Icicibank

CONTENTS (For detailed index refer to page 238)
Title Page No.

Preamble ...................................................................................................................................................................... i
Risk Factors and Management Perception thereof .......................................................................................................... ii
Terms of the Bonds ............................................................................................................................................................. xiii
PART I
I. General Information ................................................................................................................................................ 1
II. Capital Structure ..................................................................................................................................................... 6
III. Terms of the Present Issue ..................................................................................................................................... 22
Nature of Bonds ...................................................................................................................................................... 22
z Tax Saving Bond ......................................................................................................................................... 22
z Regular Income Bond ................................................................................................................................ 23
z Children Growth Bond ................................................................................................................................ 23
Common Features, Terms and Conditions of the Bonds .................................................................................... 23
Procedure for Application ..................................................................................................................................... 29
Payment Instructions ............................................................................................................................................... 31
Tax Benefits ............................................................................................................................................................. 33
IV. Particulars of the Issue ............................................................................................................................................ 36
V. Company Information ............................................................................................................................................ 36
VI. Overview of Our Operations .................................................................................................................................. 39
VII. Regulations and Policies ........................................................................................................................................ 103
VIII. Indian Licences, Approvals, Registrations and Permissions .............................................................................. 113
IX. Outstanding Litigations or Defaults and Material Developments ....................................................................... 114
X Companies Under the Same Management .......................................................................................................... 124
XI. Changes in Memorandum of Association ............................................................................................................ 124
XII. Mechanism Evolved for Redressal of Investor Grievances ................................................................................ 125
XIII. Specific Disclosures ............................................................................................................................................... 126
PART II
A. General Information ................................................................................................................................................ 127
B. Financial Information .............................................................................................................................................. 129
C. Statutory and Other Information ............................................................................................................................ 217
Main Provisions of the Articles of Association of the Company ........................................................................ 228
Material Contracts and Documents for Inspection .............................................................................................. 235
PART III
Declaration ...................................................................................................................................................................... 237
Detailed Index ..................................................................................................................................................................... 238
DEFINITIONS AND ABBREVIATIONS

CERTAIN DEFINITIONS
ICICI Limited, ICICI Personal Financial Services Limited and ICICI Capital Services Limited amalgamated with and into ICICI Bank Limited,
with the appointed date being March 30, 2002. In this Prospectus, all references to “ICICI Bank”, the “Company”, “we”, “our” and “us” are,
as the context requires, to ICICI Bank Limited on an unconsolidated basis subsequent to the amalgamation, to ICICI Bank Limited on an
unconsolidated basis prior to the amalgamation, or to both. References to specific data applicable to particular subsidiaries, joint
ventures, associates and other consolidated entities are made by reference to the name of that particular company or entity. References
to “ICICI” are to ICICI Limited on an unconsolidated basis prior to the amalgamation. References to “ICICI Personal Financial Services”
are to ICICI Personal Financial Services Limited. References to “ICICI Capital Services” are to ICICI Capital Services Limited. References
to the “amalgamation” are to the amalgamation of ICICI, ICICI Personal Financial Services and ICICI Capital Services with and into ICICI
Bank. References to the “Scheme of Amalgamation” are to the Scheme of Amalgamation of ICICI, ICICI Personal Financial Services and
ICICI Capital Services with ICICI Bank.
In the financial statements contained in this Prospectus and the notes thereto, all references to “the Bank” are, as the context requires, to
ICICI Bank Limited on an unconsolidated basis subsequent to the amalgamation, to ICICI Bank Limited on an unconsolidated basis prior
to the amalgamation, or to both. All references to “the Group” are to ICICI Bank, its subsidiaries, joint ventures and associates on a
consolidated basis.
ISSUE RELATED TERMS AND ABBREVIATIONS
ADR …………………………………….. American Depository Receipts
ADS………………………………………. American Depository Shares
AGM …………………………………….. Annual General Meeting
Articles ............................................... .. Our Articles of Association
March 2005
ATM …………………………………….. Automated Teller Machine

Auditors ………………………………... Our statutory auditors, S.R. Batliboi & Co., Chartered Accountants.
Banking Regulation Act……………… The Banking Regulation Act, 1949, as amended from time to time.
Board of Directors/ Board ................ Our Board of Directors or a Committee thereof
Bondholder/Debentureholder ......... The holder of the Bonds
Bond ................................................... Unsecured Redeemable Bonds in the nature of Debentures (The word “Bond” is used
interchangeably for the word “Debenture”) issued under this Prospectus
BSE ……………………………………… The Stock Exchange, Mumbai
CDSL…………………………………….. Central Depository Services (India) Limited
Companies Act or the Act…………… The Companies Act, 1956, as amended from time to time
Corporate Office ………………….…... ICICI Bank Towers, Bandra-Kurla Complex, Mumbai 400 051
CRR……………………………………… Cash Reserve Ratio
Deemed Date of Allotment .............. 30 days from the date of closure of the Issue or date of utilisation of proceeds, whichever is
earlier.
Depositories Act……………………… The Depositories Act, 1996, as amended from time to time
Depository……………………………… A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations,
1996 as amended from time to time
Depository participant………………… A depository participant as defined under the Depositories Act.
Designated Stock Exchange………….. The Stock Exchange, Mumbai (BSE)
DRR .................................................... Debenture Redemption Reserve
DRT…………………………………….. Debt Recovery Tribunal
DSPML…………………………………. DSP Merrill Lynch Limited
EPS………………………………….…. Earnings per Equity Share
ESOS……………………………………. The Employee Stock Option Scheme as approved and adopted by our shareholders in
January 2000 and amended from time to time.
FCNR……………………………………. Foreign Currency Non Repatriable
FEMA……………………………………. Foreign Exchange Management Act, 1999 as amended from time to time and regulations
framed thereunder
FERA……………………………………. Foreign Exchange Regulation Act, 1973, now repealed
FII ........................................................ . Foreign Institutional Investors
Financial year/ Fiscal/ FY……………... The 12 months ended March 31 of a particular year
GDP…………………………………….. Gross Domestic Product
HUF .................................................... Hindu Undivided Family
“ICICI Bank” or the “Company” ICICI Bank Limited (formerly ICICI Banking Corporation Limited), a company incorporated
or the “Issuer” under the Companies Act, 1956, and licensed as a bank under the Banking Regulation Act,
1949, being the issuer of the Bonds
ICICI .................................................... the erstwhile ICICI Limited
ICICI Brokerage ................................. ICICI Brokerage Services Limited
ICICI Capital ....................................... the erstwhile ICICI Capital Services Limited
3i Infotech .......................................... 3i Infotech Limited (formerly ICICI Infotech Limited)
ICICI Investment ................................. ICICI Investment Management Company Limited
ICICI Lombard ................................... ICICI Lombard General Insurance Company Limited
ICICI PFS ............................................ the erstwhile ICICI Personal Financial Services Limited
ICICI Prudential Life ........................... ICICI Prudential Life Insurance Company Limited
ICICI Securities .................................. ICICI Securities Limited
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March 2005
ICICI Venture ...................................... ICICI Venture Funds Management Company Limited

Indian GAAP…………………………… Generally accepted accounting principles in India
IRR……………………………………….. Internal Rate of Return
Issue or Tranche ................................ This Issue of Bonds aggregating Rs. 700 crore being Tranche III out of the total Rs. 4,000 crore
I.T. ……………………………………….. Income Tax
I.T. Act ................................................ The Income-tax Act, 1961 as amended from time to time
LIBOR……………………………………. London Inter Bank Offer Rate
Memorandum ................................... Our Memorandum of Association
NABARD………………………………… National Bank of Agriculture & Rural Development
NCD……………………………………… Non Convertible Debentures
NCDEX………………………………….. National Commodities and Derivatives Exchange Limited
NPA…………………………………….. Non-Performing Asset(s)
NRE……………………………………… Non Resident External
NRI/ Non Resident Indian ................. A person resident outside India, as defined in FEMA, and who is a citizen of India or a Person
of Indian origin, as defined under FEMA (Transfer or Issue of Security by a Person Resident
Outside India) Regulations, 2000.
NSDL…………………………………….. National Securities Depository Limited
NSE…………………………………….. National Stock Exchange of India Limited
Offer Document or Prospectus ........ This Prospectus through which the Bonds are being offered for public subscription
Over Subscription Option……………… Right to retain over subscription to the extent of 100% of the issue, as per SEBI Guidelines
PCM……………………………………… Professional Clearing Member
Prudential ICICI AMC ........................ Prudential ICICI Asset Management Company Limited
Prudential ICICI Trust ........................ Prudential ICICI Trust Limited
PFI ...................................................... Public Financial Institution
RBI ...................................................... the Reserve Bank of India
Registered Office……………………… Our Registered office, being ‘Landmark’, Race Course Circle, Vadodara 390 007
ROC .................................................... Registrar of Companies, Gujarat at Ahmedabad
SCRA…………………………………….. Securities Contracts (Regulation) Act, 1956, as amended from time to time.
SCRR……………………………………. Securities Contracts (Regulation) Rules, 1957, as amended from time to time.
SEBI .................................................... Securities and Exchange Board of India constituted under the Securities and Exchange Board
of India Act, 1992 (as amended from time to time)
SEBI Act…………………………….….. Securities and Exchange Board of India Act, 1992, as amended from time to time
SEBI Guidelines ................................. SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on January 19,
2000 and the subsequent amendments to the same
Securities Act…………………………… United States Securities Act of 1933, as amended from time to time.
Securitisation Act/ SARFAESI…………… The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, as amended from time to time
SIDBI…………………………………….. Small Industries Development Bank of India
Statutory Liquidity Ratio or SLR……... Statutory Liquidity Ratio prescribed by RBI under the Banking Regulation Act.
TDS………………………………………. Tax Deduction at Source
Trustees .............................................. Trustees for the Debentureholders
YTM/Yield .......................................... Yield to Maturity
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March 2005
PREAMBLE
The Lead Manager had filed a Draft Prospectus for the Public Issue of Unsecured Redeemable Bonds in the nature of Debentures
aggregating Rs.4,000 crore (including a right to retain oversubscription up to Rs.2,000 crore) and dealt with more specifically hereunder
with respect to Over Subscription option, to be raised in one or more tranches having an Over Subscription Option.
The present Public Issue is for mobilising Rs. 350 crore with a right to retain Over Subscription upto Rs. 350 crore.
Over Subscription Option

The Over Subscription option is disclosed as follows:
The Umbrella offering filed was for Public Issue of Unsecured Redeemable Bonds in the nature of Debentures aggregating Rs. 4,000 crore
(including a right to retain Over Subscription up to Rs.2,000 crore).
The shortfall in the base amount plus Over Subscription amount of this tranche and previous tranches, if any, may be raised in one or
more tranches in future within the stipulated period of 365 days from the date of SEBI’s observation letter dated December 15, 2004.
The excess amount, over the total issue size (base amount plus Over Subscription amount), raised can be retained by the company
subject to the fulfillment of the condition that overall amount raised and retained by the company falls within the limit of Rs. 4,000
crore.
The aggregate issue in terms of all tranches shall not exceed the issue size as per the Umbrella Prospectus.
The aggregate Over Subscription in terms of all tranches shall not exceed the Over Subscription limit as per the Umbrella
Prospectus.
Details of previous tranches
Tranche Date of the Issue Deemed Issue Amount Additional Date of Name of the Stock Number of
Number Date of Size for Raised Subscription Despatch Exchanges and Date Investors’
Opening Closing Allotment the (Rs. in Retained of of Listing complaints
Tranche crore) under Debenture pending
(Rs. in Over Certificates
crore) Subscription
Option
(Rs. in crore)
1 January February March 600 600 175 @ @ @
27, 2005 9, 2005 11, 2005
2. February March @ 400 @ @ @ @ @
28, 2005 9, 2005
@ Post Issue formalities are being completed.
The balance of Rs. 1300 crore, along with any shortfall in the target amount of Rs. 700 crore of this tranche and Rs. 1200 crore of tranche
I and Rs. 800 crore of Tranche II, if any, may be raised in one or more tranches having an Over Subscription Option in future within the
stipulated period of 365 days from the date of SEBI’s observation letter dated December 15, 2004. The excess amount raised, over the
target amount of any tranche (including the Over Subscription Option), can be retained by us, subject to the limit of Rs. 4,000 crore.
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March 2005
TERMS OF THE BONDS

There is no put/call option on any of the Bonds
Invest FULL Rs. 1,00,000/- in Tax Saving Bond** under Section 88

OR
Invest for 5 years and Save Tax under Section 88 (Option I)
OR
Save tax under Section 88**
Option I : Earn 5.80%* p.a. for 5 years
Option II : Rs. 5,000 becomes Rs. 6,630* in 5 years
Choose any/all of the following options :

Option I II
Tax Benefit under Section 88 88
Issue Price (Rs.) 5,000/- 5,000/-
Face Value (Rs.) 5,000/- 6,630/-
Tenure 5 years 5 years
Interest (%) (p.a.)* 5.80 DDB@ (YTM 5.8*)
Interest Payable Annually DDB @
Minimum Application 1 Bond 1 Bond

Yield to Investor (%)* #
(Including Tax Benefits) 9.8 9.4
@
Tax Saving Bond Options II is in the nature of Deep Discount Bond (DDB), hence no periodic interest is payable.
* Subject to TDS as per the then prevailing tax laws.

The yield has been calculated assuming that a tax rebate of 15% is available to the eligible investors and that a surcharge of nil%
and education cess of 2% of tax is payable in case of all the options.
# Rounded off to nearest multiple of 0.1
** All options of Tax Saving Bond.
ICICI Bank would ensure full and firm allotment against all valid applications for the Tax Saving Bond.
xiii
March 2005
ICICI BANK LIMITED

(Originally incorporated in Vadodara as ICICI Banking Corporation Limited on January 5, 1994,
subsequently renamed as ICICI Bank Limited on September 10, 1999)
Registered Office: “Landmark”, Race Course Circle, Vadodara - 390 007
Corporate Office: ICICI Bank Towers, Bandra Kurla Complex, Mumbai 400 051
Tel.: (022) 2653 1414 Fax.: (022) 2653 1122 Website: www.icicibank.com
PART I
I. GENERAL INFORMATION
OFFER OF BONDS
We are offering for Public subscription the following types of Unsecured Redeemable Bonds in the nature of Debentures aggregating
Rs. 700 crore:
z Tax Saving Bond
z Regular Income Bond
z Children Growth Bond
This is the third tranche of Rs. 350 crore, with right to retain oversubscription up to Rs. 350 crore, out of the Public Issue of Unsecured
Redeemable Bonds in the nature of Debentures aggregating Rs. 4,000 crore to be raised in one or more tranches including an Over
Subscription Option of Rs. 2,000 crore. The balance of Rs. 1,300 crore, along with any shortfall in the target amount of Rs. 700 crore of this
tranche and Rs. 1,200 crore of tranche I and Rs.800 of tranche II, if any, may be raised in one or more tranches having an Over Subscription
Option in future within the stipulated period of 365 days from the date of SEBI’s observation letter dated December 15, 2004.
AUTHORITY FOR THE ISSUE
This Issue of Bonds is being made pursuant to the Resolutions of our Board of Directors, passed at its Meeting held on April 12, 2002, the
Resolutions of the Committee of Directors, passed at its Meeting held on August 24, 2004 and March 3, 2005 and is within the overall
borrowing limit under section 293(1)(d) of the Act as per the Scheme of Amalgamation of ICICI, ICICI Capital and ICICI PFS with us. This
Scheme of Amalgamation was approved by the shareholders at their Meeting held on January 25, 2002.
No approval is required from any Government Authority for this Issue.
The RBI has vide its guidelines dated June 11, 2004, permitted banks to raise long term funds by issuing Bonds with a minimum maturity
of five years to the extent of their exposure of residual maturity of more than five years to the infrastructure sector. This means that the total
amount of long term Bonds issued shall not be more than the bank’s exposure of residual maturity of more than five years to the
infrastructure sector at the time of issuing the Bonds. The Bonds should be issued in plain vanilla form without call or put option. The
proposed issue would be within the overall limit granted by RBI as applicable to us.
The present Issue of Bonds is being made in accordance with the terms of the SEBI Guidelines and RBI Guidelines.
Our main business is to grant loans to our borrowers, hence we do not have adequate fixed assets to give as security. Further, the RBI
Guidelines have permitted Banks to issue only unsecured instruments. Moreover, terms of certain overseas and domestic borrowings by
us and Bonds issued by us stipulate that if we raise any secured loans or issue any secured Bonds, similar security needs to be extended
to them also. Hence, all our borrowings, as also this issue of Bonds, are unsecured. However, such terms of overseas and domestic loans
and Bonds shall not apply to (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the
purchase price of such property; or (ii) any statutory lien or (iii) any lien arising in the ordinary course of banking transactions or by
membership of any clearing system.
Note:
We reserve the right to revise upwards the interest rate(s) / yield(s) being offered on the Bonds being offered in this Issue, subject to prior
approvals from SEBI and/or any other regulatory authority as may be required.
DISCLAIMER CLAUSE
AS REQUIRED, A COPY OF THE DRAFT PROSPECTUS FOR MOBILISING RS. 4,000 CRORE INCLUDING AN OVER SUBSCRIPTION
OPTION OF RS. 2,000 CRORE IN ONE OR MORE TRANCHES HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD
THAT SUBMISSION OF DRAFT PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME
HAS BEEN CLEARED OR VETTED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS
OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE
STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT PROSPECTUS. DSPML, LEAD MANAGERS TO THE ISSUE, HAVE
CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY
WITH THE SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION AS IN FORCE FOR THE TIME BEING. THIS REQUIREMENT
IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD
ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY
AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT PROSPECTUS, THE LEAD MANAGERS ARE EXPECTED TO
EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF
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March 2005
AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, DSPML HAVE FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED
OCTOBER 28, 2004 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS:
1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES,
ETC., AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE DRAFT PROSPECTUS PERTAINING TO THE
SAID ISSUE.
2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS,
OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE AND
THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY,
WE CONFIRM THAT:
A. THE DRAFT PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPER
RELEVANT TO THE ISSUE;
B. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC.,
ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY
COMPLIED WITH; AND
C. THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS
TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.
3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE PROSPECTUS ARE REGISTERED WITH
SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.
The Lead Manager has issued a fresh Due Diligence Certificate dated March 16, 2005 for this tranche which reiterates the statements made
in the above referred certificate and states that all observations made by SEBI vide letter No. CFD/DIL/UR/28436/2004 dated December 15,
2004, letter No. CFD/DIL/UR/29283/2004 dated December 24, 2004, letter No. CFD/DIL/UR/29504/2004 dated December 28, 2004 and letter
No. CFD/DIL/UR/30760/2004 dated January 11, 2005 have been incorporated in the Prospectus.
THE FILING OF PROSPECTUS DOES NOT, HOWEVER, ABSOLVE US FROM ANY LIABILITIES UNDER SECTION 63 OR 68 OF THE ACT
OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY AND OTHER CLEARANCES AS MAY BE REQUIRED FOR THE
PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH THE LEAD
MANAGER, ANY IRREGULARITIES OR LAPSES IN THE PROSPECTUS.
We and the Lead Manager accept no responsibility for statements made otherwise than in the Prospectus or in advertisements or any other
material issued by or at the instance of us and the Lead Manager and anyone placing reliance on any other source of information would
be doing so at his/her/their own risk.
DISCLAIMER IN RESPECT OF JURISDICTION
This Prospectus has been registered in India in accordance with the provisions of the Act. This offer of Bonds is made in India to persons
resident in India and to NRIs. RBI vide its Notification No. FEMA 4/2000-RB dated May 3, 2000 has granted general permission to NRIs to
invest in the issue on repatriation and on non-repatriation basis subject to certain conditions mentioned elsewhere in this Prospectus. This
offer is not being made to Foreign Institutional Investors (FIIs) as defined under the Indian laws.
The distribution of this Prospectus or Application forms and the offer, sale, pledge or disposal of the Bonds may be restricted in certain
overseas jurisdictions. This Prospectus does not constitute an offer to sell or an invitation to subscribe to the Bonds issued hereby in any
other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession
this Prospectus comes is required to inform himself about and to observe any such restrictions.
DISCLAIMER CLAUSE OF BSE
BSE has given vide its letter dated December 7, 2004 permission to us to use BSE’s name in the Prospectus as one of the stock exchanges
on which the securities are proposed to be listed. BSE has scrutinised this Prospectus for its internal purpose of deciding on the matter of
granting the aforesaid permission to us.
BSE does not in any manner:
z warrant, certify or endorse the correctness or completeness of any of the contents of this prospectus; or
z warrant that this Company’s Bonds will be listed or will continue to be listed on BSE; or
z take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project
of this Company
and it should not for any reason be deemed or construed that this Prospectus has been cleared or approved by BSE. Every person who
desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation,
analysis and shall not have any claim against BSE whatsoever by reason of any loss which may be suffered by such person consequent
to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other
reason whatsoever.
DISCLAIMER CLAUSE OF NSE
As required, a copy of the Draft Umbrella Prospectus has been submitted to NSE. NSE has given vide its letter dated December 8, 2004
permission to us to use NSE’s name in the Prospectus as one of the stock exchanges on which the securities are proposed to be listed. NSE
has scrutinised the Draft Umbrella Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission
to us. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the
Draft Umbrella Prospectus has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness
or completeness of any of the contents of the Draft Umbrella Prospectus; nor does it warrant that the securities will be listed or will continue
to be listed on NSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management
or any scheme or project of this Company.
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March 2005
Every person who desires to apply for or otherwise acquire any of the securities may do so pursuant to independent inquiry, investigation
and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such person consequent
to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other
reason whatsoever.
LISTING
Our existing equity shares are listed on BSE and NSE. Further our American Depository Shares (ADSs) are listed on the New York Stock
Exchange, US$ 150 million 7.55% Medium Term Notes due August 15, 2007 issued by ICICI in August 1997 are listed on the Luxembourg
Stock Exchange, US$ 300 million 4.75% Fixed Rate Notes due October 22, 2008 issued by us in October 2003 are listed on the Singapore
Exchange Securities Trading Limited and US$ 300 million 5.00% Fixed Rate Notes issued by the Singapore Branch under the Medium Term
Notes Programme due August 18, 2009 are listed on the Luxembourg Stock Exchange. As on March 5, 2005, 97.14% of our share capital
was in dematerialised form. The Bonds issued by ICICI in February 1996, March 1997, December 1997, March 1998, April 1998, July 1998,
August 1998, October 1998, December 1998, January 1999, March 1999, May 1999, July 1999, August 1999, October 1999, November
1999, February 2000, March 2000, July 2000, August 2000, October 2000, November 2000, December 2000, February 2001, March 2001,
June 2001, July 2001, August 2001, September 2001, November 2001, December 2001, January 2002, February 2002 and March 2002 are
listed on BSE and NSE. The Bonds issued by us in January 2003, February 2003, March 2003, August 2003, October 2003 and December
2003 are listed on BSE and NSE. We will apply to BSE and NSE to list these Bonds. The Designated Stock Exchange will be BSE. We shall
complete all the formalities relating to listing of the Bonds within 70 days from the date of closure of the Issue.
If such permission is not granted within 70 days from the Date of Closure of the Issue or where such permission is refused before the expiry
of the 70 days from the closure of the Issue, we shall forthwith repay without interest, all monies received from the applicants in pursuance
of the Offer Document, and if such money is not repaid within eight days after we become liable to repay it (i.e. from the date of refusal or
70 days from the date of closing of the subscription list, whichever is earlier), then we and every director of ours who is an officer in default
shall, on and from expiry of eight days, will be jointly and severally liable to repay the money, with interest at the rate of 15 per cent per
annum on application money, as prescribed under section 73 of the Act.
FILING
A copy of this Prospectus along with the documents as specified under the head ”Material Contracts and Documents for Inspection”
required to be filed under section 60 of the Act, has been delivered to the Registrar of Companies, Gujarat, at Ahmedabad for registration.
A copy of this Prospectus has also been filed with SEBI at Mittal Court, ‘A’ Wing, Ground Floor, Nariman Point, Mumbai 400 021.
CAUTIONARY NOTE
As a matter of abundant caution and although not applicable in the case of Bonds, attention of applicants is specially drawn to the
provisions of sub-section (1) of section 68A of the Act, which is reproduced below:
“Any person who:
a) makes, in a fictitious name, an application to a company for acquiring, or subscribing for, any shares therein, or
b) otherwise induces a company to allot, or register any transfer of, shares therein to him, or any other person in a fictitious name,
shall be punishable with imprisonment for a term which may extend to five years.”
MINIMUM-MAXIMUM TARGET
We propose to make Public Issue of Unsecured Redeemable Bonds in the nature of Debentures aggregating Rs. 700 crore including an
Over Subscription Option of Rs 350 crore.
MINIMUM SUBSCRIPTION
We can retain any amount received by us even if it is less than 90% of the issue size.
LETTER(S) OF ALLOTMENT / REFUND ORDER(S) AND INTEREST IN CASE OF DELAY IN DESPATCH
We shall despatch the letter(s) of allotment or Bond certificate(s)/letter(s) of regret/refund order(s), as the case may be, by Registered Post/
Speed Post at the applicant’s sole risk, within 10 weeks from the date of closure of the Issue. However, refund orders up to Rs. 1,500/- will
be sent under certificate of posting.
a) as far as possible, allotment of securities offered to the public shall be made within 30 days of the closure of the Issue;
b) we shall pay interest @ 15 per cent per annum if the allotment has not been made and/or the Refund Orders have not been despatched
to the investors within 30 days from the date of the closure of the Issue, for the delay beyond 30 days.
We will provide adequate funds to the Registrar to the Issue, for this purpose.
ISSUE PROGRAMME
THE ISSUE WILL OPEN FOR SUBSCRIPTION AT THE COMMENCEMENT OF BANKING HOURS AND CLOSE AT THE CLOSE OF BANKING
HOURS ON THE DATES INDICATED BELOW OR EARLIER OR ON SUCH EXTENDED DATE (SUBJECT TO A MAXIMUM OF 21 WORKING
DAYS) AS MAY BE DECIDED AT THE DISCRETION OF THE COMMITTEE OF DIRECTORS OF ICICI BANK, SUBJECT TO NECESSARY
APPROVALS:
ISSUE OPENS ON : SATURDAY MARCH 26, 2005

ISSUE CLOSES ON : THURSDAY MARCH 31, 2005
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March 2005
ISSUE MANAGEMENT TEAM SOLICITORS & ADVOCATES

LEAD MANAGER TO THE ISSUE M/S. AMARCHAND & MANGALDAS &
SURESH A. SHROFF & CO.
DSP MERRILL LYNCH LIMITED
Peninsula Chambers,
Mafatlal Centre, 10th Floor, Peninsula Corporate Park,
Nariman Point, Ganpatrao Kadam Marg,
Mumbai 400 021. Lower Parel,
Tel. No.: (022) 5632 8000 Mumbai 400 013
Fax No.: (022) 2204 8518
M/S. KHAITAN AND COMPANY
ENAM FINANCIAL CONSULTANTS PRIVATE LIMITED Emerald House
801/802, Dalamal Towers, 1B Old Post Office Street
Nariman Point, Kolkata 700 001.
Mumbai 400 021. KHAITAN & JAYAKAR
Tel. No.: (022) 5638 1800 SUD BUDHIRAJA & VOHRA
Fax No.: (022) 2284 6824 D- 41, Defence Colony,
JM MORGAN STANLEY PRIVATE LIMITED New Delhi 110 024.
141, Maker Chambers III, M/S. RANGARAJAN AND PRABHAKARAN
Nariman Point, New No.315, (Old No. 152),
Mumbai 400 021. Thambu Chetty Street,
Tel. No.: (022) 5630 3030 Chennai 600 001.
Fax No.: (022) 5630 1694
LEGAL ADVISOR TO THE ISSUE
BAJAJ CAPITAL LIMITED
M/S. AMARCHAND & MANGALDAS &
Agra Building, Ground Floor,
SURESH A. SHROFF & CO.
7/9, Oak Lane,
Peninsula Chambers,
Mumbai 400 023. Peninsula Corporate Park,
Tel. No.: (022) 5637 6999 Ganpatrao Kadam Marg,
Fax No.: (022) 5637 6994 Lower Parel,
RR FINANCIAL CONSULTANTS LIMITED Mumbai 400 013
133-A, 13th Floor, A- Wing,
AUDITORS
Mittal Tower, Nairman Point,
Mumbai 400 021. S. R. BATLIBOI & CO.
Tel. No.: (022) 2288 6627 Chartered Accountants
Fax No.: (022) 2285 1925 Express Tower, 6th floor
Nariman Point
KJMC GLOBAL MARKET (INDIA) LIMITED Mumbai 400 021
168, Atlanta, 16th Floor, Tel : 2287 6485 / 86
Nariman Point, Fax : 2287 6401
Mumbai 400 021. Email id: srbatliboi.company@in.ey.com
Tel. No.: (022) 2283 2350 / 2288 5201
Fax No.: (022) 2285 2892 TRUSTEES FOR THE BONDHOLDERS
ICICI SECURITIES LIMITED THE WESTERN INDIA TRUSTEE &

163, Backbay Reclamation EXECUTOR COMPANY LTD.
H. T. Parekh Marg, Churchgate, Viswasthan Bhavan,
218, Pratap Ganj Peth,
Mumbai 400 020.
Satara 415 002.
Tel. No.: (022) 2288 2460/70
Tel. No.: (02162) 280075
Fax No.: (022) 2288 2312
Fax No.: (02162) 284686
KARVY INVESTOR SERVICES LIMITED
“Karvy House”, BANKERS TO THE ISSUE
46, Avenue 4, Street No. 1, BANK OF MAHARASHTRA
Banjara Hills, Merchant Banking Division,
Hyderabad 500 034. 85, Maker Towers “E”,
Tel. No.: (040) 2331 2454 Ground Floor, Cuffe Parade,
Fax No.: (040) 2337 4714 Mumbai 400 005.
REGISTRAR TO THE ISSUE CENTRAL BANK OF INDIA
Mumbai Main Office,
MCS LIMITED
Mahatma Gandhi Road,
Sri Padmavathi Bhavan,
Mumbai 400 023.
Plot No. 93, Road No.16,
MIDC, Andheri (East), ICICI BANK LIMITED
Mumbai 400 093. Capital Markets Division
Tel. No.: (022) 2820 1785 30, Mumbai Samachar Marg,
Fax No.: (022) 2820 1783 Fort, Mumbai 400 001.
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March 2005
PUNJAB AND SIND BANK The Investors can contact the Compliance Officer in case of any pre-
Merchant Banking Bureau, issue/post-issue related problems such as non-receipt of letters of
J. K. Somani Bldg., allotment/bond certificates/refund orders etc.
British Hotel Lane, Off Mumbai Samachar Marg, CREDIT RATING
Fort, Mumbai 400 023.
We have obtained credit rating for an amount of Rs. 4,000 crore
THE FEDERAL BANK LIMITED from the following agencies:
Merchant Banking Bureau
The Credit Analysis & Research Limited (CARE) has assigned a rating
First Floor, 32, Mumbai Samachar Marg,
of “CARE AAA” (Pronounced as “CARE triple A”) to these Bonds.
Fort, Mumbai 400 001. This is the highest rating for such instruments. Instruments carrying
THE SANGLI BANK LIMITED this rating are considered to be of the best quality, carrying negligible
296, Perin Nariman Street, investment risk. Debt services payments are protected by stable
Post Box No. 789, Gr. Flr., Fort, cash flows with good margin. While the underlying assumptions
Mumbai 400 001. may change, such changes as can be visualised are most unlikely to
impair the strong position of such instruments.
BROKERS/AGENTS TO THE ISSUE
ICRA Limited (ICRA) has assigned a rating of “LAAA” (Pronounced L
All members of the recognized Stock Exchanges and bankers to triple A) to these Bonds. This is the highest rating for such instrument.
the Issue may act as Brokers to the Issue. Agents appointed by This rating indicates highest safety and a fundamentally strong
ICICI Bank would act as agents to the Issue. position. Risk factors are negligible. There may be circumstances
adversely affecting the degree of safety but such circumstances, as
CHIEF FINANCIAL OFFICER may be visualised, are not likely to affect the timely payment of
principal and interest as per terms.
MR. N. S. KANNAN
Chief Financial Officer & Treasurer Necessary co-operation would be given to the credit rating agencies
ICICI Bank Limited, in providing true and adequate information till the debt obligations
in respect of the Bonds are outstanding.
ICICI Bank Towers,
Bandra-Kurla Complex, Credit Rating of all listed Bonds and debentures issued by us and
Mumbai 400 051 ICICI during the last five years have been disclosed under the head
“Previous Debenture/Bond Issue” on pages 219 to 227 of this
Tel. No.: (022) 2653 1414
Prospectus.
Fax No.: (022) 2653 1122
Please note that the rating is not a recommendation to buy, sell or
COMPLIANCE OFFICER AND COMPANY SECRETARY hold securities and investors should take their own decision. The
MR. JYOTIN MEHTA ratings may be subject to revision or withdrawal or suspension at
General Manager and Company Secretary any time in the future by the assigning rating agency on the basis of
ICICI Bank Limited, new information, etc. Each rating should be evaluated independently
ICICI Bank Towers, of any other rating.
Bandra-Kurla Complex, UNDERWRITING
Mumbai 400 051
Tel. No.: (022) 2653 1414 The Issue of Bonds has not been underwritten.
Fax No.: (022) 2653 1122
E-mail: investor@icicibank.com
5
March 2005
II. CAPITAL STRUCTURE
(As on December 31, 2004) (Rs. in Crore)
1. SHARE CAPITAL
A) AUTHORISED
1,550,000,000 Equity Shares of Rs. 10/- each 1,550.00
350 Preference Shares of Rs. 1,00,00,000/- each 350.00
B) ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL (1)
61,63,91,905 Equity Shares of Rs. 10/- each 616.39
Less: Calls unpaid (0.11)
Add: Forfeited (nil) equity shares 0.01
Add: Issued 11,95,36,244 equity shares
of Rs. 10/- each [refer note 1 (e), (f) & (g)] 119.54
Share capital suspense (net) (Refer note 4) 0.06
735.89
C) ISSUED, SUBSCRIBED AND PAID UP PREFERENCE SHARE CAPITAL (2) AND (3)
350 Shares of Rs. 1,00,00,000/- each 350.00 1,085.89
2. DEPOSITS AND BORROWINGS

A) Deposits 81,928.28
Total (A) 81,928.28
B) Borrowings
(i) Borrowings in India
Unsecured Redeemable Debentures/ Bonds (Subordinated for Tier-II capital) 8,176.36

Loans and Advances from the Government of India 380.65
Debentures and Bonds (Guaranteed by the Government of India) 1,481.50
Tax Free Bonds -
Other Debentures and Bonds 11,273.11
From Banks and Financial Institutions 8,916.84
Deposits taken over from erstwhile ICICI Limited 262.80
Total (B) (i) 30,491.26
(ii) Borrowings outside India
From Multilateral/ Bilateral Credit Agencies 2,562.76
(Guaranteed by Government of India equivalent of Rs. 2,112.47 crore)
From International Banks, Institutions and Consortiums 4,962.14
Other Bonds and Notes 3,105.50
Total (B) (ii) 10,630.40
Total Borrowings (B) (i) and (ii) 41,121.66
Total Deposits and Borrowings (A) and (B) 123,049.94
Secured borrowing in (B) (i) and (ii) are Rs. NIL
3. PRESENT ISSUE TO PUBLIC THROUGH THIS PROSPECTUS

Public Issue of Bonds (with a right to retain oversubscription up to Rs. 350 crore) 350.00
Notes: Pursuant to the amalgamation of ICICI Limited with ICICI Bank, ICICI Bank had increased the authorised share capital to 2,250.00
crores subsequent to March 31,2002. The Form No. 5 alongwith registration fee is yet to be filed with ROC, Gujarat and representation
has been made to the Ministry of Company Affairs in this regard. Further, the authorised capital of ICICI Bank has been reduced to
Rs.1900,00,00,000 divided into 155,00,00,000 equity shares of Rs.10 each and 350 preference shares of Rs.1 crore each vide Reserve
Bank of India approval letter dated January 16, 2003.
1 Category (1) B includes
a) 31,818,180 underlying equity shares consequent to the ADS issue
b) 23,539,800 equity shares issued to the equity share holders of Bank of Madura Limited on amalgamation
c) 264,465,582 equity shares issued to the equity share holders [excluding ADS holders] of ICICI Limited on amalgamation
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March 2005
d) 128,207,142 underlying equity shares issued to the ADS holders of ICICI Limited on amalgamation
e) 108,928,571 equity shares issued consequent to public issue vide prospectus dated April 12, 2004.
f) 6,992,187 equity shares on exercise of the green shoe option.
g) 3,615,486 equity shares on exercise of employee stock options (March 31, 2004 :3,370,604 equity shares).
2 Represents face value of 350 preference shares of Rs. 10 million each issued to preference share holders of erstwhile ICICI Limited
on amalgamation redeemable at par on April 20, 2018
3. The notification from Ministry of Finance, notification F.No. 13/3/2002-BOA dated April 17, 2002 has currently exempted the Bank
from the restriction of section 12(1) of the Banking Regulation Act, 1949, which prohibits issue of preference shares by banks.
4 Represents application money received for 62,750 equity shares of Rs. 10 each on exercise of employee stock option.
5. Our share capital history
Date of No. of Equity Face Value Issue Price Nature of Payment
Allotment Shares (Rs.) (Rs.)
January 27, 1994 700 10 10.00 Signatories to the Memorandum of Association.
April 28, 1994 150,000,000 10 10.00 Promoter’s contribution.
June 7, 1997 15,000,000 10 35.00 Promoter’s contribution.
March 31, 2000 31,818,180 10 239.91 ADR Issue.
April 17, 2001 23,539,800 10 10.00 Issue of shares to shareholders of Bank of Madura upon merger
with ICICI Bank in ratio of 2:1
June 11, 2002 392,672,724 10 10.00 Issue of shares to shareholders of ICICI upon amalgamation with
ICICI Bank in the ratio of 1:2
December 11, 2002 3,000 10 105.00 Allotment of shares under ESOS
June 30, 2003 970 10 120.35 Allotment of shares under ESOS
July 22, 2003 11,550 10 120.35 Allotment of shares under ESOS
August 5, 2003 3,000 10 105.00 Allotment of shares under ESOS
September 1, 2003 43,020 10 120.35 Allotment of shares under ESOS
September 1, 2003 375 10 164.00 Allotment of shares under ESOS
October 6, 2003 18,750 10 120.35 Allotment of shares under ESOS
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March 2005
Date of No.of Equity Face Value Issue Price Nature of Payment

