ||151033704 |
|March 2018 ||9.45 ||8.55 ||173399464 |
|Fiscal 2018 ||11.22 ||7.50 ||1941297287 |
The Bank issued one bonus ADS for every 10 ADS held effective June 242017. ADS prices and volumes in the table have been adjusted accordingly.
The performance of ICICI Bank equity shares relative to the S&P BSESensitive Index (Sensex) S&P BSE Bank Index (Bankex) and NYSE Financial Index duringthe period April 1 2017 to March 31 2018 is given in the following chart:
Share Transfer System
ICICI Bank's investor services are handled by 3i Infotech Limited(3i Infotech). 3i Infotech is a SEBI registered Category I - Registrar to an Issue &Share Transfer (R&T) Agent. 3i Infotech is an information technology company and inaddition to R&T services provides a wide range of technology & technology-enabledproducts and services.
ICICI Bank's equity shares are traded mainly in dematerialisedform. During the year 1589536 equity shares of face value Rs 2/- each involving 7238certificates were dematerialised. At March 31 2018 99.59% of paid-up equity sharecapital (including equity shares represented by ADS constituting 24.17% of the paid-upequity share capital) are held in dematerialised form.
Physical share transfer requests are processed and the sharecertificates are returned normally within a period of seven days from the date of receiptif the documents are correct valid and complete in all respects.
The number of equity shares of ICICI Bank transferred during the lastthree years (excluding electronic transfer of shares in dematerialised form) is givenbelow:
| ||Fiscal 2016 ||Fiscal 2017 ||Fiscal 2018 |
| ||Shares of face value Rs 2 ||Shares of face value Rs 2 ||Shares of face value Rs 2 |
|Number of transfer deeds ||1114 ||414 ||629 |
|Number of shares transferred ||314890 ||109155 ||157922 |
As required under Regulation 40(9) of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 acertificate is obtained every six months from a practising Company Secretary that alltransfers have been completed within the stipulated time. The certificates are filed withBSE and NSE.
In terms of SEBI circular no. D&CC/FITTC/CIR-16 dated December 312002 as amended vide circular no. CIR/ MRD/DP/30/2010 dated September 6 2010 anaudit is conducted on a quarterly basis by a firm of Chartered Accountants for thepurpose of inter alia reconciliation of the total admitted equity share capital with thedepositories and in the physical form with the total issued/paid up equity share capitalof ICICI Bank. Certificates issued in this regard are placed before the StakeholdersRelationship Committee and filed with BSE and NSE where the equity shares of ICICI Bankare listed.
Physical Share Disposal Scheme
With a view to mitigate the difficulties experienced by physicalshareholders in disposing off their shares ICICI Bank in the interest of investorsholding shares in physical form (upto 250 shares of face value of Rs 2 each) hasinstituted a Physical Share Disposal Scheme. The scheme was started in November 2008 andcontinues to remain open. Interested shareholders may contact the R&T Agent 3iInfotech Limited for further details.
Registrar and Transfer agents
The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited.Investor services related queries/requests/ complaints may be directed to R. C.D'souza at the address as under:
3i Infotech limited
International Infotech Park
Tower 5 3rd Floor
Vashi Railway Station Complex
Vashi Navi Mumbai 400 703
Tel No. : +91-22-7123 8000
Fax No. : +91-22-7123 8099
E-mail : firstname.lastname@example.org
Queries relating to the operational and financial performance of ICICI Bank may beaddressed to:
Rakesh Jha/Anindya Banerjee
ICICI Bank Limited
ICICI Bank Towers
Mumbai 400 051
Tel No. : +91-22-2653 7131
Fax No. : +91-22-2653 1175
E-mail : email@example.com
Pursuant to Regulation 53 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the names and contactdetails of the debenture trustees for the public issue bonds and privately placed bonds ofthe Bank are given below:
|Bank of Maharashtra ||Axis Trustee Services Limited ||IDBI Trusteeship Services Limited |
|Head Office Legal Dept. ||Axis House Ground Floor ||Asian Building Ground Floor |
