Your Directors have pleasure in presenting the Twenty-Fifth AnnualReport of ICICI Bank Limited (ICICI Bank/the Bank) along with the audited financialstatements for the year ended March 31 2019.
The financial performance for fiscal 2019 is summarised in thefollowing table:
|र in billion except percentages ||Fiscal 2018 ||Fiscal 2019 ||% change |
|Net interest income and other income ||404.45 ||415.27 ||2.7% |
|Operating expenses ||157.04 ||180.89 ||15.2% |
|Core operating profit ||189.39 ||220.72 ||16.5% |
|Treasury income ||58.02 ||13.66 ||(76.5)% |
|Operating profit ||247.41 ||234.38 ||(5.3)% |
|Provisions & contingencies (excluding tax) ||173.07 ||196.61 ||13.6% |
|Profit before tax ||74.34 ||37.77 ||(49.2)% |
|Profit after tax ||67.77 ||33.63 ||(50.4)% |
|र in billion except percentages ||Fiscal 2018 ||Fiscal 2019 ||% change |
|Consolidated profit before tax and minority interest ||109.78 ||74.08 ||(32.5)% |
|Consolidated profit after tax and minority interest ||77.12 ||42.54 ||(44.8)% |
The profit after tax of the Bank for fiscal 2019 is र 33.63 billionafter provisions and contingencies of र 196.61 billion provision for taxes of र 4.14billion and all expenses. The accumulated profit is र 218.58 billion taking into accountthe balance of र 179.70 billion brought forward from the previous year and credit of र5.25 billion in balance in profit and loss account towards reversal of provision forfrauds on non-retail accounts created in earlier years through accumulated profits. YourBank has a consistent dividend payment history. Your Bank's dividend policy is basedon the profitability and key financial metrics capital position and requirements and theregulations pertaining to the payment of dividend. In line with the above your Directorshave recommended a dividend of र 1.00 per equity share for the year ended March 31 2019and have appropriated the disposable profit as follows:
|र in billion ||Fiscal 2018 ||Fiscal 2019 |
|To Statutory Reserve making in all र 237.38 billion ||16.94 ||8.41 |
|To Special Reserve created and maintained in terms of Section 36(1) (viii) of the Income Tax Act 1961 making in all र 95.04 billion ||6.00 ||5.25 |
|To Capital Reserve making in all र 128.54 billion1 ||25.66 ||0.28 |
|To Capital Redemption Reserve making in all र 3.50 billion2 (amount appropriated from surplus profit available for previous years) ||- ||3.50 |
|To Investment Fluctuation Reserve making in all र 12.69 billion3 ||- ||12.69 |
|To Revenue and other reserves making in all र 40.28 billion4 ||7.01 ||0.01 |
|Dividend paid during the year || || |
| On equity shares during fiscal 2019 @ र 1.50 per share of face value र 2.00 each (during fiscal 2018 @ र 2.50 per share) ||14.57 ||9.65 |
| On preference shares2 during fiscal 2019 @ 100.00 per preference shares (र) (during fiscal 2018 @ र 100.00 per share) ||35000 ||35000 |
| Corporate dividend tax ||0.09 ||- |
|Leaving balance to be carried forward to the next year ||179.70 ||178.79 |
1 Fiscal 2018 includes transfer of र 24.90 billion on account of saleof part of equity investment in the Bank's insurance subsidiary.
2 Redeemable Non-Cumulative Preference Shares (350 RNCPS) of र 10.0million each were redeemed at par on April 20 2018. Accordingly an equivalent amount wastransferred to Capital Redemption Reserve from surplus profit available for previousyears.
3 Represents an amount transferred to Investment Fluctuation Reserve(IFR) from disposable profit. As per the RBI guidelines from the year ended March 312019 an amount not less than the lower of net profit on sale of available-for-sale (AFS)and held-to-maturity (HFT) category investments during the year or net profit for the yearless mandatory appropriations is required to be transferred to IFR until the amount ofIFR is at least 2% of the HFT and AFS portfolio.
4 Includes transfer of र 7.6 million to Reserve Fund for fiscal 2019 (र10.6 million for fiscal 2018) in accordance with regulations applicable to the Sri Lankabranch.
The Bank prepares its financial statements in accordance with theapplicable accounting standards RBI guidelines and other applicable laws/regulations.RBI under its risk-based supervision exercise carries out the risk assessment of theBank on an annual basis. This assessment is initiated subsequent to the finalisationcompletion of audit and publication of audited financial statements for a financial yearand typically occurs a few months after the financial year-end. As a part of thisassessment RBI separately reviews asset classification and provisioning of creditfacilities given by the Bank to its borrowers. The divergences if any in classificationor provisioning arising out of the supervisory process are given effect to in thefinancial statements in subsequent periods after conclusion of the exercise. In terms ofthe RBI circular no. //DBR.BP.BC.No. 32/21.04.018/ 2018-19 dated April 1 2019 banks arerequired to disclose the divergences in asset classification and provisioning consequentto RBI's annual supervisory process in their notes to accounts to the financialstatements wherever either (a) the additional provisioning requirements assessed by RBIexceed 10% of the reported net profits before provisions and contingencies or (b) theadditional gross non-performing assets (NPAs) identified by RBI exceed 15% of thepublished incremental gross NPAs for the reference period or both. Based on the conditionmentioned in RBI circular no disclosure on divergence in asset classification andprovisioning for NPAs is required with respect to RBI's supervisory process forfiscal 2018.
During the year under review the Bank allotted 18248877 equityshares of र 2.00 each pursuant to exercise of stock options under the Employee StockOption Scheme. For details refer to Schedule 1 of the financial statements.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Pursuant to Section 186(11) of the Companies Act 2013 the provisionsof Section 186 of the 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 the Banking Regulation Act1949.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
There is no change in the subsidiaries of the Bank during fiscal 2019.The definition of the subsidiary company and associate company under the Companies Act2013 was changed during fiscal 2019. One of the criterion for identification of asubsidiary company or an associate company was changed from percentage holding in totalshare capital of the investee company to percentage voting power in the investee company.Pursuant to the changes in the definition of subsidiary company and associate companyShree Renuka Sugars Limited and National Investment and Infrastructure Fund Limited ceasedto be associate companies of the Bank. Further Arteria Technologies Private Limitedbecame an associate company of the Bank during fiscal 2019. The particulars of subsidiaryand associate companies as on March 31 2019 have been included in Form MGT-9 which isannexed to this Report.
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 2019 is given in "ConsolidatedFinancial Statements of ICICI Bank Limited Schedule 18 - Note 13 Additionalinformation to consolidated accounts" of this Annual Report. A summary of keyfinancials of the Bank's subsidiaries is also given in "Statement Pursuant toSection 129 of Companies Act 2013" of 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 will be available onthe Bank's website at https://www.icicibank.com/aboutus/annual.html and will also beavailable for inspection by any Member or trustee of the holder of any debentures of theBank at its Registered Office and Corporate Office. As required by Accounting Standard 21(AS-21) issued by the Institute of Chartered Accountants of India the Bank'sconsolidated financial statements included in this Annual Report incorporate the accountsof its subsidiaries and other consolidating entities.
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.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THEBANK
There are no material changes and commitments affecting the financialposition of the Bank which have occurred between the end of the financial year of the Bankto which the financial statements relate and the date of this Report.
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL
Changes in the composition of the Board of Directors and other KeyManagerial Personnel
Since the date of the last Directors' Report the Board approvedthe appointments of Hari L. Mundra Rama Bijapurkar B. Sriram and Subramanian Madhavan asadditional Directors for a period of five years from the date of their appointment. Allthe above four Directors hold office upto the date of the forthcoming Annual GeneralMeeting (AGM) and are eligible for appointment. Their appointments are being proposed inthe Notice of the forthcoming AGM through item nos. 6 7 8 and 9. The Members at the lastAGM held on September 12 2018 approved the appointments of Radhakrishnan Nair and M. D.Mallya as independent Directors. Further the Members at the last AGM held on September12 2018 approved the appointment of Sandeep Bakhshi as a Wholetime Director and ChiefOperating Officer. The Board at its Meeting held on October 4 2018 appointed SandeepBakhshi as Managing Director & Chief Executive Officer for a period of five yearsuntil October 3 2023 subject to regulatory approvals. Reserve Bank of India (RBI) hasvide its letter dated October 15 2018 approved the appointment for a period of threeyears effective October 15 2018. Approval of the Members is being sought for SandeepBakhshi's appointment as Managing Director and Chief Executive Officer for five yearsin the Notice of the forthcoming AGM through item no.10.
The Board of Directors at its Meeting held on October 4 2018 acceptedthe request of Chanda Kochhar to seek early retirement from the Bank with immediateeffect. However the Board at its meeting held on January 30 2019 reconsidered herseparation from the Bank and regarded the same as Termination for Cause'having effect from the close of business hours of the Board Meeting i.e. January 30 2019after considering the Enquiry Report of Hon'ble Mr. Justice (Retd.) B.N. Srikrishna.
Lok Ranjan Joint Secretary Department of Financial Services Ministryof Finance was nominated by Government of India as a Government Nominee Director on theBoard of the Bank in place of Amit Agrawal with effect from April 5 2018.
Lalit Kumar Chandel Economic Adviser Department of FinancialServices Ministry of Finance has been nominated by Government of India as a GovernmentNominee Director on the Board of the Bank in place of Lok Ranjan with effect fromDecember 4 2018.
The Board of Directors on May 6 2019 approved the appointment ofSandeep Batra as an Additional Director and Wholetime Director (designated as ExecutiveDirector) for a period of five years effective May 7 2019 or the date of approval of hisappointment by RBI whichever is later. The said appointment is also subject to theapproval of Members. Approval of the Members is being sought for Sandeep Batra'sappointment for five years in the Notice of the forthcoming Annual General Meeting throughitem nos. 11 and 12.
Vijay Chandok ceased to be a Director of the Bank at the end of day onMay 6 2019 and assumes office as Managing Director & CEO of ICICI Securities Limitedwith effect from May 7 2019. Pursuant to completion of maximum permissible tenure ofeight years as per the provisions of the Banking Regulation Act 1949 Tushaar Shahindependent Director ceased to be a Director on the Board of the Bank effective close ofbusiness hours on May 2 2018. Pursuant to the internal movement N. S. Kannan ceased tobe a Director of the Bank effective close of business hours on June 18 2018. M. K. Sharmaceased to be a non-executive Director and part-time Chairman of the Bank effective closeof business hours on June 30 2018 consequent to the completion of his tenure of threeyears as approved by the RBI. M. D. Mallya Independent Director tendered his resignationdue to health reasons and ceased to be a Director effective October 4 2018 and the samewas accepted by the Board. Pursuant to completion of their primary tenure under theCompanies Act 2013 Dileep Choksi and V. K. Sharma independent Directors ceased to beDirectors on the Board of the Bank effective April 1 2019.