November 3, 2003 24,376 10 120.35 Allotment of shares under ESOS
November 3, 2003 500 10 171.10 Allotment of shares under ESOS
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March 2005

January 5, 2004 28,980 10 120.35 Allotment of shares under ESOS
January 19, 2004 350 10 120.50 Allotment of shares under ESOS
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March 2005

February 2, 2004 6,390 10 120.35 Allotment of shares under ESOS
February 2, 2004 375 10 170.00 Allotment of shares under ESOS
March 2, 2004* -13,103 10 - Forfeiture of equity shares for non payment of allotment/call
money
March 5, 2004 7,510 10 120.35 Allotment of shares under ESOS
March 8, 2004 400 10 120.50 Allotment of shares under ESOS
March 8, 2004 250 10 266.80 Allotment of shares under ESOS
April 21, 2004 100,157,271 10 280.00 Fully paid shares under public issue – April 2004
April 21, 2004 8,771,300 10 280.00 Partly paid equity shares of face value of Rs. 10/- each, on
which Rs. 150 paid up (Rs. 5/- towards share capital and Rs. 145/-
towards share premium) issued under the public issue. The
balance amount of Rs. 130/- (Rs. 5/- towards share capital and
Rs. 125/- towards share premium) payable on Call
April 27, 2004 73,328 10 120.35 Allotment of shares under ESOS
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March 2005

May 4, 2004 90,370 10 120.35 Allotment of shares under ESOS
May 10, 2004 625 10 266.80 Allotment of shares under ESOS
May 24, 2004 6,992,187 10 280.00 Fully paid equity shares of face value of Rs. 10/- each issued
under the Green Shoe Option of public issue
June 7, 2004 12,265 10 120.35 Allotment of shares under ESOS
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March 2005

July 6, 2004 700 10 164.00 Allotment of shares under ESOS
August 2, 2004 700 10 170.00 Allotment of shares under ESOS
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March 2005

August 30, 2004 170 10 132.05 Allotment of shares under ESOS
13
March 2005

October 4, 2004 920 10 120.50 Allotment of shares under ESOS
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March 2005

December 20, 2004 900 10 120.50 Allotment of shares under ESOS
15
March 2005

January 3, 2005 7,125 10 170 Allotment of shares under ESOS
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March 2005

February 7, 2005 4,255 10 120.35 Allotment of shares under ESOS.
February 14, 2005 15,000 10 105 Allotment of shares under ESOS.
February 14, 2005 800 10 120.50 Allotment of shares under ESOS.
* Date of forfeiture
17
March 2005
6. Prior to the amalgamation, ICICI was our promoter. There are now no identifiable promoters, hence the details regarding the
shareholding of the promoters and details of the transactions by them in our securities are not applicable.
7. We have not entered into any standby, buy-back or similar arrangements for these Bonds.
8. We may, at our discretion, raise a bridge loan against the proceeds of the Issue.
9. None of the Directors have, either directly or indirectly, undertaken transactions in our shares in the last six months preceding the
date on which the Prospectus is filed with SEBI except as stated below:
Sr. Date of Transaction* Transferor Transferee/Allottee No. of Shares Nature of Transaction
No.
a, November 19, 2004 Ms. Chanda D. Kochhar 1,000 Sale
November 26, 2004 Ms. Chanda D. Kochhar 1,000 Sale
December 3, 2004 Ms. Chanda D. Kochhar 1,000 Sale
December 6, 2004 Ms. Chanda D. Kochhar 6,000 ESOS Allotment
December 10, 2004 Ms. Chanda D. Kochhar 300 Sale
February 28, 2005 Ms. Chanda D. Kochhar 3,500 ESOS Allotment
b. September 2, 2004 Dr. Nachiket Mor 3,616 Sale
September 3, 2004 Dr. Nachiket Mor 19,967 Sale
September 4, 2004 Dr. Nachiket Mor 7,417 Sale
c September 3, 2004 Ms. Lalita D. Gupte 10,000 ESOS Allotment
October 18, 2004 Ms. Lalita D. Gupte 10,000 ESOS Allotment

* Information received from the depositories on the dates mentioned
10. We have not issued any shares or debentures or agreed to issue any shares or debentures for consideration other than cash other
than that mentioned elsewhere in the Prospectus, within the two years preceding the date of this Prospectus.
11. The number of our shareholders as on March 5, 2005 was 4,53,385.
12. At any given time there shall be only one denomination for our equity shares and we shall comply with such disclosure and
accounting norms as specified by SEBI from time to time.
13. The following tables set forth, for the dates indicated, our top 10 shareholders and their holdings.
a. At March 5, 2005
Name Shares held % Shareholding
1 Deutsche Bank Trust Company Americas 160,025,318 21.73
2 Life Insurance Corporation of India 71,531,991 9.71
3 Allamanda Investments Pte. Ltd 66,234,627 9.00
4 HWIC Asia Fund 33,965,361 4.61
5 Government of Singapore 30,958,244 4.20
6 Bajaj Auto Limited 22,790,381 3.10
7 M & G Investment Management Ltd A/c The Prudential Assurance Co. Ltd 18,105,484 2.46
8. The New India Assurance Company Limited 17,496,338 2.38
9 Merrill Lynch Capital Markets Espana SA SVB 11,906,777 1.62
10 Templeton Global Advisors Ltd A/c Templeton Funds Inc (Templeton Foreign Fund) 11,341,987 1.54
Note:Deutsche Bank Trust Company Americas holds the equity shares represented by 80.01 million American Depositary Receipts
outstanding, as depositary on behalf of the holders of the American Depositary Receipts. The American Depositary Receipts are listed
on the New York Stock Exchange. The depositary has the right to vote on the Equity Shares represented by the American Depositary
Receipts as directed by our Board of Directors. Under the Banking Regulation Act, no person holding shares in a banking company can
exercise more than 10.0% of the total voting power. This means that Deutsche Bank Trust Company Americas (as depositary), which
owned approximately 21.73% of our equity shares as of March 5, 2005, can only vote 10.0% of our equity shares. Pursuant to the terms
of our ADR issuance, Deutsche Bank Trust Company Americas votes in accordance with the directions of our Board of Directors.
18
March 2005
b. At At February 26, 2005

2 Life Insurance Corporation of India 71,531,991 9.72
3 Allamanda Investments Pte. Ltd 66,234,627 9.00
4 HWIC Asia Fund 33,965,361 4.61
5 Government of Singapore 30,958,244 4.20
8 M & G Investment Management Ltd A/c The Prudential Assurance Co. Ltd 18,105,484 2.46
7 The New India Assurance Company Limited 17,496,338 2.38
9 Merrill Lynch Capital Markets Espana SA SVB 11,993,177 1.63
10 Templeton Global Advisors Ltd A/c Templeton Funds Inc (Templeton Foreign Fund) 11,341,987 1.54
c. At March 11, 2003
2 Life Insurance Corporation Of India 50,948,413 8.31
3 Orcasia Limited - Class A Shares 45,481,626 7.42
4 Government Of Singapore 27,817,783 4.54
6 Unit Trust of India 19,117,827 3.12
7. M & G Investment Management Limited A/c The Prudential Assurance Co. Ltd. 18,980,477 3.10
8 The New India Assurance Company Limited 17,276,695 2.82
9 Emerging Markets Growth Fund Inc. 13,193,690 2.15
10 General Insurance Corporation of India 9,881,295 1.61
14. The following table sets forth, at March 5, 2005, certain information regarding the total ownership of our Equity Shares.
Number of Shares Percentage
Shareholding
Government Financial Institutions 115,990,520 15.75
Public Sector Banks and Govt. Companies 653,939 0.09
NRIs/ OCBs/ FIIs and Foreign Banks 360,491,547 48.96
ADRs 160,025,318 21.73
Mutual Funds 10,325,471 1.40
Bodies Corporates 35,545,235 4.83
Other Banks 74,575 0.01
Indian Public 53,218,571 7.23
Total 736,325,176 100.00
Relationship with the Government of India
We operate as an autonomous commercial enterprise, making decisions and pursuing strategies that are designed to maximise
shareholder value. Prior to the amalgamation, ICICI was our promoter. We now have no identifiable promoters. The Indian Government
has never directly held any of our or ICICI’s shares. Reflecting the dominant role of the Indian government in the Indian economy and
pursuant to the nationalisation of Indian insurance companies, which were among ICICI’s largest shareholders, in the 1950s and the
1960s, ICICI’s principal shareholders were Government-controlled. They included the Life Insurance Corporation of India, the General
Insurance Corporation of India, Government-owned general insurance companies and the UTI. Consequent to the amalgamation of
ICICI with us, these Government-controlled shareholders have received our shares in exchange for their shareholding in ICICI. There is
no shareholders’ agreement or voting trust relating to the ownership of the shares held by the Government-controlled shareholders.
19
March 2005
15. Employee Stock Option Scheme

We have since fiscal 2000 instituted ESOS to enable our employees, including wholetime Directors and employees deputed to
other companies, to participate in our future growth and financial success. ICICI had also granted stock options to its wholetime
Directors and employees. As per the ESOS, as amended, the maximum number of options granted to any employee is limited to
0.05% of our issued equity shares at the time of the grant, and the aggregate of all such options is limited to 5.0% of the aggregate
of the number of issued equity shares on the date(s) of grant of options under the ESOS. In accordance with the Scheme of
Amalgamation, Directors and employees of ICICI and its subsidiaries and affiliate companies have received stock options in us
equal to half the number of their outstanding unexercised stock options in ICICI. The exercise price of these ICICI Bank options is
twice the exercise price for the ICICI stock options. All other terms and conditions are similar to those applicable under ESOS.
The following table sets forth, the particulars of options granted under ESOS at February 28, 2005
a. Options granted 28,956,975
b. Exercise Price Note 1
c. Options vested 11,481,477
d. Options exercised 7,403,067
e. Total number of Equity Shares arising as a result of
exercise of options 7,403,067
f. Options forfeited / lapsed 2,889,140
g. Extinguishment or modification of options Nil
h. Money realised by exercise of options (Rs.) 1,097,450,014
i. Total number of options in force 18,664,768
j. Person-wise details of options granted to
(i) Directors and key managerial employees Details as below
(ii) Any other employee who has received a grant
in a year of options amounting to 5% or more
of options granted during that year None
(iii) Identified employees who are granted options,
during any one year equal to or exceeding 1% of our
issued capital (excluding outstanding warrants and
conversions) at the time of grant None
k. Dilution in EPS Not meaningful
l. Vesting schedule 20% at the end of one year, 30% at the end of
two years and 50% at the end of three years
from the date of grant of options.
All options granted for FY2004 and beyond
vest in a graded manner over a four-year
period with 20%, 20%,30% and 30% of the
grants vesting each year, commencing from the
end of 12 months from the date of grant.
m. Lock-in 30 days from the date of allotment
(1) The exercise price for options granted prior to June 30, 2003 is equal to the market price of our equity shares on the
date of grant on the stock exchange that recorded the highest trading volume on the date of grant.
The exercise price for options granted after June 30, 2003 and upto September 19, 2004 is equal to the average of the
high and low market price of the equity shares in the two week period preceding the date of grant of the options, on
the stock exchange which recorded the highest trading volume during the two week period.
The exercise price of options granted on and after September 20, 2004 is equal to the closing price of our equity
shares on the stock exchange that recorded the highest trading volume on the date prior to the grant date.
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March 2005
The following table sets forth details of options granted to senior managerial personnel at February 28, 2005 and shares of ICICI
Bank held by them at March 5, 2005.
Name Position Stock Options Shares held at Options
granted Mar. 5, 2005(1) Outstanding
Mr. K. V. Kamath Managing Director &
Chief Executive Officer 775,000 68,500 686,000
Ms. Lalita D. Gupte Joint Managing Director 630,000 51,987 560,500
Ms. Kalpana Morparia Deputy Managing Director 490,000 21,190 470,000
Ms. Chanda D. Kochhar Executive Director 380,000 84,231 2,96,500
Dr. Nachiket Mor Executive Director 377,000 0 250,000
Mr. Bhargav Dasgupta Senior General Manager 173,475 4,800 167,475
Mr. M. N. Gopinath Senior General Manager 170,250 19,250 116,300
Mr. N. S. Kannan Chief Financial Officer & Treasurer 187,400 7,600 167,920
Mr. Sanjiv Kerkar Senior General Manager 185,500 4,344 185,500
Ms. Vishakha Mulye Senior General Manager 135,975 16,195 113,280
Ms. Ramni Nirula Senior General Manager 244,500 26,500 192,000
Ms. Madhabi Puri-Buch Senior General Manager 204,900 1,411 147,450
Mr. Nagesh Pinge Senior General Manager 157,500 31,983 111,300
Mr. P. H. Ravikumar(2) Senior General Manager 154,700 17,250 66,200
Mr. K. Ramkumar Senior General Manager 105,000 650 87,000
Mr. Balaji Swaminathan Senior General Manager 255,000 33,000 179,000
Mr. V. Vaidyanathan Senior General Manager 184,900 32,720 124,950
(1) As per records of our Registrar.
(2) Mr. P. H. Ravikumar is on deputation to National Commodities & Derivatives Exchange of India Limited.
21
March 2005
III. TERMS OF THE PRESENT ISSUE available to the eligible investors and assuming that a surcharge
of nil% and education cess of 2% of tax is payable in case of all
We are offering for public subscription Unsecured Redeemable the options
Bonds in the nature of Debentures aggregating Rs.350 crore with a #
right to retain oversubscription upto Rs. 350 crore. Rounded off to nearest multiple of 0.1
The Bonds being offered are subject to the provisions of the Act, the Notes:
Memorandum and Articles of Association, the terms of this (i) Under section 88 of the I.T. Act, Individuals and HUFs would be
Prospectus, Application Form and other terms and conditions as entitled to claim rebate on investments made up to Rs. 1,00,000/-.
may be incorporated in the Trustee Agreement, letter(s) of allotment (ii) Investors applying for Option II would be entitled to benefit
and/or Bond certificate(s). Over and above such terms and conditions, under section 88 in respect of Issue Price only and not on the
the Bonds shall also be subject to laws as applicable, guidelines, Face Value of the Bond.
notifications and regulations relating to the issue of capital and listing
of securities issued from time to time by SEBI/the Government of For Tax Benefits under Options I (Annual Interest):
India/RBI and/or other authorities and other documents that may be — For Resident refer points 1,3,4 & 5 of IIA of the Tax Benefits.
executed in respect of the Bonds.
— For NRI refer points 1,3,4,5 & 6 of IIB of the Tax Benefits.
NATURE OF BONDS — For Other Eligible Institutions refer points 1 & 2 of IIC of the Tax
We are offering for subscription for cash the following types of Benefits.
Bonds in the nature of Debentures:
For Tax Benefits under Options II (in the nature of Deep Discount
Tax Saving Bond Bond):
Regular Income Bond — For Resident refer points 1 to 5 of IIA of the Tax Benefits.
Children Growth Bond — For NRI refer points 1 to 6 of IIB of the Tax Benefits.
RBI vide its Notification No. FEMA 4/2000-RB dated May 3, 2000 has — For Other Eligible Institutions refer points 1 & 2 of IIC of the Tax
granted general permission for NRIs to invest in Bonds on repatriation Benefits.
and on non-repatriation basis subject to certain conditions
mentioned elsewhere in this Prospectus. Payment of Interest
1. TAX SAVING BOND Option I (Annual Interest)