|Lokmangal "1501"Shivaji Nagar ||Bombay Dyeing Mill Compound ||17 R Kamani Marg |
|Pune - 411 005 ||Pandurang Budhkar Marg ||Ballard Estate |
|Tel. No: +91-020-2553 6256 ||Worli Mumbai - 400 025 ||Mumbai 400 001 |
|firstname.lastname@example.org ||Tel No: +91- 22- 2425 5202 ||Tel No: +91 -22 - 4080 7001 |
| ||email@example.com ||firstname.lastname@example.org |
The details are available on the website of the Bank at the link
Information on Shareholding
Shareholding pattern of ICICI Bank at March 31 2018
|Shareholder Category ||Shares ||% holding |
|Deutsche Bank Trust Company Americas (Depositary for ADS holders) ||1553716495 ||24.17 |
|FIIs NRIs Foreign Banks Foreign Companies OCBs and Foreign Nationals ||2363839329 ||36.77 |
|Insurance Companies ||863754047 ||13.45 |
|Bodies Corporate (including Government Companies) ||125541844 ||1.95 |
|Banks & Financial Institutions ||3071804 ||0.05 |
|Mutual Funds ||1104462167 ||17.18 |
|Individuals HUF and Trusts ||353357106 ||5.50 |
|NBFC Registered with RBI ||948746 ||0.01 |
|Provident Fund / Pension Fund ||52643783 ||0.82 |
|Alternative Investment Fund ||1920162 ||0.03 |
|IEPF ||4735293 ||0.07 |
|Total ||6427990776 ||100.00 |
Shareholders of ICICI Bank with more than one percent holding at March31 2018
|S r. No ||Type of shares ||no. of shares ||% |
|Name of the Shareholder || || || |
|1 Deutsche Bank Trust Company Americas ||Equity ||1553716495 ||24.17 |
|2 Life Insurance Corporation of India ||Equity ||603252345 ||9.38 |
|3 Dodge & Cox International Stock Fund ||Equity ||388897176 ||6.05 |
|4 HDFC Trustee Co Ltd (Various Mutual Fund Accounts)/HDFC Large Cap Fund ||Equity ||275843678 ||4.29 |
|5 ICICI Prudential Mutual Fund (Various Mutual Fund Accounts) ||Equity ||163223945 ||2.54 |
|S r. No Name of the Shareholder ||Type of shares ||no. of shares ||% |
|6 SBI Mutual Fund/SBI Dual Advantage Fund And Other Various Fund Accounts ||Equity ||133169518 ||2.07 |
|7 Reliance Capital Trustee Co Ltd/Reliance ETF/Reliance Emergent India Fund (Various Fund Accounts) ||Equity ||101446335 ||1.58 |
|8 Aditya Birla Sun Life Trustee Private Limited ||Equity ||99464487 ||1.55 |
|9 Government of Singapore ||Equity ||101380233 ||1.58 |
|10 Norges Bank on account of The Government Pension Fund Global ||Equity ||59362755 ||0.92 |
Note- Pursuant to SEBI circular dated December 19 2017 theshareholding under different folios has been consolidated basis common Permanent AccountNumber
Distribution of shareholding of ICICI Bank at March 31 2018
|Range Shares ||No. of Folios ||% ||No. of Shares ||% |
|Upto 1000 ||427985 ||48.28 ||14850980 ||0.23 |
|1001 5000 ||300970 ||33.95 ||71153318 ||1.11 |
|5001 10000 ||95204 ||10.74 ||62618295 ||0.97 |
|10001 50000 ||53571 ||6.05 ||97157514 ||1.51 |
|50001 & above ||8694 ||0.98 ||6182210669 ||96.18 |
|Total ||886424 ||100.00 ||6427990776 ||100.00 |
Disclosure with respect to shares lying in suspense account
The Bank had 99175 equity shares held by 498 shareholders lying insuspense account at the beginning of the fiscal 2018. The Bank has been transferring theshares lying unclaimed to the eligible shareholders as and when the request for the samehas been received after proper verification. During the year the Bank had allotted 9662Bonus shares and had received requests from 18 shareholders holding 9715 shares forclaiming these shares out of which 8615 shares held by 15 shareholders were transferredfrom the suspense account. As on March 31 2018 100222 shares held by 483 shareholdersremained unclaimed in the suspense account.
The voting rights on the shares lying in suspense account are frozentill the rightful owner of such shares claims the shares.
Transfer of unclaimed dividend and shares to investor education &protection fund (IEPF)
Pursuant to the provisions of Section 124 of the Companies Act 2013the amounts of dividend remaining unpaid or unclaimed for a period of seven years from thedate of its transfer to the Unpaid Dividend Accounts of the Company are required to betransferred to the Investor Education and Protection Fund (IEPF) established by theCentral Government. Accordingly the unclaimed dividend for the financial year ended March31 2010 was transferred to the IEPF on August 21 2017.