The Board acknowledges the valuable contribution and guidance providedby the above Directors.
The Board of Directors at its Meeting held on 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 P. Sanker as theCompany Secretary and Compliance Officer of the Bank effective close of business hours onJuly 27 2018.
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 asamended (the Act) and Regulation 16 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations)which have been relied on by the Bank and were placed at the Board Meeting held on May 62019. In the opinion of the Board the independent Directors fulfil the conditionsspecified in the Act and the SEBI Listing Regulations and are independent of theManagement.
Retirement by rotation
In terms of Section 152 of the Companies Act 2013 Anup Bagchi wouldretire by rotation at the forthcoming AGM and is eligible for re-appointment. Anup Bagchihas offered himself for re-appointment.
At the Annual General Meeting (AGM) held on September 12 2018 theMembers approved the appointment of M/s Walker Chandiok & Co LLP CharteredAccountants as statutory auditors to hold office from the conclusion of the Twenty-FourthAGM till the conclusion of the Twenty-Fifth AGM. As per the Reserve Bank of India (RBI)guidelines the statutory auditors of the banking companies are allowed to continue for aperiod of four years subject to fulfilling the prescribed eligibility norms. AccordinglyM/s Walker Chandiok & Co LLP Chartered Accountants would be eligible forre-appointment at the conclusion of the forthcoming AGM. As recommended by the AuditCommittee the Board has proposed the re-appointment of M/s Walker Chandiok & Co LLPChartered Accountants as statutory auditors for the year ending March 31 2020 (fiscal2020). M/s Walker Chandiok & Co LLP Chartered Accountants will hold office from theconclusion of the forthcoming AGM till the conclusion of the Twenty-Sixth AGM subject tothe approval of Members of the Bank RBI and other regulatory approvals as may benecessary or required. The re-appointment of the statutory auditors is proposed to theMembers in the Notice of the forthcoming AGM through item no. 4. There are noqualifications reservation or adverse remarks made by the statutory auditors in the auditreport.
The Board appointed M/s. Parikh Parekh & Associates a firm ofCompany Secretaries in Practice to undertake the Secretarial Audit of the Bank for fiscal2019. The Secretarial Audit Report is annexed herewith as Annexure A. 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.
Maintenance of Cost Records
Being a Banking Company the Bank is not required to maintain costrecords as specified by the Central Government under Section 148(1) of the Companies Act2013.
Reporting of Frauds by Auditors
During the year under review there were no instances of fraud reportedby the statutory auditors branch auditors and secretarial auditor under Section 143(12)of the Companies Act 2013 to the Audit Committee or the Board of Directors.
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 financial statements are being sent to the Members excluding theaforesaid Annexure. The Annexure is available for inspection at the Registered office ofthe Bank. Any Member interested in obtaining a copy of the Annexure may write to theCompany Secretary 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 2019.
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 at(https://www.icicibank.com/aboutus/ other-policies.page?#toptitle). The Bank also has aBoard approved Group Arm's Length Policy which requires transactions with the groupcompanies to be at arm's length. The transactions between the Bank and its relatedparties during the year ended March 31 2019 were in the ordinary course of business andbased on the principles of arm's length. The details of material related partytransactions at an aggregate level for the year ended March 31 2019 are given in AnnexureB.
The extract of Annual Return in Form No. MGT 9 is annexed herewith asAnnexure C. The Annual Return in Form No. MGT 7 will be hosted on the website of the Bankat https://www.icicibank.com/aboutus/annual.html.
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 will be hosted on the website of the Bank athttps://www.icicibank.com/aboutus/annual.html. Any Member interested in obtaining aphysical copy of the same may write to the Company Secretary of the Bank.
The Bank has sought to adopt the principles of the InternationalIntegrated Reporting Framework as developed by the International Integrated ReportingCouncil (IIRC) in its Annual Report for fiscal 2019. For accessing the Integrated Reportplease refer to the Annual Report 2018-2019 hosted on the website of the Bank athttps://www.icicibank.com/aboutus/annual.html.
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 focussed 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 oversees the financial reportingprocess and also monitors compliance with inspection and audit reports of RBI otherregulators 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/subgroups. The Bank has dedicated groups namely the Risk ManagementGroup Compliance Group Corporate Legal Group Internal Audit Group and the FinancialCrime Prevention & Reputation Risk Management Group with a mandate to identifyassess and monitor all of the Bank's principal risks in accordance with well-definedpolicies and procedures. The Risk Management Group is further organised into the CreditRisk Management Group Market Risk Management Group Operational Risk Management Group andInformation Security Group. The Chief Risk Officer (CRO) reports to the Risk Committeeconstituted by the Board which reviews risk management policies of the Bank. The CRO foradministrative purpose reports to President. The above mentioned groups are independent ofall 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 THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013
The Bank has a policy against sexual harassment and a formal processfor dealing with complaints of harassment or discrimination. The said policy is in linewith the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. The Bank has complied with provisions relating tothe constitution of Internal Complaints Committee under the said Act.
Pursuant to the amendment to the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the detailspertaining to number of complaints during the year has been provided below: a) number ofcomplaints filed during the financial year: 59 b) number of complaints disposed off duringthe financial year: 59 c) number of complaints pending1 at end of the financial year: Nil
1 Complaints that are open beyond the applicable turnaround time (90days). All complaints received during FY2019 have been closed within the applicableturnaround time.
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 2019 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.
The Bank has formulated a Whistle-Blower Policy which is periodicallyreviewed. The policy comprehensively provides an opportunity for any employee or directorof the Bank to raise any issue concerning breaches of law accounting policies or any actresulting in financial or reputation loss and misuse of office or suspected or actualfraud. The policy provides for a mechanism to report such concerns to the Audit Committeethrough specified channels. The policy has been periodically communicated to the employeesand also posted on the Bank's intranet. The Whistle-Blower Policy complies with therequirements of Vigil mechanism as stipulated under Section 177 of the Companies Act 2013and other applicable laws rules and regulations. The details of establishment of theWhistle-Blower Policy/Vigil mechanism have been disclosed on the website of the Bank.
Code of Conduct as prescribed under the Securities and Exchange Boardof India (Prohibition of Insider Trading) Regulations 2015
In accordance with the amendments to the Securities and Exchange Boardof India (Prohibition of Insider Trading) Regulations 2015 the Bank has adopted therevised ICICI Bank Code on Prohibition of Insider Trading.
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 the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a confirmation from theManaging Director & CEO regarding compliance with the Code by all the Directors andsenior management forms part of the Annual Report.
In accordance with the requirements of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBank has formulated a Policy for determining Material Subsidiaries and the same has beenhosted on the website of the Bank at (https://www.icicibank.com/aboutus/other-policies.page?#toptitle). At March 31 2019 no subsidiary of the Bank qualifies as amaterial unlisted subsidiary as per the criteria 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: (https://www.icicibank.com/aboutus/bod-1.page?).
In terms of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the certification by theManaging Director & CEO and Chief Financial Officer on the financial statements andinternal controls relating to financial reporting has been obtained.
Fees to statutory auditors
The details of fees pertaining to services provided by the statutoryauditors and entities in the network firm/network entity of which the statutory auditorsis a part to ICICI Bank Limited and its subsidiaries during the year ended March 31 2019are given in the following table:
|Nature of service ||Amount in र1 |
|Audit ||72218686 |
|Certification and other audit related services ||6800000 |
|Total ||79018686 |
1 Excludes taxes and out of pocket expenses.
Details of utilisation of funds
During the year under review the Bank has not raised any funds throughPreferential Allotment or Qualified Institutions Placement as specified under Regulation32(7A) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
Recommendations of mandatory committees
All the recommendations made by the committees of the Board mandatorilyrequired to be constituted by the Bank under the Companies Act 2013 and the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 were accepted by the Board.
Skills/expertise/competence of the Board of Directors
The Bank has identified the core skills/expertise/ competence of theBoard of Directors as required under Section 10A(2)(a) of the Banking Regulation Act 1949in the context of its business(es) and the sectors(s) for it to function effectively andhas been in compliance with the same.
The details of the core skills/expertise/competence possessed by theexisting directors of the Bank is detailed as under:
|Name of Directors ||Areas of expertise |
|Girish Chandra Chaturvedi ||Banking Economics Business Management and Agriculture Sector |
|Rama Bijapurkar ||Business Management and Marketing |
|Uday Chitale ||Accounts Finance and Alternate Dispute Resolution (ADR) Specialist |
|Neelam Dhawan ||Information Technology |
|S. Madhavan ||Accountancy Economics Finance Law Information Technology Human Resources Risk Management Business Management |
|Hari L. Mundra ||Credit and Consumer Finance |
|Radhakrishnan Nair ||Accountancy Agriculture and Rural Economy Banking Law Co-operation Risk Management Business Management Economics & Finance |
|B. Sriram ||Banking and Finance |
|Lalit Kumar Chandel ||Banking Insurance Capital Markets External Assistance Agriculture and Rural Development Power Irrigation and Health |
|Sandeep Bakhshi ||Finance Banking and Insurance |
|Vishakha Mulye ||Finance and Banking |
|Anup Bagchi ||Retail & Rural and Inclusive Banking |
Credit Rating as on March 31 2019
Foreign currency denominated instrument ratings
|Instrument type ||Moody's ||S&P ||JCRA |
|Senior unsecured medium term notes ||Baa3 ||BBB- ||- |
|Senior unsecured medium term notes issued under Tokyo pro-bond ||- ||- ||BBB+ |
|Certificate of Deposits ||P-3 ||- ||- |
Rupee denominated instrument ratings
|Instrument type ||CARE ||ICRA ||CRISIL |
|Tier II bonds (Basel III) ||CARE AAA ||[ICRA]AAA ||- |
|Additional Tier 1 bonds (Basel III) ||CARE AA+ ||[ICRA]AA+ ||CRISIL AA+ |
|Unsecured redeemable bonds ||CARE AAA ||[ICRA]AAA ||- |
|Upper Tier II bonds ||CARE AAA ||- ||CRISIL AAA |
|Lower Tier II bonds1 ||CARE AAA ||[ICRA]AAA ||- |
|Long-term bonds issued by erstwhile ICICI Limited ||CARE AAA ||[ICRA]AAA ||CRISIL AAA |
|Certificate of Deposits ||CARE A1+ ||[ICRA]A1+ ||- |
|Fixed deposits ||CARE AAA ||MAAA ||- |
1 Includes Lower Tier II bonds issued by erstwhile The Bank ofRajasthan Limited.
Moody's: Moody's Investors Services S&P: S&P Global RatingsJCRA: Japan Credit Rating Agency Limited CARE: CARE Ratings Limited India ICRA: ICRALimited India CRISIL: CRISIL Limited India
During the year under review there were no revisions in the creditratings obtained by the Bank. During the year the Bank sought a rating from CRISILLimited for its Additional Tier 1 bonds which were rated CRISIL AA+.