Investors can avail of rebate under section 88 of the I.T. Act by Interest will be paid on May 1 each year. The first interest payment
investing in this Bond. will be made on May 1, 2006 for the period commencing from the
Deemed Date of Allotment and the last interest payment will be
The proceeds from this Bond shall be deployed towards
made at the time of Redemption of the Bond on a pro-rata basis.
infrastructure projects in accordance with the Income-tax Rules.
The Central Board of Direct Taxes (CBDT), Department of Revenue, Option II
Ministry of Finance, Government of India has vide its letter F. No.178/ Tax Saving Bond Option II is in the nature of Deep Discount Bond.
63/2004-ITA.I dated January 6, 2005 declared the Tax Saving Bond This Bond would be issued at an Issue Price of Rs. 5,000/- and would
as eligible security for the purpose of clause (xvi) of sub-section (2) be redeemed at the Face Value of Rs. 6,630 at the end of 5 years
of section 88 of the I.T. Act. The tax rebate under section 88 can be from the Deemed Date of Allotment. Hence, no periodic interest
availed of by NRIs in accordance with the prevailing provisions of payment will be made.
the I.T. Act.
Section 115I of the I.T. Act, gives an option to the non-resident Taxation
Indian either to be assessed as per the normal provisions applicable
Section 88
to a resident Indian, or, to be assessed under the special provisions
of Chapter XII-A of the I.T. Act. Under section 88 of the I.T. Act, subscription to the Tax Saving Bond
The investor may choose any/all of the following options in respect (Options I and II) would entitle Individuals and HUFs to a rebate from
for Tax Saving Bond: income tax as indicated below
Option I II Gross Total Income (Rs.) Maximum Rebate available under
section 88*
Tax Benefit Under section 88 88
0 – 150,000 Rebate @20% on tax saving
Issue Price (Rs.) 5,000 5,000
investments of Rs.100,000
Face Value (Rs.) 5,000 6,630
150,001 - 500,000 Rebate @15% on tax saving
Tenure 5 years 5 years investments of Rs.100,000
Interest (%) (p.a.)* 5.80 DDB@ 500,001 & Above Nil
(YTM 5.8*)
* Rebate under section 88 is available on the aggregate of the
Interest Payable Annually DDB@ sums paid or deposited up to Rs. 1,00,000/-, including
Minimum Application 1 Bond 1 Bond subscription to Tax Saving Bonds of the Issuer Company.
Yield to Investor (%)*># In case of individuals / HUFs with Gross Total Income before
(Including Tax benefits) 9.8 9.4 giving effect to the deduction under Chapter VIA upto Rs 1,50,000
@
- 20% of the aggregate of the sums paid or deposited upto Rs.
Tax Saving Bond-Option II is in the nature of Deep Discount 1,00,000 in a financial year by the tax payer as prescribed in
Bond (DDB), hence no periodic interest is payable.
clause (xvi) of sub-section 2 of section 88 of the I.T. Act subject
* Subject to TDS as per the then prevailing tax laws. to the conditions and the specific provision made in this behalf
>
The Yield has been calculated considering tax rebate of 15% under section 88 of the I.T. Act.
22
March 2005
In case of individuals / HUFs with Gross Total Income before For Tax Benefits under Options I,II and III (Annual Interest):
giving effect to the deduction under Chapter VIA more than
— For Resident refer points 1,4 & 5 of IIA of the Tax Benefits.
1,50,000 upto Rs 5,00,000 - 15% of the aggregate of the sums
paid or deposited upto Rs. 1,00,000 in a financial year by the — For NRI refer points 1,4,5 & 6 of IIB of the Tax Benefits.
tax payer as prescribed in clause (xvi) of sub-section 2 of section — For Other Eligible Institutions refer points 1 & 2 of IIC of the Tax
88 of the I.T. Act subject to the conditions and the specific Benefits.
provision made in this behalf under section 88 of the I.T. Act.
In case of individuals / HUFs with Gross Total Income before Payment of Interest
giving effect to the deduction under Chapter VIA above Rs Interest will be paid on May 1 each year. The first interest payment
5,00,000 – no rebate would be available under section 88 of the will be made on May 1, 2006 for the period commencing from the
I.T. Act.
Deemed Date of Allotment and the last interest payment will be
Further an individual shall be entitled to an enhanced rate of made at the time of Redemption of the Bond on a pro-rata basis.
rebate @ 30% if his income chargeable under the head “salaries”
does not exceed Rs.1,00,000 before allowing deduction under See also “Common Features, Terms and Conditions of the Bonds”.
section 16 and is not less than 90% of the gross total income 3. CHILDREN GROWTH BOND
subject to and in accordance with the specific provisions made
in this behalf under section 88 of the I.T. Act. This Bond has been designed to provide for lumpsum expenditure
If investment of a lower amount is made, tax rebate would be requirements once the child has grown up for events such as the
available at the applicable rate as specified above of the amount child’s wedding, higher education etc.
invested, subject to fulfilment of prescribed conditions. Each Children Growth Bond in the nature of Deep Discount Bond
To avail of benefit under section 88, such investment needs to be will have a different Face Value under each Option and will be issued
held for a period of at least three years. In case the Bonds are sold at a discounted price.
or otherwise transferred by the investor at any time within a period
of three years from the date of acquisition, the amount of deduction Investors can choose any/all of the following options:
of income-tax allowed in respect of these Bonds shall be deemed to Option I II
be tax payable by the investor for the assessment year relevant to
the previous year in which the Bonds are sold or otherwise transferred Issue Price (Rs.) 5,000 5,000
and shall be added to the amount of income-tax on the total income Tenure 7 years 10 years
of the assessee with which he is chargeable for such assessment
year. Face Value (Rs.) 8,000 10,000
Section 88D of the I.T. Act Minimum Application 2 Bonds 2 Bonds
As per the provisions of the Finance (No.2) Act, 2004, a resident Yield to Investor (%)*# 6.9 7.2
individual assessee, whose income does not exceed Rs.1,00,000 * Subject to TDS as per the then prevailing tax laws.
shall be entitled to a tax rebate of 100% on his total income chargeable
to tax in accordance with the provisions of section 88D of the I.T. # Rounded off to nearest multiple of 0.1
Act.
For Tax Benefits under Options I and II :
See also “Common Features, Terms and Conditions of the Bonds”.
— For Resident refer points 1,2,4 & 5 of IIA of the Tax Benefits.
2. REGULAR INCOME BOND
— For NRI refer points 1,2,4,5 & 6 of IIB of the Tax Benefits.
This Bond has been designed keeping in view the need for a regular
— For Other Eligible Institutions refer points 1 & 2 of IIC of the Tax
income to meet expenses that are incurred on a regular basis - for
example, household expenses. The product also helps provide a Benefits.
source of income to individuals who have either a variable income See also “Common Features, Terms and Conditions of the Bonds”.
(Self Employed Professional, etc.) or who have retired (including
those who have opted for VRS). COMMON FEATURES, TERMS AND CONDITIONS OF THE BONDS
Issue Price/ Face Value : Rs. 5,000 Interest on Application Money
Redemption : At Face Value, i.e., Rs. 5,000
No interest on application money will be paid to any investor.
The investors can choose any/all of the following options in respect
of payment of interest. Deemed Date of Allotment
Option I II III The Deemed Date of Allotment for the issue has been fixed as 30
Minimum Application 3 Bonds 3 Bonds 3 Bonds days from the date of closure of the Issue or date of utilisation of
Issue Price/Face Value (Rs.) 5,000 5,000 5,000 proceeds, whichever is earlier. All benefits relating to the Bonds will
Tenure 5 years 7 years 10 years be available to the investors from the Deemed Date of Allotment.
Interest (%) (p.a.)* 6.75 7.00 7.25 The actual allotment may occur on a date other than the Deemed
Date of Allotment.
Interest Payable Annually Annually Annually
Yield to Investor (%)* # 6.8 7.0 7.3 Market Lot
* Subject to TDS as per the then prevailing tax laws. The market lot will be one Bond (“Market Lot”).
# Rounded off to nearest multiple of 0.1
23
March 2005
Terms of Payment dated July 16, 2002, for example, certified true copy of Recognition
Certificate under section 10(25)(ii) of the I.T. Act, 1961 applicable
Type of Bond Minimum Amount
only for recognised employee provident funds, or (b) a declaration
Application for Payable on
(in duplicate) in the prescribed form i.e. Form15G which can be
Application
issued by all applicants (other than Companies and Firms) subject to
per Bond (Rs.)
provisions of section 197A of the I.T.Act, or (c) a certificate, from the
Tax Saving Bond Assessing Officer of the Applicant, in the prescribed form under
Option I 1 Bond 5,000/- section 197 of the I.T. Act which can be obtained by all applicants
Option II 1 Bond 5,000/- (including Companies and Firms).
Regular Income Bond To ensure non-deduction/lower deduction of tax at source from
Bonds, the resident investor should submit Form 15G / 15H / certificate
Option I 3 Bonds 5,000/- under section 197 of the I.T. Act/ other evidence, as may be
Option II 3 Bonds 5,000/- applicable, with the Application Form, or send to the Registrar along
Option III 3 Bonds 5,000/- with a copy of the application form on or before the closure of the
Issue. Subsequently, Form 15G/ 15H / certificate under section 197 of
Children Growth Bond the I.T. Act / other evidence, as may be applicable, may be submitted
Option I 2 Bonds 5,000/- to 3i Infotech Limited, Maratha Mandir Annexe, Dr. A.R. Nair Road,
Option II 2 Bonds 5,000/- Mumbai Central, Mumbai or to such person at such address as may
be notified by us from time to time, quoting the name of the sole/first
Payment of Interest on Tax Saving Bond (Option I) and Regular
Bondholder, Bondholder number and the distinctive number(s) of
Income Bond.
the Bond(s) held, at least one month prior to the interest payment
Payment of Interest on Tax Saving Bond (Option I) and Regular date.
Income Bond will be made to those Bondholders whose names
The investors need to submit Form 15G/ 15H/ certificate under section
appear in the register of Bondholders (or to first holder in case of
197 of the I.T. Act/other evidence each financial year to ensure non-
joint-holders) as on Record Date/Book Closure Date to be fixed by
deduction or lower deduction of tax at source from interest on
us for this purpose from time to time.
Bonds.
Buyers of the Bonds are advised to send the Bond Certificate(s) to us/
If the applicant is eligible to submit Form 15G/15H, then he should
3i Infotech or to such persons as may be notified by us from time to tick at the relevant place on the Application Form, so that we may
time, along with a duly executed transfer deed or other suitable send a blank copy of the form to the applicants. Blank declaration
instrument of transfer as may be prescribed by us for registration of form would be furnished to other investors by us on request made
transfer of the Bond(s). Otherwise interest will be paid to the seller atleast two months prior to the interest payment date. This facility is
and not to the buyer. In such cases, claims in respect of interest, if being provided for the convenience of investors and we would not
any, shall be settled inter se amongst the parties and no claim or be liable in any manner, whatsoever, in case the investor does not
action shall lie against us or 3i Infotech/ the Registrars. receive the form. As per the prevailing tax provisions, Form 15G
Interest payment will be made by cheques payable at par at such cannot be submitted if the aggregate of income of the nature referred
places as we may deem fit. In case the cheque payable at par facility to in section 197A of the I.T. Act viz. dividend, interest etc. as
is not available, we reserve the right to adopt any other suitable prescribed therein, credited or paid or likely to be credited or paid
mode of payment. during the financial year in which such income is to be included
We may enter into an arrangement with one or more banks in one or exceeds the maximum amount which is not chargeable to tax.
(Presently, the maximum amount of income not chargeable to tax in
more cities for direct credit of interest to the account of the investors.
case of individuals and HUFs is Rs. 50,000 and for Co-operative
In such cases, interest, on the interest payment date, would be directly
societies Rs. Nil)
credited to the account of those investors who have given their bank
mandate for such banks. Senior citizens, who are 65 or more years of age at any time during
the financial year, can submit a self-declaration in the prescribed
We may offer the facility of Electronic Clearing Service (ECS) to help
Form 15H in accordance with the provisions of section 197A of the
small investors. The terms of this facility (including towns where this
I.T. Act even if the aggregate income credited or paid or likely to be
facility would be available) would be as prescribed by RBI. Refer to
credited or paid exceeds the maximum limit i.e. Rs. 50,000 for FY
the para on “Electronic Clearing Service for Payment of Interest/ 2004-2005.
Redemption” appearing below.
In case of non-resident applicants, tax will be deducted at source on
Payment of Interest subject to Deduction of Tax at Source interest at the rates as per prevailing I.T. Act, or Double Taxation
The interest paid on refund (in case of delay beyond 30 days from Avoidance Agreement, whichever is lower, subject to submission
the date of closure of the subscription list) and interest on Bonds will of relevant documents and fulfillment of conditions as may be
be subject to deduction of tax at source at the rates prevailing from amended from time to time. Alternatively, to ensure non-deduction
time to time under the provisions of the I.T. Act or any statutory or lower deduction of tax at source, as the case may be, a certificate,
modification or re-enactment thereof. from the Assessing Officer under section 197 or section 195(3) of the
I.T. Act, should be furnished, which can be obtained by all applicants
As per the current provisions of the I.T. Act, tax will not be deducted (including Companies and Firms).
at source from interest on Bonds (in case of resident individual
Bondholders), if such interest does not exceed Rs. 2,500 in any Electronic Clearing Service for Payment of Interest/Redemption
financial year. RBI has introduced the concept of Electronic Clearing Service (ECS)
If interest on Bonds exceeds the prescribed limit (Rs. 2,500 in case through the clearing house to obviate the need for issuing and
of resident individual Bondholders), then to ensure non-deduction handling paper instruments and thereby facilitate improved customer
or lower deduction of tax at source, as the case may be, the Applicant service. This facility would be available in cities where RBI provides
should furnish either (a) an evidence for total exemption from such a facility. We may provide ECS facility to the investors as per
deduction of tax at source in terms of CBDT circular no. 4/2002 RBI Guidelines.
24
March 2005
As per the guidelines issued by RBI in this regard, the investor is Lien
required to give his mandate for ECS with all the details as per the We shall have the right of set-off and lien, irrespective of any other
format given. This will help us to credit the interest/redemption lien or charge, present as well as future on the moneys due and
amount to the investor’s account with the concerned bank at the payable to the Bondholder or deposits held in the account of the
earliest. The investors will also have the convenience of direct credit Bondholder, whether in single name or joint name, to the extent of
to their bank account without the need to receive interest/redemption all outstanding dues, whatsoever.
warrants by post and deposit the same in their bank accounts. The
relevant bank branch will credit the investor’s account and indicate Lien on Pledge of Bonds
the credit entry with ECS in the passbook/statement of account. We, at our discretion, may note a lien on pledge of Bonds if such
We may obtain the ECS mandate from the investors through the pledge of Bonds is accepted by any bank/institution for any loan
application form or subsequent to despatch of the Bond Certificate(s)/ provided to the investor against pledge of such Bonds.
Letter(s) of Allotment, we/Registrar may send to the investor a form
Depository Arrangement
to be duly filled up by those investors desiring to avail the facility of
ECS. We have made depository arrangements with National Securities
Investors who do not opt for ECS will be sent interest/redemption Depository Limited (NSDL) and Central Depository Services Limited
warrants. (CDSL) for issue and holding of the Bonds in dematerialised form.
As per the provisions of Depositories Act, 1996, the Bonds issued by
Printing of Bank Particulars on Interest/Redemption Warrants us can be held in a dematerialised form, i.e. not in the form of
As a matter of precaution against possible fraudulent encashment of physical certificates but be fungible and be represented by the
refund orders and interest/redemption warrants due to loss or statement issued through electronic mode. In this context:
misplacement, the particulars of the applicant’s bank account are i. Two tripartite agreements have been signed
mandatorily required to be given for printing on the orders/ warrants. Tripartite Agreement dated June 23, 1997 between ICICI
Applications without this detail are liable to be rejected. Bank, 3i Infotech and NSDL for offering depository option
Bank account particulars will be printed on the orders/ warrants to the investors.
which can then be deposited only in the account specified. Tripartite Agreement dated April 23, 1999 between ICICI
Status Bank, 3i Infotech and CDSL for offering depository option
to the investors.
All Bonds would constitute direct, unsecured and unsubordinated
We have applied vide letters dated October 4, 2004 to NSDL
obligations of ours and shall rank pari passu inter se and (subject to
and CDSL respectively, for umbrella approval to admit the
any obligations preferred by mandatory provisions of the law
Bonds offered in the year 2004-05 into their depository system
prevailing from time to time) shall also, as regards amount invested and have received letters dated December 3, 2004 and
and any benefits payable thereon by us out of our own funds, rank December 2, 2004 from NSDL and CDSL, respectively
pari passu with all our other existing direct, unsecured and confirming the admission subject to completion of other
unsubordinated borrowings. formalities.
These Bonds are unsecured which would mean that they are not ii. An applicant has the option to seek allotment of Bonds in
secured against any of our assets. Our main business is to grant electronic or physical mode.
loans to our borrowers, hence we do not have adequate fixed assets
iii. An applicant who wishes to apply for Bonds in the electronic
to give as security. Further, the RBI vide its guidelines dated June 11, form must have at least one beneficiary account with any of the
2004 has permitted Banks to issue only unsecured instruments. Depository Participants (DPs) of NSDL or CDSL prior to making
Moreover, terms of most overseas and domestic loans and Bonds the application.
issued by us stipulate that if we raise any secured loans or issue any
iv. The applicant seeking allotment of Bonds in the Electronic Form
secured Bonds, similar security needs to be extended to them also.
must necessarily fill in the details (including the beneficiary
Hence, all our borrowings, as also this issue of Bonds, are unsecured.
account number and DP’s ID) appearing in the Application
However, such terms of overseas and domestic loans and Bonds
form under the heading ‘Request for Bonds in Electronic Form’.
shall not apply to (i) any lien created on property, at the time of
purchase thereof, solely as security for the payment of the purchase v. Applicants must indicate in the application form, the number of
price of such property; or (ii) any statutory lien or (iii) any lien arising Bonds they wish to receive in electronic form out of the total
in the ordinary course of banking transactions or by membership of number of Bonds applied for. In case of partial allotment, Bonds
will first be allotted in electronic form and the balance Bonds, if
any clearing system.
any, will be allotted in physical form.
The Western India Trustee & Executor Company Ltd., has been
vi. Bonds allotted to an applicant in the Electronic Account Form
appointed as Trustees for the Bondholders. The Trustees would
will be credited directly to the applicant’s respective beneficiary
protect the interest of the Bondholders and take adequate steps to
account(s) with the DP.
redress the grievances of the Bondholders. In case of default, the
Bondholders can approach the Trustees or Securities & Exchange vii. For subscription in electronic form, names in the application
Board of India, or the Department of Company Affairs. form should be identical to those appearing in the account
details in the depository. In case of joint holders, the names
Loan Against Bonds should necessarily be in the same sequence as they appear in
the account details in the depository.
We may consider granting loans to Bondholders against the security
of select Bonds issued by us subject to the applicable laws, rules, viii. Non-transferable allotment advice/refund orders will be directly
regulations and guidelines. The loan shall be subject to the terms sent to the applicant by the Registrars to this Issue.
and conditions as laid down by us from time to time and be provided ix. If incomplete/incorrect details are given under the heading
at our sole discretion. For further details on this facility, the investors ‘Request for Bonds in electronic form’ in the application form, it
may contact any of our bank branches or call centre. The Articles of will be deemed to be an application for Bonds in physical
Association do not restrict us from granting loans against the Bonds. form.
25
March 2005
x. In case of allotment of Bonds in electronic form, the address, maintained by us on the Record date fixed for the purpose of
nomination details and other details of the applicant as Redemption. Also see the para “Payment on Redemption” given
registered with his/her DP shall be used for all correspondence below.
with the applicant. The Applicant is therefore responsible for
the correctness of his/her demographic details given in the Bonds held in electronic form:
application form vis-à-vis those with his/her DP. In case the No action is required on the part of Bondholder(s) at the time of
information is incorrect or insufficient, the Issuer would not be redemption of Bonds.
liable for losses, if any.
xi. It may be noted that Bonds in electronic form can be traded Payment on Redemption
only on the Stock Exchanges having electronic connectivity
with NSDL or CDSL. All the Stock Exchanges where our Bonds Bonds held in physical form:
are proposed to be listed have connectivity with NSDL and Despatch in respect of payment on redemption of the Bonds will be
CDSL. made by way of cheque/pay order, etc., only on the surrender of
xii. Separate applications in physical and dematerialised form Bond Certificate(s), duly discharged by the sole holder / all the joint-
would be considered as multiple applications and are liable to holders (signed on the reverse of the Bond Certificate(s)). Despatch
be rejected at our sole discretion. of cheques/pay order, etc. in respect of such payment will be made
on the Redemption Date or within a period of 30 days from the date
xiii. Interest or other benefits with respect to the Bonds held in of receipt of the duly discharged Bond Certificate, whichever is later.
dematerialised form would be paid to those Bondholders
whose names appear on the list of beneficial owners given by We may, at our discretion, redeem the Bonds without the requirement
the Depositories to us as on Record Date/Book Closure Date. In of surrendering of the Bond Certificates by the Bondholder(s). In
case of those Bonds for which the beneficial owner is not case we decide to do so, the redemption proceeds in the manner
identified by the Depository as on the Record Date/Book Closure stated above would be paid on the Redemption Date to those
Date, we would keep in abeyance the payment of interest or Bondholders whose names stand in the register of Bondholders
other benefits, till such time that the beneficial owner is identified maintained by us on the Record date fixed for the purpose of
by the Depository and conveyed to us, whereupon the interest Redemption. Hence the transferees, if any, should ensure lodgement
or benefits will be paid to the beneficiaries, as identified, within of the transfer documents with us before the Record Date. In case the
a period of 30 days. transfer documents are not lodged with us before the Record Date
and we despatch the redemption proceeds to the transferor, claims
Investors may note that trading of the Bonds shall be in in respect of the redemption proceeds should be settled amongst
dematerialised form only the parties inter se and no claim or action shall lie against us or 3i
Infotech/ the Registrars.
On-line Applications
Payment on redemption will be made by cheques payable at par at
We may decide to offer online application facility for Bonds, as and such places as we may deem fit. In case the cheque payable at par
when it is permitted by law subject to terms and conditions as we facility is not available, we reserve the right to adopt any other
may prescribe. suitable mode of payment.
Form and Denomination We may enter into an arrangement with one or more banks in one or
more cities for direct credit of redemption proceeds to the account
Pursuant to listing, trading in the Bonds will be in compulsory demat
of the investors. In such cases, redemption, on the redemption
segment of the Stock Exchanges. Accordingly, a single certificate payment date, would be directly credited to the account of those
for the aggregate amount (“Consolidated Certificate”) will be issued investors who have given their bank mandate for such banks.
to an investor for each type of bond allotted to him. We may, at our
discretion, only upon receipt of a request from the Bondholder, split We may offer the facility of Electronic Clearing Service (ECS) to help
such Consolidated Certificates into smaller denominations subject small investors. The terms of this facility (including towns where this
to the minimum of Market Lot. No fees would be charged for splitting facility would be available) would be as prescribed by RBI. Refer to
of Bond Certificates in Market Lots, but stamp duty payable, if any, the para on “Electronic Clearing Service for Payment of Interest/
would be borne by the Investor(s). The charge for splitting into lots Redemption” on page 24 of the Prospectus.
other than Market Lot, will be borne by the Bondholder subject to Our liability to Bondholder(s) towards his/their rights including for
the maximum amount agreed upon by us with the Stock Exchanges payment or otherwise shall stand extinguished from the date of
where the Bonds are proposed to be listed. The request for splitting redemption in all events and on our despatching the redemption
should be accompanied by the original Bond Certificate which would amounts to the Bondholder(s). Further, we will not be liable to pay
then be treated as cancelled by us. any interest, income or compensation of any kind from the date of
redemption of the Bond(s).
Procedure for Redemption by Bondholders
It may be noted that in case the redemption date fall on a holiday then
Bonds held in physical form: The Bond Certificate(s), duly the payment shall be made on the next succeeding working day.
discharged by the sole holder/all the joint-holders (signed on the
reverse of the Bond Certificate(s)) to be surrendered for redemption Bonds held in electronic form:
on maturity should be sent by the Bondholder(s) by Registered Post On the redemption date, redemption proceeds would be paid by
with acknowledgment due or by hand delivery to our office/3i cheque/pay order etc. to those Bondholders whose names appear
Infotech or to such persons at such addresses as may be notified by on the list of beneficial owners given by the Depositories to us.
us from time to time. Bondholder(s) are requested to surrender the These names would be as per the Depositories’ records on the
Bond Certificate(s) in the manner as stated above, not more than Record Date/Book Closure Date fixed for the purpose of redemption.
three months and not less than one month prior to the Redemption These Bonds will be simultaneously extinguished through
Date so as to facilitate timely payment. appropriate debit corporate action. It may be noted that in the entire
We may at our discretion redeem the Bonds without the requirement process mentioned above, no action is required on the part of
of surrendering of the Bond Certificates by the Bondholder(s). In Bondholders.
case we decide to do so, the Bondholders need not submit the Bond Payment on redemption will be made by cheques payable at par at
Certificates to us and the redemption proceeds would be paid to such places as we may deem fit. In case the cheque payable at par
those Bondholders whose names stand in the register of Bondholders facility is not available, we reserve the right to adopt any other
26
March 2005
suitable mode of payment. as may be notified by us for this purpose, at the time of registration
We may enter into an arrangement with one or more banks in one or of Bonds.
more cities for direct credit of redemption proceeds to the account Transfer of Bonds to and from NRIs will be governed by the then
of the investors. In such cases, redemption, on the redemption prevailing guidelines of RBI.
payment date, would be directly credited to the account of those
investors who have given their bank mandate for such banks. For Bonds held in electronic form: The normal procedure followed
for transfer of securities held in dematerialised form shall be followed
We may offer the facility of Electronic Clearing Service (ECS) to help for transfer of these Bonds held in electronic form. The seller should
small investors. The terms of this facility (including towns where this give delivery instructions containing details of the buyer’s DP account
facility would be available) would be as prescribed by RBI. Refer to to his depository participant.
the para on “Electronic Clearing Service for Payment of Interest/
Redemption” on page 24 of the Prospectus. In case the transferee does not have a DP account, the seller can re-
materialise the Bonds and thereby convert his demat holding into
Our liability to Bondholder(s) towards his/their rights including for physical holding. Thereafter the Bonds can be transferred in the
payment or otherwise shall stand extinguished from the date of
manner as stated above.
redemption in all events and on our despatching the redemption
amounts to the Bondholder(s). Further, we will not be liable to pay In case the buyer of the Bonds in physical form wants to hold the
any interest, income or compensation of any kind from the date of Bonds in dematerialised form, he can choose to dematerialise the
redemption of the Bond(s). securities through his Depository Participant.
It may be noted that in case the redemption date fall on a holiday Joint-holders
then the payment shall be made on the next succeeding working
day. Where two or more persons are holders of any Bond(s), they shall
be deemed to hold the same as joint tenants with benefits of
Purchase survivorship subject to other provisions contained in the Articles.
We may, at our discretion, at any time make arrangements for Nomination
purchase of Bonds at discount, at par or at a premium in the open
market or otherwise. Such Bonds may, at our option, be redeemed, The sole Bondholder or first Bondholder, along with other joint
cancelled, held, reissued or resold at such price and on such terms Bondholders (being individual(s)) may nominate any one person
and conditions as we may deem fit and as permitted by law. Our (being individual) who, in the event of death of the sole holder or all
subsidiaries may also, at their discretion, subscribe to this Issue or at the joint-holders, as the case may be, shall become entitled to the
any time purchase Bonds at discount, at par or at premium in the Bond. A person, being a nominee, becoming entitled to the Bond
open market or otherwise. by reason of the death of the Bondholder(s), shall be entitled to the
same rights to which he would be entitled if he were the registered
ICICI had, at its discretion, given a buyback option on select Bonds
holder of the Bond. Where the nominee is a minor, the Bondholder(s)
issued in one or more issues. A price, valid for a certain period, had
been quoted for buying back the Bonds. The investor, at his discretion, may make a nomination to appoint, in the prescribed manner, any
could offer the Bonds for sale to ICICI during the said period at the person to become entitled to the Bond(s), in the event of his death,
price quoted by ICICI. As of date, we, exercising our discretion, during the minority. A nomination shall stand rescinded upon sale of
continue to provide this facility for select Bonds. a Bond by the person nominating. A buyer will be entitled to make
a fresh nomination in the manner prescribed. When the Bond is held
Right to Reissue Bond(s) by two or more persons, the nominee shall become entitled to
receive the amount only on the demise of all the holders. Fresh
Where we have redeemed or repurchased any Bond(s), we shall
nominations can be made only in the prescribed form available on
have and shall be deemed always to have had the right to keep such
request at our Registered/ Corporate Office /3i Infotech or such other
Bonds alive without extinguishment for the purpose of resale or
person at such addresses as may be notified by us.
reissue and in exercising such right, we shall have and be deemed
always to have had the power to resell or reissue such Bonds either Bondholder(s) are advised to provide the specimen signature of the
by reselling or reissuing the same Bonds or by issuing other Bonds nominee to us/3i Infotech to expedite the transmission of the Bond(s)
in their place. This includes the right to reissue original Bonds. to the nominee in the event of demise of the Bondholder(s). The
signature can be provided in the application form or subsequently
Upon the merger of ICICI with us, we have all the rights and
at the time of making fresh nominations. This facility of providing the
obligations in respect of the Bonds issued by ICICI. In respect of the
specimen signature of the nominee is purely optional.
Bonds issued by ICICI, neither ICICI nor we, after merger, have
exercised the powers to reissue redeemed or cancelled Bonds as Succession
per section 121 of the Act.
Where a nomination has not been made or the nominee predeceases
Transfer/Transmission of Bond(s) the Bondholder(s) the provisions of the following paragraphs will apply:
The Bonds shall be transferred or transmitted in accordance with the In the event of the demise of the sole holder of the Bond, or the last
applicable provisions of the Act. The provisions relating to transfer survivor in case of joint-holders, we will recognise the executor or
administrator of the deceased Bondholder, or the holder of the
and transmission and other related matters in respect of our shares
succession certificate or other legal representative as having title to
contained in the Articles and the Act shall apply, mutatis mutandis the Bond(s). We shall not be bound to recognise such executor,
(to the extent applicable to Debentures) to the Bond(s) as well. A administrator or holder of the succession certificate or legal
suitable instrument of transfer as may be prescribed by us may also representative unless such executor or administrator or holder of
be used for the same. the succession certificate or legal representative obtains Probate or
In case of sale by or to Companies, Bodies Corporate, Societies Letter of Administration or is a holder of the Succession Certificate
registered under the applicable laws in India, Trusts, Provident Funds, or other legal representation, as the case may be, from an appropriate
Superannuation Funds, Gratuity Funds, Scientific and/or Industrial court in India. We at our absolute discretion, may in any case, dispense
with production of Probate or Letter of Administration or Succession
Research Organisations, Commercial Banks, Co-operative Banks,
Certificate or other legal representation.
Regional Rural Banks or NRIs, a certified true copy of the Power of
Attorney or such other authority as may be acceptable to us, must Where on the demise of the sole or last of the survivors of the joint-
be lodged separately at our office / 3i Infotech or such other person holders, who is a resident, an NRI becomes entitled to the Bond, the
following steps will have to be complied with:
27
March 2005
(i) Documentary evidence should be submitted to the Legacy Cell continues for 30 days after written notice has been given thereof
of the RBI to the effect that the Bond was acquired by the NRI as by the Trustees to us requiring the same to be remedied.
part of the legacy left by the deceased holder. ii. Any information given by us in our applications to the
(ii) Proof that the NRI is an Indian national or is of Indian origin. Bondholders, in the reports and other information furnished by
Such holding by the NRI will be on a non-repatriable basis. us and the warranties given/deemed to have been given by us
Where on the demise of the sole or last of the survivors of the joint- to the Bondholders/trustees is misleading or incorrect in any
holders, who is a non-resident, another NRI becomes entitled to the material respect.
Bond, the steps as stated earlier will have to be complied with. The iii. We are unable to or have admitted in writing our inability to
holding of the inheriting NRI would be on the same basis as held by pay our debt as they mature.
the NRI from whom the Bond(s) are inherited. iv. A Receiver or a Liquidator has been appointed or allowed to
Sharing of Information be appointed of all or any part of our undertaking and such
appointment is not dismissed within 60 days of appointment.
We may, at our option, use on our own, as well as exchange, share
or part with any financial or other information about the Bondholders v. We cease to carry on our business.
available with us, our subsidiaries and affiliates and other banks, RIGHTS, POWERS AND DISCRETION OF TRUSTEE
financial institutions, credit bureaus, agencies, statutory bodies, as GENERAL RIGHTS, POWERS AND DISCRETIONS
may be required and neither we or our subsidiaries and affiliates nor
their agents shall be liable for use of the aforesaid information. In addition to the other powers conferred on the Trustees and
provisions for their protection and not by way of limitation or
Notices
derogation of anything contained in the Trustee Agreement nor of
All notices to the Bondholder(s) required to be given by us or the any statute limiting the liability of the Trustees, IT IS EXPRESSLY
Trustees shall be published in one English and one regional language DECLARED as follows:
daily newspaper in Mumbai, Chennai, Delhi, Kolkata and Vadodara a) The Trustees shall not be bound to give notice to any person of
and/or, will be sent by post/ courier to the Registered Holders of the the execution hereof or to see to the performance or observance
Bond(s) from time to time. of any of the obligations hereby imposed on us or in any way to
Issue of Duplicate Bond Certificate(s) interfere with the conduct of our business unless and until the
If any Bond Certificate(s) is/are mutilated or defaced or the cages for rights under the Bonds shall have become enforceable and the
recording transfers of Bonds are fully utilised, the same may be Trustees shall have determined to enforce the same;
replaced by us against the surrender of such Certificate(s). Provided, b) Save as herein otherwise expressly provided the Trustees shall,
where the Bond Certificate(s) are mutilated or defaced, the same will as regards all trusts, powers, authorities and discretions, have
be replaced as aforesaid only if the certificate numbers and the absolute and uncontrolled discretion as to the exercise thereof
distinctive numbers are legible. and to the mode and time of exercise thereof and in the absence
of fraud shall not be responsible for any loss, costs, charges,
If any Bond Certificate is destroyed, stolen or lost then upon
expenses or inconvenience that may result from the exercise or
production of proof thereof to our satisfaction and upon furnishing
non-exercise thereof and in particular they shall not be bound
such indemnity/security and/or documents as we may deem
to act at the request or direction of the Bondholders under any
adequate, duplicate Bond Certificate(s) shall be issued.
provisions of these presents unless sufficient monies shall have
Trustees for the Bondholders been provided or provision to the satisfaction of the Trustees
We have appointed The Western India Trustee & Executor Company made for providing the same and the Trustees are indemnified
Ltd. to act as Trustees for the Bondholders. We and the Trustees will to their satisfaction against all further costs, charges, expenses
enter into a Trustee Agreement, inter alia, specifying the powers, and liability which may be incurred in complying with such
authorities and obligations of the Trustees and us. The Bondholder(s) request or direction;
shall, without further act or deed, be deemed to have irrevocably c) With a view to facilitate any dealing under any provision of
given their consent to the Trustees or any of their agents or authorised these presents the Trustees shall have full power to consent
officials to do all such acts, deeds, matters and things in respect of (where such consent is required) to a specified transaction or
or relating to the Bonds as the Trustees may in their absolute discretion class of transactions conditionally;
deem necessary or require to be done in the interest of the d) The Trustees shall not be responsible for the monies paid by
Bondholder(s). Any payment made by us to the Trustees on behalf of applicants for the Bonds;
the Bondholder(s) shall discharge us pro tanto to the Bondholder(s).
e) The Trustees shall not be responsible for acting upon any
The Trustees will protect the interest of the Bondholders in the event resolution purporting to have been passed at any meeting of
of default by us in regard to timely payment of interest and repayment the Bondholders in respect whereof minutes have been made
of principal and they will take necessary action at our cost. The and signed even though it may subsequently be found that
Trustees may appoint a nominee director on the Board of the there was some defect in the constitution of the meeting or the
Company in consultation with other institutional debenture holders passing of the resolution or that for any reason the resolution
in the event of default. The major events of default which happen was not valid or binding upon the Bondholders;
and continue without being remedied for a period of 30 days after
the dates on which the monies specified in (i) and (ii) below become f) The Trustees shall have full power to determine all questions
due and will necessitate repayment before stated maturity are as and doubts arising in relation to any of the provisions hereof
follows: and every such determination bonafide made (whether or not
the same shall relate wholly or partially to the acts or
(i) Default in payment of monies due in respect of interest owing proceedings of the Trustees) shall be conclusive and binding
upon the Bonds; upon all persons interested hereunder;
(ii) Default in payment of any other monies including costs, charges g) The Trustees shall not be liable for anything whatsoever except
and expenses incurred by the Trustees. a breach of trust knowingly and intentionally committed by the
Other events of default are: Trustees;
i. Default is committed in the performance or observance of any h) The Trustees shall not be liable for any default, omission or
covenant, condition or provision contained in these presents delay in performing or exercising any of the powers or trusts
and/or the financial Covenants and Conditions (other than the herein expressed or contained or any of them or in enforcing
obligation to pay principal and interest) and, except where the the covenants herein contained or any of them or in giving
Trustees certify that such default is in their opinion incapable of notice to any person or persons of the execution hereof or in
remedy (in which case no notice shall be required), such default taking any other steps which may be necessary, expedient or
28
March 2005
desirable for any loss or injury which may be occasioned by resolution placed before such meeting of the Bondholders.
reason thereof unless the Trustees shall have been previously The quorum for such meetings shall be at least five Bondholders
requested by notice in writing to perform, exercise or do any of present in person.
such steps as aforesaid by the holders representing not less 4. The Bonds are subject to the provisions of the Act, the
than three-fourths of the nominal amount of the Bonds for the Memorandum and Articles, the terms of this Prospectus and
time being outstanding or by a Special Resolution duly passed Application Form. Over and above such terms and conditions,
at a meeting of the Bondholders and the Trustees shall not be the Bonds shall also be subject to other terms and conditions as
bound to perform, exercise or do any such acts, powers or may be incorporated in the Trustee Agreement/ Letters of
things or to take any such steps unless and until sufficient monies Allotment/ Bond Certificates, guidelines, notifications and
shall have been provided or provision to the satisfaction of the regulations relating to the issue of capital and listing of securities
Trustees made for providing the same by or on behalf of the issued from time to time by the Government of India and/or
Bondholders or some of them in order to provide for any costs, other authorities and other documents that may be executed in
charges and expenses which the Trustees may incur or may respect of the Bonds.
have to pay in connection with the same and the Trustees are
5. Save as otherwise provided in this Prospectus, the provisions
indemnified to their satisfaction against all further costs, charges,
contained in Annexure C and/or Annexure D to the Companies
expenses and liabilities which may be incurred in complying
(Central Government’s) General Rules and Forms, 1956 as
with such request.
prevailing and to the extent applicable, will apply to any meeting
PROVIDED NEVERTHELESS that nothing contained in this clause of the Bondholders, in relation to matters not otherwise provided
shall exempt the Trustees from or indemnify them against any for in terms of the Issue of the Bonds.
liability for breach of trust nor any liability which by virtue of
6. A register of Bondholders will be maintained in accordance
any rule or law would otherwise attach to them in respect of
with section 152 of the Act and all interest and principal sums
any negligence, default or breach of trust which they may be
becoming due and payable in respect of the Bonds will be
guilty of in relation to their duties hereunder.
paid to the registered holder thereof for the time being or in the
Debt Equity Ratio (DER) and Notional Debt Service Coverage case of joint-holders, to the person whose name stands first in
Ratio (NDSCR) the Register of Bondholders.
We shall not declare dividends in a particular year if we fail to 7. The Bondholders will be entitled to their Bonds free from equities
maintain the DER and the NDSCR as may be required by SEBI and/ and/or cross claims by us against the original or any intermediate
or any regulatory authority, as applicable. No Bondholder shall be holders thereof.
entitled to proceed directly against us unless the Trustees, having 8. Bonds can be rolled over only with the positive consent of the
become so bound to proceed, fail to do so. Bondholders.
Future Borrowings Debenture Redemption Reserve
We will be entitled to borrow/raise loans or avail of financial assistance The Government of India, Ministry of Company Affairs has vide
in whatever form as also issue Debentures/Bonds/other securities in General Circular No. 9/2002 No.6/3/2001-CL.V dated April 18,2002
any manner having such ranking in priority, pari passu or otherwise clarified that banks need not create Debenture Redemption Reserve
and change the capital structure including the issue of shares of any as specified under section 117C of the Companies Act, 1956.
class, on such terms and conditions as we may think appropriate,
without the consent of, or intimation to, the Bondholders or the PROCEDURE FOR APPLICATION
Trustees in this connection. Availability of Prospectus and Application Forms
Bondholder not a Shareholder Application Forms with copies of the Prospectus may be obtained
The Bondholders will not be entitled to any of the rights and privileges from our Registered/ Corporate Office and the branches/ Other Offices,
available to the Shareholders. from the Lead Managers, Co-Managers and Bankers to the Issue
Rights of Bondholders stated in this Prospectus, as well as from the collection centres listed
in the Application Form.
1. The Bonds shall not, except as provided in the Act, confer upon
WHO CAN APPLY
the holders thereof any rights or privileges available to our
members including the right to receive Notices or Annual The following categories of persons are eligible to apply in the
Reports of, or to attend and/or vote, at our General Meeting. Issue:
However, if any resolution affecting the rights attached to the Resident Indian individuals - in their own names or in the
Bonds is to be placed before the shareholders, the said resolution names of their minor children as natural/legal guardians in
will first be placed before the concerned registered Bondholders single or joint names (but not exceeding three);
for their consideration. In terms of section 219(2) of the Act,
holders of Bonds shall be entitled to a copy of the Balance Hindu Undivided Families through the Karta;
Sheet on a specific request made to us. Companies, Bodies Corporate and Societies registered under
2. The rights, privileges and conditions attached to the Bonds the applicable laws in India and authorised to invest in the
may be varied, modified and/or abrogated with the consent in Bonds;
writing of the holders of at least three-fourths of the outstanding Public/Private Charitable/Religious Trusts which are authorised
amount of the Bonds or with the sanction of special resolution to invest in the Bonds;
passed at a meeting of the concerned Bondholders, provided Provident Funds, Superannuation Funds and Gratuity Funds;
that nothing in such consent or resolution shall be operative
Scientific and/or Industrial Research Organisations, which are
against us, where such consent or resolution modifies or varies
the terms and conditions governing the Bonds, if the same are authorised to invest in the Bonds;
not acceptable to us. Public Financial Institutions, Statutory Corporations,
3. The registered Bondholder or in case of joint-holders, the one Commercial Banks, Co-operative Banks and Regional Rural
whose name stands first in the Register of Bondholders shall be Banks;
entitled to vote in respect of such Bonds, either in person or by Mutual Funds;
proxy, at any meeting of the concerned Bondholders and every Partnership firms;
such holder shall be entitled to one vote on a show of hands
Associations of Persons;
and on a poll, his/her voting rights shall be in proportion to the
outstanding nominal value of Bonds held by him/her on every NRIs on both non-repatriable and repatriable basis.
29
March 2005
HOW TO APPLY documents in support of the address: (a) Ration Card (b)
General Instructions Passport (c) Driving Licence (d) Identity Card issued by any
institution (e) Copy of the electricity bill showing residential
1. Applications for the Bonds must be made in the prescribed address (f) Any document or communication issued by any
form as mentioned below: authority of the Central Government or local bodies showing
Resident Indians /NRIs on non- Printed on white residential address (g) Any other documentary evidence in
repatriable basis background form support of address given in the declaration.
NRIs on repatriable basis Printed on pink As per the prevailing provision of section 139A(5A) of the I.T.
background form Act, PAN/GIR No. needs to be mentioned on the certificate for
2. The forms should be completed in block letters in English as deduction of tax at source (TDS). Hence, every Bondholder
per the instructions contained herein and in the Application should mention his PAN/GIR No. except resident individuals
Form and are liable to be rejected if not so completed. earning interest not exceeding Rs. 2,500 during the financial
3. Applications should be in single or joint names (not more than year or bondholders submitting Form 15G/ 15H / certificate
three). under section 197 /other evidence, as may be applicable, for
non deduction of TDS.
4. In case of an HUF applying through its Karta, the applicant
should specify the name of applicant in the application form as 10 MAPIN - UNIQUE IDENTIFICATION NUMBER (UIN)
“XYZ Hindu Undivided Family applying through PQR”, where Applicable to specified investor being a body corporate [other
PQR is the name of the Karta. than a body corporate whose promoters or directors are persons
5. Applications should be for a minimum of one Bond and in resident outside India and wherever the President of India/
multiples of one Bond thereafter, except in case of Regular Central Government/State Government is a promoter is
Income Bond where the application should be for a minimum exempted from the requirement of obtaining UIN under
of three Bonds and in multiples of one Bond thereafter and regulation 6(2) of SEBI (Central Database of Market Participants)
Children Growth Bond where the application should be for a Regulations 2003] and Intermediaries registered with SEBI.
minimum of two Bonds and in multiple of one Bond thereafter. In terms of SEBI (Central Database of Market Participants)
6. Thumb impressions and signatures other than in English/Hindi/ Regulation, 2003 as amended from time to time, read with SEBI
Gujarati/Marathi or any of the other languages specified in the Notifications dated November 25, 2003 and July 30, 2004, no
8th Schedule of the Constitution of India must be attested by a specified investor being a body corporate (other than a body
Magistrate or a Notary Public or a Special Executive Magistrate corporate whose promoters or directors are persons resident
under his/her official seal. outside India – as per SEBI Press Release PR No. 344/2004
dated 31st December, 2004) shall subscribe to securities which
7. Applicant’s Bank Account Details are proposed to be listed in any recognized stock exchange
The name of the applicant’s bank, type of account and account unless such specified investor, its promoters and directors have
number must be filled in the Application Form. This is required been allotted unique identification numbers (UlNs).
for the applicant’s own safety and these details will be printed In case of specified investor being a body corporate (other
on the refund orders and interest/redemption warrants. than a body corporate whose promoters or directors are persons
Applications without these details will be deemed incomplete resident outside India - as per SEBI Press Release PR No. 344/
and are liable to be rejected. 2004 dated 31st December, 2004), nothing in the aforesaid
8. Applications under Power of Attorney regulation shall apply to such specified investor who has applied
Unless we specifically agree in writing with or without such for allotment of a Unique Identification Number (UIN) under
terms and conditions we deem fit, in the case of applications regulation 9 before December 31, 2004, till the disposal of his
made under Power of Attorney or by limited companies, application or, where he has filed an appeal, till the disposal of
corporate bodies, trusts etc., a certified copy of the Power of the appeal, as the case may be.
Attorney and/or the relevant authority, as the case may be, and In terms of the above it shall be compulsory for specified investor
a certified copy of Memorandum and Articles of Association being a body corporate (other than a body corporate whose
and/or bye-laws, where applicable, must be lodged separately, promoters or directors are persons resident outside India - as
along with a photocopy of the Application Form at the office of per SEBI Press Release PR No. 344/2004 dated 31st December,
the Registrar to the Issue simultaneously with the submission of 2004) making application in this issue to give their Unique
the Application Form, indicating the name of the applicant Identification Number. In case where a body corporate has
along with the address, application number, date of submission made an application for such Unique Identification Number
of the Application Form, name of the bank and branch where it before December 31, 2004 but the same has not been allotted,
was deposited, Cheque/Demand Draft Number and the bank or where an appeal has been filed, but not disposed off, the
and branch on which the Cheque/Demand Draft was drawn. investor shall indicate the same in the space provided in the
9. Permanent Account Number (PAN) Application form.
Where application(s) is/are for Rs. 50,000 or more, the applicant Application forms in case of specified investor being a body
or in the case of an application in joint names, each of the corporate (other than a body corporate whose promoters or
applicant, should mention his/her Permanent Account Number directors are persons resident outside India - as per SEBI Press
(PAN) allotted under the I.T. Act. The copy of the PAN card or Release PR No. 344/2004 dated 31 s1 December, 2004), not
PAN allotment letter is required to be submitted with the indicating the UIN or the details of application/appeal filed
application form. Applications without this information and shall be liable to be rejected.
documents will be considered incomplete and are liable to be
11. Joint Applications
rejected.
Applications may be made in single or joint names (not
If PAN is not allotted or has been applied for, mention
exceeding three). In the case of joint applications, all payments
accordingly. In case the Sole/First Applicant’s and Joint
will be made out in favour of the first applicant. All
Applicant is/are not required to obtain PAN, the applicant shall
communications will be addressed to the first named applicant
mention “Not Applicable”. Where the Applicant has mentioned
whose name appears in the Application Form at the address
“Applied for” or “Not Applicable”, the Sole/First Applicant and
mentioned therein.
Joint Applicant(s) as the case may be would be required to
submit Form 60, or, Form 61 (persons having only agricultural 12. Multiple Applications
income), duly filled along with a copy of any one of the following An applicant should submit only one application (and not more
30
March 2005
than one) for the total number of Bonds required. Two or more accepted. Money orders/postal orders will also not be
applications in same names will be deemed to be multiple accepted. Payment though stockinvest would also not be
applications if the sole/first applicant is one and the same. allowed as the same has been discontinued by the RBI vide
In case of a Mutual Fund, a separate application can be made in notification No. DBOD.NO.FSC.BC. 42/24.47.001/2003-04 dated
respect of each scheme of the mutual fund and such applications November 5, 2003.
will not be treated as multiple applications provided that the ii. All cheques/drafts must be made payable to “ICICI Bank
applications made clearly indicate the name of each scheme Limited- Bonds” and crossed “A/c Payee Only”.
under which the application has been made. iii. Cash up to Rs 15,000/- can be used for making Application in
No separate applications for physical and electronic form should this Issue. If the amount payable on application together with
be made. If such applications are made, the application for any earlier outstanding loan or deposit placed with us by the
Bonds in physical mode shall be considered as multiple applicant is Rs. 20,000/- or more, such payment must be effected
applications. only by way of an account payee cheque or bank draft. Otherwise
We reserve the right to accept or reject, at our sole and absolute the applications may be rejected and application money
discretion, all or any multiple applications in any/all categories refunded without any interest.
as described in the para on “Basis of Allotment”. FOR APPLICANTS WHO ARE NRIs
13. Unless we specifically agree in writing with or without such 1. For Investment on Repatriable Basis or Non-repatriable Basis
terms or conditions as we may deem fit, a separate single by NRIs
cheque/draft must accompany each Application Form. i. Applications submitted in India should be accompanied
14. Applicants are requested to write their names and application by a cheque/bank draft drawn on any bank, including a
serial number on the reverse of the instruments by which the co-operative bank which is situated at and is a member or
payments are made. sub-member of the Bankers’ clearing-house located at the
15. Tax Deduction at Source locations where the Application Form is submitted, i.e., at
For availing the exemption from deduction of tax at source designated collection centres.
from interest on Bonds the investor should submit Form 15G/ ii. Outstation cheques/bank drafts or cheques/bank drafts
15H/ certificate under section 197 of the I.T. Act/ valid proof of drawn on a bank not participating in the clearing process
exemption, as the case may be along with the name of the sole/ will not be accepted.
first applicant, Bondholder number and the distinctive numbers iii. Applications complete in all respects must be submitted
of Bonds held to us/3i Infotech on confirmation of allotment. at any of the bank branches designated for collection of
Investors need to submit Form 15G/ 15H/ certificate under section such applications mentioned in Application Form.
197 of the I.T. Act /valid proof of exemption each financial year,
iv. Cash/money orders/postal orders will not be accepted.
except in case of DDBs wherein the relevant document is
required to be submitted in the year of redemption. However, v. All cheques/bank drafts must be crossed “A/c. Payee Only”
non-resident Bondholders cannot furnish Form 15G/15H. In case and made payable in favour of “ICICI Bank Limited- Bonds
of non-resident applicants, tax will be deducted at source on - NRIs”.
interest on Bonds at the rates as per prevailing I.T. Act, or vi. Applicants need not obtain separate approval for
Double Taxation Avoidance Agreement, whichever is lower, subscribing to the Bonds either on repatriation or on non-
subject to submission of relevant documents and fulfilment of repatriation basis.
conditions as may be amended from time to time or at nil/ 2. For Investments on Repatriable Basis
lower rate in accordance with a certificate from the Assessing
RBI has granted general permission to Indian companies to
Officer under section 197 or section 195(3) of the I.T. Act.
issue, by way of public issue of Bonds to NRIs on repatriation
(Also refer para on “Payment of Interest subject to Deduction of basis subject to the following conditions:
Tax at Source” on page 24)
i. The amount of subscription should be received by inward
16. Category remittance from abroad through normal banking channels
All applicants are requested to tick the relevant column or by debit to the non-resident’s NRE/FCNR account, as
“Category of Investor” in the Application Form. Public/Private the case may be, with an authorised dealer in India. The
Religious/Charitable Trusts, PF and Other Superannuation Trusts maximum allotment to NRIs would be restricted to 24% of
and other investors requiring “approved security” status for the total paid up value of each series of the Bond issued
making investments and individuals should note that in case (including use of the Over Subscription Option, if any).
they do not tick in the relevant place, their application will be ii. The rate of interest on such Non Convertible Debentures
considered in the “Other Category ” and allotment made (“NCDs”) shall not exceed prime lending rate of State Bank
accordingly. In all such cases, we will not be held responsible of India plus 300 basis points.
for the allotment, if any.
iii. The minimum period for redemption of such NCDs should
17. An investor should apply for one or more type of Bonds and/or be three years.
one or more option of Bonds in a single Application Form only.
Further:
18. Investors are advised to exercise due caution in selecting the
a. The application would have to be accompanied by
appropriate option for which they wish to apply.
documentary evidence of the payment being made;
For further instructions, please read Application Form
carefully. out of funds held in NRE/FCNR account; or
PAYMENT INSTRUCTIONS by rupee drafts purchased out of funds held in NRE/
FCNR accounts in India; or
FOR APPLICANTS OTHER THAN NRIs by direct remittance from abroad through normal
i. Payment may be made by way of cash/cheque/bank draft drawn banking channels.
on any bank, including a co-operative bank which is situated at b. Refunds, interest and other distribution, if any, would be
and is member or sub-member of the Bankers’ clearing-house made in Indian rupees. Where the applicant provides
located at the place where the Application Form is submitted, information on the NRE/FCNR account of the applicant
i.e. at designated collection centres. from which the investment is made, payments would be
Outstation cheques/bank drafts or cheques/bank drafts drawn credited directly, to the same NRE/FCNR account. In other
on banks not participating in the clearing process will not be cases, the payments would be made by cheques payable
31
March 2005
at par at such places as we may deem fit. In case the REJECTION OF APPLICATIONS
cheque payable at par facility is not available, we reserve The Board of Directors/Committee of Directors reserves its full,
the right to adopt any other suitable mode of payment. unqualified and absolute right to accept or reject any application in
c. Cash/money orders/postal orders will not be accepted. whole or in part and in either case without assigning any reason thereof.
3. For investments on Non-repatriable Basis Application would be liable to be rejected on one or more technical
RBI has granted general permission to Indian companies to grounds, including but not restricted to:
issue Bonds to NRIs on non-repatriation basis subject to the Number of Bonds applied for is less than the minimum application;
following conditions: Bank account details not given; Application by a minor without a
The amount of subscription should be received by inward guardian name; PAN and IT Circle/Ward/District not given for
applications of Rs. 50,000 or more; In case of applications under
remittance from abroad through normal banking channels
Power of Attorney by limited companies, corporate bodies, trusts,
or by debit to the non-resident’s NRO/NRE/FCNR account,
etc. where relevant documents not submitted; Application by
as the case may be, with an authorised dealer in India. The
Stockinvest; Applications accompanied by cash of Rs. 20,000 or
principal amount representing the investment is not more; Multiple applications (as defined elsewhere).
repatriable. The investment, allotment and repatriation shall
In the event, if any Bond(s) applied for is/are not allotted in full, the
be subject to the RBI directives and guidelines as may be
excess application monies of such Bonds will be refunded, as may
applicable from time to time.
be permitted under the provisions of the Act.
The rate of interest on such NCDs shall not exceed prime LETTERS OF ALLOTMENT/BOND CERTIFICATES/REFUND
lending rate of State Bank of India, plus 300 basis points. ORDERS
The minimum period for redemption of such NCDs should
We shall credit the allotted securities to the respective beneficiary
be three years. account/ despatch the Letter(s) of Allotment or Bond Certificate(s)/
Further: Letter(s) of Regret/Refund Orders, as the case may be, by Registered
a. The application would have to be accompanied by Post/Speed Post at the applicant’s sole risk, within 10 weeks from the
documentary evidence of the payment being made out of date of closure of the Issue. However, Refund Orders up to Rs. 1,500/
foreign exchange remitted to India through approved - will be sent under certificate of posting. Further, we agree that:
banking channels, or out of funds held in NRO /NRE/FCNR a) as far as possible, allotment of securities offered to the public
accounts in India. shall be made within 30 days of the closure of the Issue;
b. Refunds, interest and other distribution, if any, would be b) it shall pay interest of 15 per cent per annum if the allotment has
made in Indian rupees. Where the applicant provides not been made and/or the Refund Orders have not been
information on the NRO account of the applicant from despatched to the investors within 30 days from the date of the
which the investment is made, payments would be credited closure of the Issue, for the delay beyond 30 days.
directly to the same NRO account. In other cases, the UNDERTAKING BY THE ISSUER
payments would be made by cheques payable at par at We undertake that :
such places as we may deem fit. In case the cheque payable a) the complaints received in respect of the Issue shall be attended
at par facility is not available, we reserve the right to adopt to by us expeditiously and satisfactorily;
any other suitable mode of payment. b) we shall take necessary steps for the purpose of getting the
c. Entire income on non-repatriable investments would be securities listed in the concerned stock exchange(s) within the
allowed to be remitted abroad if the investment is made specified time;
through NRO/NRE/FCNR account. c) the funds required for despatch of refund orders/allotment
d. Cash/money orders/postal orders will not be accepted. letters/Bond certificates by registered/ speed post shall be made
SUBMISSION OF COMPLETED APPLICATION FORMS available to the Registrar to the Issue by us;
All applications duly completed and accompanied by account payee d) the certificates of the securities/refund orders to the non-resident
cheques/ drafts/ cash shall be submitted at the branches of the Bankers Indians shall be despatched within specified time;
to the Issue (listed in the Application Form) or our Collection Centre(s) e) necessary co-operation to the credit rating agency(ies) shall be
as may be specified by us before the closure of the Issue. Our extended in providing true and adequate information till the
collection centre, however, will not accept payments made in cash. debt obligations in respect of the instrument are outstanding;
Applications should NOT be sent to us (other than our Collection f) we shall forward the details of utilisation of the funds raised
Centre(s))/ Lead Managers/ Co-Managers. through the Bonds duly certified by our statutory auditors, to
Investors residing at those places where there is no collecting Bank the Debenture Trustee at the end of each half year;
or our Collection Centre may send their Application Form along g) we shall disclose the complete name and address of the
with bank drafts payable at Mumbai by registered post with Debenture Trustee in our annual report;
acknowledgment due to the office of the Registrar MCS Limited, h) we shall provide a compliance certificate to the debenture
Sri Padmavati Bhavan, Plot No. 93, Road No.16,MIDC, Andheri (East), holders (on yearly basis) in respect of compliance of with the
Mumbai 400 093, so that the same are received before the closure of terms and conditions of issue of Bonds as contained in the
the subscription list. Prospectus, duly certified by the Debenture Trustee.
No separate receipts shall be issued for the application money.
However, Bankers to the Issue at their designated branches/our UTILISATION OF APPLICATION MONEY
Collection Centre(s) receiving the duly completed Application Forms The sum received in respect of the Issue will be kept in separate
will acknowledge the receipt of the applications by stamping and bank account(s) and we will have access to such funds as per
returning the acknowledgment slip to the applicant. applicable provisions of law(s), regulations and approvals.
Applications shall be deemed to have been received by us only
when submitted to Bankers to the Issue at their designated branches DECLARATION AS A PUBLIC SECURITY/APPROVED SECURITY
or at our Collection Centre or on receipt by the Registrar as detailed Subject to declaration as “Approved/ Public Securities” by the Central
above and not otherwise. Government in respect of trusts registered under Indian Trust Act
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March 2005
1882 and by the Government of Maharashtra and Government of at 7.5% of the total income computed before making any
Gujarat, under the Bombay Public Trusts Act, 1950 and Government deduction under this section and Chapter VIA, and 10% of the
of Rajasthan, Government of of Madhya Pradesh, Government of aggregate advances made by the rural branches. We shall at
Andhra Pradesh, in respect of trusts registered under Rajasthan Public our option be allowed further deduction in excess of the
Trusts Act, 1951, M.P. Public Trusts Act, 1951 and Andhra Pradesh specified limits, for an amount not exceeding the income
Endowment Trust Act, respectively, Public/Private Trusts in the above derived from redemption of securities in accordance with the
states will be eligible to invest in these Bonds. In other states, Public/ scheme framed by the Central Government, subject to the
Private Trusts may invest in these Bonds subject to the relevant provisions of this section.
provisions of the respective trust deeds and applicable statutory 4. Under Section 36(1)(viii) of the I.T. Act, we being a financial
provisions, if any, governing their investments. corporation are allowed deduction at 40% of the profits derived
Investment in the Bonds by religious/charitable trusts will qualify as from the business of providing long term finance computed
eligible investments under section 11(5) of the I.T. Act. under the head “Profits and gains of business or profession”
before making any deduction under this section, carried to
APPLICATIONS BY PROVIDENT FUNDS, SUPERANNUATION such reserve account. The deduction is allowed subject to the
FUNDS AND GRATUITY FUNDS aggregate of the amounts transferred to the Special Reserve
The Government of India has permitted Provident, Superannuation Account for this purpose from time to time not exceeding twice
and Gratuity Funds, subject to their assessment of the risk-return of our paid-up share capital and general reserves. The amount
prospects, to invest up to 10 per cent in the Bonds and securities withdrawn from special reserve created and maintained from
issued by private sector organisation including banks provided that April 1, 1998 onwards would be chargeable to income-tax in
the Bonds or securities have an investment grade rating from atleast the year of withdrawal.
two credit rating agencies. Accordingly, provident, superannuation 5. Under Section 43D of the I.T. Act, interest on certain categories
and gratuity funds can invest up to 10 per cent of their corpus in of bad and doubtful debts as specified in Rule 6EA of the Income-
these Bonds. tax Rules, 1962, shall be chargeable to tax only in the year of
receipt or credit to our Profit and Loss Account, whichever is
UTILISATION OF PROCEEDS earlier.
Statement by the Board of Directors: 6. Under Section 48 of the I.T. Act, the long term capital gains
(i) All monies received out of Issue of Bonds to public shall be arising out of sale of capital assets excluding bonds and
transferred to a separate bank account other than the bank debentures (except Capital Indexed Bonds issued by the
account referred to in sub-section (3) of section 73 of the Act; Government) will be computed after indexing the cost of
acquisition/improvement.
(ii) Details of all monies utilised out of Issue referred to in sub-item
(i) shall be disclosed under an appropriate separate head in our 7. Under Section 54EC of the I.T. Act, capital gains arising on
Balance Sheet indicating the purpose for which such monies transfer of long term capital assets would not be charged to tax
had been utilised; and on investment of such capital gains in any of the assets specified
for this purpose in accordance with and subject to the conditions
(iii) Details of all unutilised monies out of issue of Bonds, if any, stipulated in this Section of the I.T. Act. Further, as per the
referred to in sub-item (i) shall be disclosed under an Section 54ED of the I.T. Act, capital gains arising on transfer of
appropriate separate head in our Balance Sheet indicating the long term capital assets, being listed securities or units, would
form in which such unutilised monies have been invested. not be charged to tax on investment of long term capital gains
The fund raised from previous issues made by us have been utilised in equity shares forming part of eligible issue of capital in
for our business as stated in the respective Prospectuses. accordance with and subject to the conditions in this section of
the I.T. Act.
TAX BENEFITS
8. As per the proposed provisions of Finance Bill, 2005, a new
We have been advised by the head of Taxation that under the current section 72AA has been inserted to provide for carry forward
tax laws, the following tax benefits inter alia, will be available to us and setoff of accumulated loss and unabsorbed depreciation
and our Bondholders. The tax benefits are given as per the prevailing allowance of a bank against the profits of the Company under a
tax laws and may vary from time to time in accordance with the scheme of amalgamation sanctioned by the Central
amendments or enactments thereto. A Bondholder is advised to Government in accordance with the conditions prescribed
consider in his own case the tax implications in respect of subscription therein.
to the Bonds after consulting his tax advisor as alternate views are
9. As per the provisions of Section 80LA of the I.T. Act where our
possible.
gross total income, in any previous year, includes any income
I. To Us from an offshore banking unit in a special economic zone, or
from a business with an undertaking located in a special
1. Our taxable income would not include dividend, other than economic zone or any other undertaking which develops, or
dividends referred to in Section 115O and Section 10(23G) of develops and operates, or operates and maintains a special
the I.T. Act, interest or long-term capital gains from investment economic zone, shall, subject to the fulfillment of the conditions
made by way of shares or long-term finance in any enterprise specified in the said Section 80LA, be entitled to 100.0%
wholly engaged in the business of (i) developing, (ii) maintaining deduction of such income for three consecutive assessment
and operating, or (iii) developing, maintaining and operating years, beginning with the assessment year relevant to the
any infrastructure facility in accordance with and subject to the previous year in which the RBI’s permission to open the offshore
provisions of Section 10(23G) of the I.T. Act. As per the unit shall have been obtained, and after those three years, 50.0%
provisions of the I.T. Act, income referred in Section 10(23G), deduction of such income for the next two consecutive
would be taken into account while computing the book profit assessment years.
and the Income-tax payable under section 155JB of the I.T. Act
10. Under the provisions of Section 112 of the I.T. Act, taxable
2. Under Section 36(1)(vii) of the I.T. Act any bad debts or part
long-term capital gains, if any, on sale of listed securities or
thereof written off as irrecoverable, would be allowable as a
units or Zero Coupon Bonds issued on or after June 1, 2005
deduction from our total income in accordance with and subject
to the provisions contained therein. subject to specified conditions as proposed by Finance Bill,
2005 would be charged to tax at the concessional rate of 20%
3. Under Section 36(1)(viia) of the I.T. Act, deduction in respect of (plus surcharge and education cess at the applicable rate) after
any provision for bad and doubtful debts made by us is allowed
33
March 2005
considering indexation benefits or at 10% (plus surcharge and 3. Subject to and in accordance with the provisions of Section 88
education cess at the applicable rate) without indexation benefits of the I.T. Act, subscription to the Tax Saving Bond would
in accordance with and subject to the provision of section 48 of entitle Individuals and HUFs to a rebate from Income-tax as
the I.T. Act. indicated below:
II To Our Bondholders Gross Total Income before Rebateunder
giving effect to the deduction section 88*
A. Resident Bondholders
under Chapter VIA (Rs.)
1. We would apply to the Central Government for notifying all 0 - 150,000 20% **
these bonds under section 80L(1)(ii) of the I.T. Act. The bonds
issued by us would be eligible for the benefit under section 150,001 - 500,000 15%
80L(1)(ii) in the hands of individual or HUF bondholder subject 500,001 & Above Nil
to the notification of the bonds by the Central Government under * Rebate under section 88 is available on the aggregate of
the said section. However, as per the provisions of Finance Bill,
the sums paid or deposited upto Rs. 1,00,000/- including
2005, section 80L is proposed to be deleted with effect from
subscription to Tax Saving Bonds of the Issuer Company.
April 1, 2005.
2. The tax treatment of Option II of Tax Saving Bonds and Options I ** An individual would be entitled to an enhanced rate of
and II of Children Growth Bonds being in the nature of Deep rebate @ 30% if his income chargeable under the head
Discount Bonds (DDBs) will be in accordance with and subject to “salaries” does not exceed Rs.1,00,000 before allowing
the conditions in the CBDT circular no. 4/2004 dated May 13, 2004, deduction under section 16 and is not less than 90% of the
2/2002 dated February 15, 2002 & clarification F. No. 149/235/ gross total income subject to provisions under section 88
2001-TPL issued in May 2002 which are given in brief as under: of the Act.
(a) Every bondholder will have to offer to tax the difference As per the provisions of the Finance (No.2) Act, 2004, a resident
between the market valuation made in accordance with individual assessee, whose income does not exceed Rs.1,00,000
the guidelines issued by RBI as on two successive valuation shall be entitled to a tax rebate of 100% on his total income
dates (i.e. March 31 each financial year) as interest income chargeable to tax in accordance with the provisions of Section
(where the bonds are held as investment) or business 88D of the I.T. Act. If aggregate investment of a lower amount
income (where the bonds are held as trading asset). For is made, tax rebate would be available at the applicable rate as
this purpose, market values of different instruments declared specified above of the amount so invested, subject to fulfillment
by the RBI or by the Primary Dealers Association of India of prescribed conditions.
jointly with the Fixed Income Money Market and
Derivatives Association of India may be referred to. To avail of benefit under Section 88, such investment needs to
be held for a period of at least three years. In case the bonds are
In a case where the bond is acquired during the year, the sold or otherwise transferred by the investor at any time within
difference between the market value as on the valuation a period of three years from the date of acquisition, the amount
date and the acquisition cost, will be taxed as interest or
of deduction of income-tax allowed in respect of these bonds
business income, as the case may be.
shall be deemed to be tax payable by the investor for the
(b) On transfer of bond before maturity, the difference between assessment year relevant to the previous year in which the
the sale price and the cost will be taxable as short-term bonds are sold or otherwise transferred and shall be added to
capital gains or business income, as the case may be. For the amount of income-tax on the total income of the assessee
computing such gains, the cost of the bonds will be taken with which he is chargeable for such assessment year.
to be the cost of acquisition plus the income offered to tax
4. Under the provisions of Section 112 of the I.T. Act, taxable
in the earlier years as explained in clause (a) above.
long-term capital gains, if any, on sale of listed securities or
(c) In case of redemption by original subscriber, the difference units or Zero Coupon Bonds issued on or after June 1, 2005
between the redemption price and the value as on the last subject to specified conditions as proposed by Finance Bill,
valuation date immediately preceding the maturity date will 2005 would be charged to tax at the concessional rate of
be taxed as interest or business income, as the case may be. 20%(plus surcharge at the applicable rate and education cess
In case of redemption by an intermediate purchaser, the @ 2%) after considering indexation benefits or at 10% (plus
difference between the redemption price and cost of bond surcharge at the applicable rate and education cess @ 2%)
will be taxable as income. For this purposes, the cost of without indexation benefits in accordance with and subject to
the bond will be taken to be the cost of acquisition plus the the provision of section 48 of the I.T. Act. In case of individuals
income offered to tax in the earlier years by such and HUFs where the total taxable income as reduced by long-
intermediate purchaser as explained in clause (a) above. term capital gain, is below the basic exemption limit, the long-
term capital gain will be reduced to the extent of the short fall
(d) A non-corporate investor holding DDBs upto an aggregate
and only the balance long-term capital gain will be subjected
face value of Rs.1 lakh may opt to offer income for tax in
to the flat rate of income-tax in accordance with the proviso to
accordance with earlier CBDT clarification dated March
sub-section (1) of Section 112 of the I.T. Act read with CBDT
12, 1996. The clarification states that the difference between
Circular 721 dated September 13, 1995. Short-term capital gains
the redemption price and subscription price would be
on the transfer of bonds, where bonds are held for a period of
treated as interest income assessable under the I.T. Act in
not more than 12 months would be taxed at the normal rates of
the year of maturity. It further states that on transfer of bonds
tax (plus applicable surcharge and education cess @ 2%). Cost
before maturity, the difference between the sale price and
indexation benefits would not be available in computing short
issue price will be treated as capital loss/gains if held by
terms capital gains.
the assessee as investments or as trading profit/loss if the
assessee dealt in purchase of sale of bonds, securities, etc. 5. No Income tax is deductible at source under the present
provisions of the Income-tax Act on interest on bonds in respect
(e) The difference between the issue price and redemption
of the following:
price, will be subject to tax deduction at source under
section 193 of the I.T. Act in the year of maturity. (a) In case the payment of interest on bonds to resident
individual bondholder in the aggregate during the financial
year does not exceed Rs.2,500;
34
March 2005
(b) When the Assessing Officer issues a Certificate on an normal rates of tax. Cost indexation benefits will not be
application by a Bondholder on satisfaction that the total available in such case.
income of the Bondholder justifies no deduction of tax at b) Under section 115F of the I.T. Act, subject to the conditions
source as per the provisions of Section 197(1) of the I.T. Act; and to the extent specified therein, long term capital gains
(c) When the resident Bondholder (not being a company or a arising to a non-resident Indian from transfer of share of
firm) submits a declaration in the prescribed declaration the company acquired out of convertible foreign exchange
Form 15G verified in the prescribed manner to the effect that shall be exempt from capital gain tax if the net consideration
the tax on his estimated total income of the previous year in is invested within six months of the date of transfer of the
which such income is to be included in computing his total asset in any specified asset or in any saving certificates
income will be nil as per the provisions of section 197A of referred to in clause (4B) of the section 10 of the I.T. Act or
the I.T. Act. Under section 197A(1B) of the Act, Form 15G specified assets as defined in Section 115C(f) of the I.T.
cannot be submitted nor considered for exemption from Act. Under Section 115 G of the I.T. Act, it shall not be
deduction from tax at source if the aggregate of income of necessary for a non-resident Indian to file a return on
the nature referred to in the said section, viz. dividend, income under section 139(1) of the I.T. Act, if his total
interest, etc as prescribed therein, credited or paid or likely income consists only of, investment income and/or long
to be credited or paid during the financial year in which term capital gains earned on transfer of such investment
such income is to be included exceeds the maximum amount acquired out of convertible foreign exchange, and the tax
which is not chargeable to tax. To illustrate, the maximum has been deducted at source from such income under the
amount of income not chargeable to tax in case of provisions of chapter XVII-B of the I.T. Act.
individuals and HUFs is Rs. 50,000, which is proposed to be d) Under section 115H of the I.T. Act, where a non-resident
increased under the proposed provisions of Finance Bill, Indian becomes assessable as resident in India in any
2005, to Rs.1,00,000 for individuals and to Rs.1,25,000 for previous year in respect of total income of any subsequent
women for FY 2005-06. years, he may furnish to the Assessing Officer a declaration
Senior citizens, who are 65 or more years of age at any in writing along with return of income under section 139
time during the financial year, can submit a self-declaration for the assessment year for which he is assessable, to the
in the prescribed Form 15H for non deduction of tax at effect that the provisions of chapter XII-A shall continue to
source in accordance with the provisions of section 197A apply to him in relation to the investment income (other
even if the aggregate income credited or paid or likely to than on shares in the Company) derived from any foreign
be credited or paid exceeds the maximum limit i.e. Rs. exchange assets as defined therein. On doing so, the
50,000 for FY 2004-2005, which is proposed to be increased provisions of Chapter XII-A shall continue to apply to him
to Rs.1,50,000 for FY 2005-06 vide Finance Bill, 2005. in relation to such income for that assessment year and for
Tax will be deducted at a lower rate where the Assessing every subsequent assessment year until the transfer or
Officer on application by any bondholder issues a conversion into money of such assets.
certificate for such lower deduction of tax as per the e) Section 115I of the I.T. Act, gives an option to the non-
provisions of Section 197(1) of the I.T. Act. resident Indian either to be assessed as per the normal
In all other situations, tax would be deducted at source on each provisions applicable to a resident Indian, or, to be assessed
payment as per prevailing provisions of the I.T. Act. under the special provisions of Chapter XII-A of the I.T.
Act.
B To the Non Resident Indians 6. Tax will be deducted at source on interest at the rates as per
1. We would apply to the Central Government for notifying all prevailing I.T. Act or Double Taxation Avoidance Agreement,
these bonds under section 80L(1)(ii) of the I.T.Act. The bonds whichever is lower, subject to submission of relevant documents
issued by the company would be eligible for the benefit under and fulfillment of conditions as may be amended from time to
section 80L(1)(ii) in the hands of individual or HUF bondholder time. Alternatively, to ensure non-deduction or lower deduction
subject to the notification of the bonds by the Central Government of tax at source, as the case may be, the bondholder should
under the said section. However, as per the provisions of Finance furnish a certificate under section 197(1) or 195(3) of the I.T. Act,
Bill, 2005, section 80L is proposed to be deleted with effect from the Assessing Officer. This certificate can be obtained by
from April 1, 2005. all applicants (including Companies and Firms).
2. For the tax treatment of Option II of Tax Saving Bonds and C. To the Other Eligible Institutions
Options I and II of Children Growth Bonds being in the nature of
Deep Discount Bonds (DDBs), please refer to the tax implications 1. Investment in the Bonds by religious/charitable trusts will qualify
given in point 2 above under the head ‘A. Resident Bondholders’. as eligible investments under Section 11(5)(viii) of the I.T. Act,
the issuer company being a financial corporation eligible for
3. For the availability of rebate under Section 88 of the I.T. Act on
deduction under section 36(1)(viii) of the I.T. Act.
subscription to the Tax Saving Bond, please refer to the tax
implications given in point 3 above under the head ‘A. Resident 2. All notified mutual funds set up by public sector banks or
Bondholders’. financial institutions or authorised by the Securities and
4. For rate of capital gains, please refer to the tax implications Exchange Board of India will be exempt from income tax on all
given in point 4 above under the head ‘A. Resident Bondholders’. their income, including income from investment in Bonds under
the provisions of Section 10(23D) of the I.T. Act.
5. A non-resident Indian has the option to be governed by the
provisions of chapter XII-A of the I.T.Act, according to which : Wealth-tax
a) Under Section 115E of the I.T.Act, income from bonds Wealth-tax is not levied on investment in our bonds under Section
acquired out of convertible foreign exchange will be 2(ea) of the Wealth-tax Act, 1957.
taxable at 20% (plus surcharge as applicable and education
cess @ 2%), while income from long term capital gains on Gift-tax
transfer of shares of the company acquired out of Gift-tax is not levied on gift of our bonds in the hands of the donor as
convertible foreign exchange shall be taxed at the rate of well as the donee because the provisions of the Gift-tax Act, 1958
10% (plus surcharge as applicable and education cess @ have ceased to apply in respect of gifts made on or after October 1,
2%). Short-term capital gains are however, taxable at the 1998.
35
March 2005
IV. PARTICULARS OF THE ISSUE insurance policies issued by our joint ventures, ICICI Prudential Life
Insurance Company and ICICI Lombard General Insurance Company.
Objects of the Issue Our commercial banking operations for corporate customers include
To meet the enhanced demand for financial assistance, we need to a range of products and services for India’s leading companies and
augument our resources. We meet our financing requirements growth-oriented small middle market businesses. Our products and
through borrowings (including Public Issue of Bonds), deposits, services for corporate customers include loan products and fee and
equity and equity-linked offerings in the domestic and international commission-based products and services. Our loan products consist
markets, from loan repayments and interest payments and through of project finance, corporate finance and working capital loans,
internally generated funds. These resources are used for our various including cash credit facilities and bill discounting. Fee and
financing activities, replacement of maturing debt and general commission-based products and services include letters of credits,
corporate purposes. Hence it is not possible to project activity-wise project finance guarantees, cash management services, cross-border
break-up of the disbursement of funds raised. trade services, payment services, custodial services and loan
syndication. We also take rupee or foreign currency deposits with
Reserve Bank of India has permitted banks to raise bonds in fixed or floating interest bases from our corporate customers. Our
connection with their exposure to infrastructure projects. We currently deposit taking products include certificates of deposit, current
have exposure to various segments in the infrastructure sector, such accounts and time deposits. We also offer agricultural financing
as power, telecommunications, roads and ports and propose to products.
engage in financing of these and other infrastructure segments
Our treasury operations include maintenance and management of
requiring medium-to-long term financing in the future as well. The
regulatory reserves, proprietary trading in equity and fixed income,
present issue of Bonds are being made pursuant to applicable
a range of products and services for corporate customers, such as
regulations and approval of Reserve Bank of India. The resources
forward contracts and interest rate and currency swaps, and foreign
raised through this issue, including oversubscription retained, if any, exchange products and services. Through our treasury operations,
would be utilised for our business operations, to meet the demand we manage our balance sheet including the maintenance of required
for medium-to-long term financing as specified hereinabove. The regulatory reserves and seek to optimise profits from our trading
expenses of the present issue would also be met from the proceeds portfolio by taking advantage of market opportunities. There is no
of this issue. Pending utilisation, the proceeds of the issue may be restriction on active management of our regulatory reserve portfolio
used in short term investments. through sales and purchases of securities. Our subsidiary ICICI
The main object clause of our Memorandum of Association enables Securities is engaged in the investment banking business and offers
us to undertake the activities for which the funds are being raised corporate advisory services, including advice on financing and
through the present Issue and also the activities which we have been strategic transactions, underwriting and placement of equity offerings
carrying on till date. and broking, and has fixed income operations, including primary
dealership in government securities and proprietary operations in
V. COMPANY INFORMATION various money market instruments. Funds managed by our subsidiary
ICICI Venture Funds Management Company Limited provide venture
Overview capital funding to start-up companies, as well as private equity to a
We are a private sector commercial bank and together with our range of companies.
subsidiaries, offer products and services in the areas of commercial ICICI Prudential Life Insurance Company, our joint venture with
banking to retail and corporate customers (both domestic and Prudential plc, offers a range of life insurance products to individuals
international), treasury and investment banking and other products in India. ICICI Lombard General Insurance Company, our joint venture
like insurance. We were incorporated in India in 1994. We were the with Fairfax Financial Holdings Limited, through its subsidiary
surviving entity in an all-stock amalgamation of ICICI, a long-term Lombard Canada Limited, offers property and other non-life
financial institution and two of its subsidiaries, ICICI Personal Financial insurance products to companies and individuals in India.
Services and ICICI Capital Services, with us, with the appointed date
being March 30, 2002 ICICI Personal Financial Services was engaged We believe that the international markets present a major growth
in the distribution and servicing of various retail credit products and opportunity and have, therefore, expanded overseas to meet our
other services offered by ICICI and us. ICICI Capital Services was a customers’ cross-border needs and offer our commercial banking
distributor of financial and investment products. Our products and products to international customers. Our strategy for growth in
services now include those previously offered by ICICI. As of March international markets is based on leveraging home country links for
31, 2004 we were the largest private sector bank in India and the international expansion by capturing market share in select
second largest bank in India, in terms of assets with total assets of Rs. international markets. We have identified North America, the United
1,25,229 crore. Kingdom, the Middle-East and South-East Asia as the key regions
for establishing an international presence. We have established
Our commercial banking products and services for retail customers wholly-owned subsidiaries, ICICI Bank UK Limited and ICICI Bank
include both retail loans and retail liability products and services. Canada in the United Kingdom and Canada respectively. We have
We offer a wide range of retail credit products including home also established offshore branches in Singapore and Bahrain and
loans, car loans, commercial vehicle loans, two wheeler loans, dealer representative offices in New York in the United States, Dubai in the
financing, personal loans, credit cards, loans against time deposits United Arab Emirates, Shanghai in China and Dhaka in Bangladesh.
and loans against shares. We also offer loans and fee-based services We have also received regulatory approval to set up a representative
to small enterprises, which include suppliers and dealers of large office in South Africa and propose to establish a subsidiary in Russia.
corporations, and clusters of small enterprises that have a In September, 2004, we filed an application for a branch license in
homogeneous profile. We take rupee and foreign currency deposits, Sri Lanka. In June 2004, we filed an application for a branch license
primarily from non-resident Indians. Our deposit products include in the United States with the Federal Reserve.
demand deposits (savings and current accounts) and time deposits,
with specific products for customers in various segments, like student We offer our customers a choice of delivery channels including
accounts, payroll accounts, accounts for small businesses and non- physical branches, ATMs, telephone banking call centres and the
resident Indian accounts. Our other retail products and services Internet. In recent years, we have expanded our physical delivery
include private banking, debit cards, fund transfer facilities and utility channels, including bank branches and ATMs, to cover a total of
bill payment services. We also distribute third party investment approximately 1,850 locations in 296 centres throughout India at
products, including Government of India Relief Bonds, mutual funds, December 31, 2004. We use technology to differentiate our products
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March 2005
and services from those of our competitors. Our technology-driven The key elements of our business strategy are to:
products include Internet banking, cash management services, z fully leverage on the synergies of the amalgamation and our
mobile phone banking services and electronic commerce-based enhanced capital base following our recent share issuance;
business-to-business and business-to-consumer banking solutions.
We remain focused on changes in customer needs and technological z focus on profitable, quality growth opportunities by:
advances and seek to remain at the forefront of technology banking maintaining and enhancing our strong retail franchise;
in India. maintaining and enhancing our strong corporate franchise;
History building an international presence; and
We are a private sector bank and are the surviving entity in the enhancing our strengths in the insurance business.
amalgamation of ICICI and two of its subsidiaries with us. ICICI was z emphasize conservative risk management practices and
formed in 1955 at the initiative of the World Bank, the Government of enhance asset quality;
India and representatives of Indian industry. The principal objective z use technology for competitive advantage; and
was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. z attract and retain talented professionals.
Until the late 1980s, ICICI primarily focused its activities on project Fully Leverage on the Synergies of the Amalgamation and Our
finance, providing long-term funds to a variety of industrial projects. Enhanced Capital Base following Our Recent Share Issuance
With the liberalisation of the financial sector in India in the 1990s, As a result of the acquisition of Bank of Madura, we became and
ICICI transformed its business from a development financial institution continue to be the largest private sector bank in India and as a result
offering only project finance to a diversified financial services of the amalgamation, we became and continue to be the second
provider that, along with its subsidiaries and other group companies, largest among all banks in India, in terms of total assets. The
offered a wide variety of products and services. As India’s economy amalgamation increased our capital base, lowered the cost of our
became more market-oriented and integrated with the world funding compared to ICICI and expanded the scope of our business
economy, ICICI capitalised on the new opportunities to provide a operations. Subsequent to year-end fiscal 2004, we completed a
wider range of financial products and services to a broader spectrum share issuance of Rs. 3,246 crore to support growth in various areas
of clients. of our business operations. We aim to continue to leverage on our
We were incorporated in 1994 as a part of the ICICI group. Our initial larger size and enhanced capital base, comprehensive suite of
equity capital was contributed 75.0% by ICICI and 25.0% by SCICI products and services, extensive corporate and retail customer
Limited, a diversified finance and shipping finance lender of which relationships, technology-enabled distribution architecture, strong
ICICI owned 19.9% at December 1996. Pursuant to the merger of brand franchise and vast talent pool to develop and increase our
SCICI into ICICI, we became a wholly-owned subsidiary of ICICI. market share in profitable business lines.
Effective March 10, 2001, we acquired Bank of Madura, an old private
sector bank, in an all-stock merger. Focus on Profitable, Quality Growth Opportunities by:
The issue of universal banking, which in the Indian context means Maintaining and Enhancing our Strong Retail Franchise
conversion of long-term lending institutions such as ICICI into
We believe that the Indian retail financial services market is likely to
commercial banks, has been discussed at length over the past few
continue to experience sustained growth. With upward migration of
years. Conversion into a bank offered ICICI the ability to accept low-
household income levels, increasing affordability of retail finance
cost demand deposits and offer a wider range of products and
and acceptance of use of credit to finance purchases, retail credit
services, and greater opportunities for earning non-fund based has emerged as a rapidly growing opportunity for banks that have
income in the form of banking fees and commissions. We also the necessary skills and infrastructure to succeed in this business. We
considered various strategic alternatives in the context of the have capitalised on the growing retail opportunity in India and
emerging competitive scenario in the Indian banking industry. We believe that we have emerged, on an incremental basis, as a market
identified a large capital base and size and sale of operations as key leader in retail credit. The key dimensions of our retail strategy are
success factors in the Indian banking industry. In view of the benefits innovative products, parity pricing, customer convenience, wide
of transformation into a bank and the RBI’s pronouncements on distribution, strong processes, prudent risk management and
universal banking, ICICI and we decided to merge. customer focus. We are also focusing on growth in our retail deposit
At the time of the merger, both we and ICICI were publicly listed in base to diversify our funding towards more stable and lower cost
India and on the New York Stock Exchange. The amalgamation was funding sources. We earn fee income from our commercial banking
approved by each of the boards of directors of ICICI, ICICI Personal services to retail customers, including retail loan processing fees,
Financial Services, ICICI Capital Services and us at the respective credit card and debit card fees, and retail transaction fees. Our ATM
board meetings held on October 25, 2001. The amalgamation was acquiring business also generates fee income when customers of
approved by our and ICICI’s shareholders at their extraordinary other banks execute transactions at our ATMs. We have also entered
general meetings held on January 25, 2002 and January 30, 2002, the credit card acquiring business, in which we earn income on
respectively. The amalgamation was sanctioned by the High Court transactions executed at merchant point of sale terminals owned by
of Gujarat at Ahmedabad on March 7, 2002 and by the High Court of us. We also offer our customers depositary share accounts and
Judicature at Bombay on April 11, 2002. The amalgamation was direct sales of third party mutual funds and government of India
approved by the RBI on April 26, 2002. The amalgamation became Relief Bonds, for which we earn fee income. Cross selling of the
effective on May 3, 2002 and the date of the amalgamation for entire range of credit and investment products and banking services
accounting purposes under Indian GAAP (being the Appointed Date to our customers is a critical aspect of our retail strategy. We will
defined in the Scheme of Amalgamation) was March 30, 2002. also continue to securitise a portion of the retail assets originated by
us.
Strategy We have integrated our strategy with regard to small enterprises
Our objective is to enhance our position as a premier provider of with our strategy for retail products and services. We are focusing
banking and other financial services in India and to leverage our on offering working capital loans and other banking products and
competencies in financial services and technology to develop our services to suppliers or dealers of large corporations, and clusters
international business. of small enterprises that have a homogeneous profile.
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March 2005
Maintaining and Enhancing our Strong Corporate Franchise aim to expand our offering to include local banking to non-resident
Indians as well as to the broader local market. We propose to increase
Our commercial banking services to corporate customers will
our scale of operations in each of these locations by launching
continue to focus on leveraging our strong corporate relationships
appropriate products that leverage our technological capabilities
and increased capital base to increase our market share in non-fund
and relative cost efficiencies.
based working capital products and fee-based services. Our
corporate lending activities will continue to focus on structured Enhancing Our Strengths in the Insurance Business
finance, corporate finance and working capital lending to highly
rated corporations. We will also focus on achieving directed lending Following the deregulation of the insurance sector in India, private
obligations to the agricultural sector through carefully structured sector companies were allowed to enter the insurance business. We
credit products. The government policy focus on infrastructure have a joint venture partnership with Prudential plc of UK for the life
development, including resolution of certain issues through insurance business. We have a 74.0% interest in this joint venture.
legislation, and the repositioning and emerging global This joint venture company, ICICI Prudential Life Insurance Company
competitiveness of the Indian industry offer growth opportunities in Limited, obtained the license to conduct life insurance business in
the area of project financing. In project finance, we will continue to November 2000 and commenced business operations in December
focus on structuring and syndication of financing for large projects 2000. ICICI Prudential Life Insurance Company is the largest private
by leveraging our expertise in project financing, and on actively sector life insurance company in India, with about 31% market share
managing our project finance portfolio to reduce portfolio in the private sector based on incremental premium income (i.e.,
concentration and to manage portfolio risk. We view ourselves not new business) in fiscal 2004. We distribute life insurance policies
only as a provider of project finance but also as an arranger and issued by ICICI Prudential Life Insurance Company through our
facilitator, creating appropriate financing structures that may serve branch network, based on a customer referral arrangement.
as financing and investment vehicles for a wider range of market In the non-life insurance sector, we have a joint venture partnership
participants. with Fairfax Financial Holdings Limited throught its subsidaries
Our goal is to provide a comprehensive and integrated service to Lombard Canada Limited. We have a 74.0% interest in this joint
corporate treasurers through our client bankers. We aim to increase venture. The joint venture company, ICICI Lombard General Insurance
the cross selling of our products and services and maximise the Company Limited, obtained the license to conduct general insurance
value of our corporate relationships through the effective use of business in August 2001 and subsequently commenced operations.
technology, speedy response times, quality service and the provision ICICI Lombard General Insurance Company is the largest private
of products and services designed to meet specific customer needs. sector general insurance company in India, with about 22% market
We will continue to actively manage our asset portfolio through share in the private sector in fiscal 2004. ICICI Lombard General
securitisation of assets as well as through acquisition of credit Insurance Company offers general insurance products to corporate
portfolios from other institutions and banks, to diversify the portfolio, and retail customers and seeks to capitalise on our customer
reduce long-term balance sheet exposures and maximise risk- relationships.
adjusted returns. The key dimensions of our strategy for growth in the insurance
business are innovative products, a wide distribution network, a
Building an International Presence prudent portfolio mix and sound risk management practices. In
We believe that the international markets present a major growth addition, we are focused on leveraging our corporate and retail
opportunity and have therefore expanded the range of our customer base for cross selling insurance products.
commercial banking products in international markets. Our initial
Emphasize Conservative Risk Management Practices and Enhance
strategy for growth in international markets is based on leveraging
Asset Quality
home country links for international expansion by capturing market
share in select international markets. The initial focus areas are We believe that conservative risk management policies, processes
supporting Indian companies in raising corporate and project finance and controls are critical for long-term sustainable competitive
for their investments abroad, trade finance, personal financial advantages in our business. Our Risk Management Group is an
services for non-resident Indians and international alliances to support independent, centralized group responsible for establishing and
domestic businesses. We have over the last few years built a large implementing company-wide risk management policies, with an
network of correspondent relationships across all major countries. increasing focus on enhancing asset quality. An independent,
Most of these countries have significant trade and other relationships centralized Compliance and Audit Group and a Middle Office Group
with India. monitor adherence to regulations, policies and procedures. We
We have identified North America, the United Kingdom, the Middle- continue to build on our credit risk management procedures, credit
East and South-East Asia as the key regions for establishing our evaluation and rating methodology, credit risk pricing models,
international presence. We currently have subsidiaries in the United proprietary analytics and monitoring and control mechanisms. We
Kingdom and Canada, branches in Singapore and Bahrain and expect to enter new product markets only after conducting detailed
representative offices in the United States, China, United Arab risk analysis and pilot testing programs.
Emirates and Bangladesh. We have also received regulatory approval To reduce risk, we have diversified our loan portfolio towards retail
to set up a representative office in South Africa and propose to have lending and shorter-term working capital, while continuing to focus
a subsidiary in Russia. In addition, we have filed an application for a on corporate lending to highly-rated corporate customers and
branch license in Sri Lanka and applied to the Federal Reserve for a structured finance. In addition, we seek to lower the credit risk profile
branch license in the United States. We have entered into alliance of the project and corporate loan portfolio through the increased
with existing banks in various markets, to leverage our use of financing structures based on a security interest in the cash
complementary capabilities, primarily the banks’ existing physical flows generated from the business of the borrower and increased
distribution network in the overseas markets and our India-linked collateral, including additional security in the form of liquid assets,
products and servies for the Indian community. We have entered such as investment securities and readily marketable real property.
into alliance with Lloyds TSB in the United Kindon, Bank of Montreal We are also trying to mitigate project risk through the allocation of
in Canada, DBS Bank in Singapore, Emirates Bank in the United Arab risk to various project counterparties, such as construction
Emirates and Wells Fargo in the United States. contractors, operations and maintenance contractors and raw
material and fuel suppliers, by entering into rigorous project contracts
With the establishment of a presence in key overseas locations, we
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March 2005
with those counterparties. We seek to control credit risk in the retail Commercial Banking Products and Services for Retail Customers
loan portfolio, the small enterprises loan portfolio and the agricultural
financing portfolio through carefully designed approval criteria and General
credit controls and efficient collection and recovery systems. We We believe that the Indian retail financial services market is likely to
have placed emphasis on recruiting experienced retail credit continue to experience sustained growth in the future. With upward
professionals to staff our retail credit approval function. We have migration of household income levels, increasing affordability of
also established standards and investigative verification procedures retail finance and acceptance of use of credit to finance purchases,
for selection of our marketing and processing agents. While our retail credit has emerged as a rapidly growing opportunity for banks
lending to the agricultural sector and small scale industries to comply that have the necessary skills and infrastructure to succeed in this
with the priority sector lending norms of the RBI may result in higher business. We have capitalised on the growing retail opportunity in
credit risk, we are seeking to develop appropriate credit approval India and believe that we have emerged as a market leader in retail
criteria and credit delivery structures to mitigate this risk. credit on an incremental basis, with an outstanding retail finance
Management has placed great emphasis on asset quality and this portfolio of Rs.33,424 crore at year-end fiscal 2004. The key
focus has been institutionalised across the organisation. We believe dimensions of our retail strategy are innovative products, parity
we are the market driver in India in achieving early settlements with pricing, customer convenience, wide distribution, strong processes,
troubled borrowers, thus maximising our cash flows from these prudent risk management and customer focus. Cross-selling of the
loans. Our Special Asset Management Group has the responsibility entire range of credit and investment products and banking services
for managing large impaired loans and accounts under watch. to our customers is a critical aspect of our retail strategy. We offer a
Use Technology for Competitive Advantage wide variety of consumer credit products such as home loans,
automobile loans, commercial vehicle loans, two wheeler loans,
We seek to be at the forefront of technology usage in the financial consumer durable loans, dealer financing, personal loans, credit
services sector. Information technology is a strategic tool for our cards, loans against time deposits and loans against shares. Our
business operations to gain a competitive advantage and to improve total retail finance loans were 31.9% of our total exposure at year-
overall productivity and efficiency of the organisation. All of our end fiscal 2004. Retail finance constituted 53.8% of our advances at
technology initiatives are aimed at enhancing value, offering customer year-end fiscal 2004. Our commercial banking operations for retail
convenience and improving service levels while optimising costs. customers also consist of raising deposits from retail customers. In
We expect to continue with our policy of making investments in addition, we offer retail liability products in the form of a variety of
technology to achieve a significant competitive advantage. The key unsecured redeemable Bonds. All of our retail products are marketed
objectives behind our information technology strategy continue to under the “ICICI Bank” brand. To enhance our brand equity, we
be: undertake brand building and advertising campaigns with
z building a cost-efficient distribution network to accelerate the advertisements in print and on television.
development of our retail franchise; Retail Lending Activities
z enhancing cross selling and client segmenting capability by
We offer a range of retail asset products, including home loans, car
using analytical tools and efficient data storage and retrieval
loans, commercial vehicle loans, two wheeler loans, personal loans,
systems;
credit cards, farm equipment loans, Construction equipment loans,
z improving credit risk and market risk management; and professional equipment loans, loans against time deposits and loans
z improving product and client profitability analysis. against securities. We also fund dealers who sell automobiles, two
wheelers, consumer durables and commercial vehicles. For details
Attract and Retain Talented Professionals of the composition of our outstanding retail finance portfolio, see
We believe a key to our success will be our ability to continue to “Asset Composition and Classification” on page 47.
maintain and grow a pool of strong and experienced professionals.
Home Finance
We have been successful in building a team of talented professionals
with relevant experience, including experts in credit evaluation, risk Our home finance business involves giving long-term secured
management, retail consumer products, treasury, technology and housing loans to individuals and corporations. We also provide
marketing. Recruitment is a key management activity and we continue construction finance to builders. We provide housing loans directly
to attract graduates from the premier Indian business schools as and also through our wholly-owned subsidiary called ICICI Home
well as employees with other professional qualifications. Recruitment Finance Company, which serves as the focal point for marketing,
and assimilation of talented professionals from other organisations distribution and servicing of our home loan products. Currently,
is a key element of our strategy. these loans are being given to resident and non-resident Indians for
Our management team is committed to enhancing shareholder value the purchase, construction and extension of residential premises
and our performance targets seek to meet this primary objective. and to self-employed for office premises. At year-end fiscal 2004,
We believe we have created the right balance of performance our total home finance loans were approximately 53.0% of our
bonuses, stock options and other economic incentives for our consumer loans and credit card receivables.
employees so that they will be challenged to develop business, Car Finance
achieve profitability targets and control risk. We intend to continuously
re-engineer our management and organisational structure to allow Car finance generally involves the provision of retail consumer credit
us to respond effectively to changes in the business environment for an average maturity of three to five years to acquire specified
and enhance our overall profitability. new and used automobiles. Car loans are secured by a charge on
the purchased automobile. We have a strong external distribution
VI. OVERVIEW OF OUR OPERATIONS network and a strong in-house team to manage the distribution
network which has been instrumental in achieving this leadership
We offer products and services in the areas of commercial banking
position. We also have strong relationships with automobile
to corporate and retail customers, both domestic and international.
manufacturers and are a “preferred financier” with 12 automobile
We also undertake treasury operations and offer treasury related
manufacturers in India.
products and services to our customers. Our subsidiaries are
engaged primarily in insurance, investment banking and venture
capital and private equity financing.
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March 2005
Commercial Business and upon which cheques can be drawn; and