Further as per the provisions of Section 124(6) of the Companies Act2013 read with the Investor Education & Protection Fund Authority (Accounting AuditTransfer & Refund) Rules 2016 (IEPF Rules) the shares in respect of which thedividend has not been claimed for seven consecutive years are required to be transferredby the Company to the designated Demat account of the IEPF Authority. In compliance withthe aforesaid provision the Bank on November 30 2017 has transferred 4735293 equityshares of Rs 2 each to the demat account of the IEPF Authority which is maintained withNational Securities Depository Limited (NSDL).
With respect to the unclaimed dividend for the financial year endedMarch 31 2011 reminder letters were sent to the Members in March and April 2018 to claimthe outstanding dividend amounts on or before June 27 2018 failing which thecorresponding shares alongwith unclaimed dividend would become due for transfer to thedesignated demat account as mentioned above. The unclaimed dividend for the financial yearended March 31 2011 would accordingly be transferred to the IEPF in August 2018. Thecorresponding shares alongwith the unclaimed dividend would also be transferred to thedemat account of the IEPF Authority.
Members who have not yet encashed their dividend warrant(s) for thefinancial years ended March 31 2012 and/ or subsequent years are requested to submittheir claims to the Registrar and Transfer Agent of the Company without any delay. Theunclaimed dividend and the unclaimed equity shares can be claimed by making an applicationdirectly to IEPF in the prescribed form under the IEPF Rules which is available on thewebsite of IEPF i.e. www.iepf.gov.in. or you may write to 3i Infotech Limited for anyassistance in this regard. As stipulated under the said Rules all subsequent corporatebenefits that would accrue in relation to the above shares will also be credited to thesaid IEPF Account.
Securities and Exchange Board of India (SEBI) vide its circular no.SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated April 20 2018 has stipulated various proceduralsteps for all listed entities and their Registrar & Transfer Agents (RTA) with theobjective of streamlining the processes relating to maintenance of records transfer ofsecurities and seamless payment of dividend amounts to shareholders. The circular alsomandated the issuer companies to seek the copy of PAN Card and Bank Account details fromthe shareholders through their RTA. Further BSE vide circular No. LIST/COMP/15/2018-19dated July 5 2018 regarding amendment to Regulation 40 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI LODR Regulations) with respect tomandatory dematerialisation for transfer of securities had stipulated to ensure thatshares must be held in the DEMAT form in case of transfer of securities. Listed Companiesand their Registrars and Transfer Agents (RTAs) were advised that with effect fromDecember 5 2018 it should be ensured that shares which are lodged for transfer shall bein dematerialised form only.
In view of the above the Registrar and Transfer Agent had vide itsletter dated July 11 2018 advised the shareholders whose PAN/Bank account details werenot available/updated in the records to provide the same within 21 days of the date of theletter. The RTA had further advised the shareholders to convert the physical shares intodematerialized form.
Outstanding GDRs/ADSs/Warrants or any Convertible Debenturesconversion date and likely impact on equity
ICICI Bank has 776.86 million ADS (equivalent to 1553.72 millionequity shares) outstanding which constituted 24.17% of ICICI Bank's total equitycapital at March 31 2018. 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 withinthe Rs 15.00 billion net overnight open position (NOOP) limit approved by the Board ofDirectors. The Bank does not take positions in commodities. The Bank primarily hasfloating rate linked foreign currency assets. Wholesale liability raising takes place inUSD or other currencies via bond issuances bilateral loans and syndicated/club loans aswell as refinance from Export Credit Agencies (ECA) which may be at a fixed rate orfloating rate linked. In case of fixed rate fund raising in USDs the interest rate riskis hedged via interest rate swaps wherein the Bank moves to a floating rate index in orderto match the asset profile. In case of fund raising in non USD currencies the foreignexchange risk is hedged via foreign exchange swaps or currency interest rate swaps.
Plant Locations Not applicable
Address for Correspondence
General Manager & Company Secretary (with effect from July 28 2018)
ICICI Bank Limited
ICICI Bank Towers
Mumbai 400 051
Tel No. : +91-22-2653 8900
Fax No. : +91-22-2653 1230
E-mail : email@example.com
The Bank is in compliance with requirements specified in Regulations 17to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
The Bank has also complied with the discretionary requirements such asmaintaining a separate office for the Chairman at the Bank's expense ensuringfinancial statements with unmodified audit opinion separation of posts of Chairman andChief Executive Officer and reporting of internal auditor directly to the Audit Committee.