DIVIDEND DISTRIBUTION POLICY
In accordance with Regulation 43A of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Bank hasformulated a Dividend Distribution Policy and the same is annexed herewith as Annexure D.The Policy is hosted on the website of the Bank and can be viewed at(https://www.icicibank.com/aboutus /other-policies.page?#toptitle).
CERTIFICATE FROM A COMPANY SECRETARY IN PRACTICE
In terms of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Bank has obtained aCertificate from a Company Secretary in practice that none of the directors on the Boardof the Bank have been debarred or disqualified from being appointed or continuing asdirectors of companies by the Securities and Exchange Board of India/Ministry of CorporateAffairs or any such statutory authority. The Certificate of Company Secretary in practiceis annexed herewith as Annexure E.
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 theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and in accordance with good corporate governance practices. The Boardfunctions either as a full Board or through various committees constituted to overseespecific operational areas. The Board has constituted various committees namely AuditCommittee Board Governance Remuneration & Nomination Committee Corporate SocialResponsibility Committee Credit Committee Customer Service Committee Fraud MonitoringCommittee Information Technology Strategy Committee Risk Committee StakeholdersRelationship Committee and Review Committee for Identification of Wilful Defaulters/NonCo-operative Borrowers. There were eighteen meetings of the Board during the year April 2 May 2 May 7 May 8 May 15 May 17 May 29 June 13 June 18 June 27 June 29July 27 September 18 October 4 and October 26 in 2018 and January 14 January 30 andFebruary 22 in 2019.
There were no inter se relationships between any of the Directors.
The names of the Directors their attendance at Board Meetings duringthe year attendance at the last AGM and details of other directorships and boardcommittee memberships held by them at March 31 2019 are set out in the following table:
| || || ||Number of directorships || || |
|Name of Director ||Board Meetings attended during the year ||Attendance at last AGM (September 12 2018) ||of other Indian public limited companies ||of other Indian companies ||Names of the other listed entity where a person is a director and category of directorship ||Number of other committee1 memberships |
|Independent Directors || || || || || || |
|G. C. Chaturvedi (Director w.e.f. July 1 2018 Chairman w.e.f. July 17 2018) (DIN: 00110996) ||7/7 ||Present ||2 ||- ||1) Infrastructure Leasing and Financial Services Limited (NED) ||1(1) |
| || || || || ||2) IL & FS Energy Development Company Limited (Chairman NED) || |
|M. K. Sharma (Chairman upto close of business hours on June 30 2018) (DIN: 00327684) ||11/11 ||N.A. ||N.A. ||N.A. ||N.A. ||N.A. |
|Dileep Choksi (upto March 31 2019) (DIN: 00016322) ||17/18 ||Present ||N.A. ||N.A. ||N.A. ||N.A. |
|Hari L. Mundra (w.e.f. October 26 2018) (DIN: 00287029) ||2/3 ||N.A. ||2 ||- ||1) Allcargo Logistics Limited (ID) ||3(1) |
|M. D. Mallya (w.e.f. May 29 2018 and upto October 4 2018) (DIN: 01804955) ||0/7 ||Absent ||N.A. ||N.A. ||N.A. ||N.A. |
|Neelam Dhawan2 (DIN: 00871445) ||14/18 ||Present ||- ||- ||- ||- |
|Radhakrishnan Nair (w.e.f. May 2 2018) (DIN: 07225354) ||16/16 ||Present ||7 ||1 ||1) ICICI Prudential Life Insurance Company Limited (ID) ||2 |
| || || || || ||2) Geojit Financial Services Limited (ID) || |
| || || || || ||3) ICICI Securities Primary Dealership Limited (ID) || |
|Rama Bijapurkar ||2/2 ||N.A. ||3 ||2 ||1) Nestle India Limited (ID) ||3(2) |
|(w.e.f. January 14 2019) (DIN: 00001835) || || || || ||2) Mahindra & Mahindra Financial Services Limited (ID) || |
| || || || || ||3) Emami Limited (ID) || |
|B. Sriram (w.e.f. January 14 2019) (DIN: 02993708) ||2/2 ||N.A. ||- ||- ||- ||- |
|Tushaar Shah (upto close of business hours on May 2 2018) (DIN: 03055738) ||1/2 ||N.A. ||N.A. ||N.A. ||N.A ||N.A. |
|Uday Chitale (DIN: 00043268) ||18/18 ||Present ||4 ||1 ||1) ICICI Lombard General Insurance Company Limited (ID) ||4(1) |
| || || || || ||2) India Infradebt Limited (ID) || |
|V. K. Sharma (upto March 31 2019) (DIN : 02449088) ||8/18 ||Absent ||N.A. ||N.A. ||N.A ||N.A. |
|Government Nominee Directors || || || || || || |
|Amit Agrawal (upto April 5 2018) (DIN: 07117013) ||0/1 ||N.A. ||N.A. ||N.A. ||N.A. ||N.A. |
|Lalit Kumar Chandel (w.e.f. December 4 2018) (DIN: 00182667) ||0/3 ||N.A. ||1 ||- ||1) National Insurance Company Limited (Government Nominee Director) ||- |
|Lok Ranjan (w.e.f. April 5 2018 and upto December 4 2018) (DIN: 07791967) ||0/14 ||Absent ||N.A. ||N.A. ||N.A. ||N.A. |
|Managing Director & CEO / Wholetime Directors || || || || || || |
|Anup Bagchi (DIN: 00105962) ||17/18 ||Present ||5 ||- ||1) ICICI Prudential Life Insurance Company Limited (NED) ||1 |
| || || || || ||2) ICICI Securities Limited (NED) || |
| || || || || ||3) ICICI Home Finance Company Limited (Chairman NED) || |
|Chanda Kochhar (upto close of business hours on October 4 2018) (DIN: 00043617) ||8/14 ||Absent ||N.A. ||N.A. ||N.A. ||N.A. |
|N. S. Kannan (upto close of business hours on June 18 2018) (DIN: 00066009) ||8/9 ||N.A. ||N.A. ||N.A. ||N.A. ||N.A. |
|Sandeep Bakhshi (Wholetime Director w.e.f. July 31 2018 Managing Director & CEO w.e.f. October 15 2018) (DIN: 00109206) ||6/6 ||Present ||- ||- ||- ||- |
|Vijay Chandok (upto May 6 2019) (DIN: 01545262) ||17/18 ||Present ||1 ||- ||- ||- |
|Vishakha Mulye (DIN: 00203578) ||15/18 ||Present ||1 ||- ||1) ICICI Lombard General Insurance Company Limited (NED) ||- |
Independent Director (ID) Non-Executive Director (NED)
1 Includes only chairpersonship/membership of Audit Committee andStakeholders' Relationship Committee of other Indian public limited companies.Figures in parentheses indicate committee chairpersonships.
2 Participated in three Meetings through video-conference and oneMeeting through tele-conference.
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 2019 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 review of management's discussion & analysisrecommendation of appointment terms of appointment remuneration and removal of centraland branch statutory auditors and chief internal auditor approval of payment to statutoryauditors for other permitted services rendered by them reviewing and monitoring with themanagement the auditor's independence and the performance and effectiveness of theaudit process approval of transactions with related parties or any subsequentmodifications review of statement of significant related party transactions utilisationof loans and/or advances from/investment by the Bank in its subsidiaries review offunctioning of the Whistle-Blower Policy review of the adequacy of internal controlsystems and the internal audit function review of compliance with inspection and auditreports 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 AuditCommittee is also empowered to appoint/oversee the work of any registered publicaccounting firm establish procedures for receipt and treatment of complaints receivedregarding accounting and auditing matters and engage independent counsel as also providefor appropriate funding for compensation to be paid to any firm/advisors. In addition theAudit Committee also exercises oversight on the regulatory compliance function of theBank. The Audit Committee is also empowered to approve the appointment of the ChiefFinancial Officer (i.e. the wholetime Finance Director or any other person heading thefinance function or discharging that function) after assessing the qualificationsexperience and background etc. of the candidate.
There were seventeen Meetings of the Committee during the year April 20 April 26 May 7 June 6 June 28 July 12 July 18 July 26 July 27 July 30October 22 and October 26 in 2018 and January 28 January 29 January 30 February 22 andMarch 7 in 2019. The details of the composition of the Committee and attendance at itsMeetings held during the year are set out in the following table:
|Name of Member ||Number of meetings attended |
|Uday Chitale Chairman ||17/17 |
|Dileep Choksi* Alternate Chairman ||15/17 |
|Radhakrishnan Nair (w.e.f. May 3 2018) ||15/15 |
|Tushaar Shah (upto May 2 2018) ||0/2 |
* Participated in one Meeting through tele-conference.
Upon completion of his tenure as a Director Dileep Choksi ceased to bea Member of the Committee with effect from April 1 2019. The Board on April 14 2019reconstituted the Committee pursuant to which S. Madhavan independent Director wasinducted a Member of the Committee with immediate effect.
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 and senior management personnel. Recommendingcommission and fee payable to non-executive Directors subject to applicable regulationsapproving the policy for and quantum of bonus payable to the 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 Employees Stock Option Scheme (ESOS)and decide on the grant of stock options to employees and wholetime Directors of the Bankand its subsidiary companies.