We fund commercial vehicles, utility vehicles and construction and z current accounts, which are non-interest bearing demand
farm equipment sold through manufacturer-authorised dealers. The deposits.
finance is generally for a maximum term of five to seven years In addition to deposits from Indian residents, we accept time and
through loans, hire purchase agreements or a lease. savings deposits from non-resident Indians, foreign nationals of
Indian origin and foreign nationals working in India. These deposits
Personal Loans
are accepted on a repatriable and a non-repatriable basis and are
Personal loans are unsecured loans provided to customers for maintained in rupees and select foreign currencies.
various purposes such as higher education, medical expenses, social In addition to our conventional deposit products, we offer a variety
events and holidays. of special value-added products and services, such as special
Credit Cards products for different categories of customers depending upon their
age and occupation, which seek to cater to their specific needs.
At December 31, 2004, we had a credit card base of over 3 million Following a strategy focused on customer profiles and product
cards. As the Indian economy develops, we expect that the retail segmentation, we offer differentiated liability products to various
market will seek short-term credit for personal uses, and our offering categories of customers depending on their age group, such as
of credit cards will facilitate further extension of our retail credit Young Star Accounts for children below the age of 18 years, Student
business. We also expect that as credit usage increases, we will be Banking Services for students, Salary Accounts for salaried
able to leverage our customer relationships to cross-sell additional employees and Senior Citizens Account for individuals above the
retail and consumer-oriented products and services. age of 60 years. We have also micro-segmented various categories
Dealer Funding of customers to offer targeted products, like Private Banking for high
net worth individuals, Defence Banking Services for defence
We fund dealers who sell automobiles, two wheelers, tractors and personnel, Special Savings Accounts for trusts and Roaming Current
commercial vehicles. These loans are generally given for a short Account for businessmen. This segmentation strategy has contributed
term. In May 2003, we acquired the entire paid-up capital of significantly to the growth in our deposit base.
Transamerica Apple Distribution Finance Private Limited, which was
primarily engaged in providing dealer financing in the two-wheeler Salary Accounts
segment. The acquisition has supplemented our retail franchise, In September 1996, we introduced “Power Pay”, a direct deposit
especially in the two-wheeler segment. product for our corporate customers, to help them streamline their
Lending to Small Enterprises salary payment systems for their employees. This product allows
the employees’ salaries to be directly credited to a special individual
We are seeking to extend our reach to the growing small enterprises savings account established for this purpose. Renamed as “Salary
sector without the accompanying high credit risks, which are Account” in 2002, this product provides us with a competitive
normally associated with advances to small enterprises, through advantage as these new payroll account holders often open other
our Small Enterprises Group. This group focuses on supply-chain accounts with us, including time deposits. We also seek to market
financing. Supply-chain financing means financing suppliers and our retail credit products to our salary account holders. We aim to
dealers of large companies, thereby providing banking services at deliver value to corporates and their employees by offering end-to-
every stage of the supply chain from input to sale of the final product. end financial solutions from salary processing through strategic
Typically, the financing is in the form of short-term revolving facilities alliances, offering payment services through cheques, debit and
with overdraft or bill discounting limits and is extended only to credit cards as well as online bill payment and in-house as well as
carefully pre-selected suppliers and dealers to be used only for third party investment vehicles.
genuine transactions with our corporate clients. The group is also
involved in financing based on a cluster or community based Auto Invest Account
approach, that is, financing of small enterprises that have a Our auto invest account is a savings account product that offers the
homogeneous profile such as apparel manufacturers and customer liquidity as well as higher returns than an ordinary savings
manufacturers of pharmaceuticals. account. This product provides weekly automatic transfer of idle
Loans against Securities balances, above a certain minimum amount, from savings accounts
to time deposits, resulting in higher yields. Whenever there is a
This is an overdraft product, where the credit limit is set in the shortfall in the customer’s savings account, deposits are automatically
current account of the customers. The Interest is charged only on the transferred back from the time deposit account, in units of Rs. 5,000
amount withdrawn and for the time span utilized. The various to meet the shortfall. A similar product is available for current
securities lent against are Shares, Bonds (RBI, UTI, ICICI), Mutual accounts.
Fund units, IMDs & Life Policies. The customer has been provided a
facility to sell the “pledged” shares online and also view the portfolio Roaming Current Account
online. We launched a current account product called “Business Multiplier”
Retail Deposits in July 2000 to meet the needs of the small enterprises segment. This
product was re-launched in September 2002 as Roaming Current
Our retail deposit products include the following: Account and offers flexibility to customers to choose from six product
z time deposits including: options with varying minimum average quarterly balance
z recurring deposits, which are periodic deposits of a fixed requirements. In addition to conventional banking facilities, this
amount over a fixed term that accrue interest at a fixed rate product offers a multi-city checking facility, anywhere banking facility,
and may be withdrawn before maturity by paying cash deposit and withdrawal facility across branches and doorstep
penalties; and banking. Customers can access their account through the corporate
Internet banking platform and a 24-hour telephone banking facility
z certificates of deposit; and can receive account balance information on mobile telephones
z savings accounts, which are demand deposits that accrue and electronic mail.
interest at a fixed rate set by the RBI (currently 3.5% per annum)
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March 2005
Private Banking was approximately 7.9 million as at December 31, 2004.