ANALYSIS OF CUSTOMER COMPLAINTS
|a) Customer complaints in fiscal 2018 || |
|No. of complaints pending at the beginning of the year ||4272 |
|No. of complaints received during the year ||237343 |
|No. of complaints redressed during the year ||235406 |
|No. of complaints pending at the end of the year ||6209 |
|Note: The above does not include complaint redressed within 1 working day. || |
|b) Awards passed by the Banking Ombudsman in fiscal 2018 || |
|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 certificate obtained from thestatutory auditors M/s B S R & Co. LLP Chartered Accountants regarding complianceof conditions of Corporate Governance as stipulated in Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015.
EMPLOYEE STOCK OPTION SCHEME
The Bank has an Employee Stock Option Scheme (ESOS/Scheme) which wasinstituted in fiscal 2000 to enable the employees and wholetime Directors of ICICI Bankand its subsidiaries to participate in future growth and financial success of the Bank.The ESOS aims at achieving the twin objectives of (i) aligning employee interest to thatof the shareholders; and (ii) retention of talent. Through employee stock option grantsthe Bank seeks to foster a culture of long-term sustainable value creation. The Scheme isin compliance with the SEBI (Share Based Employee Benefits) Regulations 2014 and thebelow disclosures are available at www.icicibank.com/aboutus/annual.page. Pursuant to SEBI(Share Based Employee Benefits) Regulations 2014 options are granted by the BoardGovernance Remuneration & Nomination Committee (BGRNC) and noted by the Board.
The Scheme was initially approved by the Members at their meeting heldon February 21 2000 and thereafter further amended through resolutions at the GeneralMeeting held on September 20 2004 June 25 2012 and vide a postal ballot resolutionpassed on April 22 2016. The scheme was further amended through a resolution at the BoardGovernance Remuneration & Nomination Committee held on July 11 2016 and vide apostal ballot resolution passed on June 12 2017. The Bank has upto March 31 2018 granted487.11 million stock options from time to time aggregating to 7.58% of the issued equitycapital of the Bank at March 31 2018. As per the ESOS as amended from time to time themaximum number of options granted to any employee/Director in a year is limited to 0.05%of ICICI Bank's issued equity shares at the time of the grant and the aggregate ofall such options is limited to 10% of ICICI Bank's issued equity shares on the dateof the grant (equivalent to 642.80 million shares of face value Rs 2 each at March 312018).
Options granted after April 1 2014 vest in a graded manner over a three year periodwith 30% 30% and 40% of the grant vesting in each year commencing from the end of 12months from the date of the grant other than the following:
275000 options granted in April 2014 50% vested on April 30 2017 and balance50% vested on April 30 2018.
Options granted in September 2015 50% vested on April 30 2018 and balance 50%would vest on April 30 2019. The unvested options would lapse upon termination ofemployment due to retirement (including pursuant to early/voluntary retirement scheme).
300000 options granted in January 2018 would vest to the extent of 100% at theend of four years from the date of grant.
Options granted prior to April 1 2014 vested in a graded manner over a four-yearperiod with 20% 20% 30% and 30% of the grants vesting in each year commencing from theend of 12 months from the date of grant other than the following:
Options granted in April 2009 vested in a graded manner over a five-year periodwith 20% 20% 30% and 30% of the grant vesting in each year commencing from the end of24 months from the date of the grant.
The grant approved by the Board at its Meeting held on October 29 2010 (forwhich RBI approval for grant to wholetime Directors was received in January 2011) vested50% on April 30 2014 and the balance 50% vested on April 30 2015.
Options granted in September 2011 vested in a graded manner over a five-yearperiod with 15% 20% 20% and 45% of the grant vesting in each year commencing from endof 24 months from the date of grant.
The price for options granted (except for grants approved on October29 2010 where the grant price was the average closing price of the ICICI Bank stock onthe stock exchange during the six months upto October 28 2010) is equal to the closingprice on the stock exchange which recorded the highest trading volume preceding the dateof grant of options in line with the SEBI regulations.
The BGRNC at its Meeting held on May 3 2017 approved a grant ofapproximately 36.3 million options (bonus adjusted) for fiscal 2017 to eligible employeesand wholetime Directors of ICICI Bank and its subsidiaries. Each option confers on theemployee a right to apply for one equity share of face value of Rs 2 of ICICI Bank at Rs250.55 being the grant price proportionately adjusted post issuance of bonus options inJune 2017 based on the price of Rs 275.60 calculated as per the SEBI Regulationswhich was closing price on the stock exchange which recorded the highest trading volume inICICI Bank shares on May 2 2017.