There were twelve Meetings of the Committee during the year May7 May 29 June 18 June 27 June 29 July 27 September 18 October 4 and October 26 in2018 and January 14 January 30 and March 20 in 2019. The details of the composition ofthe Committee and attendance at its Meetings held during the year are set out in thefollowing table:
|Name of Member ||Number of meetings attended |
|Neelam Dhawan Chairperson (Chairperson w.e.f. July 1 2018) ||7/7 |
|Dileep Choksi (Chairman w.e.f. May 3 2018 and upto June 30 2018 Member upto January 14 2019) ||10/10 |
|Tushaar Shah1 (Chairman and Member upto May 2 2018) ||- |
|G. C. Chaturvedi2 (w.e.f. July 27 2018) ||6/6 |
|M. K. Sharma (upto June 30 2018) ||5/5 |
|Rama Bijapurkar (w.e.f. January 14 2019) ||2/2 |
|B. Sriram (w.e.f. January 14 2019) ||2/2 |
|V. K. Sharma (upto January 14 2019) ||6/10 |
1 No Meetings were held during his tenure.
2 Participated in one Meeting through video-conference.
Policy/Criteria for Directors' Appointment
The Bank with the approval of its Board Governance Remuneration &Nomination Committee (Committee) has put in place a policy on Directors' 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 evaluatethe prospective candidate for the position of a Director from the perspective of thecriteria for independence prescribed under Companies Act 2013 as well as the listingregulations. For a non-executive Director to be classified as independent he/she mustsatisfy the criteria of independence as prescribed and sign a declaration of independence.The Committee will review the same and determine the independence of a Director.
The Committee based on the above assessments will make suitablerecommendations on the appointment of Directors to the Board.
The Compensation Policy of the Bank is in line with the RBI circulardated January 13 2012 and is in compliance with the requirements for the RemunerationPolicy as prescribed under the Companies Act 2013. The Policy is divided into thesegments Part A Part B and Part C where Part A covers the requirements for wholetimeDirectors & employees pursuant to RBI guidelines Part B relates to compensation tonon-executive Directors (except part-time non-executive Chairman) and Part C relates tocompensation to part-time non-executive Chairman. The Compensation/Remuneration Policy isavailable on the website of the Bank under the link (https://www.icicibank.com/aboutus/other-policies.page?#toptitle). Further details with respect to the Compensation Policyare provided under the section titled "Compensation Policy and Practices".
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 Director) would be sitting fee for attending each Meeting of theCommittee/Board as approved by the Board. The Members at their Meeting held on July 112016 approved the payment of profit related commission upto र 1000000 per annum to eachnon-executive Director of the Bank (other than part-time Chairman and the GovernmentNominee Director).
For the non-executive Chairman the remuneration in addition tositting fee includes such fixed payments as may be recommended by the Board and approvedby the Members and RBI maintaining a Chairman's office at the Bank's expensebearing expenses for travel on official visits and participation in various forums (bothin India and abroad) as Chairman of the Bank and bearing travel/halting/other expenses andallowances for attending to duties as Chairman of the Bank and any other modes ofremuneration as may be permitted by RBI through any circulars/guidelines as may be issuedfrom 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 BoardChairman of the Board and the Committees is carried out through circulation of fourdifferent questionnaires for the Directors for the Board for the Chairperson of theBoard and the Committees respectively. The performance of the Board is assessed on selectparameters related to roles responsibilities and obligations of the Board relevance ofBoard discussions attention to strategic issues performance on key areas providingfeedback to executive management and assessing the quality quantity and timeliness offlow of information between the Company management and the Board that is necessary for theBoard to effectively and reasonably perform their duties. The evaluation criteria for theDirectors is based on their participation contribution and offering guidance to andunderstanding of the areas which were relevant to them in their capacity as members of theBoard. The evaluation criteria for the Chairperson of the Board besides the generalcriteria adopted for assessment of all Directors focuses incrementally on leadershipabilities effective management of meetings and preservation of interest of stakeholders.The evaluation of the Committees is based on assessment of the clarity with which themandate of the Committee is defined effective discharge of terms and reference of theCommittees and assessment of effectiveness of contribution of the Committee'sdeliberation/recommendations to the functioning/decisions of the Board. The overallperformance evaluation process for fiscal 2019 was completed to the satisfaction of theBoard. The Board of Directors also identified specific action points arising out of theoverall evaluation which would be executed as directed by the Board.
The evaluation process for wholetime Directors is further detailedunder the section titled "Compensation Policy and Practices".
Details of Remuneration paid to Executive 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 Directors in fiscal 2019:
| ||Sandeep Bakhshi1 2018-19 ||Vishakha Mulye 2018-19 ||Anup Bagchi 2018-19 ||Vijay Chandok 2018-19 |
|Basic ||22120038 ||23301960 ||21067440 ||21067440 |
|Allowances and perquisites 2 ||22438936 ||20613574 ||20542265 ||18775761 |
|Contribution to provident fund ||2654403 ||2796237 ||2528094 ||2528094 |
|Contribution to superannuation fund ||0 ||3495300 ||0 ||3160120 |
|Contribution to gratuity fund ||1842599 ||1941053 ||1754918 ||1754918 |
1 Sandeep Bakhshi assumed office as Chief Operating Officer (Designate)effective June 19 2018. RBI approved his appointment as Wholetime Director designated asChief Operating Officer effective July 31 2018. He was subsequently appointed as ManagingDirector & CEO as per RBI approval effective October 15 2018. The above is his partyear salary.
2 Allowances and perquisites exclude stock options exercised duringfiscal 2019 which does not constitute remuneration paid to the wholetime Directors forfiscal 2019.
3 The performance bonus and ESOPs payable in fiscal 2019 (pertaining tofiscal 2018) is pending RBI approvals.
4 Remuneration paid to following Directors not included above
(a) Chanda Kochhar was with the Bank till October 4 2018. Basicallowances & perquisites and retirals paid during the year are
र 15665561 र 56576012 and र 3184807 respectively. These includeamount pertaining to full and final settlement given to Kochhar in October 2018.
(b) N.S. Kannan was with the Bank till June 18 2018. Basic allowances& perquisites and retirals paid during the year are र 5048758
र 5711859 and र 1783728 respectively.
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 fulfill prescribed eligibility criteria to avail loansfor purchase of residential property the wholetime Directors are also eligible forhousing loans subject to approval of RBI. The stock options for fiscal 2018 are awaitingapprovals from the RBI. The options shall vest in a graded manner over a three yearperiod with 30% 30% and 40% of the grant vesting in each year commencing from the endof 12 months from the date of the grant. The options so vested are to be exercised within5 years from the date of vesting.
Sandeep Bakhshi was appointed as Managing Director & CEO witheffect from October 15 2018 as per the RBI approval. The Bank does not pay any severancefees to its Managing Director & CEO or to its wholetime Directors. The tenure of theoffice of Managing Director & CEO and the wholetime Directors of the Bank is 5 yearssubject to approval of RBI and the Members. The notice period for each of them asspecified in their respective terms of appointments is 2 months in addition to gardeningleave.
Details of Remuneration paid to non-executive Directors
The Board of Directors have approved the payment of र 100000 assitting fee for each Meeting of the Board and Audit Committee and र 50000 as sitting feefor each Meeting of the Committee attended other than the Audit Committee.
RBI has approved the appointment of G. C. Chaturvedi as Non-Executive(part-time) Chairman of the Bank for a period from July 17 2018 till June 30 2021 on afixed remuneration of र 3500000 per annum. Information on the total sitting fees andcommission paid to each non-executive Director during fiscal 2019 is set out in thefollowing table:
|Name of Director ||Sitting Fees ||Commission1 |
|G.C. Chaturvedi2 8 ||1100000 ||- |
|M. K. Sharma3 ||1850000 ||- |
|Rama Bijapurkar4 ||350000 ||- |
|Uday Chitale8 ||4450000 ||202740 |
|Dileep C. Choksi8 ||4650000 ||1000000 |
|Neelam Dhawan8 ||2650000 ||216438 |
|Radhakrishnan Nair8 ||4800000 ||- |
|Hari L. Mundra5 ||700000 ||- |
|V. K. Sharma ||1300000 ||1000000 |
|B. Sriram4 ||450000 ||- |
|Tushaar Shah6 ||200000 ||1000000 |
|M. D. Mallya7 ||- ||- |
1 Commission pertaining to fiscal 2018 paid in fiscal 2019.
2 w.e.f. July 1 2018 3 upto June 30 2018 4 w.e.f. January 14 2019 5w.e.f. October 26 2018 6 upto May 2 2018
7 w.e.f. May 29 2018 and upto October 4 2018
8 The independent Directors were paid sitting fees for its meeting heldon September 12 2018.
In fiscal 2019 a gross amount of र 2474465 was paid as remunerationfor the period July 17 2018 to March 31 2019 to G. C. Chaturvedi and a gross amount of र4083334 was paid as remuneration for the period May 1 2017 to June 30 2018 to M. K.Sharma.
Government Nominee Director is only entitled to reimbursement ofexpenses for attending Board/ Committee Meetings.
Details of shares/convertible instruments held by existingNon-Executive Directors:
As on March 31 2019 Rama Bijapurkar and Lalit Kumar Chandel held2600 and 6 equity shares of र 2 each respectively. Further S. Madhavan held 1600 equityshares of र 2 each as on the date of his appointment i.e. April 14 2019.
Remuneration disclosures as required under RBI guidelines
The RBI circular DBOD No. BC. 72/29.67.001/2011-12 on"Compensation of wholetime Directors/Chief Executive Officers/Risk takers and Controlfunction staff etc." requires the Bank to make following disclosures on remunerationon an annual basis in their Annual Report:
COMPENSATION POLICY AND PRACTICES
(A) Qualitative Disclosures a) Information relating to the bodies thatoversee remuneration.
Name composition and mandate of the main body overseeingremuneration
The Board Governance Remuneration and Nomination Committee(BGRNC/Committee) is the body which oversees the remuneration aspects. The functions ofthe Committee include recommending appointments of Directors to the Board identifyingpersons who are qualified to become Directors and who may be appointed in seniormanagement in accordance with the criteria laid down and recommending to the Board theirappointment and removal; formulate a criteria for the evaluation of the performance of thewhole time/ 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) and senior management commission and fee payable to non- executive Directorssubject to applicable regulations approving the policy for and quantum of bonus payableto 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 theEmployee Stock Option Scheme (ESOS) and decide on the grant of the Bank's stockoptions to employees and WTDs of the Bank and its subsidiary companies.
External consultants whose advice has been sought the bodyby which they were commissioned and in what areas of the remuneration process
The Bank employed the services of a reputed consulting firm for marketbenchmarking in the area of compensation including executive compensation.