Our private banking services seek to meet the entire banking and Online Bill Payment
financial advisory needs of high net worth individuals. At present,
we offer these services at all our branches to clients with a banking We have tie-ups with leading telecommunication companies, utility
relationship size in excess of Rs. 5,00,000. Private banking services providers, insurance companies and internet shopping portals for
aim at providing complete personalised services alongwith online payment of bills by our Internet banking customers. Currently,
competitive pricing on certain asset products, preferential rates for we have tied up with over 100 service providers (for utility bill
select liability products and services, special complimentary offers payments) and 95 online shopping portals. Utility Bill Payment
service is offered free of cost. This service is based on cost sharing
and value-linked benefits.
arrangements with most of these companies.
In addition, we look at offering financial planning and investment
advisory services to assist our top end customers in their investment Other Fee-Based Products and Services
and savings plans. This includes assistance in risk profiling, regular
Mutual Fund Sales
monitoring and performance review of the clients’ investment and
savings portfolio. We have entered into arrangements with select mutual funds to
distribute their products through our distribution network, for which
Service charges for deposit accounts we earn up-front and trailing commissions.
Service charges on deposit accounts mainly comprise of levies to
Depository Share Accounts
savings account customers for non-maintenance of the minimum
Quarterly Average Balance (QAB). Savings account customers, other SEBI has made it mandatory for the 10 largest stock exchanges of
than salary account customers, are generally required to maintain the country to settle securities transactions in a dematerialised mode.
Rs 5,000 as the minimum QAB. Non-maintenance of the minimum We are a depository participant of the NSDL and CDSL and offer
QAB attracts charges of Rs. 750 for the quarter. depository accounts for securities & commodities.
Debit cum ATM Cards Government of India Bond Sales
We offer a complete range of international Debit Cards to our We have been permitted by the RBI to sell Government of India
customers that allow them to pay for purchases at merchant locations bonds This includes the receipt of applications for these bonds, the
immediately from their account. Catering to different customer issue of these bonds in the form of bond ledger accounts and the
segments, Debit Cards are available in 5 variants - ICICI Bank Private servicing of bondholders. These Government of India bonds are
Banking Debit Card for premium customers, ICICI Bank Gold Debit sold across a majority of our retail branches. We seek to capitalise
Card for select customers, ICICI Bank Ncash Debit card, ICICI Bank - on this opportunity by effectively distributing these bonds through
HPCL Debit Card and the ICICI Bank Young Stars Debit Card. The co- our distribution network/branches and earning fee income in the
branded ICICI Bank - HPCL Card offers customers the benefit of fuel process.
surcharge refund at all HPCL pumps. ICICI Bank Young Stars Debit
Card is for the young bank customers, to help inculcate the virtue of Web Broking
financial discipline. ICICI Web Trade Limited provides web broking services. This service
Operating on both the Visa International and Visa Electron platforms, involves the online integration of a customer’s depositary share
these cards are valid at more than 12 million merchant locations. accounts and bank accounts with us and securities brokerage
Our Debit Cards provide customers with value-added payment accounts with ICICI Web Trade. This service has assisted us in our
solutions which are a safer and more convenient alternative to efforts to acquire new customers and low-cost savings deposits, as
carrying cash, both locally and internationally. We earn an annual each e-broking customer is required to open a bank account. ICICI
fee of Rs. 99 for every card and an interchange fee of 1.1% of the Comm Trade Limited, a subsidiary of ICICI Web Trade, proposes to
amount spent through the debit card. The debit cards also serve as provide web and telephone based broking services in the
ATM cards and can be used for various transactions including cash
commodities and commodity derivatives market.
withdrawal at our ATMs free of cost and at other visa affiliated ATMs
at a nominal charge. We had a debit card base of over 6.0 million Portfolio Investment Scheme
cards at December 31, 2004.
We are one of the banks designated by the RBI for issuing approvals
Bond Issues to non-resident Indians and overseas corporate bodies (OCBs) (w.e.f.
We have issued a variety of unsecured redeemable Bonds to the September 16, 2003 OCBs are not permitted to get fresh approvals
Indian public. These Bonds, which are not insured by any Indian and can not make fresh investments but can continue to hold the
authority, are designed to address various investor needs, such as existing holdings until disposed off) to trade in shares and convertible
the need for regular income, liquidity and tax saving. During fiscal debentures on the Indian stock exchanges through registered brokers
2004, we raised Rs. 1,352 crore through these Bond issuances. We under Portfolio Investment Scheme as defined in Schedule 3 of
had about 3.7 million Bondholder accounts at December 31, 2004. FEMA Regulations. Pursuant to this scheme of the RBI, these investors
can trade on the Indian stock exchanges within a prescribed limit
Internet banking services and in the approved companies by obtaining an approval from a
designated bank and by routing all the transactions through that
We offer Internet banking services to retail customers through our
bank. As a designated bank, we report all such transactions to the
website www.icicibank.com. We believe that the increasing number
RBI. We also help these investors with regulatory compliance, such
of Internet users, the demographic characteristics of those users and
as ensuring delivery-based trading and limit monitoring and
the relative flexibility and convenience of internet banking provides
providing tax calculations.
us an opportunity to capitalise on our experience and to increase
market share in retail banking. Services offered to our Internet banking Life Insurance Policy Referral and Lead Generation
customers include online access to account information, placement
of time deposits, secure mail box facility for communication with We have a Memorandum of Understanding with ICICI Prudential Life
Bank, Bill payments through Bank and Credit Card Accounts, Transfer Insurance Company for generating leads from our banking customers
of funds to third party within ICICI Bank or to any account outside for the products of ICICI Prudential Life Insurance Company and
ICICI Bank (select cities). The number of our Internet banking accounts referring these leads to ICICI Prudential Life Insurance Company.
The insurance policy is issued by ICICI Prudential Life Insurance
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March 2005
Company. We collect fees for generating leads and providing Working Capital Finance
referrals that are converted into policies.
Under working capital finance, we offer cash credit facilities, bill
General Insurance Policy Referral and Lead Generation discounting and other products to our customers.
We have a Memorandum of Understanding with ICICI Lombard Cash Credit Facilities
General Insurance Company for generating leads from our banking
Under the cash credit facility, a line of credit is provided up to a pre-
customers for products of ICICI Lombard General Insurance Company
established amount based on the borrower’s projected level of
and referring these leads to ICICI Lombard General Insurance
inventories, receivables and cash deficits. Up to this pre-established
Company. The insurance policy is issued by ICICI Lombard General
amount, disbursements are made based on the actual level of
Insurance Company. We collect fees for generating leads and
inventories and receivables. A cash credit facility is typically given
providing referrals that are converted into policies.
to companies in the manufacturing, trading and service sectors on a
Distribution of equity offerings floating interest rate basis. Interest is earned on this facility on a
monthly basis, based on the daily outstanding amounts. The facility
We distribute public offerings of equity shares by companies through is generally given for a period of up to 12 months, with a review after
our distribution network. that period. Our cash credit facility is generally fully secured with full
Commercial Banking Products and Services for Corporate recourse to the borrower. In most cases, we have a first charge on
Customers the borrower’s current assets, which normally are inventory and
receivables. Additionally, in some cases, we may take further security
General of a first or second lien on fixed assets including real estate, a pledge
We provide a range of commercial banking products and services of financial assets like marketable securities, corporate guarantees
to India’s leading companies and growth-oriented middle market and personal guarantees.
businesses. Our key commercial banking products and services to Cash credit facilities are extended to borrowers by a single bank,
corporate customers include loan products and fee and commission- multiple banks or a consortium of banks with a lead bank. The nature
based products and services. Our loan products include project of the arrangement is usually agreed between the bank or banks and
and corporate finance and working capital finance including cash the borrower and depends upon the amount of working capital
credit facilities and bill discounting. We also offer agricultural financing required by the borrower, the risk profile of the borrower
financing. Our fee and commission-based products and services and the amount of loan exposure a single bank can take on the
include letters of credit, financial and performance guarantees, cash borrower. We are focused on highly rated large corporations and
management services, trust and retention accounts, cross border have participated in multiple bank and consortium arrangements.
trade services, payment services, securities processing services and Regardless of the arrangement, we undertake our own due-diligence
loan syndication. We also accept rupee or foreign currency deposits and follow our credit risk policy to determine whether we should
with fixed or floating interest bases from our corporate customers. lend money to the borrower and, if so, the amount to be lent to the
Our deposit products include current deposits and time deposits. borrower and the rate of interest to be charged. For more details on
We deliver our commercial banking products and services to our our credit risk procedures, see “— Risk Management — Credit Risk”
corporate customers through a combination of physical branches, on page 56.
correspondent banking networks, telephone banking and the Internet.
Overdraft
Corporate Loan Portfolio An overdraft is a form of credit similar to cash credit. The overdraft
Our corporate loan portfolio primarily consists of term loans for is a running account facility where the borrower may remit and
project and corporate finance, and working capital credit facilities. draw funds freely, subject to the limit granted.
Project and Corporate Finance Commercial paper
We offer project finance to the manufacturing sector and structured A commercial paper is an unsecured, short-term corporate paper in
finance to the infrastructure sector respectively. Our project finance the nature of a usance promissory note with fixed maturities and is
business consists principally of extending medium-term and long- negotiable by endorsement and delivery. Under current guidelines,
term rupee loans to our clients although we do provide financing in commercial paper can be issued for a minimum tenor of 15 days
foreign currencies. We also provide guarantees to foreign lenders and a maximum tenor of 365 days. Commercial papers are generally
and export credit agencies, on behalf of our clients, typically for issued by highly rated borrowers and since they are tradeable, they
large projects in the infrastructure sector. Our manufacturing sector offer us a liquid investment opportunity.
financing includes project-based lending to companies in traditional
Bill Discounting
manufacturing sectors, including iron, steel and metal products,
textiles, machinery and capital goods, cement and paper. We also Bill discounting involves the financing of short-term trade receivables
offer corporate finance to our customers based on their existing through negotiable instruments. These negotiable instruments can
operations and balance sheets. We have focused on using then be discounted with other banks if required, providing us with
securitisation techniques to credit enhance our lending products. liquidity. In addition to traditional bill discounting, we also provide
Project and corporate finance is provided generally through term customised solutions to our corporate customers having large dealer
loans that amortise over a period of typically between one and ten networks. Loans are approved to dealers in the form of working
years. Our term credits include rupee loans, foreign currency loans, capital lines of credit, based on analysis of credit risk profiles of
lease financing and subscription to preferred stock. These products dealers.
also include marketable instruments such as fixed rate and floating Short-term loan
rate debentures. In the case of rupee and foreign currency loans,
and debentures, we generally have a security interest and first lien Short-term loans are demand loans with a maturity of three to six
on the fixed assets of the borrower. The security interest typically months provided by us to corporate borrowers to meet their
includes property, plant and equipment and other tangible assets of temporary cash flow mismatches or to avail of interest rate arbitrage.
the borrower. They can be denominated in either rupee or foreign currency and
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March 2005
can be disbursed as fixed rate loans or floating rate loans linked to remittance services and Internet-based payment products. Our
our prime lending rate or money market benchmark rates. Short- customers pay a fee to us for these services based on the volume of
term loans are usually provided to highly rated corporates and may the transaction, the location of the cheque collection centre and
be unsecured. speed of delivery. This also results in low-cost funds being
maintained for short durations in checking accounts of customers
Export Credit which we invest profitably.
The RBI requires banks to make loans to exporters at concessional
Escrow and Trust and Retention Accounts
rates of interest. We provide export credit for pre-shipment and
post-shipment requirements of exporter borrowers in rupees and We offer escrow account and trust and retention account facilities to
foreign currencies. The RBI provides export credit refinancing for lenders in project finance transactions who typically require the
an eligible portion of total outstanding export loans at the bank rate setting up of escrow accounts and trust and retention accounts as
prevailing from time to time. The interest income earned on export part of the project financing structure. Our customers include power,
credits is supplemented through fees and commissions earned from road and other infrastructure development companies. This service
these exporter customers from other fee-based products and services enables us to capture the receivables of the project on behalf of the
availed by them from us, such as foreign exchange products. lenders and channel the cash flows in a pre-determined manner. We
also offer escrow account facilities for securitisation, revenue sharing
Fee and Commission-Based Activities between joint venture partners, merger and acquisition transactions
Our fee and commission-based products and services include letters etc. Our customers pay a negotiated fee to us for this product based
of credit, guarantees, cash management services, trust and retention on the complexity of the structure and the level of monitoring involved
accounts, escrow accounts, payment services, securities markets in the transaction.
services and loan syndication.
Payment Services
Letters of Credit We offer online electronic payment facilities through our commercial
We provide letter of credit facilities to our working capital loan Internet banking platform to our corporate customers and their
customers both for meeting their working capital needs as well as suppliers and dealers as a closed user group, where the entire
for capital equipment purchases. For working capital purposes, we group is required to maintain bank accounts with us. We use the
issue letters of credits on behalf of our borrowers for the sourcing of Internet as the delivery platform for this business-to-business
their raw materials and stock inputs. Lines of credit for letters of electronic commerce product. Under this service, payments from
credit are approved as part of a working capital loan package our corporate customers to their suppliers and payments from the
provided to a borrower. These facilities, like cash credit facilities, dealers to our corporate customers are made electronically. This
are generally given for a period up to 12 months, with review after service offers a high level of convenience since no physical
that period. Typically, the line is drawn down on a revolving basis instruments are required, all transactions are done online and the
over the term of the facility, resulting in a fee payable to us at the time information may be viewed on the Internet. This product can be
of each drawdown, based on the amount and term of the drawdown. customised to meet the specific requirements of individual
customers. We presently do not charge a fee for this service, as it
We issue letters of credit on behalf of borrowers both for domestic
results in large low-cost funds being maintained for short durations
and foreign purchases. Borrowers pay a fee to us based on the
in current accounts of customers. Some of these users are also
amount drawn down from the facility and the term of the facility. This
using the platform for making payments and receiving collections
facility is generally secured by the same collateral available for cash
from their channel partners.
credit facilities. We may also take collateral in the form of cash
deposits, in the range of 5.0% to 100.0% of the drawdown amount, Securities Markets Services
from our borrowers before each drawdown of the facility.
We are a clearing member of the National Stock Clearing Corporation
Guarantees Limited, BSE, Mumbai and a custodian registered with the SEBI, a
depositary participant of the NSDL and the CDSL, a custodian for
We provide guarantees, which can be drawn down any number of
Global Depositary Receipts and American Depositary Receipts issued
times up to the committed amount of the facility. We issue guarantees
by Indian companies and a Professional Clearing Member (PCM)
on behalf of our borrowers in favour of corporations and
for the derivatives segment of the NSE and the BSE.
government authorities. Guarantees are generally issued for the
purpose of bid bonds, guaranteeing the performance of our Loan Syndication
borrowers under a contract as security for advance payments made
to our borrowers by project authorities and for deferral of and We have developed significant syndication capabilities while
exemption from the payment of import duties granted to our structuring and arranging large project finance transactions. We
borrowers by the government against fulfillment of certain export seek to leverage these syndication capabilities to arrange project
obligations by our borrowers. The term of these guarantees is and corporate finance for our corporate clients and earn fee income,
as well as to securitise loans originated by us. We have been granted
generally up to 36 months though in specific cases, the term could
a merchant banking license by the SEBI.
be higher. This facility is generally secured by collateral similar to
that of letters of credit. In addition, as a part of our project financing Corporate Deposits
activity, we issue guarantees to foreign lenders, export credit
agencies and domestic lenders on behalf of our clients. We take deposits from our corporate clients with terms ranging
from 15 days (seven days in respect of deposits over Rs. 15 lakhs
Cash Management Services with effect from April 19, 2001) to 7 years but predominantly from
Under cash management services, we offer our corporate clients 15 days to one year. The RBI regulates the term of deposits in India,
custom-made collection, payment and remittance services allowing but not the interest rates, with some minor exceptions. Banks are not
them to reduce the time period between collections and remittances, permitted to pay interest for periods less than seven days. Also,
thereby streamlining their cash flows. Our cash management products pursuant to the current regulations, we are permitted to vary the
include physical cheque-based clearing in locations where interest rates on our corporate deposits based upon the size range
settlement systems are not uniform, electronic clearing services, of the deposit so long as the rates offered are the same for every
central pooling of country-wide collections, dividend and interest customer of a deposit of a certain size range on a given day.
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March 2005
Corporate deposits include funds taken by us from large public acted as trustee for the holders of convertible and non-convertible
sector corporations, government organisations, other banks and debentures issued in the public and private markets. During SEBI’s
private sector companies. inspection of the Debenture Trustee operations of ICICI, observations
We offer a variety of deposit products to our corporate customers. on certain shortcomings were made by SEBI in its inspection report.
We market corporate deposits from branches and directly from our ICICI had initiated suitable action based on SEBI report and had
corporate office. We take rupee or foreign currency denominated submitted a detailed reply to SEBI. The matter was being examined
deposits with fixed or floating interest rates. Our deposit products by SEBI. ICICI had subsequently, with a view to exit this business,
for corporations include: been divesting the portfolio of debenture trusteeship in favour of
other debenture trustees. We continue to act as a debenture trustee
z current accounts — non-interest-bearing demand deposits; for remaining companies.
z time deposits — fixed-term deposits that accrue interest at a
Commercial Banking Products and Services for International
fixed rate and may be withdrawn before maturity by paying
Customers
penalties; and
z certificates of deposit — a type of time deposit. Our strategy in international commercial banking is based on
leveraging home country links for international expansion by
In addition to our corporate deposit taking activities described capturing market share in select international markets. The initial
above, we also act as a banker to the market offerings of select focus areas are supporting Indian companies in raising corporate
companies on account of raising of equity or debt, buy back of and project finance for their investments abroad, trade finance,
equity and takeovers. These companies are required to maintain the personal financial services for non-resident Indians and international
subscription funds with the bankers to the offering until the allotment alliances to support domestic businesses. We have over the last few
of shares/buy back of shares and the refund of excess subscription is years built a large network of correspondent relationships with
completed. This process generally takes about 15 to 30 days, resulting international banks across all major countries. Most of these countries
in short-term deposits with us. We act as a banker to corporates for have significant trade and other relationships with India.
their dividend payout to their shareholders and interest payout to
investors and depositors, which results in mobilising interest-free, Some of the key products and services that are unique to our
float balances to us. We believe that our relationships with corporate international customers are described below
deposit customers significantly reduce the volatility in our corporate TradeWay
deposit base. We also offer inter-bank call rate-linked floating rate
deposits. “TradeWay” is an Internet-based documentary collection product,
which provides correspondent banks access to real-time on-line
We also provide liquidity management services to our corporate information on the status of their export bills collections routed
customers to enable them to invest their short-term cash surpluses in through us. The main features of the product are the availability of
a variety of short-term treasury and deposit-based instruments, online status enquiry for documentary collections, availability of
including treasury bills, commercial paper and certificates of deposit. tracking and tracing functions for bills routed through us and the
We also facilitate the holding of foreign currency accounts. In addition presence of a single point contact for India-bound documentary
to large public and private sector companies, our other target collections.
customers for these products are provident funds.
Guarantee Re-issuance
Client Coverage
We re-issue guarantees favoring corporations and government
Our principal corporate relationship groups are the Corporate departments in India against counter guarantees issued by
Banking Group, the Government Banking Group and the Rural, Micro- correspondent banks. This service is provided subject to pre-
banking and Agri-business Group. The Corporate Banking Group is arrangement. We offer competitive pricing for our guarantee re-
responsible for managing relationships with large corporates in issuance facility. We can issue bid bond guarantees, performance
both the private and public sector. The Government Banking Group guarantees and financial guarantees including payment guarantees.
is a dedicated group created to leverage the business opportunities Our guarantees have wide acceptance across Indian corporates and
in central and state governments and local government bodies. The government departments.
Rural, Micro-banking and Agri-business Group is responsible for all
our rural and micro-banking and agri-business initiatives. The group Remittance Tracker
is also responsible for relationships with regional rural banks, co- Remittance Tracker is a web-based application that allows a
operative banks, co-operatives and all other entities with a primarily correspondent bank to query on the status of their payment instructions
agricultural or rural focus. The Structured Finance, Credit and Markets and also to get various information reports online. We currently offer
Group is responsible for structuring customised financing solutions this product free of charge to all our correspondent banks.
for our customers, who are increasingly seeking integrated financial
solutions encompassing credit, investment advice, foreign exchange Offshore Banking Deposits
management and derivatives and risk management. This group
We have 3 offshore banking units in Mumbai, Singapore and Bahrain.
includes our corporate treasury and risk management products and
The offerings in the units are as listed below:
services. We also have specialised groups for infrastructure project
finance and manufacturing project finance (including oil, gas and Location of Unit Currencies Offered Tenors
petrochemicals and shipping). Product specialists from the product Mumbai USD, GBP, Euro 3 mths – 6 years
groups who focus on product improvements and customisation Singapore USD, GBP, Euro, CAD,
support our corporate relationship managers. The main focus of the CHF, AUD, JPY 1 mth – 5 years
relationship managers is to market our products, including cross-
selling of our products and services for retail customers to our Bahrain USD, GBP, AUD, BHD 1 mth – 5 years
corporate clients and their employees. In addition to the above,
Foreign Currency Non-Resident Deposits
they cross-sell the products offered by our subsidiaries.
Foreign Currency Non-Resident deposits are simple foreign currency
Debenture Trusteeship deposits offered in four main currencies – US Dollar, Pound Sterling,
ICICI had provided debenture trusteeship services since 1983, and Euro and Japanese Yen. Both the principal amount and interest earned
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March 2005
can be fully repatriated out of India. These foreign currency deposits Loan Pricing
are subject to minimum deposit values of US$ 1,000, GBP 1,000,
We price our loans based on the following factors:
EUR 1,000 and 200,000 Yen respectively.
z our internal credit rating of the company;
Non-Resident External Fixed Deposits
z the maturity of the loan;
These deposits are maintained in Indian rupees and the minimum z the nature of the banking or financing arrangement (either a
investment amount is Rs. 25,000. These deposit accounts can be single bank, multiple bank or consortium arrangement);
opened for tenure in the range of one year to 10 years. Both the
interest earned and principal amounts are fully repatriable out of z the collateral available; and
India. Interest rates are fixed on a monthly basis. The interest rates z market conditions.
cannot exceed the LIBOR/swap rates plus 50 basis points for US As required by the RBI’s guidelines and the advice issued by the
Dollar deposits of corresponding maturity. Loans against these Indian Banks’ Association, effective January 1, 2004, we price our
deposits are generally available for up to 90.0% of the deposit loans (other than fixed rate loans and certain categories of loans to
amount. individuals and agencies specified by the Indian Banks’ Association,
Non-Resident External Savings Account including among others, loans to individuals for acquiring residential
properties, loans for purchase of consumer durables, non-priority
Non-resident external savings accounts are maintained in Indian sector personal loans and loans to individuals against shares,
rupees and the minimum quarterly average balance required to be debentures, bonds and other securities) with reference to a benchmark
maintained is Rs. 10,000. An international ATM cum debit card is prime lending rate, called the ICICI Bank Benchmark Advance Rate.
offered together with the account and funds can be accessed from The Asset-Liability Management Committee of our Board of Directors
ATMs across the world. Funds can be transferred to this account free fixes the ICICI Bank Benchmark Advance Rate based on cost of
of cost, through the online remittance channel Money2India. Interest funds, cost of operations and credit charge as well as yield curve
rates on balances in the non-resident external savings accounts are factors, such as interest rate and inflation expectations, as well as
fixed on a quarterly basis. The interest rate cannot exceed the LIBOR/ market demand for loans of a certain term and our cost of funds. The
swap rates for six months maturity on US Dollar deposits and is ICICI Bank Benchmark Advance Rate is currently 11.00% p.a. payable
fixed quarterly on the basis of the LIBOR/swap rate of US Dollar on monthly, effective February 9, 2005. The lending rates comprise
the last working day of the preceding quarter. ICICI Benchmark Advance Rate, term premium and transaction-
Non-Resident Ordinary Savings Accounts and Non-Resident specific credit and other charges.
Ordinary Fixed Deposits Delivery Channels
These products are primarily intended for non-residents who earn We deliver our products and services through a variety of distribution
income in India. The interest rates offered and other product features outlets, ranging from traditional bank branches to ATMs, call centres,
are similar to the rates offered on domestic deposits. Principal is not franchisees and the Internet. We believe that India’s vast geography
freely repatriable while the interest is repatriable net of taxes payable necessitates a variety of distribution channels to best serve our
in India. customers’ needs. As part of our strategy to migrate customers to
Money2India Remittance Facility lower cost electronic delivery channels, we have made investments
in channels such as ATMs, call centres and the Internet. Our channel
We provide a full range of online and offline remittance services migration effort is aimed at reducing cost while enhancing customer
under our specific money transfer brand “Money2India “. For all satisfaction levels by providing them round-the-clock transaction
our products, we have entered into tie-ups with leading banks and and servicing facilities. We believe that currently, more than 70.0%
exchange houses in different geographies in order to ensure that the of our retail customer-induced banking transactions take place
customers get consistently high levels of service. through non-branch channels. The key components of our distribution
The Money2India online remittance product portfolio presents value network are described below:
added features such as transfers into bank accounts with over 30 Branches and Extension Counters in India
banks in India, demand drafts issued and payable at over 1250
locations in India, online tracking of the status of funds and superior At December 31, 2004, we had a network of 451 branches and 53
exchange rates. The range of products include Power Transfer extension counters in 296 centres across several Indian states.
(Internet based wire transfer available in 13 currencies), e-Transfer Extension counters are small offices primarily within office buildings
(Direct debit using ACH network in USA), Cheque Transfer (Local or on factory premises that provide commercial banking services.
cheque lockbox facility available in 5 countries), NetExpress (Online Prior to opening a branch, we conduct a detailed study in which we
debit through local bank’s internet banking facility in UK and assess the deposit potential of the area. Our branch locations are
Singapore) and Card Transfer (Online debit to USD denominated largely leased rather than owned. Our back office operations are
credit card in USA). centralised at regional processing centres, enabling us to create a
more efficient branch network.
Money2India also offers a host of offline remittance products, where
the remitter has to simply walk into our partner exchange house/ As a part of its branch licencing conditions, the RBI has stipulated
bank branch location and give remittance instructions. The range of that at least 25.0% of our branches must be located in semi-urban
products include Speed Transfer (funds remitted to receiver within and rural areas. A semi-urban area is defined as a centre with a
24 hours), Insta Transfer (funds remitted to receiver within 2 hours) population of greater than 10,000 but less than 1,00,000. A rural area
and DD Drawing (INR Demand Drafts issued across the counter) is defined as a centre with a population of less than 10,000. The
apart from other customized products launched in association with population figures relate to the 1991 census. We have adhered to
partner banks in specific geographies this requirement as shown in the table below. Several of these
branches are located in suburbs of large cities, and some of these
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March 2005
branches are located in areas where large corporations have their Internet
manufacturing facilities. About 225 of our branches are open for 12
We believe that round the clock account access is key to high level
hours a day, six days a week.
customer servicing. We offer Internet Banking facilities through our
The following table sets forth, at the date indicated, the number of website www.icicibank.com. Our Internet banking service facilitates
branches and extension counters broken down by area. customers to access their accounts for various informational and
At December 31, 2004 transactional needs. Using Internet Banking, Customers can transfer
Number of branches % of total funds to third parties within ICICI Bank and outside in addition to
and extension counters payments for Utility Bills and online shopping for our Internet banking
Customers. We also provide Internet Banking Service for our Credit
Metropolitan/urban 311 61.7% Card and Demat Customers facilitating access to credit card statements
Semi-urban/rural 193 38.3% and online instruction facility for Demat.
Total 504 100.0% As at December 31, 2004 we had 7.9 million registered Internet
banking users. We provide Internet banking services to our corporate
Prior to the amalgamation, ICICI had set up a number of ‘’ICICI customers through ICICI e-business, a finance portal which is the
Centres’’, which were low-cost, technology driven, stand-alone single point web-based interface for all our corporate customers.
offices with three or more employees, acting as marketing and service ICICI Bank e-business facilitates the customers to conduct banking
centres. At year-end fiscal 2002, ICICI had 95 ICICI Centres. Pursuant business online in a secured environment. The Corporate Internet
to the amalgamation, we have, with the approval of the RBI converted Banking (CIB) platform of ICICI Bank-ebusiness allows the customers
25 of these centres into bank branches, 26 centres into distribution to view and transact on its accounts online, bill payment, inter-bank
and servicing centres attached to existing bank branches, and closed transfer of funds, etc. CIB also extends Trade Finance services like
the remaining 44 centres. online application for letter of credit and bank guarantees and view
Our corporate relationship groups are principally based at Mumbai, the transaction events with us on Letter of Credit, Bank Guarantee,
New Delhi, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad, Bills and Forward Contracts. We also offer foreign exchange trading,
Pune, Vadodara, Coimbatore, Ludhiana, Chandigarh, Jaipur and through Forex Online for our Corporate Customers for dealing in
Kochi. Our commercial banking services to corporate customers spot and forward contract with us. Forex Online, a secure and user-
are delivered through our network of branches. friendly platform that makes it easy for clients to get live prices for
their deals and transact from virtually anywhere in the world. We
Franchisee Network also facilitate trading in Government Securities and Corporate Bonds
We have a vast franchisee network spread over all major cities in through Debt Online for our Corporate Customers.
India. The franchisees deliver our retail credit products. These agents
Call Centres
help us achieve deeper penetration by offering door-step service to
the customer. These agents market our products on an exclusive We provide Phone Banking services through our Centralized Phone
basis. All credit and risk management decisions pertaining to any Banking center. The center functions 24 hours a day, seven days a
customer are made by us and no agent can extend credit to any week, and offers a self-service option to customers for automated
customer without our approval. These agents receive a fee based phone banking. In addition, a team of Phone Banking officers offer
on the volume of business generated by them. personalised service for banking, dematerialised securities, online
share trading, Credit cards, Bonds and loan products. The Phone
ATMs Banking center is also used for product specific marketing campaigns
At December 31, 2004, we had 1,850 ATMs, of which 518 were to generate leads, which are assigned to the franchisees for fulfillment.
located at our branches and extension counters. The remaining At December 31, 2004, our Phone Banking center had 2,300
1,332 were located at the offices of select corporate clients, large workstations across two locations.
residential developments, airports, and petrol pumps and on major
Mobile Phone Banking
roads in metropolitan cities. Apart from cards issued to our own
customers, our ATMs also process Visa, Visa Electron, Master, Cirrus Our mobile phone banking services enables a customer to bank
and Maestro card transactions. We have entered into ATM sharing while being on the move. Savings account and credit card customers
arrangements with Federal Bank and Andhra Bank, which allow our can view their account details on their mobile phones. Savings
customers to access their accounts with us through the ATM networks account customers can also request a cheque book or account
of these banks in addition to our own ATM network. Similarly, statement, and obtain a list of all the major transactions in their
customers of these banks can also access their bank accounts using account through Short Messaging Service (SMS).
our ATM network.
Correspondent Banking Networks
In view of the diversity of regional languages used in various parts
of India, our ATMs offer multilingual screens. These screens are We have correspondent banking relationships with other banks in
loaded depending on the location of the ATM centre. ATMs offer India with large physical branch networks to offer a broader coverage
instructions in 11 languages. Other facilities offered through ATMs for our collections and payments products. As a result of our
include bill payment services, a facility for recharging prepaid cards correspondent banking associations, we facilitate collections at over
for mobile phones, obtaining internet packs, offering donations to 4,000 locations and payments at more than 500 locations In India.
leading temples and donating money towards charity. We have also Treasury
pioneered the concept of mobile ATMs in India to reach remotely
located customers. This service deploys ATMs mounted on mobile Through our treasury operations, we seek to manage our balance
vans to visit specific areas at a pre-designated time. At present there sheet including the maintenance of required regulatory reserves
are 3 mobile vans operating in different parts of the country. Some and to optimise profits from our trading portfolio by taking advantage
of our ATMs in Mumbai and Pune have also been modified to aid a of market opportunities. Our trading and securities portfolio includes
visually handicap person to do a transaction on the ATM. our regulatory reserve portfolio, as there is no restriction on active
management of our regulatory reserve portfolio. Our treasury
operations include a range of products and services for corporate
customers, such as forward contracts and interest rate and currency
swaps, and foreign exchange products and services.
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March 2005
General requirements of our corporate clients. The products and services