Particulars of options granted by ICICI Bank upto March 31 2018 are given below:
|Options granted till March 31 2018 (excluding options forfeited/lapsed) ||487109621 |
|Options forfeited/lapsed ||83085543 |
|Options vested ||401079784 |
|Options exercised ||251437371 |
|Total number of options in force ||235672250 |
|Number of shares allotted pursuant to exercise of options ||251437371 |
|Extinguishment or modification of options ||Nil |
|Amount realised by exercise of options ( Rs ) ||20369703051 |
1. The numbers indicated include options granted till March 312018 including those granted to wholetime Directors (WTDs)as per RBI approvals. For theyear ended March 31 2018 approx. 35.5 million options were approved by BGRNC at itsmeeting held on May 7 2018 (FY2017: 36.3 million options bonus adjusted) which includesoptions granted to WTDs subject to RBI approval.
2. For details on option movement during the year referFinancials-Schedule 18-Employee Stock Option Scheme. 37507933 options vested duringFY2018 and Rs 3939489824 was realised by exercise of options during FY2018.
3. Pursuant to the issuance of bonus shares by the Bank in June2017 stock options were also adjusted with increase of one option for every 10outstanding options. Accordingly all numbers reported above have been re-stated.
The following Key Managerial Personnel (other than wholetime Directors)and Senior Management Personnel (SMP) were granted ESOPs upto maximum of 365750 optionsaggregating to 3768545 in FY2018. The numbers reported here are adjusted with increaseof one option for every 10 outstanding options pursuant to the issuance of bonus shares bythe Bank in June 2017.
|SR. NO. NAME ||GRADE |
|1 Madhivanan B ||Group Executive |
|2 Prasanna Balachander ||Group Executive |
|3 Rakesh Jha ||Group Executive (Chief Financial Officer) |
|4 Sanjay Chougule ||Senior General Manager |
|5 G Srinivas ||Senior General Manager |
|6 T. K. Srirang ||Senior General Manager |
|7 Anita Pai ||Senior General Manager |
|8 Partha Dey ||Senior General Manager |
|9 Sanker Parameswaran ||Senior General Manager (Company Secretary) |
|10 Saurabh Singh ||Senior General Manager |
|11 Supritha Shirish Shetty ||Senior General Manager |
|12 Sujit Ganguli ||Senior General Manager |
|13 Ajay Gupta ||Senior General Manager |
|14 Murali Ramakrishnan ||Senior General Manager |
|15 Amit Palta ||Senior General Manager |
|16 Narayanan N R ||Senior General Manager |
|17 Kumar Ashish ||Senior General Manager |
|18 Loknath Mishra ||Senior General Manager |
|19 Anuj Bhargava ||Senior General Manager |
|20 Avijit Saha ||Senior General Manager |
|21 Subir Saha ||Senior General Manager |
|22 Anil Kaul ||Senior General Manager |
1. For the year-ended March 31 2018 the numbers indicated arethe options granted during the year FY2018.
No employee was granted options during any one year equal to orexceeding 0.05% of the issued equity shares of ICICI Bank at the time of the grant.
The diluted earnings per share (EPS) pursuant to issue of shares onexercise of options calculated in accordance with AS-20 was Rs 10.46 in fiscal 2018compared to basic EPS of Rs 10.56. Based on the intrinsic value of options nocompensation cost was recognised during fiscal 2018. However if the Bank had used thefair value of options based on the binomial tree model compensation cost in fiscal 2018would have been higher by Rs 3.52 billion including additional cost of Rs 0.07 billion dueto change in exercise period and proforma profit after tax would have been Rs 64.25billion. On a proforma basis the Bank's basic and diluted earnings per share wouldhave been Rs 10.01 and Rs 9.91 respectively.
The key assumptions used to estimate the fair value of options grantedduring fiscal 2018 are given below:
|Risk-free interest rate ||7.06% to 7.59% |
|Expected life ||3.90 to 6.90 years |
|Expected volatility ||31.71% to 32.92% |
|Expected dividend yield ||0.73% to 1.81% |
The weighted average fair value of options granted during fiscal 2018was Rs 86.43 ( Rs 76.72 during fiscal 2017).