Scope of the Bank's remuneration policy (e.g. byregions business lines) including the extent to which it is applicable to foreignsubsidiaries and branches
The Compensation Policy of the Bank as last reviewed by the BGRNC andthe Board at their meeting held on May 7 2018 pursuant to the guidelines issued by RBIcovers all employees of the Bank including those in overseas branches of the Bank. Inaddition to the Bank's Compensation Policy guidelines the overseas branches alsoadhere 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 2019 was 84922. b)Information relating to the design and structure of remuneration processes.
Key features and objectives of remuneration policy
The Bank has under the guidance of the Board and the BGRNC 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 hasoversight over compensation. The Committee defines Key Performance Indicators (KPIs) forWTDs and equivalent positions and the organisational performance norms for bonus based onthe financial and strategic plan approved by the Board. The KPIs include both quantitativeand qualitative aspects. The BGRNC assesses organisational performance as well as theindividual performance for WTDs and equivalent positions. Based on its assessment itmakes recommendations to the Board regarding compensation for WTDs senior management andequivalent positions and bonus for employees including senior management and keymanagement personnel.
Alignment of compensation philosophy with prudent risk taking:
The Bank seeks to achieve a prudent mix of fixed and variable pay 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 the firm'sremuneration policy during the past year and if so an overview of any changes that weremade
During the year ended March 31 2019 the Bank's CompensationPolicy was reviewed by the BGRNC and the Board at their meeting held on May 7 2018. Nochanges were proposed in the compensation policy.
Discussion of how the Bank ensures that risk and complianceemployees 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 taken into account in theremuneration processes.
Overview of the key risks that the Bank takes into accountwhen 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 risk calibrated core operating profit(profit before provisions and tax excluding treasury income) performance indicatorsinclude aspects such as asset quality. The BGRNC takes into consideration all the aboveaspects while assessing organisational and individual performance and makingcompensation-related recommendations to the Board.
Overview of the nature and type of key measures used to takeaccount of these risks including risk difficult to measure
The annual performance targets and performance evaluation incorporateboth qualitative and quantitative aspects including asset quality refinement/improvementof the risk management framework effective management of stakeholder relationships andmentoring key members of the top and senior 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 risk calibrated core operating profit performance indicators includeaspects such as asset quality. The BGRNC takes into consideration all the above aspectswhile assessing organisational and individual performance and making compensation-relatedrecommendations to the Board.
Discussion of how the nature and type of these measures havechanged over the past year and reasons for the changes as well as the impact of changeson 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 risk calibrated core operatingprofit (profit before provisions and tax excluding treasury income) asset quality metrics(such as additions to non-performing loans and recoveries & upgrades) compliance withregulatory norms refinement of risk management processes and customer service. Thespecific metrics and weightages for various metrics vary with the role and level of theindividual.
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 general implementto adjust remuneration in the event that performance metrics are weak including theBank'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 and vestingof variable remuneration and if the fraction of variable remuneration that is deferreddiffers across employees or groups of employees a description of the factors thatdetermine 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) Descriptionof the different forms of variable remuneration that the Bank utilises and the rationalefor 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 variablepay at senior levels and lower variable pay for front-line staff and junior managementlevels.
(B) Quantitative disclosures
The following table sets forth for the period indicated the detailsof quantitative disclosure for remuneration of WTDs (including MD & CEO) andequivalent positions. र in million except numbers
|Particulars ||Year ended March 31 2019 ||Year ended March 31 2018 |
|Number of meetings held by the BGRNC ||12 ||7 |
|Remuneration paid to its members during the financial year (sitting fees) ||1.9 ||0.3 |
|Number of employees who received a variable remuneration award ||- ||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 || || |
|Fixed1 ||274.7 ||222.7 |
|Variable2 ||- ||- |
|- Deferred ||- ||- |
|- Non-deferred ||- ||- |
|Particulars ||Year ended March 31 2019 ||Year ended March 31 2018 |
|Share-linked instruments ||- ||4526500 |
|Total amount of deferred remuneration paid out during the year ||- ||6.1 |
|Total amount of outstanding deferred remuneration ||- ||- |
|Cash ||N.A. ||N.A. |
|Shares (nos.) ||- ||- |
|Shares-linked instruments3 ||6260597 ||14825250 |
|Other forms ||- ||- |
|Total amount of outstanding deferred remuneration and retained remuneration exposed to ex-post explicit and/or implicit adjustments ||- ||- |
|Total amount of reductions during the year due to ex-post explicit adjustments4 ||- ||- |
|Total amount of reductions during the year due to ex-post implicit adjustments ||- ||- |
1 Fixed pay includes basic salary supplementary allowancessuperannuation contribution to provident fund and gratuity fund by the Bank. The amountsmentioned in the above table corresponds to the period of employment of WTDs/ President inthe Bank during the year ended March 31 2019.
2 For the years ended March 31 2019 and March 31 2018 variable andshare-linked instruments represent amounts paid/options awarded for the years ended March31 2018 and March 31 2017 respectively as per RBI approvals.
3 Includes stock options granted to MD & CEO and President duringtheir employment with the group company.
4 Excludes र 74.1 million variable pay to the former MD & CEO forpast years which has been directed for claw-back.
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;
|Sandeep Bakhshi Managing Director & CEO1 ||118:1 |
|Vishakha Mulye ||97:1 |
|Vijay Chandok ||89:1 |
|Anup Bagchi ||89:1 |
1 Sandeep Bakhshi was appointed as MD & CEO effective October 152018 as per the RBI approval. Annualised remuneration has been used for computation ofratios.
(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 done with effect from April 1 2018 in theremuneration of each Director Chief Financial Officer Chief Executive Officer andCompany Secretary is provided below:
|Sandeep Bakhshi Managing || |
|Director & CEO1 ||NA |
|Vishakha Mulye Executive Director ||15% |
|Vijay Chandok Executive Director ||15% |
|Anup Bagchi Executive Director ||15% |
|Rakesh Jha Chief Financial Officer ||15% |
|Ranganath Athreya Company Secretary ||11% |
1 Sandeep Bakhshi was appointed as MD & CEO effective October 152018 as per the RBI approval.
(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 9%.
(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 86763. Out of this theemployees on permanent rolls of the Company is 84922 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 employeesother than the Key Managerial Personnel for FY2019 was around 9% while the averageincrease in the remuneration of the Key Managerial Personnel was in the range of 11% to15%.
(vi) Affirmation that the remuneration is as per the remunerationpolicy of the Company.
The independent Directors of the Bank other than Chairman receiveremuneration in the form of sitting fees and profit related commission. The Chairmanreceives sitting fees and remuneration as approved by the shareholders and RBI.
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.
There were three Meetings of the Committee during the year April12 2018 September 7 2018 and January 16 2019. The details of the composition of theCommittee and attendance at its Meetings held during the year are set out in the followingtable:
|Name of Member ||Number of meetings attended |
|Radhakrishnan Nair Chairman (Member w.e.f. May 3 2018 and Chairman w.e.f. July 1 2018) ||2/2 |
|Dileep Choksi (Chairman w.e.f. May 3 2018 and upto June 30 2018) ||1/3 |
|Tushaar Shah (Chairman and Member upto May 2 2018) ||1/1 |
|Amit Agrawal (upto April 5 2018)1 ||- |
|Anup Bagchi (w.e.f. July 1 2018) ||2/2 |
|Chanda Kochhar (upto October 4 2018) ||1/2 |
Upon completion of his tenure as a Director Dileep Choksi ceased to bea Member of the Committee with effect from April 1 2019. The Board at its Meeting on May6 2019 reconstituted the Committee pursuant to which Rama Bijapurkar and Uday Chitaleindependent Directors has been inducted as the Members of the Committee with effect fromJune 30 2019.
Details about the policy developed and implemented by the Company onCorporate Social Responsibility (CSR) initiatives taken during the year.
ICICI Bank has a long-standing commitment towards socio-economicdevelopment. The Bank's Corporate Social Responsibility (CSR) activities are focussedin the areas of education health skill development for sustainable livelihoods ruraldevelopment and related activities including financial inclusion and financial literacyand other activities as may be required towards fulfilling the CSR objectives. Theactivities are largely implemented either directly or through the ICICI Foundation forInclusive Growth. The CSR policy has been hosted on the website of the Bank athttps://www.icicibank.com/managed- assets/docs/about-us/ICICI-Bank-CSR-Policy.pdf. TheAnnual Report on the Bank's CSR activities is annexed herewith as Annexure F.
V. CREDIT COMMITTEE
Terms of Reference
The functions of the Committee include review of developments in keyindustrial sectors major credit portfolios and approval of credit proposals as per theauthorisation approved by the Board.
There were thirty one Meetings of the Committee during the year. Thedetails of the composition of the Committee and attendance at its Meetings held during theyear are set out in the following table:
|Name of Member ||Number of meetings attended |
|Sandeep Bakhshi Chairman1 (Member w.e.f. July 31 2018 and Chairman w.e.f. October 26 2018) ||17/20 |
|M. K. Sharma (Chairman upto June 30 2018) ||7/7 |
|Chanda Kochhar (upto October 4 2018) ||4/17 |
|Hari L. Mundra2 (w.e.f. October 26 2018) ||9/11 |
|M. D. Mallya (w.e.f. May 29 2018 and upto October 4 2018) ||0/13 |
|Radhakrishnan Nair3 (w.e.f. May 3 2018) ||29/29 |
|Tushaar Shah (upto May 2 2018) ||1/2 |
|Vishakha Mulye4 (w.e.f. July 1 2018) ||21/24 |
1 Attended one meeting through video-conferencing
2 Attended one meeting through tele-conference
3 Attended three meetings through video-conferencing
4 Attended two meetings through video-conferencing and one throughtele-conference.
The Chairperson was decided at each Meeting held during July 1 2018till October 25 2018.
The Board at its Meeting on May 6 2019 reconstituted the Committeepursuant to which Radhakrishnan Nair independent Director ceases to be a Member of theCommittee with effect from June 30 2019 G. C. Chaturvedi independent Director has beeninducted as a Member with effect from June 30 2019 and upto September 30 2019 B.Sriram independent Director has been inducted as a Member of the Committee with effectfrom October 1 2019.
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.