offered include:
Under the RBI’s statutory liquidity ratio requirement, we are required
to maintain a minimum of 25.0% of our demand and time liabilities z spot foreign exchange for the conversion of foreign currencies
by way of approved securities, such as Government of India securities without any value restrictions;
and state government securities. We maintain the statutory liquidity z forward foreign exchange for hedging future receivables and
ratio through a portfolio of Government of India securities that we payables, without any value restriction, up to a maximum period
actively manage to optimise the yield and benefit from price of three years; and
movements. Until September 17, 2004, under the Reserve Bank of z foreign exchange and interest rate derivatives for hedging long-
India’s cash reserve ratio requirements, we were required to maintain term exposures.
4.5% of our demand and time liabilities in a current account with the
Reserve Bank of India. The Reserve Bank of India announced an We earn commissions on these products and services from our
increase in the cash reserve ratio to 5.0% in two stages (4.75% corporate customers.
effective September 18, 2004 and 5.0% effective October 2, 2004). Forward Contracts, Interest Rate Swaps and Currency Swaps
The Reserve Bank of India pays no interest on these cash reserves up
to 3.0% of the net demand and time liabilities and, effective We provide forward contracts to our customers for hedging their
September 18, 2004, pays interest at 3.5% on the remaining eligible short-term exchange rate risk on foreign currency denominated
balance, on which it used to pay interest at the bank rate (the rate at receivables and payables. We generally provide this facility for a
which the Reserve Bank of India provides refinance to the banking term of up to six months and occasionally up to 12 months. We also
system, currently 6.0%). For further discussion of these regulatory offer interest rate and currency swaps to our customers for hedging
reserves, see “Regulations and Policies — Legal Reserve their medium and long-term risks due to interest rate and currency
Requirements” on page 109. exchange rate movements. We offer these swaps for a period ranging
from three to 10 years. Our customers pay a commission for this
Our treasury undertakes liquidity management by seeking to maintain product that is included in the price of the product and is dependent
an optimum level of liquidity and complying with the cash reserve upon market conditions. We also hedge our own exchange rate risk
ratio. The objective is to ensure the smooth functioning of all our related to our foreign currency trading portfolio with products from
branches and at the same time avoid the holding of excessive cash. banking counterparties. Our risk management products are currently
Our treasury maintains a balance between interest-earning liquid limited to foreign currency forward transactions and currency and
assets and cash to optimise earnings. The treasury undertakes reserve interest rate swaps for selected approved clients. We believe,
management by maintaining statutory reserves, including the cash however, that the demand for risk management products will grow,
reserve ratio and the statutory liquidity ratio. and we are building the capabilities to grow these products. We are
Our treasury engages in domestic and foreign exchange operations focusing particularly on setting up sophisticated infrastructure and
from a centralised trading floor in Mumbai. As part of our treasury internal control procedures that are critical to these products.
activities, we also maintain proprietary trading portfolios in domestic
debt and equity securities and in foreign currency assets. The Risk Asset Composition and Classification
Committee and Asset-Liability Management Committee of our Board Loan Concentration
of Directors approve our investment and market risk policies.
We follow a policy of portfolio diversification and evaluate our total
We have a limited equity portfolio because the RBI restricts
financing exposure in a particular sector in light of our forecasts of
investments by a bank in equity securities to 5.0% of its total
growth and profitability for that sector.
outstanding domestic loan portfolio as at March 31 of the previous
year. A significant portion of ICICI’s investments in equity securities Our current policy is to limit our exposure to any particular industry
was related to projects financed by it. The RBI has permitted us to (excluding retail finance) to 15.0% of our total exposure. With effect
exclude these investments for determining compliance with the from June 1, 2004, this limit has been revised to 12.0%. At year-end
restriction on investments by banks in equity securities, for a period fiscal 2004, our largest exposure to a single industry (excluding
of five years from the amalgamation. In addition, the RBI also retail finance) was to the iron & steel sector, which was 7.5% of our
approves the exclusion, on a case by case basis, of equity total exposure.
investments acquired by conversion of loans under restructuring The following diagram represents the composition of our exposure
schemes approved by the Corporate Debt Restructuring Forum. at year-end fiscal 2004:
See also “Regulations and Policies” on page 103. To ensure
compliance with the SEBI’s revised insider trading regulations, all Industry-wise exposure at M arch 31, 2004
dealings in our equity investments in listed companies are undertaken
by the equity and corporate bonds dealing desks of our treasury,
which are segregated from our other business groups as well as the
other groups and desks in the treasury, and which do not have
access to unpublished price sensitive information about these OTHERS
RETAIL
30.3%
companies that may be available to us as lenders. 31.9%
We deal in several major foreign currencies and take deposits from

non-resident Indians in four major foreign currencies. We also
manage onshore accounts in foreign currencies. We control market CRUDE/ PETROLEUM
risk and credit risk on our foreign exchange trading portfolio through 3.0%
an internal model which sets counterparty limits, stop-loss limits OTHER SERVICES IRON & STEEL
3.7% 7.5%
and limits on the loss of the entire foreign exchange trading operations
TELECOM M POWER
and exception reporting. 5.0% 7.3%
ENGINEERING
5.3% SERVICES-FINANCIAL
Customer Foreign Exchange 6.2%
We provide customer specific products and services and risk hedging

solutions in several currencies to meet the trade and service-related
47
March 2005
The following tables set forth, at March 31, 2004 , the composition of Pursuant to the RBI guidelines, our exposure to individual borrowers
must not exceed 15.0% of our capital funds comprising Tier-1 and
our total exposure.
Tier-2 capital. Exposure to individual borrowers may exceed the
(Rs. Crore) exposure norm of 15.0% of our capital funds by an additional 5.0%
Industry Total % To Total Total (i.e. up to 20.0%) provided the additional exposure is on account of
Exposure Exposure Exposure To infrastructure financing. With effect from June1, 2004, banks may, in
Top 5 Companies exceptional circumstances, enhance the exposure to an individual
As % Of Total borrower by 5.0% of capital funds (i.e. 20.0% of capital funds for an
individual borrower and 45.0% of capital funds for a group of
Exposure To The
companies under the same management) with approvals from their
Industry
board and making appropriate disclosures in their annual report.
Retail Finance 33,423.92 31.9 Our exposure to a group of companies under the same management
Iron & Steel 7,828.61 7.5 64.0 control must not exceed 40.0% of our capital funds unless the
Power 7,617.18 7.3 51.7 exposure is in respect of an infrastructure project. In that case, the
Financial Services 6,460.81 6.2 30.1 exposure to a group of companies under the same management
control may be up to 50.0% of our capital funds. Pursuant to the RBI
Engineering 5,506.03 5.3 67.5
guidelines, exposure for funded facilities is calculated as the total
Telecom 5,202.87 5.0 64.9 approved limit or the outstanding funded amount, whichever is higher
Other Services 3,826.19 3.7 35.9 (for term loans, as undisbursed commitments plus the outstanding
Crude Petroleum/ amount). Exposure for non-funded facilities is calculated as 100.0%
Refining 3,174.74 3.0 90.6 of the approved amount or the outstanding non-funded amount,
Petrochemicals 2,749.90 2.6 93.5 whichever is higher (50.0% of the approved amount or the
outstanding non-funded amount, whichever is higher until year-end
Textiles 2,424.83 2.3 36.3
fiscal 2003).
Metal & Metal
Products 2,299.04 2.2 55.6 The largest borrower at year-end fiscal 2004 accounted for
approximately 2.2% of our total exposure and 24.9% of our capital
Road/Port/Railways 2,236.63 2.1 63.6 funds. We have received permission from RBI to exceed the exposure
Electronics 2,109.24 2.0 75.5 limit for this borrower. The largest borrower group at year-end
Cement 1, 735.05 1.7 58.7 fiscal 2004 accounted for approximately 4.6% of total exposure
Automobiles 1,453.14 1.4 55.5 and 53.1% of total capital funds. We have received permission from
Fertilisers 1,359.87 1.3 86.8 RBI to exceed the exposure limit for this borrower. At year-end fiscal
2004, the 10 largest individual borrowers in aggregate accounted
Chemicals 1,269.45 1.2 35.8 for approximately 13.8% of the total exposure and the 10 largest
Paper & Paper borrower groups in aggregate accounted for approximately 22.2%
products 1,223.04 1.2 67.0 of the total exposure.
Shipping 979.02 0.9 79.2 The following table sets forth, our exposure (including principal
Hotels 876.07 0.8 70.2 outstanding, interest and other charges, equity investments and non-
NBFCs 826.40 0.8 75.6 fund based exposures at 100%) to our 10 largest single borrowers at
Man Made Fibres 817.12 0.8 54.3 year-end fiscal 2004.
Food Processing 785.54 0.7 32.7
Plastic 732.44 0.7 61.5 At March 31, 2004
Sugar 661.83 0.6 44.5
Sr. Name of the Industry Exposure as Exposure as
Drugs & Pharma 450.10 0.4 50.5
No. % of Total % of Total
Rubber & Rubber Capital Exposure
Products 217.73 0.2 71.7
Mining 180.23 0.2 100.0 1 Crude Petroleum/
Refining 24.9% 2.2%
Other Infrastructure 93.10 0.1 100.0
Miscellaneous 6,298.63 6.0 2 Iron & Steel 20.7% 1.8%
Total 104,818.75 100.0 3 Chemicals 19.9 % 1.7%
The following table sets forth, at the dates indicated, the composition 4 Power 15.7% 1.4%
of our outstanding retail finance portfolio. 5 Iron & Steel 14.8% 1.3%
(in Crore) 6 Telecom 13.3% 1.2%
At March 31, 2004 7 Electrical 13.1% 1.1%
Home loans 16,618 8 Electrical 13.0% 1.1%
Automobile loans 6,974 9 Electrical 12.4% 1.1%
Commercial business (including
10 Power 10.5% 0.9%
commercial-vehicle, construction
equipment & farm equipment loans) 4,239 Directed Lending
Two Wheeler loans 964
RBI requires banks to lend to certain sectors of the economy. Such
Personal loans 977 directed lending comprises priority sector lending, export credit
Credit cards 1,037 and housing finance.
Loans against securities & others 878
Priority Sector Lending
Dealer Funding 1,034
Consumer Durables and The RBI guidelines require banks to lend 40.0% of their net bank
Professional Equipment 702 credit (total domestic loans less marketable debt instruments and
certain exemptions permitted by the RBI from time to time) to certain
Total retail finance portfolio 33,423
48
March 2005
specified sectors called priority sectors. Priority sectors include priority sector lending requirement but credits extended to exporters
small-scale industries, the agricultural sector, food and agri-based that are small scale industries or small businesses may also meet
industries, small businesses and housing finance up to certain limits. part of the priority sector lending requirement. The RBI provides
Out of the 40.0%, banks are required to lend a minimum of 18.0% of export refinancing for an eligible portion of total outstanding export
their net bank credit to the agriculture sector and the balance to loans at the bank rate prevailing in India from time to time. At March
certain specified sectors, including small scale industries (defined 19, 2004 (last reporting Friday for March 2004), our export credit
as manufacturing, processing and services businesses with a limit was Rs. 602 crore, constituting 3.3% of our residual net bank credit.
on investment in plant and machinery of Rs. 1 crore), small
Housing Finance
businesses, including retail merchants, professional and other self
employed persons and road and water transport operators, housing The RBI requires banks to lend up to 3.0% of their incremental
loans up to certain limits and to specified state financial corporations deposits in the previous fiscal year for housing finance. This can be
and state industrial development corporations. in the form of home loans to individuals or investments in the
debentures and bonds of the National Housing Bank and housing
In its letter dated April 26, 2002 granting its approval for the development institutions recognised by the Government of India.
amalgamation, the RBI stipulated that since ICICI’s loans transferred Our housing finance lending in fiscal 2004 was significantly higher
to us were not subject to the priority sector lending requirement, we than the requirement of 3.0% of incremental deposits. Housing
are required to maintain priority sector lending of 50.0% of our net finance also qualifies as priority sector lending. At March 19, 2004
bank credit on the residual portion of our advances (i.e. the portion (last reporting Friday for March 2004), our housing finance advances
of our total advances excluding advances of ICICI at year-end fiscal, qualifying as priority sector advances were Rs.8,674 crore.
2002, henceforth referred to as residual net bank credit). This
additional 10.0% priority sector lending requirement will apply until Classification of Assets
such time as our aggregate priority sector advances reach a level of All loans are classified as per RBI guidelines into performing and
40.0% of our total net bank credit. The RBI’s existing instructions on non-performing assets. Under these guidelines, effective year-end
sub-targets under priority sector lending and eligibility of certain fiscal 2004, a term loan is classified as non-performing if any amount
types of investments/ funds for qualification as priority sector of interest or principal remains overdue for more than 90 days (as
advances apply to us. against the period of 180 days stipulated earlier). Similarly, an
We are required to comply with the priority sector lending overdraft or cash credit facility is classified as non-performing if the
requirements at the end of each fiscal year. Any shortfall in the amount account remains out of order for a period of 90 days and a bill is
required to be lent to the priority sectors may be required to be classified as non-performing if the account remains overdue for
deposited with Government sponsored Indian development banks more than 90 days. Further, non-performing assets are classified
like the National Bank for Agriculture and Rural Development and into sub-standard, doubtful and loss assets. The Bank had classified
the Small Industries Development Bank of India. These deposits an asset as non-performing if any amount remained overdue for
have a maturity of up to five years and carry interest rates lower than more than 90 days, effective June 30, 2003.
market rates. Asset Classification
At year-end fiscal 2004, our priority sector loans were Rs. 14,380.8 Assets are classified as described below:
crore, constituting 84.4% of our residual net bank credit against the
requirement of 50.0%. Standard assets Assets that do not disclose any problems
or which do not carry more than normal
The following table sets forth, for the periods indicated, our priority risk attached to the business are
sector loans, classified by the type of borrower. classified as standard assets.
(Rs. in Crore, except percentages) Sub-standard assets Sub-standard assets comprise assets
2001 2002 2003* 2004 % of that are non-performing for a period not
residual exceeding 18 months.
net bank Doubtful assets Doubtful assets comprise assets that are
credit at non-performing for more than 18
March 31, months.
2004
Loss assets Loss assets comprise assets (i) the losses
Small scale for which are identified or (ii) that are
industries 636.9 471.5 307.2 291.6 1.7% considered uncollectible.
Others including
Housing Loans Restructured Assets
and small The RBI has separate guidelines for restructured assets. A fully
Businesses 977.9 703.5 5,442.8 10,135.2 59.5% secured standard asset can be restructured by reschedulement of
Agricultural principal repayments and/ or the interest element, but must be
sector 628.6 877.6 2,266.9 3,954.0 23.2% separately disclosed as a restructured asset. The amount of sacrifice,
Total 2,243.4 2,052.6 8,016.9 14,380.8 84.4% if any, in the element of interest, measured in present value terms, is
either written-off or provision is made to the extent of the sacrifice
involved. Similar guidelines apply to sub-standard assets. The sub-
* Based on residual advances.
standard accounts which have been subjected to restructuring,
Export Credit whether in respect of principal installment or interest amount are
As part of directed lending, the RBI also requires banks to make eligible to be upgraded to the standard category only after the
loans to exporters at concessional rates of interest. Export credit is specified period, i.e., a period of one year after the date when first
provided for pre-shipment and post-shipment requirements of payment of interest or of principal, whichever is earlier, falls due,
exporter borrowers in rupees and foreign currencies. At the end of subject to satisfactory performance during the period.
the any fiscal year, 12.0% of a bank’s net bank credit is required to be
in the form of export credit. This requirement is in addition to the
49
March 2005
Provisioning and Write-Offs Our policy

The RBI guidelines on provisioning and write-offs applicable up to All non-performing retail loans (other than home loans) are fully
fiscal 2004 are as follows: written-off or provided for over a period of 180 days. Non-
performing home loans are fully written-off or provided for over a
Standard assets A general provision of 0.25%.
period of two years. In respect of corporate assets, till fiscal 2004
Sub-standard assets A general provision of 10%. the Bank had adopted a provisioning policy whereby provisions
Doubtful assets A 100% write-off is made of the aggregating 50.0% of the secured portion of corporate non-
unsecured portion of the doubtful asset performing assets were made over a three-year period instead of a
and charged against income. The five-and-a-half year period prescribed by RBI. Effective quarter
value assigned to the collateral ended June 30, 2004, the Bank provides for corporate non-
securing a loan is that reflected on the performing assets in line with the revised RBI guidelines applicable
borrower’s books or that determined from March 31, 2005 requiring 100% provision over a five-year
period. Loss assets and the unsecured portion of doubtful assets are
by third party appraisers to be
fully provided for or written off. Additional provisions are made
realisable. In cases where there is a
against specific non-performing assets if considered necessary by
secured portion of the asset,
the management. Non-performing assets acquired from ICICI in the
depending upon the period for which
merger were fair valued and additional provisions were recorded
the asset remains doubtful, 20% to
to reflect the fair valuation. The Bank does not distinguish between
50% provision on such secured asset
provisions and write-offs while assessing the adequacy of the Bank’s
is made as follows:
loan loss coverage, as both provisions and write-offs represent a
Upto one year: 20% provision reduction of the principal amount of a non-performing asset. In
One to three years: 30% provision compliance with regulations governing the presentation of financial
More than three years: 50% provision information by banks, the Bank reports non-performing assets net of
Loss assets The entire asset is written-off / provided cumulative write-offs in its financial statements.
for. The Bank has adopted a conservative general provisioning policy
Restructured Assets A provision is made equal to the net for its standard asset portfolio. While RBI’s guidelines require only
present value of the reduction in the a 0.25% general provision against standard assets, the Bank makes
rate of interest on the loan over its additional general provisions against standard assets having regard
maturity. to overall portfolio quality, asset growth, economic conditions and
other risk factors. The corporate and project finance portfolio
In June 2004, the RBI announced additional provisioning requirements acquired from ICICI in the merger were fair valued and additional
for advances classified as doubtful for more than three years, based provisions were recorded to reflect the fair valuation. During fiscal
on which banks will be required to make a provision of 100% of the 2003, the Bank also made additional/accelerated provisions against
amount of additions to the “doubtful for more than three years” loans and other assets, primarily relating to ICICI’s portfolio. For
category on or after April 1, 2004, while a provision of 100% of restructured assets, provisions are made in accordance with
outstanding advances in this category as on year-end fiscal 2004 guidelines issued by RBI.
will have to be made in a phased manner by year-end fiscal 2007.
The following table sets forth data regarding ICICI Bank‘s gross asset (net of write-offs and interest suspense) classification for the last five
years i.e. after reducing amounts written-off and interest due but not received from the gross amount due:
(Rs. in crore)
March 31, 2000 March 31, 2001 March 31, 2002 March 31, 2003 March 31, 2004
Amt. % Amt. % Amt. % Amt. % Amt. %
Standard 4,996 97.9 10,648 96.3 55,198 91.2 63,050 91.5 70,598 94.6
- of which
restructured assets — — — — 5,043 8.3 9,287 13.4 7,545 10.1
Sub-standard 85 1.7 251 2.3 1,908 3.2 1,869 2.7 1,493 2.0
Doubtful Assets 22 0.4 147 1.3 3,411 5.6 3,940 5.7 2,487 3.3
Loss Assets — — 5 0.1 6 0.0 30 0.0 34 0.1
Total Loan Assets 5,103 100.0 11,051 100.0 60,523 100.0 68,889 100.0 74,612 100.0
The following tables sets forth, for the dates indicated, data regarding our non-performing assets.
(Rs. in crore, except %)
As on Total Total Net Total Net % of Net NPA to % of Gross NPA*
Gross NPA* NPA Customer Assets Total Net to Total Gross
Customer Assets Customer Assets
March 31, 2000 107 70 5,066 1.4 2.10
March 31, 2001 403(1) 161 10,809 1.5 3.60
March 31, 2002 5,325(2) 2,721 57,526 4.7 8.80
March 31, 2003 5,839 3,151 64,051 4.9 8.48
March 31, 2004 4,014 2,037 71,002 2.9 5.38
* Net of write-offs and interest suspense]

(1) In March 2001 increase in NPA includes additions to NPAs to the extent of Rs.252.52 crore taken over from the erstwhile Bank of
Madura.
50
March 2005
(2) In March 2002 increase in NPA was mainly on account of provisions against standard assets were Rs.2,016 crore, including
additions to NPAs to the extent of Rs. 4,512.09 crore taken over provisions against restructured standard assets pursuant to the RBI
from ICICI. norms and general provisions against the Bank’s retail finance
portfolio.
The information for Fiscal 2002, Fiscal 2003 and Fiscal 2004 is not
comparable with earlier periods on account of the amalgamation. Non-Performing Asset Strategy
The ratio of net non-performing assets to net customer assets
In respect of unviable non-performing assets, where the companies
decreased to 2.87% at year-end fiscal 2004 compared to 4.92% at
have lost viability, we adopt an aggressive approach aimed at out-
year-end fiscal 2003. At year-end fiscal 2004, the gross non-
of-court settlements, enforcing collateral and driving consolidation.
performing assets (net of write-offs) were Rs.4,014 crore compared
Our focus is on time value of recovery and a pragmatic approach
to Rs. 5,839 crore at year-end fiscal 2003. Including technical write-
towards settlements. The strong collateral against our loan assets
offs, the gross non-performing assets at year-end fiscal 2004 were
has been the critical factor towards the success of our recovery
Rs.6,715 crore compared to Rs. 8,414 crore at year-end fiscal 2003.
efforts. In addition, we continually focus on proactive management
The coverage ratio (i.e. total provisions and write-offs made against
of accounts under watch. Our strategy constitutes a proactive
non-performing assets as a percentage of gross non-performing
approach towards identification, aimed at early stage solutions to
assets) at year-end fiscal 2004 was 69.7% compared to 62.6% at
incipient problems.
year-end fiscal 2003.
We have institutionalised the focus on recovery and settlements. Our
In the past few years, the Indian economy has been impacted by
efforts in tackling non-performing loans have been spearheaded by
negative trends in the global marketplace, particularly in the
the Special Assets Management Group (SAMG), which was created
commodities markets, and recessionary conditions in various
to focus exclusively on large non-performing assets and restructured
economies, which have impaired the operating environment for the
accounts. Methods utilised by the SAMG include facilitating the
industrial sector in India. The manufacturing sector has also been
integration of fragmented capacities, catalysing the merger of weak
impacted by several other factors, including increased competition
and unviable units into strong and viable ones, financial restructuring
arising from economic liberalisation in India and volatility in
and taking early steps for legal action where necessary.
industrial growth and commodity prices. This has led to stress on
the operating performance of companies and an increase in the The Securitisation Act has strengthened the ability of lenders to
level of non-performing assets in the financial system, including resolve non-performing assets by granting them greater rights as to
ICICI and us. enforcement of security and recovery of dues from borrowers
including removal of reference to the Board for Industrial and
Certain companies are coming to terms with this new competitive
Financial Reconstruction and stay thereto. The Securitisation Act
reality through a process of restructuring and repositioning, including
and guidelines issued by the RBI have permitted the setting up of
rationalisation of capital structures and production capacities. To
asset reconstruction companies to acquire financial assets by banks
create an institutional mechanism for the restructuring of corporate
and financial institutions. The RBI has issued guidelines to banks on
debt, the RBI has devised a corporate debt restructuring system.
the process to be followed for sales of financial assets to asset
The objective of this framework is to ensure a timely and transparent
reconstruction companies. These guidelines provide that a bank
mechanism for the restructuring of corporate debts of viable entities
may sell financial assets to an asset reconstruction company provided
facing problems. The operation of this system has led to the approval
the asset is a non-performing asset. At year-end fiscal 2004, we had
of restructuring programmes for a large number of companies,
which has resulted in an increase in the level of restructured assets in investments of Rs.1,251 crore in security receipts arising out of sale
the Indian financial system, including an increase in our restructured of net non-performing assets by us to Asset Reconstruction Company
assets. As a result, our gross restructured standard assets increased (India) Limited, a reconstruction company registered with the RBI.
to Rs. 9,287 crore at year-end fiscal 2003 from Rs.5,043 crore at The sale price has been determined on an arms length basis and the
year-end fiscal 2002. Our gross restructured standard assets declined sale has resulted in removal of the net non-performing assets from
from Rs. 9,287 crore at year-end fiscal 2003 to Rs. 7,570 crore at our books. The principal recovery and rate of return on the investments
year-end fiscal 2004 mainly on account of upgradations and in security receipts are dependent on the recovery of the underlying
settlements during the period. The restructured assets continue to assets. These investments in security receipts are to be valued at the
be classified as such till they complete one year of satisfactory net asset value as declared by ARCIL.
performance.
We closely monitor migration of the credit ratings of our borrowers.
In addition to the cumulative provisions and write-offs against non- We frequently review the industry outlook and analyse the impact of
performing assets, the Bank has made provisions against standard changes in the regulatory and fiscal environment. Our periodic
assets pursuant to the RBI norms for provisions for restructured review system helps us to monitor the health of accounts and to take
standard assets, the Bank’s general provisioning policy, the
prompt remedial measures. In respect of our retail loans, we adopt
provisions recorded on fair valuation of ICICI’s corporate and project
a standardised collection process to ensure prompt action for follow-
finance portfolio while accounting for the merger and the additional/
accelerated provisions, primarily relating to ICICI’s portfolio, made up on overdues and recovery of defaulted amounts.
during Fiscal 2003. At year-end fiscal 2004, the total cumulative
51
March 2005
Sector-wise Analysis of Gross Non-Performing Assets

The following table sets forth, at the dates indicated, classification of gross non-performing assets by industry sector.
(Rs in Crore, except percentages)
At March 31,2002 At March 31,2003 At March 31,2004
Amt. % Amt. % Amt. %
Chemicals
(including fertilisers & pesticides) 1,304.33 24.29 1,512.70 25.69 849.35 20.9
Power 33.79 0.63 62.33 1.06 619.99 15.25
Textiles 819.11 15.26 981.10 16.66 426.12 10.48
Engineering 422.42 7.87 411.32 7.87 213.55 5.25
Other metal & metal products 270.54 5.04 321.32 5.46 198.1 4.87
Iron and steel 914.57 17.04 767.15 13.03 166.27 4.09
Cement 140.59 2.62 162.30 2.76 154.49 3.8
Ceramics, granite and related products 81.25 1.51 155.65 2.64 141.66 3.49
Electronics 96.85 1.80 104.62 1.78 101.94 2.51
Food processing 238.55 4.44 150.05 2.55 99.39 2.45
Services – finance 34.53 0.64 154.17 2.62 83.63 2.06
Services – others 102.69 1.91 79.77 1.35 82.83 2.04
Automobile (including trucks) 27.78 0.52 73.43 1.25 68.57 1.69
Paper and paper products 206.91 3.85 173.40 2.94 59.77 1.47
Rubber and rubber products 42.80 0.80 40.85 0.69 42.65 1.05
Sugar 84.44 1.57 86.14 1.46 26.48 0.65
Non-banking finance companies 64.93 1.21 64.22 1.09 25.4 0.62
Agriculture 20.01 0.37 23.70 0.40 21.85 0.54
Shipping 49.38 0.92 23.99 0.41 18.51 0.46
Petroleum 1.27 0.02 0.78 0.01 0.79 0.02
Road / port / railways 18.00 0.34 18.00 0.31 0 0
Other industries 393.97 7.34 521.51 8.86 663.06 16.31
Total 5,368.71 100.00 5,888.51 100.00 4,064.40 100
Interest suspense -43.69 -49.03 -50.19
Gross NPAs 5,325.02 5,839.48 4,014.21
The net non-performing assets in the retail portfolio at year-end fiscal 2004 were 0.71% of net retail assets.
The largest proportion of our non-performing loans constituted loans to the chemicals (including fertilisers and pesticides), textiles and
power industries.
Chemicals. Increasing competition in the global chemical industry has resulted in significant structural changes, with players opting for
increased focus on core competencies through corporate restructuring and consolidation or spin-off to attain leadership position in their core
businesses. These trends in the global chemical industry environment have significantly affected the Indian chemical industry. The tariff
rationalisation and other policy measures effected by the Government of India since 1991 have made the domestic chemical industry
vulnerable to movements in international prices, with viability being closely linked to cost of production and capacity utilisation.
Power. Our non-performing loans in the power sector primarily include loans to a large private sector power generation project in the state
of Maharashtra, the implementation of which is currently suspended on account of a dispute between the power company and the
purchaser, the state electricity board. The matter is currently pending before the Indian courts, while parallel efforts are continuing for an
out of court settlement, including re-negotiation of the power tariff. The principal sponsor of the project has filed for bankruptcy in the
United States. The assets of the project are in the possession of a receiver appointed by the High Court of Judicature at Mumbai on a plea
by the lenders of the project, including us. Efforts are continuing for sale of the project to new sponsors.
Textiles. Over the last few years, the textiles sector was adversely affected by the impact of erratic monsoons on cotton production, the
South-east Asian economic crisis and competitive pressures from other low cost textile producing countries. A substantial portion of our
loans to this sector have been classified as non-performing.
52
March 2005
The following table sets forth the 10 largest net non-performing competitive returns and hence, have increasingly become a viable
assets at year-end fiscal 2004 on the basis of gross principal. alternative to bank deposits.
(Rs. in crore) Commercial banking products and services for corporate customers
Borrower Industry Segment Gross Net In products and services for corporate customers, we face strong
Principal Outstanding (1) competition primarily from public sector banks, foreign banks and
other new private sector banks. Our principal competition in these
Borrower A Power 969.83 545.17
products and services comes from public sector banks, which have
Borrower B Chemicals 184.89 85.71 built extensive branch networks that have enabled them to raise
low-cost deposits and, as a result, price their loans and fee-based
Borrower C Textiles 128.44 45.70 services very competitively. Their wide geographical reach facilitates
Borrower D Textiles 118.19 32.81 the delivery of banking products to their corporate customers
located in most parts of the country. We have been able, however, to
Borrower E Iron and Steel 111.34 0.00 compete effectively because of our efficient service and prompt
turnaround time that we believe is significantly faster than public
Borrower F Other Metal &
sector banks. We seek to compete with the large branch networks of
Metal Products 108.07 42.95 the public sector banks through our multi-channel distribution
Borrower G Textiles 99.68 28.50 approach and technology-driven delivery capabilities.
Traditionally, foreign banks have been active in providing trade
Borrower H Cement 81.62 29.10
finance, fee-based services and other short-term financing products
Borrower I Services - Finance 79.50 55.65 to top tier Indian corporations. We effectively compete with foreign
banks in cross-border trade finance as a result of our wider
Borrower J Power 73.76 51.63 geographical reach relative to foreign banks and our customised
(1) Net of cumulative provisions trade financing solutions. We have established strong fee-based
cash management services and compete with foreign banks due to
Competition our technological edge and competitive pricing strategies.
As a result of the acquisition of Bank of Madura, we became and Other new private sector banks also compete in the corporate banking
continue to be the largest private sector bank in India and as a result market on the basis of efficiency, service delivery and technology.
of the amalgamation, we became and continue to be the second However, we believe our size, capital base, strong corporate
largest bank in India, in terms of total assets. We face competition in relationships, wider geographical reach and ability to use
all our principal areas of business from Indian and foreign technology to provide innovative, value-added products and
commercial banks, housing finance companies, mutual funds and services provide us with a competitive edge.
investment banks. We are the largest private sector bank in India and In project finance, ICICI’s primary competitors were established
the second largest bank among all banks in the country, in terms of long-term lending institutions. In recent years, Indian and foreign
total assets, with total assets of Rs. 1,25,228.87 crore at year-end commercial banks have sought to expand their presence in this
fiscal 2004. Subsequent to year-end fiscal 2004, we completed a market. We believe that we have a competitive advantage due to
share issuance of Rs. 3,246 crore to support growth in our various our strong market reputation and expertise in risk evaluation and
areas of business operations. We seek to gain a competitive mitigation. We believe that our in-depth sector specific knowledge
advantage over our competitors through our larger size and scale and capabilities in understanding risks and policy related issues as
of operations and by offering innovative products and services, the well as our advisory, structuring and syndication services have
use of technology, building customer relationships and developing allowed us to gain credibility with project sponsors, overseas lenders
a team of highly motivated and skilled employees. We evaluate our and policy makers.
competitive position separately in respect of our products and
services for retail and corporate customers. New business areas
Commercial banking products and services for retail customers Our international strategy is focused on India-linked opportunities in
the initial stages. In our international operations, we face competition
In the retail markets, competition is primarily from foreign and Indian from Indian public sector banks with overseas operations, foreign
commercial banks and housing finance companies. Foreign banks banks with products and services targeted at non-resident Indians
have product and delivery capabilities but are likely to focus on and Indian businesses and other service providers like remittance
limited customer segments and geographical locations since they services. We are seeking to position ourselves as an Indian bank
have a smaller branch network than Indian commercial banks. offering globally-benchmarked products and services with an
Foreign banks in the aggregate had only 196 branches in India at extensive distribution network in India to gain a competitive
year-end fiscal 2004. Indian commercial banks have wide distribution advantage. We seek to leverage our technology capabilities
networks but relatively less strong technological and marketing developed in our domestic business to offer convenient and efficient
capabilities. We seek to compete in this market through a full product services to our international customers. We also seek to leverage
portfolio, effective distribution channels, which include agents, robust our strong relationships with Indian corporates in our international
credit processes and collection mechanisms, experienced business.
professionals and superior technology.
Our insurance joint ventures face competition from existing dominant
Commercial banks attract the majority of retail bank deposits, public sector players as well as new private sector players. We
historically the preferred retail savings product in India. We have believe that the key competitive strength of our insurance joint
sought to capitalise on our corporate relationships to gain individual ventures is the combination of our experience in the Indian financial
customer accounts through payroll management products and will services industry with the global experience and skills of our joint
continue to pursue a multi-channel distribution strategy utilising venture partners. We believe that ICICI Prudential Life Insurance
physical branches, ATMs, telephone banking call centers and the Company and ICICI Lombard General Insurance Company have
Internet to reach customers. Further, following a strategy focused built strong product, distribution and risk management capabilities,
on customer profiles and product segmentation, we offer achieving market leadership positions in their respective businesses.
differentiated liability products to customers of various ages and ICICI Prudential Life Insurance Company had a market share of 31%
income profiles. Mutual funds are another source of competition to in new business written by private sector life insurance companies
us. Mutual funds offer tax advantages and have the capacity to earn in India during fiscal 2004. ICICI Lombard General Insurance had a
53
March 2005
market share of 22% among the private sector general insurance year-end fiscal 2003 and 32.9% of our liabilities at year-end fiscal
companies in India during fiscal 2004. 2002. Our borrowings (including subordinated debt) constituted
34.1% of our total liabilities at year-end fiscal 2004 and 44.3% year-
Funding end fiscal 2003 compared to 60.5% of our total liabilities at year-
Our funding operations are designed to ensure stability of funding, end fiscal 2002. Our borrowings (including subordinated debt)
minimise funding costs and effectively manage liquidity. Subsequent declined to Rs. 39,846 crore at year-end fiscal 2004 compared to
to the amalgamation, our primary source of funding is deposits Rs.44,052 crore at year-end fiscal 2003 and Rs. 58,970 crore at year-
raised from both retail and corporate customers. We also raise funds end fiscal 2002 due to repayment of ICICI’s long-term and short-
through short-term rupee borrowings and public issuance of Bonds. term borrowings in line with scheduled maturities, and new funding
As a financial institution, ICICI was not allowed to raise banking primarily through deposits. At year-end fiscal 2002, ICICI’s
deposits and so its primary sources of funding, prior to the borrowings transferred to us pursuant to the amalgamation were
amalgamation, were rupee borrowings from a wide range of Rs. 58,210 crore, which declined to Rs.28,352 crore at year-end
institutional investors, and retail Bonds. ICICI also obtained funds fiscal 2004.
through foreign currency borrowings from multilateral institutions Our deposits were Rs.68,108 crore at year-end fiscal 2004 compared
like the Asian Development Bank and the World Bank, which were to Rs. 48,169 crore at year-end fiscal 2003 and Rs. 32,085 crore at
guaranteed by the Government of India, as well as through year-end fiscal 2002. This significant growth in deposits was achieved
commercial foreign currency borrowings. In October 2003, we made primarily through increased focus on retail and corporate customers
a Eurobond issue of US$ 300 million in the international markets. by offering a wide range of products designed to meet varied
The composition of our liabilities has changed significantly pursuant individual and corporate needs and leveraging on our network of
to the amalgamation. Our deposits constituted 58.3% of our total branches, extension counters and ATMs.
liabilities at year-end fiscal 2004 and 48.4% of our total liabilities at
The following table sets forth, at the dates indicated, our outstanding deposits and the percentage composition by each category of
deposits.
(Rs. in crore, except percentages)
March 31, 2002 March 31, 2003 March 31, 2004
Amount % of total Amount % of total Amount % of total
Non-Interest bearing
demand deposits 2,736 8.5 3,689 7.6 7,259 10.7
Savings deposits 2,497 7.8 3,793 7.9 8,372 12.3
Time deposits 26,852 83.7 40,687 84.5 52,477 77.0
Total deposits 32,085 100.0 48,169 100.0 68,108 100.0
Time deposits at year-end fiscal 2004 included current and savings account linked deposits of approximately Rs. 10,042 crore, which was
14.7% of total deposits. Time deposits at year-end fiscal 2003 included current and savings account linked deposits of approximately
Rs. 8,574 crore.
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March 2005
The following table sets forth our 25 largest borrowings at year-end Information Services of India Limited (CRISIL) and the OTC Exchange
fiscal 2004. of India (OTCEI). We have, along with other institutions, set up the
NCDEX. NCDEX has received accreditation from the Forward
Borrowing Amt in Crore Tenor Coupon (%)
Markets Commission, the regulator for commodity exchanges, and
Borrowing A 1,312 5 Yrs 4.75 is a national level commodity exchange. Further, following the
Borrowing B 1,148 3 Yrs - 5 Yrs & 4 Months 6.90 - 7.25 enactment of the Securitisation Act, which has created a facilitative
environment for resolution of distressed debt in India, we have,
Borrowing C 1,102 3 Yrs - 21 Yrs 9.00 - 10.40
together with other institutions, set up the Asset Reconstruction
Borrowing D 841 2 yrs 11 mths - 3 yrs 1 mth 7.3 Company (India) Limited, which has been registered with the RBI as
Borrowing E 758 3 Yrs - 7 Yrs 6.70 - 6.75 an asset reconstruction company.
Borrowing F 664 3 Yrs - 21 Yrs 9.00 - 10.40 While we have varying levels of shareholding in the above mentioned
entities, organisations and institutions, ranging from no equity holding
Borrowing G 637 3 Yrs - 21 Yrs & 3 Months 9.40 - 10.30
to up to 30.0% equity holding, on account of our being a banking
Borrowing H 603 18 Yrs 8 mths 1.63 company and the development role played in establishment or
Borrowing I 600 11 Yrs 10 setting up of such entities, organisations and institutions, we are not
Borrowing J 569 3 Yrs - 21 Yrs & 3 Months 8.75 - 10.30 promoters or sponsors of such entities, organisations and institutions.
Borrowing K 546 330 Days 1.38 Risk Management
Borrowing L 538 3 Yrs & 4 Months - As a financial intermediary, we are exposed to risks that are particular
19 Yrs & 5 Months 10.50 - 11.30 to our lending and trading businesses and the environment within
Borrowing M 524 3 Yrs - 5 Yrs 5.50 which we operate. Our goal in risk management is to ensure that we
understand, measure and monitor the various risks that arise and
Borrowing N 509 10 Yrs 7.55
that the organisation adheres strictly to the policies and procedures
Borrowing O 500 5 yrs 7.1 which are established to address these risks.
Borrowing P 491 3 Yrs - 7 Yrs 6.70 - 6.75 We are primarily exposed to credit risk, market risk, liquidity risk,
Borrowing Q 489 3 Yrs - 7 Yrs 5.60 - 5.75 operational risk and legal risk. We have two centralised groups, the
Borrowing R 455 3 Yrs - 21 Yrs 8.90 - 10.40 Risk Management Group and the Compliance and Audit Group with
a mandate to identify, assess and monitor all of our principal risks in
Borrowing S 437 5 Yrs 1.92 accordance with well-defined policies and procedures. The Head
Borrowing T 431 3 Yrs - 21 Yrs 8.90 - 10.40 of the Risk Management Group reports to the Chief Financial Officer
Borrowing U 400 11 Yrs 10 and Treasurer and through him to the Deputy Managing Director.
The Head of the Compliance and Audit Group reports to the Deputy
Borrowing V 345 3 Yrs - 7 Yrs 5.75 - 6.00
Managing Director. Both the groups are independent of the business
Borrowing W 328 5 Yrs 1.82 units and coordinate with representatives of the business units to
Borrowing X 306 3 Yrs - 21 Yrs 9.00 - 10.40 implement our risk management methodologies. Committees of the
Borrowing Y 300 5 Yrs & 1 month 11.90 board of directors have been constituted to oversee the various risk
management activities. The Audit Committee provides direction to
Developmental Activities and also monitors the quality of the internal audit function. The Risk
ICICI had sought to broaden the scope of its activities by examining Committee reviews risk management policies in relation to various
all sectors of the economy and by introducing new concepts, new risks including portfolio, liquidity, interest rate, off-balance sheet
instruments and, in some cases, new institutions in response to and operational risks, investment policies and strategy, and
perceived needs. In this regard, ICICI’s developmental activities regulatory and compliance issues in relation thereto. The Credit
encompassed such diverse areas as technology financing, science Committee reviews developments in key industrial sectors and our
parks, rural development, vocational training and skill development exposure to these sectors as well as to large borrower accounts.
for handicapped, education of the underprivileged and health care The Agriculture & Small Enterprises Business Committee reviews
for the weaker sections of society. our strategy for small enterprises and agri-business and the quality
of the agricultural lending and small enterprises finance credit
ICICI had also been a pioneer in setting up specialised institutions in
portfolio. The Asset Liability Management Committee is responsible
certain key sectors, singly or jointly with other institutions, banks and
governments, including Housing Development Finance Corporation for managing the balance sheet and reviewing the asset-liability
Limited (HDFC), National Stock Exchange (NSE), The Credit Rating position to manage our liquidity and market risk exposure.
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March 2005
Our risk management set-up is organised as shown in the following chart:
Risk/ Credit Committee Managing Director Audit Committee of