The Bank has an Employees Stock Option Scheme 2000'(ESOS scheme) framed in line with the SEBI (Share Based Employee Benefits) Regulations2014 (Regulations). The Scheme has been amended from time to time with the approval of theMembers and as per the amendments last approved by the Members vide a Postal Ballotresolution passed on June 12 2017 the Exercise Period was defined as the periodcommencing from the date of vesting and which 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 ("BGNRC") for each grant.
The Board Governance Remuneration & Nomination Committee and Board at its meetingsheld on May 7 2018 with the objective to further enhance employee efforts to execute thecurrent strategy and align the compensation payout schedules for senior management to thetime horizon of risks approved the amendment to the definition of Exercise Period as givenbelow:
"The "Exercise Period" would commence from the date of vesting and willexpire on completion of such period not exceeding five years from the date of vesting ofOptions as may be determined by the Board Governance Remuneration & NominationCommittee for each grant".
The amendment is intended to cover only future grants to be made and would come intoeffect only after approval by Members and will not cover grants already made. As per theRegulations any variation to the terms of the Scheme requires the approval of Members byway of a special resolution. There are no other changes to the existing terms of theScheme.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The Bank has undertaken various initiatives for energy conservation atits premises further details are given under Principle 6 of Section E of the BusinessResponsibility Report. The Bank has used information technology extensively in itsoperations for more details please refer the section on Information Technology underBusiness Overview.
UPDATE ON RECENT DEVELOPMENTS AT THE BANK
The Audit Committee of the Bank under direction given by the Board ofDirectors has instituted an independent enquiry headed by a former Supreme Court JudgeHon'ble Mr. Justice B. N. Srikrishna (Retd.) to consider various allegationsrelating to the MD and CEO Ms. Chanda Kochhar. The allegations have been levelled againstMs. Kochhar through media articles a whistleblower complaint and complaints written by aprivate individual to senior government officials and regulators. The allegations includenepotism quid pro quo and claims that Ms. Kochhar by not disclosing conflicts ofinterest caused by certain transactions between certain borrowers of the Bank and entitiescontrolled by Ms. Kochhar's spouse committed infractions under applicableregulations and the Bank's Code of Conduct. The independent enquiry is supported byan independent law firm and a forensic firm. The independent enquiry is under way. Inaddition SEBI issued a show-cause notice to Ms. Kochhar and to the Bank in May 2018related to the allegations. The Bank is in the process of responding to the relevantallegations in the notice which pertain to the Bank. The Central Bureau of Investigation(CBI) also initiated a preliminary enquiry against various individuals and firms includingunknown officers and/or officials of the Bank.
Ms. Kochhar is on a leave of absence while the independent enquirytakes place. In the interim Mr. Sandeep Bakhshi has been appointed as Chief OperatingOfficer subject to approval of the Reserve Bank of India (RBI) and reports directly tothe Board of Directors during her absence.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
In line with the Green Initiative' since the last fiveyears the Bank has effected electronic delivery of Notice of Annual General Meeting andAnnual Report to those Members whose e-mail IDs were registered with the respectiveDepository Participants and downloaded from the depositories viz. National SecuritiesDepository Limited/Central Depository Services (India) Limited. The Companies Act 2013and the underlying rules as well as Regulation 36 of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 permit thedissemination of financial statements and annual report in electronic mode to the Members.Your Directors are thankful to the Members for actively participating in the GreenInitiative and seek your continued 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. that they have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Bank at the end of the financial year and of theprofit of the Bank for that period;
3. that they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Banking Regulation Act 1949and the Companies Act 2013 for safeguarding the assets of the Bank and for preventing anddetecting 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 ofall applicable laws and that such systems were adequate and operating effectively.
ICICI Bank is grateful to the Government of India Reserve Bank ofIndia Securities and Exchange Board of India Insurance Regulatory and DevelopmentAuthority of India and overseas regulators for their continued co-operation support andguidance. ICICI Bank wishes to thank its investors the domestic and international bankingcommunity rating agencies and stock exchanges for their support. ICICI Bank would like totake this opportunity to express sincere thanks to its valued clients and customers fortheir continued patronage. The Directors express their deep sense of appreciation to allthe employees whose outstanding professionalism commitment and initiative has made theorganisation's growth and success possible and continues to drive its progress.Finally the Directors wish to express their gratitude to the Members for their trust andsupport.
| ||For and on behalf of the Board |
| ||GIRISH CHANDRA CHATURVEDI |
|July 27 2018 ||Chairman |