There were five Meetings of the Committee during the year. The detailsof the composition of the Committee and attendance at its Meetings held during the yearare set out in the following table:
|Name of Member ||Number of meetings attended |
|Rama Bijapurkar Chairperson (Chairperson w.e.f. January 14 2019) ||1/1 |
|M. D. Mallya (Chairman w.e.f. July 1 2018 and upto October 4 2018) ||0/2 |
|Tushaar Shah (Chairman and Member upto May 2 2018)1 ||- |
|Uday Chitale (Chairman w.e.f. May 3 2018 and upto June 30 2018)2 ||5/5 |
|Anup Bagchi ||3/5 |
|Chanda Kochhar (upto October 4 2018) ||1/3 |
|Neelam Dhawan (w.e.f. May 3 2018) ||5/5 |
|Sandeep Bakhshi (w.e.f. July 31 2018) ||3/3 |
1 No meetings were held during his tenure.
2 Also chaired the meeting held in November 2018.
The Board at its Meeting on May 6 2019 reconstituted the Committeepursuant to which Uday Chitale Neelam Dhawan independent Directors ceases to be theMembers of the Committee with effect from June 30 2019 and Hari L. Mundra independentDirector has been inducted as a Member of the Committee with effect from June 30 2019.
VII. FRAUD MONITORING COMMITTEE
Terms of Reference
The Committee monitors and reviews all the frauds involving an amountof र 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.
There were six Meetings of the Committee during the year. The detailsof the composition of the Committee and attendance at its Meetings held during the yearare set out in the following table:
|Name of Member ||Number of meetings attended |
|Dileep Choksi Chairman ||6/6 |
|Anup Bagchi ||6/6 |
|Chanda Kochhar (upto October 4 2018) ||1/3 |
|Neelam Dhawan ||6/6 |
|Sandeep Bakhshi (w.e.f. July 31 2018) ||3/3 |
|Uday Chitale ||6/6 |
Upon completion of his tenure as Director Dileep Choksi ceased to bethe Chairman and Member of the Committee with effect from April 1 2019. The Board at itsMeeting on May 6 2019 reconstituted the Committee pursuant to which Uday Chitaleindependent Director ceases to be a Member of the Committee with effect from June 30 2019and S. Madhavan independent Director has been inducted as a Member as well as appointedas Chairman of the Committee and Radhakrishnan Nair independent Director has beeninducted as a Member of the Committee with effect from June 30 2019.
VIII. INFORMATION TECHNOLOGY STRATEGY COMMITTEE
Terms of Reference
The functions of the Committee are to approve strategy for 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.
There were four Meetings of the Committee during the year. The detailsof the composition of the
Committee and attendance at its Meetings held during the year are setout in the following table:
|Name of Member ||Number of meetings attended |
|Neelam Dhawan Chairperson ||4/4 |
|Anup Bagchi (w.e.f. July 1 2018) ||2/3 |
|Chanda Kochhar (upto October 4 2018) ||1/2 |
|Dileep Choksi ||4/4 |
|Sandeep Bakhshi (w.e.f. July 31 2018) ||3/3 |
Upon completion of his tenure as a Director Dileep Choksi ceased to bea Member of the Committee with effect from April 1 2019.
The Board at its Meeting on May 6 2019 reconstituted the Committeepursuant to which B. Sriram independent Director has been inducted as a Member as well asappointed as the Chairman of the Committee with effect from June 30 2019.
IX. RISK COMMITTEE
Terms of Reference
The functions of the Committee are to review ICICI Bank's 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. The Committee also carries out Cyber Security riskassessment.
There were eight Meetings of the Committee during the year April27 2018 June 11 2018 June 20 2018 July 25 2018 October 22 2018 January 29 2019February 18 2019 and March 20 2019. The details of the composition of the Committee andattendance at its Meetings held during the year are set out in the following table:
|Name of Member ||Number of meetings attended |
|B. Sriram Chairman (Chairman w.e.f. January 14 2019) ||3/3 |
|Dileep Choksi (Chairman w.e.f. July 1 2018 and upto January 14 2019) ||6/8 |
|M. K. Sharma (Chairman upto June 30 2018) ||3/3 |
|Chanda Kochhar (upto October 4 2018) M. D. Mallya (w.e.f. July 1 2018 and upto October 4 2018) ||1/4 |
| ||0/1 |
|Sandeep Bakhshi (w.e.f. July 31 2018) ||4/4 |
|V. K. Sharma ||4/8 |
Upon completion of their tenure as Directors Dileep Choksi and V. K.Sharma ceased to be the Members of the Committee with effect from April 1 2019. The Boardon April 14 2019 reconstituted the Committee pursuant to which S. Madhavan independentDirector was inducted as a Member of the Committee with immediate effect.
The Board at its Meeting on May 6 2019 reconstituted the Committeepursuant to which Sandeep Bakhshi Managing Director & CEO ceases to be a Member ofthe Committee with effect from June 30 2019 B. Sriram independent Director ceases to bea Member and Chairman of Risk Committee with effect from September 30 2019 and G. C.Chaturvedi has been inducted as a Member as well as the Chairman of the Committee witheffect from October 1 2019.
X. STAKEHOLDERS RELATIONSHIP
Terms of Reference
The functions of the Committee include approval and rejection oftransfer or transmission of shares bonds debentures issue of duplicate certificatesallotment of securities from time to time redressal and resolution of grievances ofsecurity holders delegation of authority for opening and operation of bank accounts forpayment of interest/dividend.
There were four Meetings of the Committee during the year April26 2018 July 26 2018 October 26 2018 and January 29 2019. The details of thecomposition of the Committee and attendance at its Meetings held during the year are setout in the following table:
|Name of Member ||Number of meetings attended |
|Hari L. Mundra Chairman (Chairman w.e.f. January 14 2019) ||1/1 |
|M. D. Mallya (Chairman w.e.f. July 1 2018 and upto October 4 2018) ||0/1 |
|Uday Chitale (Chairman upto June 302018) (Chairman w.e.f. October 26 2018 and upto January 14 2019) ||4/4 |
|Anup Bagchi ||4/4 |
|N.S. Kannan (upto June 18 2018) ||1/1 |
|Vijay Chandok (w.e.f. October 26 2018 and upto January 14 2019) ||1/1 |
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. 173 investor complaintsreceived in fiscal 2019 were processed. At March 31 2019 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 comprising wholetime Directors and senior executives ofthe Bank to examine the facts and record the fact of the borrower being a wilfuldefaulter/non co-operative borrower) and confirm the same for the order to be consideredfinal.
The Managing Director & CEO is the Chairman of this Committee andany two independent Directors comprise the remaining members. Two Meetings of theCommittee were held during the year. The Meeting held on January 30 2019 was attended bySandeep Bakhshi Uday Chitale and Radhakrishnan Nair and the Meeting held on March 192019 was attended by Sandeep Bakhshi Uday Chitale and Neelam Dhawan.
XII. SEPARATE MEETING OF INDEPENDENT DIRECTORS
During the year the independent Directors met on May 7/8/11 2018 andSeptember 12 2018 inter alia to review the matters statutorily prescribed under theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015.
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 Wilful
Defaulters/Non Co-operative Borrowers Committee of Senior Management(comprising certain wholetime Directors and Executives) and Committee of ExecutivesCompliance Committee Product & Process Approval Committee Regional Committees forIndia and overseas operations Outsourcing Committee Operational Risk ManagementCommittee Vigilance Committee Product Governance Committee and other Committees (allcomprising Executives). These committees are responsible for specific operational areaslike asset liability management approval/renewal of credit proposals approval ofproducts and processes and management of operational risk under authorisation/supervisionof the Board and its Committees.
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-Fourth Annual ||Wednesday ||11:30 a.m. ||Sir Sayajirao Nagargruh Vadodara Mahanagar |
|General Meeting ||September 12 2018 || ||Seva Sadan Near GEB Colony Old Padra Road Akota Vadodara 390 020 |
|Twenty-Third Annual General Meeting ||Friday June 30 2017 ||12 noon ||Professor Chandravadan Mehta Auditorium General Education Centre Opposite D. N. Hall Ground The Maharaja Sayajirao University Pratapgunj Vadodara 390 002 |
|Twenty-Second Annual General Meeting ||Monday July 11 2016 ||12 noon ||Sir Sayajirao Nagargruh Vadodara Mahanagar Seva Sadan Near GEB Colony Old Padra Road Akota Vadodara 390 020 |
The details of the Special Resolutions passed in the Annual GeneralMeetings held in the previous three years are given below:
|General Body Meeting ||Day Date ||Resolutions |
|Annual General Meeting ||Wednesday September 12 2018 || Amendment to Capital Clause of the Memorandum of Association |
| || || Amendment to Article 5(a) of the Articles of Association |
| || || Amendment to the definition of Exercise Period under Employees Stock Option Scheme-2000 |
| || || Private placement of securities under Section 42 of the Companies Act 2013 |
|Annual General Meeting ||Friday June 30 2017 || Private placement of securities under Section 42 of the Companies Act 2013 |
|Annual General Meeting ||Monday July 11 2016 || Private placement of securities under Section 42 of the Companies Act 2013 |
No resolution was passed through postal ballot during the financialyear ended March 31 2019. At present no special resolution is proposed to be passedthrough postal 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: i. As mentioned by RBI in its press release datedMarch 29 2018 RBI has through an order dated March 26 2018 imposed a monetary penaltyof
र 589.0 million on the Bank for non-compliance withdirections/guidelines issued by RBI. This penalty has been imposed in exercise of powersvested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of theBanking Regulation Act 1949. ii. The RBI in exercise of powers conferred under Section47(A)(1)(c) read with Section 46(4)(i) of the Banking Regulation Act 1949 levied anaggregate penalty of र 10.0 million vide its order dated February 25 2019. The penaltyhas been levied for delay in compliance to RBI's directives on "Time-boundimplementation & strengthening of SWIFT related controls".