of the board & CEO the board
Asset Liability Deputy Managing Director

Committee
Chief Financial Officer and Head - Compliance and Audit

Treasurer Group
Head -
Risk Management Group
Credit Risk Market Risk Retail risk Analytics Internal Audit Compliance and
Management Management Management (including Anti-Money
subsidiaries) laundering
Group
Borrower credit Developing and Approval of Development of Comprehensive Ensuring

ratings implementing retail policies proprietary review of compliance to
Sectoral analysis market risk and procedures models for risk operational risk regulatory
and review measurement Portfolio review measurement inherent in all guidelines
methodologies and monitoring areas of Formulation of
Credit portfolio
Approval of all business anti-money
analysis
new products Initiation of laundering
Monitoring systems audit in policies and
market risk information ensuring
exposures technology- compliance
intensive areas Formulation of
credit policies
and ensuring
compliance
The Risk Management Group is also responsible for assessing the risks pertaining to the international operations, including review of
policies and setting sovereign and counterparty limits.
Credit Risk
Our credit policy is approved by the Credit Committee of the Board of Directors. In our lending operations, we are principally exposed to
credit risk. Credit risk is the risk of loss that may occur from the failure of any party to abide by the terms and conditions of any financial
contract with us, principally the failure to make required payments on loans due to us. We currently measure, monitor and manages credit
risk for each borrower and also at the portfolio level. We have a structured and standardised credit approval process, which includes a
well-established procedure of comprehensive credit appraisal.
Credit Risk Assessment Procedures for Corporate Loans
In order to assess the credit risk associated with any financing proposal, we assess a variety of risks relating to the borrower and the relevant
industry. Borrower risk is evaluated by considering:
z the financial position of the borrower by analysing the quality of its financial statements, its past financial performance, its financial
flexibility in terms of ability to raise capital and its cash flow adequacy;
z the borrower’s relative market position and operating efficiency; and
z the quality of management by analysing their track record, payment record and financial conservatism.
Industry risk is evaluated by considering:
z certain industry characteristics, such as the importance of the industry to the economy, its growth outlook, cyclicality and government
policies relating to the industry;
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March 2005
z the competitiveness of the industry; and comprehensive insurance on their assets where we are recognised
as payee in the event of loss. In some cases, we also take additional
z certain industry financials, including return on capital employed,
collateral in the form of corporate or personal guarantees from one
operating margins and earnings stability.
or more sponsors of the project and a pledge of the sponsors’
After conducting an analysis of a specific borrower’s risk, the Credit equity holding in the project company. In certain industry segments,
Risk Management Group assigns a credit rating to the borrower. We we also take security interest in relevant project contracts such as
have a scale of 10 ratings ranging from AAA to B, an additional concession agreements, off-take agreements and construction
default rating of D and short-term ratings from S1 to S8. Credit rating contracts as part of the security package. In limited cases, loans are
is a critical input for the credit approval process. We determine the also guaranteed by commercial banks and, in the past, have also
desired credit risk spread over its cost of funds by considering the been guaranteed by Indian state governments or the government of
borrower’s credit rating and the default pattern corresponding to India.
the credit rating. Every proposal for a financing facility is prepared
It is our current practice to normally disburse funds after the entire
by the relevant business unit and reviewed by the appropriate industry
project funding is committed and all necessary contractual
specialists in the Credit Risk Management Group before being
arrangements have been entered into. Funds are disbursed in tranches
submitted for approval to the appropriate approval authority. The
to pay for approved project costs as the project progresses. When
approval process for non-fund facilities is similar to that for fund-
we appoint technical and market consultants, they are required to
based facilities. The credit rating for every borrower is reviewed at
monitor the project’s progress and certify all disbursements. We
least annually and is typically reviewed on a more frequent basis for
also require the borrower to submit periodic reports on project
higher risk credits and large exposures. We also review the ratings
implementation, including orders for machinery and equipment as
of all borrowers in a particular industry upon the occurrence of any
well as expenses incurred. Project completion is contingent upon
significant event impacting that industry.
satisfactory operation of the project for a certain minimum period
Working capital loans are generally approved for a period of 12 and, in certain cases, the establishment of debt service reserves. We
months. At the end of 12 months validity period, we review the loan continue to monitor the credit exposure until its loans are fully repaid.
arrangement and the credit rating of the borrower and take a decision
on continuation of the arrangement and changes in the loan covenants Corporate Finance Procedures
as may be necessary. As part of the corporate loan approval procedures, we carry out a
Project Finance Procedures detailed analysis of funding requirements, including normal capital
expenses, long-term working capital requirements and temporary
We have a strong framework for the appraisal and execution of imbalances in liquidity. Our funding of long-term core working capital
project finance transactions. We believe that this framework creates requirements is assessed on the basis, among other things, of the
optimal risk identification, allocation and mitigation, and helps borrower’s present and proposed level of inventory and receivables.
minimise residual risk. In case of corporate loans for other funding requirements, we
The project finance approval process begins with a detailed undertake a detailed review of those requirements and an analysis
evaluation of technical, commercial, financial, marketing and of cash flows. A substantial portion of our corporate finance loans
management factors and the sponsor’s financial strength and are secured by a lien over appropriate assets of the borrower.
experience. Once this review is completed, an appraisal The focus of our structured corporate finance products is on cash
memorandum is prepared for credit approval purposes. As part of
flow based financing. We have a set of distinct approval procedures
the appraisal process, a risk matrix is generated, which identifies
to evaluate and mitigate the risks associated with such products.
each of the project risks, mitigating factors and residual risks
These procedures include:
associated with the project. The appraisal memorandum analyses
the risk matrix and establishes the viability of the project. Typical risk z carrying out a detailed analysis of cash flows to accurately
mitigating factors include the commitment of stand-by funds from forecast the amounts that will be paid and the timing of the
the sponsors to meet any cost overruns and a conservative collateral payments based on an exhaustive analysis of historical data;
position. After credit approval, a letter of intent is issued to the z conducting due diligence on the underlying business systems,
borrower, which outlines the principal financial terms of the proposed including a detailed evaluation of the servicing and collection
facility, sponsor obligations, conditions precedent to disbursement, procedures and the underlying contractual arrangements; and
undertakings from and covenants on the borrower. After completion
of all formalities by the borrower, a loan agreement is entered into z paying particular attention to the legal, accounting and tax
with the borrower. issues that may impact any structure.
In addition to the above, in the case of structured project finance in Our analysis enables us to identify risks in these transactions. To
areas such as infrastructure and oil, gas and petrochemicals, as a mitigate risks, we use various credit enhancement techniques, such
part of the due diligence process, we appoint consultants, wherever as over-collateralisation, cash collateralisation, creation of escrow
considered necessary, to advise the lenders, including technical accounts and debt service reserves and performance guarantees.
advisors, business analysts, legal counsel and insurance consultants. The residual risk is typically managed by complete or partial recourse
These consultants are typically internationally recognised and to the borrowing company whose credit risk is evaluated as described
experienced in their respective fields. Risk mitigating factors in these above. We also have a monitoring framework to enable continuous
financings generally also include creation of debt service reserves review of the performance of such transactions.
and channeling project revenues through a trust and retention
Working Capital Finance Procedures
account.
Our project finance credits are generally fully secured and have full We carry out a detailed analysis of our borrowers’ working capital
recourse to the borrower. In most cases, we have a security interest requirements. Credit limits are established in accordance with the
and first lien on all the fixed assets and a second lien on all the approval authorisation approved by the Board of Directors. Once
current assets of the borrower. Security interests typically include credit limits are approved, we calculate the amounts that can be lent
property, plant and equipment as well as other tangible assets of the on the basis of monthly statements provided by the borrower and
borrower, both present and future. Typically, it is our practice to the margins stipulated. Quarterly information statements are also
lend between 60.0% and 80.0% of the appraised value of these obtained from borrowers to monitor the performance on a regular
types of collateral securities. Our borrowers are required to maintain basis. Monthly cash flow statements are obtained where considered
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March 2005
necessary. Any irregularity in the conduct of the account is reported to the appropriate authority on a monthly basis. Credit limits are
reviewed on an annual basis.
Working capital facilities are primarily secured by inventories and receivables. Additionally, in certain cases, these credit facilities are
secured by personal guarantees of directors, or subordinated security interests in the tangible assets of the borrower including plant and
machinery.
Credit Approval Authority for Corporate Loans
We have established four levels of credit approval authorities for our corporate banking activities, the Credit Committee of the Board of
Directors, the Committee of Directors, the Committee of Executives (Credit) and the Regional Committee (Credit). The Credit Committee has
the power to approve all financial assistance. The Board of Directors has delegated the authority to the Committee of Directors, consisting
of the wholetime directors, to the Committee of Executives (Credit) and the Regional Committee (Credit), both consisting of our designated
executives, to approve financial assistance to any company within certain individual and group exposure limits set by the board of
directors.
The following table sets forth the composition and the approval authority of these committees.
S No Committee Members Approval Authority
1 Credit Committee of the board of Chaired by an independent z All approvals (in practice, generally above the
directors director and consisting of a prescribed authority of the Committee of Directors).
majority of independent z Approvals to companies identified by the Credit
directors.
Committee where the company or the borrower group
requires close monitoring.
The following proposals are placed before the Credit
Committee for approval / ratification
z All credit and investment proposals of the bank with its
subsidiaries / affiliates.
z Any proposal exceeding the individual and / or group
borrower prudential exposure ceilings as prescribed
by the Reserve Bank of India (RBI); i.e. 15% of capital
funds for a single borrower (20% in case of
infrastructure) and 40% of capital funds for a group
(50% in case of infrastructure). However, such proposals
for additional exposure, over and above the prudential
exposure ceilings, shall be considered within the
guidelines prescribed by RBI from time to time. At
present RBI has allowed Banks to consider additional
exposure to a borrower up to 5% of capital funds, over
and above the prudential ceilings outlined above,
subject to certain conditions being fulfilled.
z Any credit / investment proposal relating to a borrower,
rated A or below, which is in default in payment of
either simple interest or principal or both to the Bank for
a period in excess of 30 days.
2 Committee of Directors Chaired by the Managing z All approvals above the prescribed authority of the
Director and Chief Executive Committee of Executives.
Officer and consisting of all z Any proposal not exceeding the individual and / or
wholetime directors. group borrower prudential exposure ceilings as
prescribed by the Reserve Bank of India (RBI); i.e. 15%
of capital funds for a single borrower (20% in case of
infrastructure) and 40% of capital funds for a group (50%
in case of infrastructure). However, such proposals for
additional exposure, over and above the prudential
exposure ceilings, shall be considered within the
guidelines prescribed by RBI from time to time. At present
RBI has allowed Banks to consider additional exposure
to a borrower up to 5% of capital funds, over and above
the prudential ceilings outlined above, subject to certain
conditions being fulfilled.
z Small Enterprise Group (SEG) proposals exceeding
individual exposure of Rs.25.00 crore or where the
aggregate exposure to all such borrowers (where the
individual exposure is greater than Rs.10.00 crore)
exceeds 33% of the total SEG portfolio.
z Proposals where the individual borrower exposure
exceeds stipulated limits for different internal rating
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March 2005
categories
z Proposals for renewal with additional limits in excess
of 20% of earlier sanctioned limits or total exposure
including the additional limit exceeds the stipulated
limit for different internal rating categories.
z Proposal carrying a pricing deviation in excess of
Rs. 30 lakh.
3 Committee of Executives Consisting of heads of client z Approvals linked to the rating of the borrower which
relationship groups, Retail Products are above the authority of the Regional Committee
& Distribution Group, Retail subject to the following cumulative exposure limits:
Infrastructure Group, International z Up to Rs. 500 crore for each company with an
Banking Group, Structured Finance, internal credit rating of AA+ and AAA;
Credit and Markets Group,
z Up to Rs. 150 crore for each company with an
Compliance and Audit Group,
internal credit rating of AA;
Project Finance Group, Risk
Management Group and Chief z Up to Rs. 90 crore for each company with an internal
Financial Officer. credit rating of AA;-
z Up to Rs. 70 crore for each company with an internal
credit rating of A+;
credit rating of A;
credit rating of A-;
credit rating of BBB;
credit rating of BB;
z In respect of SEG proposals not exceeding individual
exposure of Rs.25.00 crore or where the aggregate
exposure to all such borrowers (where the individual
exposure is greater than Rs.10.00 crore) does not
exceed 33% of the total SEG portfolio.
4 Regional Committee Consisting of regional representatives z Approvals linked to the rating of the borrower which
of various client relationship groups are subject to the following cumulative exposure
with representatives of Risk limits :
Management Group, Compliance and z Up to Rs. 350 crore for each company with an
Audit Group and Middle Office internal credit rating of AA+ and AAA;
Group as permanent invitees.
z Up to Rs. 110 crore for each company with an
internal credit rating of AA;
credit rating of AA;-
credit rating of A+;
credit rating of A;
z In addition to the above, proposals of Rural and
Micro Banking group rated A-, BBB and BB are
subject to the following cumulative exposure limits:
credit rating of A-;
credit rating of BBB;
credit rating of BB;
(1) Capital funds consist of Tier 1 and Tier 2 capital, as defined in the RBI regulations. See “Regulations and Policies – Capital Adequacy
Requirements”.
All new loans must be approved by the above committees in accordance with their respective powers. Certain designated executives are
authorised to approve:
z ad-hoc/ additional working capital facilities not exceeding the lower of 10.0% of existing approved facilities and Rs. 2.0 crore;
z temporary accommodation not exceeding the lower of 20.0% of existing approved facilities and Rs. 2.0 crore; and
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March 2005
z facilities fully secured by deposits, cash margin, letters of credit We have established centralised operations to manage operating
of approved banks or approved sovereign debt instruments. risk in the various back office processes of our retail loan business
The Committee of Directors is authorised to approve all program except for a few operations which are decentralised to improve
sanctions. The Committee of Executives/Regional Committee shall turnaround time for customers.
be authorised to approved program sanctions within the limit of We have a collections unit structured along various product lines
their credit approval authority as mentioned above. and geographical locations, to manage delinquency levels. The
In addition to the above loan products, our Rural, Micro Banking collections unit operates under the guidelines of a standardised
and Agri-business Group provides loans to self-help groups, rural recovery process. We also make use of external collection agents to
agencies, as well as certain categories of agricultural loans and aid it in collection efforts, including collateral repossession in
loans under government-sponsored schemes. These loans are accounts that are overdue for more than 90 days. External agencies
typically of small amounts. The credit approval authorisation for collections are governed by standardised process guidelines.
approved by the Board of Directors requires that all such loans A fraud control department has been set up to manage levels of
above Rs.15 lakh be approved by the Committee of Directors, while fraud, primarily through fraud prevention in the form of forensic
the authority to approve loans up to Rs.15 lakh has been delegated audits and also through recovery of fraud losses. The fraud control
to designated executives. department is aided by specialised agencies. The fraud control
department also evaluates the various external agencies involved in
Credit Monitoring Procedures for Corporate Loans the retail finance operations, including direct marketing agents,
The Credit Middle Office Group monitors compliance with the terms external verification agents and collection agents.
and conditions for credit facilities prior to disbursement. It also
Small Enterprises Loan Procedures
reviews the completeness of documentation, creation of security
and insurance policies for assets financed. All borrower accounts The Small Enterprises Group finances dealers and vendors of
are reviewed at least once a year. Larger exposures and lower companies by implementing structures to enhance the base credit
rated-borrowers are reviewed more frequently. quality of the vendor / dealer, that involve an analysis of the base
credit quality of the vendor / dealer pool and an analysis of the
Retail Loan Procedures linkages that exist between the vendor / dealer and the company.
Our customers for retail loans are typically middle and high-income, The group is also involved in financing based on a community-
salaried or self-employed individuals, and, in some cases, based approach, that is, financing of small enterprises that have a
partnerships and corporations. Except for personal loans, credit homogeneous profile such as apparel manufacturers and
cards and loan against shares, we require a contribution from the manufacturers of pharmaceuticals. The risk assessment of such
borrower and our loans are secured by the asset financed. communities involves identification of appropriate credit norms for
Our retail credit product operations are sub-divided into various target market, use of scoring models for enterprises that satisfy these
product lines. Each product line is further sub-divided into separate norms and applying pre-determined exposure limits to enterprises
sales and marketing and credit groups. The Risk Management Group, that are awarded a minimum required score in the scoring model.
which is independent of the business groups, approves all new The assessment also involves setting up of portfolio control norms,
retail products and product policies and credit approval individual borrower approval norms and stringent exit triggers to
authorisations. All products and policies require the approval of the be followed while financing such clusters or communities.
Committee of Directors. All credit approval authorisations require
Market Risk
the approval the Board of Directors.
We use direct marketing agents as well as our own branch network Market risk is exposure to loss arising from changes in the value of a
and employees for marketing retail credit products. However, credit financial instrument as a result of changes in market variables such
approval authority lies only with our credit officers who are distinct as interest rates, exchange rates and other asset prices. The prime
from the product marketing teams. The delegation of credit approval source of market risk for us is the interest rate risk we are exposed to
authority is linked, among other factors, to the size of the credit and as a financial intermediary, which arises on account of our asset
the authority delegated to credit officers varies across different liability management activities. In addition to interest rate risk, we
products. are exposed to other elements of market risk such as, liquidity or
funding risk, price risk on trading portfolios, and exchange rate risk
Our credit officers evaluate credit proposals on the basis of the
on foreign currency positions.
product policy approved by the Committee of Directors and the risk
assessment criteria defined by the Risk Management Group. These Market Risk Management Procedures
criteria vary across product segments but typically include factors
Our exposure to market risk is a function of our asset and liability
such as the borrower’s income, the loan-to-value ratio and certain
management activities, proprietary trading activities, and our role
stability factors. In case of credit cards, in order to limit the scope of
as a financial intermediary. The objective of market risk management
individual discretion, we have implemented a credit-scoring
is to avoid excessive exposure of our earnings and equity to loss
programme that is an automated credit approval system that assigns
and to reduce the volatility inherent in financial instruments. The
a credit score to each applicant based on certain demographic
Asset Liability management (ALM) activities of the Bank are governed
attributes like earnings stability, educational background and age.
by the ALM policy, which is approved by the Asset Liability
The credit score then forms the basis of loan evaluation. External
Management Committee (ALCO). Our investment activities are
agencies such as field investigation agents and credit processing
governed by Treasury Investment policy (TIP), which is approved
agents are used to facilitate a comprehensive due diligence process
by the Risk Committee.
including visits to offices and homes in the case of loans to individual
borrowers. Before disbursements are made, the credit officer The Asset Liability Management Committee is responsible for
conducts a centralised check and review of the borrower’s profile. managing interest rate risk on the banking book and liquidity risk.
We avail the services of certain private agencies operating in India The Asset Liability Management Committee is chaired by the Joint
to check applications before disbursement. A centralised retail credit Managing Director. Deputy Managing Director and two Executive
team undertakes review and audit of credit quality across each credit Directors are members of the Committee. The Committee generally
approval team. meets on a monthly basis and reviews the interest rate and liquidity
gap positions on the banking book, formulates a view on interest
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March 2005
rates, sets deposit and benchmark lending rates, reviews the business specific credit and other charges. Interest rates on loans outstanding
profile and its impact on asset liability management and determines at December 31, 2003 continue to be based on the four-tier prime
the asset liability management strategy, as deemed fit, in light of the rate structure. We seek to eliminate interest rate risk on undisbursed
current and expected business environment. The Structural Rate commitments by fixing interest rates on rupee loans at the time of
Risk Management Group and Balance Sheet Management Group loan disbursement.
are responsible for managing interest rate risk and liquidity risk, In contrast to the rupee loans, a large proportion of the foreign
under the supervision of the Asset Liability Management Committee. currency loans are floating rate loans. These loans are generally
An independent Market Risk Management Group, which is part of funded with floating rate foreign currency funds. Our fixed rate foreign
currency loans are generally funded with fixed rate foreign currency
Risk Management Group, recommends changes in risk policies,
funds. We generally convert all our foreign currency borrowings
limits and controls. It also evaluates methodologies for quantifying
and deposits into floating rate dollar liabilities through the use of
and assessing market risks. We also have in place a Treasury Middle interest rate and currency swaps with leading international banks.
Office Group (TMOG), which is responsible for monitoring adherence The foreign currency gaps are generally significantly lower than
to limits and daily reporting to senior management with respect to rupee gaps, representing a considerably lower exposure to
treasury operations. TMOG is independent of the front office and fluctuations in foreign currency interest rates.
reports directly to the Deputy Managing Director.
We use the duration of government securities portfolio as a key
Risk Limits variable for interest rate risk management. The duration of
government securities portfolio is either increased or decreased to
We have established various risk control limits to manage our market increase or decrease the interest rate risk exposure. In addition, we
risks. We have set up position limits, stop loss limits, and value at risk also use interest rate derivatives to manage the asset and liability
limits for various portfolios in our treasury. Counterparty limits and positions. We are an active participant in the interest rate swap
sovereign limits have been set to avoid excessive exposure to any market and are one of the largest counterparties in India.
particular counterparty or country. These limits are monitored on a Our asset liability management policy stipulates an interest rate risk
daily basis. ALM related limits have been put in place to manage limit, which seeks to cap the risk on account of the mark-to-market
liquidity and interest rate risks. trading book and the earnings at risk on the banking book, based on
Interest Rate Risk a sensitivity analysis of a 100 basis points parallel and immediate
shift in interest rates. In addition, the Market Risk Management Group
Exposure to fluctuations in interest rates is measured primarily by stipulates risk limits including position limits and stop loss limits for
way of gap analysis, providing a static view of the maturity and re- the trading book. These limits are monitored on a daily basis and
pricing characteristics of balance sheet positions. An interest rate reviewed periodically. In addition to risk limits, we also have risk
gap report is prepared by classifying all assets and liabilities into monitoring tools such as Value-at-Risk models for measuring market
various time period categories according to contracted maturities risk in our trading portfolio.
or anticipated re-pricing date. The difference in the amount of assets We are required to invest a specified minimum percentage, currently
and liabilities maturing or being re-priced in any time period 25.0%, of our liabilities in Government of India securities to meet the
category, then gives an indication of the extent of exposure to the statutory ratio requirement prescribed by the RBI. As a result, we
risk of potential changes in the margins on new or re-priced assets have a very large portfolio of Government of India securities classified
and liabilities. The interest rate gap reports are prepared on a as Available for Sale (AFS) or Held to Maturity (HTM) portfolio. This
fortnightly basis. Interest rate risk is further monitored through interest portfolio is managed by the Balance Sheet Management Group
rate risk limits approved by the Asset Liability Management
Committee. Equity Risk
Our core business is deposit taking and lending in both rupees and We assume equity risk both as part of our investment book and our
foreign currencies, as permitted by the RBI. These activities expose trading book. On the investment book, investments in equity shares
us to interest rate risk. As the rupee market is significantly different and preference shares are essentially long-term in nature. Nearly all
from the international currency markets, gap positions in these markets the equity investment securities have been driven by its project
differ significantly. financing activities. The decision to invest in equity shares during
The primary source of funding is deposits, and to a much smaller project financing activities has been a conscious decision to
extent borrowings. In the rupee market, most of the deposit taking is participate in the equity of the company with the intention of realising
at fixed rates of interest for fixed periods, except for savings deposits capital gains arising from the expected increases in market prices,
and current deposits, which do not have any specified maturity and and is separate from the lending decision.
can be withdrawn on demand. The borrowing is usually for a fixed
Exchange Rate Risk
period with a one-time repayment on maturity, with some borrowings
having European call/put options, exercisable only on specified We offer foreign currency hedge instruments like swaps, forwards,
dates, attached to them. We have a mix of floating and fixed interest and currency options to clients, which are primarily banks and highly
rate assets. The loans are generally repaid more gradually, with rated corporate customers. We actively use cross currency swaps,
principal repayments being made over the life of the loan. The forwards, and options to hedge against exchange risks arising out
housing loans are primarily floating rate loans where the rates are of these transactions. The forex risks arising from these transactions
reset every quarter. Till December 31, 2003, we followed a four-tier are mitigated by setting counterparty limits, stipulating daily and
prime rate structure, namely, a short-term prime rate for one-year cumulative stop-loss limits, and engaging in exception reporting.
loans or loans that re-price at the end of one year, a medium-term All the options are maintained within the specified Greek limits. In
prime rate for one to three year loans, a long-term prime rate for addition, foreign currency loans are made on terms that are similar
loans with maturities greater than three years and a prime rate for to foreign currency borrowings, thereby transferring the foreign
cash credit products. Effective January 1, 2004, we have moved to exchange risk to the borrower. Foreign currency cash balances are
a single benchmark prime rate structure for all loans other than generally maintained abroad in currencies matching with the
specific categories of loans advised by the Indian Banks’ Association underlying borrowings. In addition, there is an open foreign exchange
(which include, among others, loans to individuals for acquiring position limit to minimise exchange rate risk.
residential properties, loans for purchase of consumer durables,
non-priority sector personal loans and loans to individuals against Liquidity Risk
shares, debentures, Bonds and other securities), with lending rates Liquidity risk arises in the funding of lending, trading, and investment
comprising the benchmark prime rate, term premia and transaction-
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March 2005
activities and in the management of trading positions. It includes Notes