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 information regarding its position to enable them to accurately assess its futurepotential. ICICI Bank disseminates information on its operations and initiatives on aregular basis. ICICI Banks website (www.icicibank.com) serves as a key awarenessfacility for all its stakeholders allowing them to access information at theirconvenience. It provides comprehensive information on ICICI Bank's 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 Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 are filed electronically with NSE/BSEthrough NSE's Electronic Application Processing System (NEAPS) and through BSEListing Centre and are also available on their respective websites in addition to theBank's website. 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 Meeting ||Day Date ||Time ||Venue |
|Twenty-Fifth Annual ||Friday ||11:45 a.m. ||Professor Chandravadan Mehta Auditorium |
|General Meeting ||August 9 2019 || ||General Education Centre Opposite D. N. Hall |
| || || ||Ground The Maharaja Sayajirao University |
| || || ||Pratapgunj Vadodara 390 002 |
|Financial Year ||: April 1 2018 to March 31 2019 |
|Book Closure ||: July 24 2019 to August 9 2019 (both days inclusive) |
|Dividend Payment Date ||: Will be paid/despatched on or after August 9 2019 |
Listing of Equity Shares/ADSs/Bonds on Stock Exchanges
|Stock Exchange ||Code for ICICI Bank |
|BSE Limited (BSE) (Equity) Phiroze Jeejeebhoy Towers Dalal Street Mumbai 400 001 ||532174 & 6321741 |
|National Stock Exchange of India Limited (NSE) (Equity) Exchange Plaza Bandra-Kurla Complex Bandra (East) Mumbai 400 051 ||ICICIBANK |
|New York Stock Exchange (ADSs)2 ||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 as bonds issued via public issues which are listed on BSE/NSE. ICICI Bank has paidannual listing fees for the relevant periods to BSE and NSE where its equity shares/bondsare 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 2019 on BSE and NSE are set out in the following table:
| ||BSE ||NSE || |
|Month ||High र ||Low र ||Volume ||High र ||Low र ||Volume ||Total Volume on BSE and NSE |
|April-18 ||291.70 ||261.90 ||48964990 ||291.75 ||261.85 ||505069489 ||554034479 |
|May-18 ||311.10 ||277.10 ||16729093 ||310.95 ||276.90 ||437411078 ||454140171 |
|June-18 ||300.85 ||271.15 ||21579782 ||300.65 ||271.40 ||438940061 ||460519843 |
|July-18 ||307.25 ||259.30 ||32034681 ||307.35 ||259.25 ||494208829 ||526243510 |
|August-18 ||344.40 ||297.85 ||27140030 ||344.35 ||298.55 ||484867421 ||512007451 |
|September-18 ||335.05 ||305.00 ||16355694 ||335.10 ||305.55 ||327737124 ||344092818 |
|October-18 ||355.10 ||303.60 ||31068109 ||355.00 ||303.70 ||603713714 ||634781823 |
|November-18 ||369.60 ||349.80 ||21701012 ||370.00 ||349.65 ||417163584 ||438864596 |
|December-18 ||366.60 ||342.75 ||20667652 ||366.50 ||342.80 ||320932298 ||341599950 |
|January-19 ||382.00 ||343.45 ||35262982 ||382.25 ||343.55 ||467373555 ||502636537 |
|February-19 ||358.90 ||338.55 ||22186545 ||359.30 ||338.75 ||289573739 ||311760284 |
|March-19 ||400.00 ||353.50 ||31473075 ||400.55 ||354.25 ||359345712 ||390818787 |
|Fiscal 2019 ||400.00 ||259.30 ||325163645 ||400.55 ||259.25 ||5146336604 ||5471500249 |
The reported high and low closing prices and volume of ADRs of ICICIBank traded during fiscal 2019 on the NYSE are given below:
|Month ||High (USD) ||Low (USD) ||Number of ADS traded |
|April-18 ||8.85 ||8.19 ||187144800 |
|May-18 ||9.17 ||8.36 ||129614888 |
|June-18 ||8.83 ||7.88 ||143643499 |
|July-18 ||8.83 ||7.72 ||144318500 |
|August-18 ||9.77 ||8.77 ||142154987 |
|September-18 ||9.26 ||8.49 ||147329300 |
|October-18 ||9.49 ||8.19 ||219347100 |
|November-18 ||10.34 ||9.39 ||131262900 |
|December-18 ||10.34 ||9.26 ||125519700 |
|January-19 ||10.78 ||9.55 ||154374100 |
|February-19 ||10.00 ||9.50 ||127747800 |
|March-19 ||11.46 ||9.91 ||144777900 |
|Fiscal 2019 ||11.46 ||7.72 ||1797235474 |
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 2018 to March 31 2019 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 registeredCategory I - Registrar to an Issue
& Share Transfer (R&T) Agent. 3i Infotech is an informationtechnology company and in addition to R&T services provides a wide range oftechnology & technology-enabled products and services. ICICI Bank's equity sharesare traded mainly in dematerialised form. During the year 4148620 equity shares of facevalue र 2 each involving 19451 certificates were dematerialised. At March 31 201999.68% of paid-up equity share capital (including equity shares represented by ADSconstituting 24.89% of the paid-up equity share capital) are held in dematerialised form.
Physical share transfer requests were processed and the sharecertificates were returned normally within a period of seven days from the date ofreceipt if the documents were 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 2017 Shares of face value र 2 ||Fiscal 2018 Shares of face value र 2 ||Fiscal 2019 Shares of face value र 2 |
|No. of transfer deeds ||414 ||629 ||2013 |
|No. of shares transferred ||109155 ||157922 ||585550 |
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 Regulation 76 of the Securities and Exchange Board of India(Depositories and Participants) Regulations 2018 and SEBI CircularD&CC/FITTC/CIR-16/2002 dated December 31 2002 as amended vide Circular no.CIR/MRD/DP/30/2010 dated September 6 2010 an audit is conducted on a quarterly basis by afirm of Chartered Accountants for the purpose of inter alia reconciliation of the totaladmitted equity share capital with the depositories and in the physical form with thetotal issued/paid up equity share capital of ICICI Bank. Certificates issued in thisregard are placed before the Stakeholders Relationship Committee and filed with BSE andNSE where the equity shares of ICICI Bank are listed.
Registrar and Transfer Agents
The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited.Investor services related queries/requests/complaints may be directed to Ms. R. C.D'souza at the address as under:
|3i Infotech Limited |
|International Infotech Park |
|Tower# 5 3rd Floor |
|Vashi Railway Station Complex |
|Vashi Navi Mumbai 400 703 |
|Maharashtra India |
|Tel. No.: +91-22-7123 8000 |
|Fax No.: +91-22-7123 8099 |
|E-mail : firstname.lastname@example.org |
|Queries relating to the operational and financial |
|performance of ICICI Bank may be addressed to: |
|Rakesh Jha/Anindya Banerjee |
|ICICI Bank Limited |
|ICICI Bank Towers |
|Bandra-Kurla Complex |
|Mumbai 400 051 |
|Tel. No.: +91-22-2653 7131 |
|Fax No.: +91-22-2653 1175 |
|E-mail: email@example.com |
Pursuant to Regulation 53 of the 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 |
|Head Office Legal Dept. |
|"1501" Shivaji Nagar |
|Pune - 411 005 |
|Tel. No.: +91-020-2553 6256 |
|Axis Trustee Services Limited |
|The Ruby 2nd Floor SW 29 |
|Senapati Bapat Marg |
|Dadar West Mumbai - 400 028 |
|Tel. No.: +91-22-2425 5202 |
|IDBI Trusteeship Services Limited |
|Asian Building Ground Floor |
|17 R Kamani Marg |
|Ballard Estate |
|Mumbai - 400 001 |
|Tel. No.: +91-22-4080 7001 |
|The details are available on the website of the Bank at the link (https://www.icicibank.com/Personal-Banking/ investments/icici-bank-bonds/index.page). |
|Information on Shareholding |
|Shareholding pattern of ICICI Bank at March 31 2019 |
|Shareholder Category ||No. of shares ||% holding |
|Deutsche Bank Trust Company Americas (Depositary for ADS holders) ||1604424721 ||24.89 |
|FIIs/FPIs NRIs Foreign Banks Foreign Companies OCBs and Foreign Nationals ||2105174383 ||32.66 |
|Insurance Companies ||772315354 ||11.98 |
|Bodies Corporate (including Government Companies and Clearing Members) ||152759354 ||2.37 |
|Banks & Financial Institutions ||1085096 ||0.02 |
|Mutual Funds/UTI ||1351914622 ||20.97 |
|Individuals HUF and Trusts ||372621600 ||5.78 |
|NBFCs Registered with RBI ||6547817 ||0.10 |
|Provident Fund/Pension Fund ||62358629 ||0.97 |
|Alternate Investment Fund ||10999750 ||0.17 |
|IEPF ||6038327 ||0.09 |
|Total ||6446239653 ||100.00 |
Shareholders of ICICI Bank with more than one percent holding at March31 2019
|Name of the Shareholder ||No. of shares ||% holding |
|Deutsche Bank Trust Company Americas* ||1604424721 ||24.89 |
|Life Insurance Corporation of India ||509224087 ||7.90 |
|HDFC Trustee Co Ltd (Various Mutual Fund Accounts)/HDFC Large Cap Fund ||267000149 ||4.14 |
|Dodge & Cox International Stock Fund ||254429276 ||3.95 |
|SBI Mutual Fund/SBI Dual Advantage Fund and Other Various Fund Accounts ||173093609 ||2.69 |
|ICICI Prudential Mutual Fund (Various Mutual Fund Accounts) ||144736199 ||2.25 |
|Aditya Birla Sun Life Trustee Private Limited ||130775083 ||2.03 |
|Reliance Capital Trustee Co Ltd/Reliance ETF/Reliance Emergent India Fund (Various Fund Accounts) ||115164358 ||1.79 |
|Government of Singapore ||98147231 ||1.52 |
|Kotak Capital Fund (Various Mutual Fund Accounts) ||85155884 ||1.32 |
* Deutsche Bank Trust Company Americas holds equity shares of ICICIBank as depositary for ADS holders.
Distribution of shareholding of ICICI Bank at March 31 2019
|Range Shares ||No. of Folios ||% ||No. of Shares ||% |
|Upto 1000 ||799843 ||92.93 ||144418631 ||2.24 |
|1001 5000 ||51868 ||6.02 ||95449190 ||1.48 |
|5001 10000 ||4124 ||0.48 ||28231323 ||0.44 |
|10001 50000 ||2895 ||0.34 ||59559473 ||0.92 |
|50001 & above ||1968 ||0.23 ||6118581036 ||94.92 |
|Total ||860698 ||100.00 ||6446239653 ||100.00 |
Disclosure with respect to shares lying in suspense account
The Bank had 100222 equity shares held by 483 shareholders lying insuspense account at the beginning of the fiscal 2019. 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 receivedrequests from 33 shareholders holding 11429 shares for claiming these shares out of which4559 shares held by 8 shareholders were transferred from the suspense account. As onMarch 31 2019 95663 shares held by 475 shareholders remained unclaimed in the suspenseaccount.
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 Sections 124 and 125 of the CompaniesAct 2013 during fiscal 2019 dividend amount of र 3.33 crore remaining unclaimed for aperiod of seven years from the date of its transfer to the Unpaid Dividend Accounts of theCompany have been transferred to the Investor Education and Protection Fund (IEPF).
Pursuant to Section 124(6) of the Companies Act 2013 read with theInvestor Education & Protection Fund Authority (Accounting Audit Transfer &Refund) Rules 2016 during fiscal 2019 1314679 equity shares in respect of which thedividend has not been claimed for seven consecutive years have been transferred to thedesignated demat account of the IEPF Authority.
Members who have not yet encashed their dividend warrant(s) for thefinancial year ended March 31 2012 and/or subsequent years are requested to submit theirclaims to the Registrar and Transfer Agent of the Company without any delay. The unclaimeddividend and the equity shares transferred to IEPF can be claimed by making an applicationin the prescribed form available on the website of IEPF i.e. www.iepf.gov.in. The detailsof the Nodal Officer appointed under the provisions of IEPF are available under theInvestor Relations section on the website of the Bank at www.icicibank.com.
Dematerialisation of securities and updation of PAN and Bank details
SEBI vide its Circular dated April 20 2018 introduced a documentedframework for streamlining and strengthening the systems and processes of RTAs IssuerCompanies and Bankers to an Issue with regards to handling and maintenance of recordstransfer of securities and payment of dividend as may be applicable. The said SEBICircular inter alia provides for updation of PAN and Bank details by the Shareholderswherever not available. This has been separately communicated to investors holdingsecurities in physical form by the Bank. Those investors who are yet to respond arerequested to take necessary action in the matter at the earliest.
Outstanding GDRs/ADSs/Warrants or any Convertible instrumentsconversion date and likely impact on equity
ICICI Bank has 802.21 million ADS (equivalent to 1604.42 millionequity shares) outstanding which constituted 24.89% of ICICI Bank's total equitycapital at March 31 2019. There are no other convertible instruments outstanding as onMarch 31 2019.
Commodity price risk or foreign exchange risk and hedging activities
The foreign exchange risk position including bullion is managed withinthe net overnight open position (NOOP) limit approved by the Board of Directors. Theforeign currency assets of the Bank are primarily floating rate linked assets. Wholesaleliability raising for foreign currencies takes place in USD or other currencies via bondissuances bilateral loans and syndicated/club loans as well as refinance from ExportCredit Agencies (ECA) which may be at a fixed rate or floating rate linked. In case offixed rate Long-term wholesale fund raising in USDs the interest rate risk is generallyhedged via interest rate swaps wherein the Bank moves to a floating rate index in order tomatch 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.
The extant RBI guidelines do not allow AD Category I Banks to take anymarket positions in commodity related activities. However the extant guidelines allowsBank to import gold and silver in line with the RBI license and selling of importedgold/silver on outright basis to domestic clients or providing gold metal loan tojewellery manufacturers and take gold deposits under the Gold Monetisation scheme. ICICIBank provides pricing and hedging of Gold Metal Loan to jewellery customers and suchexposures are covered on a back-to-back basis with gold suppliers. In view of the abovethe disclosure pursuant to the SEBI Circular no. SEBI/HO/CFD/CMD1/
CIR/P/2018/0000000141 dated November 15 2018 is not required to begiven.
Plant Locations Not applicable
|Address for Correspondence |
|Ranganath Athreya |
|Company Secretary |
|ICICI Bank Limited |
|ICICI Bank Towers |
|Bandra-Kurla Complex |
|Mumbai - 400 051 |
|Tel. No.: +91-22-2653 8900 |
|Fax No.: +91-22-2653 1230 |
|E-mail: firstname.lastname@example.org |
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 as maintaining aseparate office for the Chairman at the Bank's expense ensuring financial statementswith unmodified audit opinion separation of posts of Chairman and Chief Executive Officerand reporting of internal auditor directly to the Audit Committee.
ANALYSIS OF CUSTOMER COMPLAINTS
a) Customer complaints in fiscal 2019
|No. of complaints pending at the beginning of the year ||6209 |
|No. of complaints received during the year ||264726 |
|No. of complaints redressed during the year ||262259 |
|No. of complaints pending at the end of the year ||8676 |
Note: The above does not include complaint redressed within 1 workingday.
b) Awards passed by the Banking Ombudsman in fiscal 2019
|No. of unimplemented awards at the beginning of the year ||Nil |
|No. of awards passed by the Banking Ombudsman during the year ||Nil |
|No. of awards implemented during the year ||Nil |
|No. 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 Walker Chandiok & Co LLP Chartered Accountants regardingcompliance of conditions of Corporate Governance as stipulated in the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
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 Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014 (the SEBI Regulations). Pursuant to the SEBI Regulationsoptions are granted by the Board Governance Remuneration & Nomination Committee(BGRNC) and noted by the Board. The Scheme was initially approved by the Members at theirmeeting held on February 21 2000 and amended from time to time.
The Members at the Annual General Meeting held on September 12 2018approved the change in exercise period to not exceeding five years from date of vesting ofoptions as may be determined by the BGRNC for each grant. The above definition of ExercisePeriod has been made applicable to all future grants effective May 2018. The Bank has uptoMarch 31 2019 granted 499.24 million stock options from time to time aggregating to 7.74%of the issued equity capital of the Bank at March 31 2019. As per the ESOS as amendedfrom time to time the maximum number of options granted to any employee/Director in ayear is limited to 0.05% of ICICI Bank's issued equity shares at the time of thegrant and the aggregate of all such options is limited to 10% of ICICI Bank's issuedequity shares on the date of the grant (equivalent to 644.62 million shares of face valueर 2 each at March 31 2019).
Particulars of options granted by ICICI Bank as on March 31 2019 aregiven below:
|Number of options outstanding at the beginning of the year ||235672250 |
|Number of options granted during the year* ||31112400 |
|Number of options forfeited/lapsed during the year ||18979999 |
|Number of options vested during the year ||46916376 |
|Number of options exercised during the year ||18248877 |
|Number of shares arising as a result of exercise of options ||18248877 |
|Money realised by exercise of options during the year (र) ||3486300104 |
|Number of options outstanding at the end of the year ||229555774 |
|Number of options exercisable at the end of the year ||152151329 |
* Excludes options pertaining to Wholetime Directors pending for RBIapproval.
The Bank follows the intrinsic value method to account for itsstock-based employee compensation plans. The diluted earnings per share (EPS) pursuant toissue of shares on exercise of options calculated in accordance with Accounting Standard20 (AS-20) was र 5.17 in fiscal 2019 compared to basic EPS of र 5.23. Based on theintrinsic value of options no compensation cost was recognised during fiscal 2019.However if the Bank had used the fair value of options based on the binomial tree modelcompensation cost in fiscal 2019 would have been higher by र 3.18 billion and proformaprofit after tax would have been र 30.45 billion. On a proforma basis the Bank'sbasic and diluted earnings per share would have been र 4.73 and र 4.68 respectively.
The key assumptions used to estimate the fair value of options grantedduring fiscal 2019 are given below:
|Risk-free interest rate ||7.32% to 8.31% |
|Expected life ||3.64 to 6.64 years |
|Expected volatility ||30.79% to 32.22% |
|Expected dividend yield ||0.43% to 0.80% |
The weighted average fair value of options granted during fiscal 2019was र 107.22 (र 86.43 during fiscal 2018) and the weighted average exercise price ofoptions granted during fiscal 2019 was र 283.91 (र 251.05 during fiscal 2018).
Risk free interest rates over the expected term of the option are basedon the government securities yield in effect at the time of the grant. The expected termof an option is estimated based on the vesting term as well as expected exercise behaviorof the employees who receive the option. Expected exercise behaviour is estimated based onthe historical stock option exercise pattern of the Bank. Expected volatility during theestimated expected term of the option is based on historical volatility determined basedon observed market prices of the Bank's publicly traded equity shares. Expected dividendsduring the estimated expected term of the option are based on recent dividend activity.
The detailed disclosures as stipulated under Regulation 14 of theSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014will be hosted on the website of the Bank athttps://www.icicibank.com/aboutus/other-policies.page.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The Bank has undertaken various initiatives for energy conservation atits premises. A detailed write up is given in the chapter Natural Capital in theIntegrated Report section of the Annual Report for fiscal 2019 and under Principle 6 ofSection E of the Business Responsibility Report which will be available on the website ofthe Bank at https://www.icicibank.com/aboutus/annual.page. The Bank has used informationtechnology extensively in its operations; for details refer to the chapter Strategic FocusAreas for Business in the Integrated Report section of the Annual Report for fiscal 2019.
UPDATE ON RECENT DEVELOPMENTS AT THE BANK
Shareholders were provided an update under this section last year thatthe Audit Committee of the Bank under direction given by the Board of Directors hadinstituted an independent enquiry headed by a former Supreme Court Judge Hon'bleMr. Justice B. N. Srikrishna (Retd.) to consider various allegations relating to the thenMD & CEO Ms. Chanda Kochhar. The final findings and actions taken by the Board weredisclosed by the Bank to the stock exchanges vide press release dated January 30 2019 andis now generally available information. Shareholders can access the said press release at(www.icicibank.com). Any shareholder who requires a printed copy of this press release mayalso write to the Registrar and Transfer Agents of the Bank.
GREEN INITIATIVE IN CORPORATE GOVERNANCE
In line with the continuing efforts towards 'Green Initiative' theBank has effected electronic delivery of Notice of Annual General Meeting and AnnualReport to those Members whose e-mail ids were registered with the DepositoryParticipants/3i Infotech/Bank. The Companies Act 2013 and the underlying rules as well asRegulation 36 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 permit the dissemination of financialstatements and annual report in electronic mode to the Members. Your Directors arethankful to the Members for actively participating in the Green Initiative and seek yourcontinued support.
Your Bank is in compliance with the Secretarial Standard on Meetings ofthe Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) for thefinancial year ended March 31 2019.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm:
1. that in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; 2. that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Bank at the end of the financialyear and of the profit of the Bank for that period; 3. that they have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Banking Regulation Act 1949 and the Companies Act 2013 forsafeguarding the assets of the Bank and for preventing and detecting fraud and otherirregularities; 4. that they have prepared the annual accounts on a going concern basis;5. that they have laid down internal financial controls to be followed by the Bank andthat such internal financial controls are adequate and were operating effectively; and 6.that they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
ICICI Bank is grateful to the Government of India Reserve Bank 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.
Compliance with the Group Code of Business Conduct and Ethics
I confirm that all Directors and members of the senior management haveaffirmed compliance with Group Code of Business Conduct and Ethics for the year endedMarch 31 2019.
| ||Sandeep Bakhshi |
|May 6 2019 ||Managing Director & CEO |
| ||For and on behalf of the Board |
| ||Girish Chandra Chaturvedi |
|May 6 2019 ||Chairman |