both the risk of unexpected increases in the cost of funding its asset 1) Includes, balances in current accounts with banks, money at
portfolio at appropriate maturities and the risk of being unable to call and short notice, term deposits and other placements
liquidate a position in a timely manner at a reasonable price. Another
source of liquidity risk is put options written by us on certain of the (2) The maturity profile has been computed based on relevant
loans, which we have securitised. These options are binding and Asset & Liability Management guidelines of RBI and ICICI Bank’s
require us to purchase, upon request of the holders, securities issued internally adopted policy in this regard.
in such securitized transactions. The options seek to provide liquidity (3) In computing the information of maturity profile, certain
to the security holders. If exercised, we will be obligated to purchase estimates and assumptions have been made by the management
the securities at the pre-determined exercise price. which have been relied upon by the auditors.
The goal of liquidity management is to enable us to meet all of our The maturity profile of the assets and liabilities as at year-end fiscal
liability repayments on time even under adverse conditions and 2003 is given in the table below:
fund all investment opportunities. We actively monitor the liquidity
(Rs. in crore)
position and attempt to maintain adequate liquidity at all times to
meet all requirements of all depositors and Bondholders, while also Maturity Buckets <1 year 1 to 3 3 to 5 >5 Total
years years years
meeting the requirement of lending groups. We continuously seek
to establish a continuous information flow and an active dialogue Assets (Inflows)
between the funding and borrowing divisions of the organisation to Loans & Advances 10,266.20 16,623.54 9,275.29 17,114.38 53,279.41
enable optimal liquidity management. The Balance Sheet Investments 15,392.46 11,028.69 2,217.34 6,823.81 35,462.30
Management Group is responsible for liquidity management. Cash/RBI Balances 2,552.62 1,642.92 223.40 467.20 4,886.14
We maintain diverse sources of liquidity to facilitate flexibility in Balances with
meeting funding requirements. We fund our operations principally banks, Call and
by accepting deposits from retail and corporate depositors. We Term money (1) 1,098.88 251.20 55.33 197.45 1,602.86
also borrow occasionally in the short-term inter-bank market. While Leased Assets 477.29 749.80 543.06 — 1,770.15
generally this market provides an adequate amount of liquidity, the Others Fixed Assets — — — 2,290.58 2,290.58
interest rates at which funds are available can sometimes be volatile. Others 1,454.29 786.76 332.31 4,947.17 7,520.53
Loan maturities and sale of investments also provide liquidity. We
Total (A) 31,241.74 1,082.91 12,646.73 31,840.59 106,811.97
maintain a substantial portfolio of liquid high quality securities that
may be sold on an immediate basis to meet the liquidity needs. Liabilities (Outflows)
Also, we are required to maintain a certain minimum percentage of Capital — — — 962.66 962.66
our demand and time liabilities, excluding specified liabilities, in Reserves/Surplus — — — 6,320.65 6,320.65
cash reserves with the RBI, which currently stands at 5.0%. In addition, Deposits 25,852.80 20,564.79 1,063.22 688.50 48,169.31
we also are required to maintain a minimum statutory liquidity reserve Borrowings 12,159.88 13,950.27 3,517.93 4,674.34 34,302.42
by way of investments in Government of India securities, which is Others (including
25.0% at present. We have recourse to the liquidity adjustment facility subordinated debt) 4,720.55 5,127.99 1,127.64 6,080.75 17,056.93
and the refinance window, which are short-term funding
Total (B) 42,733.23 39,643.05 5,708.79 18,726.90 106,811.97
arrangements provided by the RBI.
Gap (11,491.49) (8,560.14) 6,937.94 13,113.69 —
To review our liquidity position, a regular maturity gap statement is
prepared. This however, only provides a static picture. So it is (1) Includes, balances in current accounts with banks, money at
supplemented with the dynamic gap statements that take into account call and short notice, term deposits and other placements
future business growth over short horizons. In addition, certain key (2) The maturity profile has been computed based on relevant
liquidity ratios are tracked on a fortnightly basis. Asset & Liability Management guidelines of RBI and ICICI Bank’s
The following table sets forth the maturity profile of our assets and internally adopted policy in this regard.
liabilities at year-end fiscal 2004 (3) In computing the information of maturity profile, certain
(Rs. in crore) estimates and assumptions have been made by the management
which have been relied upon by the auditors.
Maturity Buckets <1 1-3 3-5 >5 Total
year years years years The maturity profile of the assets and liabilities as at year-end fiscal
Assets (Inflows) 2002 is given in the table below:
Loans & Advances 14,845.47 18,259.80 9,609.13 19,381.12 62,095.52 (Rs. in crore)
Investments 18,673.10 11,720.79 2,244.77 10,104.19 42,742.86 <1 year 1 to 3 3 to 5 >5 Total
Cash/RBI Balances 2,789.82 1,886.34 308.51 423.32 5,408.00 years years years
Balances with Assets (Inflows)
banks, Call and
Loans & Advances 10,427.38 14,263.98 8,822.46 13,521.05 47,034.87
Term money (1) 2,725.14 163.23 88.48 85.79 3,062.64
Investments 12,790.48 7,365.76 4,474.61 11,260.24 35,891.09
Leased assets 344.89 831.85 477.98 8.47 1,663.18
Other fixed Assets 0.00 0.00 0.00 2,393.23 2,393.23 Cash/RBI Balances 878.45 573.39 140.44 182.19 1,774.47
Other Assets 2,322.61 526.17 156.37 4,858.29 7,863.45 Balance with banks,
Total (A) 41,701.02 33,388.19 12,885.24 37,254.42 125,228.87 Call and Term
money(1) 10,312.67 488.30 83.25 127.66 11,011.88
Liabilities (Outflows)
Leased Assets 237.08 747.51 609.11 676.26 2,269.96
Deposits 34,880.83 30,158.94 2,122.05 946.77 68,108.58
Borrowings 10,234.36 11,760.12 4,521.00 4,224.76 30,740.24 Others Fixed Assets — — — 1,969.37 1,969.37
Capital 0.00 0.00 0.00 966.40 966.40 Others 1,885.19 656.62 406.13 1,206.72 4,154.66
Reserves/Surplus 0.00 0.00 0.00 7,394.16 7,394.16 Total (A) 36,531.25 24,096.56 14,536.00 28,943.49 104,106.30
Other Liabilities 6,479.63 4,041.89 1,775.81 5,722.17 18,019.49 Liabilities (Outflows)
Total (B) 51,594.82 45,960.95 8,418.85 19,254.25 125,228.87 Capital — — — 962.55 962.55
Gap (9,893.80) (12,572.76) 4,466.39 18,000.17 — Reserves/Surplus — — — 5,632.40 5,632.40
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March 2005
<1 year 1 to 3 3 to 5 >5 Total Operational Controls and Procedures for Internet Banking
years years years
In order to open an Internet banking account, the customer must
Deposits 18,091.71 13,445.70 403.51 144.20 32,085.12 provide us with documentation to prove the customer’s identity,
Borrowings 23,178.06 15,803.92 5,165.58 5,071.09 49,218.65 such as a copy of the customer’s passport, a photograph and
Others specimen signature of the customer. After verification of this
(including sub- documentation, we open the Internet banking account and issue the
ordinated debt) 2,872.40 4,093.85 2,965.13 6,276.20 16,207.58 customer a user ID and password to access his account online.
Total (B) 44,142.47 33,343.47 8,534.22 18,086.44 104,106.30
Operational Controls and Procedures in Regional Processing
Gap (7,610.92) (9,247.91) 6,001.78 10,857.05 — Centers & Central Processing Centers
(1) Includes, balances in current accounts with banks, money at To improve customer service at our physical locations, we handle
call and short notice, term deposits and other placements. transaction processing centrally by taking away such operations
(2) The maturity profile has been computed based on relevant from branches. We have centralised operations at regional processing
Asset & Liability Management guidelines of RBI and Bank’s centers located at 15 cities in the country. These regional processing
internally adopted policy in this regard. centers process clearing checks and inter-branch transactions, make
(3) In computing the information of maturity profile, certain inter-city check collections, and engage in back-office activities for
estimates and assumptions have been made by the management account opening, standing instructions and auto-renewal of deposits.
which have been relied upon by the auditors. In Mumbai, we have centralised transaction processing on a nation-
Our Bonds are rated AAA by two Indian credit rating agencies, ICRA wide basis for transactions like the issue of ATM cards and PIN
Limited and Credit Analysis & Research Limited. Our term deposits mailers, reconciliation of ATM transactions, monitoring of ATM
are rated AAA by ICRA Limited. Our foreign currency borrowings functioning, issue of passwords to Internet banking customers,
are rated Baa3 by Moody’s and BB by Standard and Poor’s. Our depositing postdated checks received from retail loan customers
long-term foreign currency deposits are rated Ba2 by Moody’s. Our and credit card transaction processing. Centralised processing has
short-term foreign currency ratings are ‘not Prime’ by Moody’s and been extended to the issuance of personalised check books, back-
B by Standard & Poor’s. Any downgrade in these credit ratings, or office activities of non-resident Indian accounts, opening of new
any adverse change in these ratings relative to other banks and bank accounts for customers who seek web brokering services and
financial intermediaries, could adversely impact our ability to raise recovery of service charges for accounts for holding shares in book-
resources to meet our funding requirements, which in turn could entry form.
adversely impact our liquidity position. Operational Controls and Procedures in Treasury
In April 2003, unsubstantiated rumours, believed to have originated Our treasury engages in domestic and foreign exchange operations
in Gujarat, alleged that we were facing liquidity problems, although from a centralized trading floor in Mumbai. We believe that our
our liquidity position was sound. We witnessed higher than normal dealing room is one of the best in India in terms of technological
deposit withdrawals during the period April 11 to 13, 2003, on capability and skills. The infrastructure includes the latest voice
account of these unsubstantiated rumours. We successfully controlled systems and electronic dealing terminals with access to real time
the situation, but if such situations were to arise in the future, any market information feeds.
failure to control such situations could result in large deposit Our treasury operations for rupee transactions consist of operations
withdrawals, which would adversely impact our liquidity position. in fixed income securities, equity securities and inter-bank money
Operational Risk markets. Our dealers analyse the market conditions and take views
on price movements. Thereafter, they strike deals in conformity with
We are exposed to many types of operational risk. Operational risk various limits relating to counterparties, securities and brokers. The
can result from a variety of factors, including failure to obtain proper deals are then forwarded to the back office for settlement.
internal authorisations, improperly documented transactions, failure
of operational and information security procedures, computer Trade strategies are discussed frequently and decisions are taken
systems, software or equipment, fraud, inadequate training and based on market forecasts, information and liquidity considerations.
employee errors. We attempt to mitigate operational risk by We have a high level of automation in trading operations. We use
maintaining a comprehensive system of internal controls, establishing technology to monitor risk limits and exposures. Trading operations
systems and procedures to monitor transactions, maintaining key are conducted in conformity with the code of conduct prescribed
back–up procedures and undertaking regular contingency planning. by internal and regulatory guidelines.
The Front office, Middle office and Back office operations are
Operational Controls and Procedures in Branches segregated in keeping with the regulatory guidelines. The Middle
We have operating manuals detailing the procedures for the office concurrently monitors treasury operations using various risk
processing of various banking transactions and the operation of the monitoring tools. Procedures for reporting breaches in limits are
application software. Amendments to these manuals are also in place.
implemented through circulars sent to all offices. The Treasury Middle Office Group, which reports to the Deputy
We have a scheme of delegation of financial powers that sets out the Managing Director monitors counterparty limits, evaluates the mark-
monetary limit for each employee with respect to the processing of to-market impact on various positions taken by dealers and monitors
transactions in a customer’s account. Withdrawals from customer market risk exposure of the investment portfolio and adherence to
accounts are controlled by dual authorisation. Senior officers have various market risk limits.
delegated power to authorise larger withdrawals. Our operating sOur settlement office undertakes the settlement of funds and
system validates the check number and balance before permitting securities. The settlement office has procedures and controls for
withdrawals. Cash transactions over Rs. 10 lakh are subject to special minimising operational risks, verifying the authenticity of
scrutiny to avoid money laundering. Our banking software has counterparty checks and securities, ensuring receipt of contract notes
multiple security features to protect the integrity of applications and from brokers, monitoring receipt of interest and principal amounts
data. on due dates, ensuring transfer of title in the case of purchases of
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March 2005
securities, reconciling actual security holdings with the holdings Risk measurement and modeling
pursuant to the records and reports any irregularity or shortcoming We are in the process of implementing a measurement approach to
observed. arrive at regulatory capital allocation for operational risk. We have
Anti-money Laundering Controls initiated work on modeling the impact of losses arising out of
operational risk in different processes. These models, based on
In 2002, the Parliament of Indian passed the Prevention of Money statistical methods, seek to facilitate the identification of processes
Laundering Act, the provisions of which are yet to declared effective that are prone to very high risk and assist us further in developing the
by the government of India. RBI issued detailed guidlines to banks necessary controls to reduce operational risk.
on “Know You Customer” issues and anti-money laundering in August
Audit
2002 and again in November 2004. We are in compliance with the
August 2002 guidelines of the RBI and have till December 31, 2005 The Internal Audit Group, which is part of the Compliance and Audit
to be in compliance with the November 2004 guidelines. Our Board Group, undertakes a comprehensive audit of all business groups
of Directors has approved for implementation an anti-money and other functions, in accordance with a risk-based audit plan. This
laundering policy which would apply to all our business operations plan allocates audit resources based on an assessment of the
in India and abroad. A Money Laundering Reporting Officer has operational risks in the various businesses. The audit plan for every
been designated for implementing and monitoring compliance with fiscal year is approved by the Audit Committee of our board of
this policy. The Audit Committee of the Board of Directors supervises directors.
the implementation of the anti-money laundering policy. The anti- The Internal Audit Group also has a dedicated team responsible for
money laundering policy has been designed using a risk-based information technology security audits. The annual audit plan covers
approach and is based on two pillars: know your customer and various components of information technology including
monitoring and reporting of suspicious transactions. The business applications, databases, networks and operating systems.
groups are required to undertake risk profiling of various customer
The RBI requires banks to have a process of concurrent audits at
segments and products, and classify them into high, medium and
branches handling large volumes, to cover a minimum of 50.0% of
low-risk categories. The anti-money laundering framework seeks to
business volumes. We have a process of concurrent audits, using
institute a process of customer identification and verification
external accounting firms. Concurrent audits are also carried out at
depending on the nature of the customer and the transactions. A
centralised and regional processing centers operations to ensure
business relationship may be commenced only after establishing
existence of and adherence to internal controls.
and verifying the identity of the customer and understanding the
nature of the business the customer expects to conduct. The ultimate The Internal Audit Group has formed a separate International Banking
beneficiary of the relationship and the purpose of commencing the Audit Group for audit of international branches, representative offices
relationship must also be established. In respect of unusual or and subsidiaries.
suspicious transactions or when the customer moves from a low- Legal Risk
risk to high-risk profile, appropriate enhanced due-diligence The uncertainty of the enforceability of the obligations of our
measures are required to be adopted. The November 2004 customers and counter-parties, including the foreclosure on
guidelines are based on the Recommendations of the Financial Action collateral, creates legal risk. Changes in laws and regulations could
Task Force and the paper issued on Customer Due Diligence (CDD) adversely affect us. Legal risk is higher in new areas of business
for banks by the Basel Committee on Banking Supervision and as where the law is often untested by the courts. We seek to minimise
per these guidelines, we have to, within a period of three months legal risk by using stringent legal documentation, employing
with the approval of our Board, formulate and put in place a policy procedures designed to ensure that transactions are properly
framework on ‘Know Your Customer’ and Anti-Money Laundering authorised and consulting internal and external legal advisors.
measures.
Derivative Instruments Risk
Global risk management framework
We enter into interest rate and currency derivative transactions
We have adopted a global risk management framework for our primarily for the purpose of hedging interest rate and foreign
international banking operations, including overseas branches, exchange mismatches and also engage in trading of derivative
offshore banking units and subsidiaries. Under this framework, our instruments on our own account. We provide derivative services to
credit, treasury investment, asset liability management and anti- selected major corporate customers and other domestic and
money laundering policies apply to all our overseas branches and international financial institutions, including foreign currency forward
offshore banking units, with modifications to meet local regulatory transactions and foreign currency and interest rate swaps. Our
or business requirements. These modifications may be made only derivative transactions are subject to counterparty risk to the extent
with the approval of the appropriate committee of our board of particular obligors are unable to make payment on contracts when
directors. All overseas banking subsidiaries are required to adopt due.
risk management policy frameworks to be approved by their board
of directors or an appropriate committee of their board of directors, Risk management in key subsidiaries
based on applicable laws and regulations as well as our corporate ICICI Securities provides investment banking services, including
governance and risk management framework. The overseas banking corporate advisory, fixed income and equity services, to corporate
subsidiaries are required to adopt a process for formulation of customers. All investment banking mandates, including underwriting
policies which involves seeking the guidance and recommendations commitments, are approved by the Commitments Committee
of our related groups. comprising the Managing Director and CEO and relevant group
The Compliance and Audit Group is responsible for implementing heads, of ICICI Securities. ICICI Securities is a primary dealer and
and monitoring the global risk management framework. The has government of India securities as a significant proportion of its
Compliance and Audit Group plays an oversight role in respect of portfolio. It has a corporate risk management group for managing
regulatory compliance with both local and Indian regulatory principally the credit and market risks arising out of the various
requirements. Key risk indicators pertaining to our international activities of the company.
banking operations are presented to the Risk Committee of our board ICICI Prudential Life Insurance is exposed to business risks arising
of directors on a quarterly basis. out of the nature of products and underwriting, and market risk
arising out of the investments made out of the corpus of premiums
64
March 2005
collected and the returns guaranteed to policyholders. ICICI Technology Organisation

Prudential Life Insurance believes it has a well-developed framework
While we have dedicated technology groups for our products and
for assessing and managing these risks. We believe it has the largest
services for retail and corporate customers, our enterprise-wide
team of underwriters among private sector insurance companies in
technology initiatives are coordinated by the Technology
India. The key risks and the risk management framework are
Management Group.
periodically reviewed by the Risk Management and Audit Committee
of its board of directors. The Investment Committee oversees Banking Application Software
investment-related risk management by approving and reviewing
Our banking application software is flexible, scaleable and allows
the implementation of the investment policy within the norms
us to effectively and efficiently serve our growing customer base. In
stipulated by the Insurance Regulatory and Development Authority.
fiscal 2003, our core banking software was upgraded and enabled
ICICI Prudential Life Insurance has an asset-liability management
with multi-currency features. A central stand-in server provides
framework for its investment related risks. At year-end fiscal 2004,
services all days of the week, throughout the year, to delivery channels.
linked insurance plans constituted about 48.0% of the portfolio.
The server stores the latest customer account balances, which are
These are exposed to low market risk as the returns are linked to the
continuously streamed from the core banking database. We have a
value of underlying investments. In order to manage the interest rate
data center in Mumbai for centralised data base management, data
risk on the non-linked portfolio, ICICI Prudential Life Insurance has
storage and retrieval.
hedged the single premium non-participating portfolio by duration
matching, re-balanced at monthly intervals. For the participating Electronic and Online Channels
portfolio, ICICI Prudential Life Insurance has adopted an asset
allocation strategy which includes investments in equities. The equity We use a combination of physical and electronic delivery channels
portfolio is benchmarked to a stock market index. ICICI Prudential to maximise customer choice and convenience, which has helped
Life Insurance follows a disciplined approach to portfolio the differentiation of our products in the marketplace. Our ATMs are
construction to manage the volatility of equity investments and sourced from some of the world’s leading vendors. At December
achieve superior equity asset class returns over the long term. The 31, 2004, we had 1,850 ATMs across India. We have also entered
portfolio largely comprises index stocks and is constructed with into bilateral arrangements with Federal Bank and Andhra bank and
small limits for sector and stock deviation vis-à-vis index stock multilateral arrangements with Corporation Bank, Bank of Baroda,
weighs. In addition, there are limits on exposures to companies, Punjab National Bank and IDBI bank, thereby increasing our ATM
groups and industries. reach to more than 4,000.
ICICI Lombard General Insurance is principally exposed to risks We were one of the first banks to offer online banking facilities to our
arising out of the nature of business underwritten and credit risk on customers. We now offer a number of online banking services to our
customers for both corporate and retail products and services. Our
its investment portfolio. In respect of business risk, ICICI Lombard
telephone banking call centers have a total seating capacity of 2,300
General Insurance seeks to diversify its insurance portfolio across
seats, across two locations, Mumbai and Hyderabad. These
industry sectors and geographical regions. It focuses on product
telephone banking call centers use an Interactive Voice Response
segments that have historically experienced low loss ratios. It also
System. The call centers are based on the latest technology and
has the ability to reduce the risk retained on its own balance sheet by
provide an integrated customer database that allows the call agents
re-insuring a part of the risks underwritten. Its investments are
to get a complete overview of the customer’s relationship with us.
governed by the investment policy approved by its board of
The database enables customer segmentation and assists the call
directors within the norms stipulated by the Insurance Regulatory agent in identifying cross-selling opportunities.
and Development Authority. The Investment Committee overseas
the implementation of this policy and reviews it periodically. We launched mobile banking services in India in March 2000, in line
Exposure to any single entity is normally restricted to 5.0% of the with our strategy to offer multi-channel access to our customers.
portfolio and to any industry to 10.0% of the portfolio. Investments This service has now been extended to all mobile telephone service
in debt instruments are generally restricted to instruments with a providers across India and non-resident Indian customers in the
domestic credit rating of AA or higher. United States of America, the United Kingdom, the Middle East and
Singapore.
Technology
High-Speed Electronic Communications Infrastructure
We seek to be at the forefront of usage of technology in the financial
services sector. We use information technology as a strategic tool We have a nationwide data communications network linking all our
for our business operations, to gain a competitive advantage and to channels and offices. The network design is based on a mix of
improve our overall productivity and efficiency. Our technology dedicated leased lines and satellite links to provide for reach and
initiatives are aimed at enhancing value, offering customers enhanced redundancy, which is imperative in a vast country like India. The
convenience and improved service while optimising costs. Our focus communications network is monitored 24 hours a day using
on technology emphasises: advanced network management software.
z Electronic and online channels to: Treasury and Operations relating to Commercial Banking for
z offer easy access to our products and services; Corporate Customers
z reduce distribution and transaction costs; We use technology to monitor risk limits and exposures. We have
invested significantly to acquire advanced systems from some of
z reach new target customers; and
the world’s leading vendors and connectivity to the SWIFT network.
z enhance existing customer relationships. In fiscal 2003, we successfully centralised our corporate banking
z Application of information systems to: back office operations and rolled out a business process management
solution to automate our activities in the areas of trade services and
z effectively market to our target customers;
general banking operations. Through integration of the workflow
z monitor and control risks; and system with the imaging and document management system, we
z identify, assess and capitalise on market opportunities. have achieved substantial savings and practically eliminated the
We also seek to leverage our domestic technology capabilities in use of paper for these processes.
our international operations.
65
March 2005
In fiscal 2004, we have centralised the systems of the treasuries of all approximately 2,350 eligible employees, 1,495 employees exercised
our international branches and subsidiaries. As a result, the processing the Option.
of transactions as well as the applications used for deal entry are The amount payable to these employees was the lesser of the amount
now centrally located and maintained out of India. equal to:
Data Warehouse z three months’ salary for every completed year of service, and
The Retail Data Warehouse initiative achieves the customer z one month’s salary for the number of months of service left.
integration at the back-office. This central view of the total customer The above payment was subject to an overall limit of Rs. 20 lakhs for
relationship is being used extensively for identifying opportunities employees at the level of Joint General Manager and below, and
to cross sell new products and services to the existing customer Rs.25 lakhs for employees at the level of General Manager and
base. Through appropriate and timely customer need identification Senior General Manager. For the purpose of this computation, salary
on the Data Warehouse, ICICI Bank has been able to add significant included basic pay and dearness allowance but excluded all other
number of cross sold accounts at very low costs of acquisition. In allowances. While we have made provisions for leave encashment
the next phase, an automated campaign management product will and retirement benefits based on actuarial valuation in accordance
be rolled out to facilitate better customer management. with relevant accounting guidelines, the early retirement of employees
resulted in additional payouts over and above the provisions made
Data center and disaster recovery system
to date in respect of those employees. The total cost of the Early
While our primary data center is located in Mumbai, a separate Retirement Option including these provisions was Rs. 191 crore,
disaster recovery data center has been set up in another city and is which is being amortised over a period of five years in line with
connected to the main data center in Mumbai. The disaster recovery RBI’s approval.
data center has facilities to host critical banking applications in the
event of a disaster at the primary site. Properties
Our registered office is located at Landmark, Race Course Circle,
Employees
Vadodara 390 007, Gujarat, India. Our corporate office is located at
At December 31, 2004 we had 17,024 employees, of whom 7,161 ICICI Bank Towers, Bandra-Kurla Complex, Mumbai 400 051,
employees were professionals in business management, Maharashtra, India.
accountancy, engineering, law, computer science or economics. We had a principal network consisting of 451 branches, 53 extension
Management believes that it has good relationship with its staff. We counters and 1,850 ATMs at December 31, 2004. These facilities are
have a staff centre, which serves as a forum for grievances. located throughout India. In addition to the branches, extension
We rely extensively on our human capital and continue to attract the counters and ATMs, we have 18 controlling/administrative offices
best graduates from the premier business schools of the country. We including the registered office at Vadodara and the corporate
dedicate a significant amount of senior management time to ensure headquarters at Mumbai, 14 regional processing centres in various
that employees remain highly motivated and perceive the cities and one central processing centre at Mumbai. We also own
organisation as a place where opportunities abound, innovation is apartments and residential facilities for our employees.
fuelled, teamwork is valued and success is rewarded. Employee
compensation is clearly tied to performance and we encourage the CERTAIN CORPORATE MATTERS
involvement of all our employees in our overall performance and
Our Main Objects
profitability through profit sharing incentive schemes based largely
on the financial results and other quantitative and qualitative factors. Our main objects as contained in our Memorandum of Association
A performance management system has been implemented to assist are:
management in career development and succession planning. We 1. To establish and carry on business of banking in any part of
have an employee stock option scheme to encourage and retain India or outside India.
high performing employees. Up to 5.0% of our equity share capital
2. To carry on the business of accepting, for the purpose of lending
at the time of grant of stock option can be issued as stock options
or investment, of deposits of money repayable on demand or
under this scheme. The stock option entitles eligible employees to
otherwise and withdrawable by cheque, draft, order or
apply for equity shares. The Board Governance and Remuneration
otherwise.
Committee determines the eligibility of each employee based on an
evaluation of the employee including employee’s work performance, 3. To borrow, raise or take up money, lend or advance money
technical knowledge and leadership qualities. with or without interest either upon or without security.
We have a training centre at Khandala, near Mumbai which conducts 4. To draw, make, execute, issue, endorse, negotiate, accept,
a series of training programmes designed to meet the changing skill discount, buy, sell, collect and deal in bills of exchange, hundies,
requirements of our employees. These training programmes include promissory notes, coupons, drafts, bills of lading, railway
orientation sessions for new employees and management receipts, warrants, debentures, Bonds, mortgage-backed
development programmes for mid-level and senior executives. The securities, letters of credit or obligations, certificates, scrips
training centre regularly offers courses conducted by faculty, both and other instruments and securities whether transferable or
national and international, drawn from industry, academia and from negotiable or mercantile or not.
our own employees. Training programmes are also conducted for 5. To grant and issue letters of credit, travelers cheques and circular
developing functional as well as managerial skills. We also depute notes, buy, sell and deal in bullion and specie.
our employees to various specialised training programmes held in
6. To receive all kinds of Bonds, scrips or valuables on deposit or
India and abroad.
for safe custody or otherwise, provide safe deposit vaults,
In July 2003, we offered an Early Retirement Option to our employees. collect and transmit money, negotiable instruments and all
All employees who were 40 years of age and had completed seven securities.
years of service with us (including periods of service with Bank of
7. To buy, acquire, issue on commission, deal, sell, dispose of,
Madura, ICICI, ICICI Personal Financial Services and ICICI Capital
exchange, convert, underwrite, subscribe, participate, invest
Services which were amalgamated with and into us) as of July 31,
in and hold whether on its own account or on behalf of any
2003 were eligible for the Early Retirement Option. Out of
66
March 2005
person, Body Corporate, company, society, firm or association debit, stored value, prepaid, smart or other cards whether private
of persons whether incorporated or not, shares, stocks, funds, label, co-branded, affinity or otherwise and to establish and
debentures, debenture stocks, units, promissory notes, bills maintain card acceptance network (including physical,
of exchange, Bonds, warrants, participation certificates or electronic, computer or automated machines network) and
participation units, other money market or capital market make payments or provide settlement service to the merchants
instruments, obligations and securities and investments of or issuing banks on account of usage by the cardholders of the
all kinds issued or guaranteed by any government, state, credit, charge, debit, stored value, prepaid, smart or other
dominion, sovereign body, commission, public body or cards whether private label, co-branded, affinity or otherwise.
authority, supreme, local or municipal or company or body, 19. To provide or assist in obtaining, directly or indirectly, advice
whether incorporated or not or by any person or association. or services in various fields such as management, finance,
7A. To securitise, purchase, acquire, invest in, transfer, sell, dispose investment, technology, administration, commerce, law,
of or trade in any financial asset whatsoever, receivables, debts, economics, labour, human resources development, industry,
whether unsecured or secured by mortgage of immoveables public relations, statistics, science, computers, accountancy,
or charge on movables or otherwise, securitised debts, asset taxation, fund management, foreign exchange dealings, quality
or mortgaged backed securities or mortgage backed control, processing, strategic planning and valuation.
securitised debts and to manage, service or collect the 20. To do any other form of business which the Government of
same and to appoint managing, servicing or collection agent India may specify as a form of business in which it is lawful for
therefor and to issue certificates or other instruments in respect a banking company to engage.
thereof to public or private investors and to guarantee and
insure the due payment, fulfillment and performance of 20A.To carry on the business of assisting industrial, infrastructure
obligations in respect thereof or in connection therewith and to and commercial enterprises:
promote, establish, undertake, organise, manage, hold or in general by
dispose of any special purpose entity, body corporate or i) assisting in the creation, expansion and modernisation of
vehicle for carrying on all or any such activities. such enterprises;
8. To act as foreign exchange dealer and to buy, sell or otherwise ii) encouraging and promoting the participation of capital,
deal in all kinds of foreign currencies including foreign bank both internal and external in such enterprises;
notes, foreign currency options, forward covers, swaps of all
and in particular by
kinds and to transact for itself or on behalf of any person, body
corporate, company, society, firm or association of persons i) providing finance in the form of long, medium or short
whether incorporated or not, all transactions in foreign term loans or equity participations;
currencies. ii) sponsoring and underwriting new issues of shares and
9. To carry on the activities of bill discounting, rediscounting bills, securities;
marketing, factoring, dealing in commercial paper, treasury iii) guaranteeing loans from other investment sources;
bills, certificate of deposits and other financial instruments.
iv) making funds available for re-investment by revolving
10. To act as agents for any government or local authority or any investments as rapidly as prudent;
other person or persons, carry on agency business of any
v) performing and undertaking activities pertaining to leasing,
description including clearing and forwarding of goods, give
giving on hire or hire-purchase, bill marketing, factoring
receipts and discharges and otherwise act as an attorney on
behalf of customers, but excluding the business of a managing and related fields.
agent or secretary and treasurer of a company. 20B. To lend money, with or without interest, (with or without
11. To contract for public and private loans and advances and security) for any maturity, in any form whatsoever including
negotiate and issue the same. by way of loans, advances, instalment credit, trade finance,
hire or otherwise to any person or persons (whether individuals,
12. To form, constitute, promote, act as managing and issuing firms, companies, bodies corporate, Government, State,
agents, brokers, sub-brokers, prepare projects and feasibility Sovereign, public body or authority, supreme, local or otherwise
reports for and on behalf of any company, association, society, or other entities), whether in the private or public sector, for any
firm, individual and Body Corporate.
purpose whatsoever, including agriculture, industry,
13. To carry on and transact every kind of guarantee and indemnity infrastructure, export-import, housing, consumer or others.
business.
20C. To lend money, with or without interest, (with or without
14. To undertake and execute trusts and the administration of estates security) for any maturity, in any form whatsoever, to any
as executor or trustee. person or persons (whether individuals, firms, companies,
15. To act as Registrar and Transfer Agents and Registrar to the bodies corporate, Government, State, Sovereign, public body
Issue, Issue Agents and Paying Agents. or authority, supreme, local or otherwise or other entities),
16. To provide custodial and depository services and to do all whether in the private or public sector, for:
such things as may be advised, permitted or required for this (i) Purchasing or acquiring any freehold or leasehold lands,
purpose. estate or interest in any land or property,
17. To effect, insure, guarantee, underwrite, participate in managing (ii) Taking demise for any term or terms of years of any land
and carrying out of any issue, public or private, of state, or property or
municipal or other loans or of shares, stock, debentures or (iii) Constructions, erection, purchase, extension, alteration,
debenture stock of any company, corporation or association renovation, development or repair any house or building
and the lending of money for the purpose of any such issue. or any form of real estate or any part or portion thereof.
18. To provide credit, charge, debit, saving, investment or other 20D. To provide financial assistance to any person or persons
facilities to any person or persons (whether individuals, (whether individuals, firms, companies, bodies corporate,
firms, companies, bodies, corporate or other entities), whether Government, State, Sovereign, public body or authority,
in the private or public sector by issuance of credit, charge,
67
March 2005
supreme, local or otherwise or other entities), whether in the equity capital was contributed 75.0% by ICICI and 25.0% by SCICI
private or public sector for any purpose whatsoever by means Limited, a diversified finance and shipping finance lender of which
of leasing, giving on hire or hire-purchase, lending, selling, ICICI owned 19.9% at December 1996. Pursuant to the merger of
reselling, or otherwise disposing of all forms of immoveable SCICI into ICICI, we became a wholly owned subsidiary of ICICI.
and moveable properties and assets of any kind, nature or use,
The chronology of events since we were incorporated in 1994 is as
whatsoever and for the purpose, purchasing or otherwise
acquiring dominion over the same, whether new or used. follows:
20E. To purchase, acquire, sell, dispose of, deal or trade in bullion Change of name
and specie and/or to issue, subscribe to, acquire, purchase,
Our name was changed from ICICI Banking Corporation Limited to
sell, dispose of, deal or trade in derivative financial
ICICI Bank Limited on September 10, 1999. The change of name was
instruments including futures, forwards options, swaps, caps,
effected on account of our being widely known by the name “ICICI
collars, floors, swap options, Bond options or other derivative
instruments whether traded on any market or exchange or Bank”.
otherwise, for proprietary trading activities or for any person Merger of Bank of Madura
or persons (whether individuals, firms, companies, bodies
corporate, Government, State, Sovereign, public body or Bank of Madura was merged with us effective March 10, 2001. The
authority, supreme, local or otherwise or other entities), whether share exchange ratio fixed for the transaction was two of our Equity
in the private or public sector. Shares of Rs. 10 each for every equity share of Bank of Madura of Rs.
20F. To promote, organise, manage or undertake the activities of 10 each.
insurance intermediaries including insurance or reinsurance Amalgamation of ICICI
brokers, consultants, surveyors, loss assessors, loss control
engineers, risk managers, actuarial analyst and to promote ICICI, ICICI Capital Services and ICICI Personal Financial Services
organise, manage or undertake, marketing, trading, amalgamated with us with effect from May 3, 2002. The Appointed
distribution or servicing of insurance and assurance products Date for the merger specified in the Scheme of Amalgamation,
of all kinds, whether life or general; financial, investment or which was the date of the amalgamation for accounting purposes
other products including (without limitation) securities, stocks, under Indian GAAP, was March 30, 2002. The amalgamation was
shares, debentures, Bonds, units, certificates or services offered approved by the High Court of Judicature at Bombay vide its order
by the Company and/or by any person, firm, company, body dated April 11, 2002 and by the High Court of Gujarat at Ahmedabad
corporate, mutual fund, Government, State, public body or vide its order dated March 7, 2002. The share exchange ratio was
authority, supreme, municipal, local or otherwise, through the one of our Equity Share of Rs. 10 each for every two Equity Shares
Company.s branches, or offices. of ICICI of Rs. 10 each.
20G.To promote, organise or manage funds or investments on a
discretionary or non-discretionary basis on behalf of any person Board of Directors and Management
or persons (whether individual, firms, companies bodies, Our Board of Directors consisting of 16 members at March 5, 2005
corporate, public body or authority, supreme, local or otherwise, is responsible for the management of our business. Our Articles of
trusts, pension funds, offshore funds, charities, other associations Association provide for a minimum of three directors and a
or other entities), whether in the private or public sector. maximum of 21, excluding the Government Director (appointed by
20H.To act as Trustee of any deeds, constituting or securing any the Government of India under the terms of its loan and guarantee
debentures, debenture stock, or other securities or obligations facilities to us) and the Debenture Director (who may be appointed
and to undertake and execute any other trusts, and also to by trustees for our debenture issuances). The Government Director
undertake the office of or exercise the powers of executor, and the Debenture Director are not liable to retire by rotation. The
administrator, receiver, treasurer, custodian and trust Government Director may be removed from office only by the
corporation. President of India. The Debenture Director may be removed from
20I. To provide financial services, advisory and counselling services office only as provided in the relevant trust deed. Mr. Vinod Rai,
and facilities of every description capable of being provided Additional Secretary, Ministry of Finance, is the Government Director.
by share and stock brokers, share and stock jobbers, share There is currently no Debenture Director.
dealers, investment fund managers and to arrange and sponsor
Mr. N. Vaghul is the non-executive Chairman of our Board of Directors.
public and private issues or placement of shares and loan capital
and to negotiate and underwrite such issues. Mr. Vaghul was Chairman and Managing Director of ICICI from 1985
to 1992, executive Chairman from 1992 to 1996 and non-executive
For details of the capital raised by us, see “Capital Structure” on Chairman from 1996 to 2002. He has been previously Chairman and
page 6.
Managing Director of Bank of India from 1981 to 1984, and has also
History and Major Events been Chairman of the Indian Banks’ Association. RBI has vide its
letter dated June 22, 2002 approved his appointment as Chairman
We were incorporated in 1994 as a part of the ICICI group. Our initial
for a period of three years effective May 3, 2002.
68
March 2005
Our Board of Directors has five wholetime Directors. The following table sets-forth the names, designations and tenure of appointment of
our wholetime Directors.
Name Designation Date of appointment Tenure of appointment
K. V. Kamath Managing Director & CEO May 3, 2002 Till April 30, 2006
Lalita D. Gupte Joint Managing Director May 3, 2002 Till October 31, 2006
Kalpana Morparia Deputy Managing Director* May 3, 2002 Till April 30, 2006
Chanda D. Kochhar Executive Director April 1, 2001 Till March 31, 2006
Nachiket Mor Executive Director April 1, 2001 Till March 31, 2006
* Appointed as Executive Director and elevated as Deputy Managing Director effective February 1, 2004
Ms. Lalita D. Gupte is responsible for our international business strategy. Ms. Kalpana Morparia is responsible for the Corporate Centre and
the Special Assets Management Group. Ms. Chanda D. Kochhar is responsible for our commercial banking operations for retail customers
and Dr. Nachiket Mor is responsible for our commercial banking and project finance operations for corporate customers. In order to
comply with the Companies Act, and the Articles of Association, Ms. Lalita D. Gupte and Ms. Kalpana Morparia will be liable to retire by
rotation if at any time the number of non-rotational Directors exceeds one-third of the total number of Directors. If they are re-appointed as
Directors immediately on retirement by rotation, they will continue to hold their offices and the retirement by rotation and re-appointment
shall not be deemed to constitute a break in their appointment.
Stock Market Data the date of filing with SEBI.
Stock Market Data of Our Equity Shares Month Number of shares traded
The following table sets forth, for the periods indicated, the high and September 2004 3,999,422
low of daily closing prices of our Equity Shares on the BSE. October 2004 4,710,303
Period High (Rs.) Low (Rs.) Average(1) (Rs.) November 2004 5,572,902
FY2001 260.00 110.60 179.85 December 2004 5,612,437
FY2002 184.40 71.45 116.76 January 2005 2,239,684
FY2003 161.80 110.90 137.61 February 2005 3,417,066
FY2004 342.75 120.80 211.97 * Source: BSE
April 2004 319.15 287.30 300.16 Our Equity Shares are actively traded on the BSE and the NSE. Our
May 2004 314.85 230.55 274.82 ADSs are actively traded on the New York Stock Exchange where
June 2004 272.15 236.50 258.07 they are listed.
July 2004 266.80 234.65 250.01 Until recently, our outstanding equity shares were also traded on the
August 2004 278.95 264.50 272.65 stock exchanges at Chennai, Delhi, Kolkata and Vadodara. Pursuant
September 2004 295.25 262.15 274.85 to delisting applications made by us, our equity shares have been
October 2004 299.00 286.05 291.86 delisted from The Delhi Stock Exchange Association Limited effective
February 11, 2004, the Madras Stock Exchange Limited effective
November 2004 340.20 296.20 319.76
July 2, 2004 and The Calcutta Stock Exchange Association Limited
December 2004 373.90 339.90 362.11
effective July 21, 2004 and our equity shares and Bonds have been
January 2005 374.35 337.75 352.09 delisted from the Vadodara Stock Exchange Limited effective July
February 2005 382.95 360.20 372.36 22, 2004.
(1) Average of the daily closing share price for the period.
Details of other Listings
The following table sets-forth, for the period indicated, the number
of Equity Shares traded on the days high and low prices of our The following US dollar denominated bond issue made by ICICI in
Equity Shares was recorded on BSE for the last six months preceding August 1997 is listed on the Luxembourg Stock Exchange:
the date of filing of this Prospectus with SEBI. US$ 150.0 million 7.55% Medium-Term Notes due August 15,
Month High Number of Low Date Number of 2007
Date shares shares The following US dollar denominated Euro Bond Issue by us in
traded traded October 2003 has been listed on the Singapore Stock Exchange:
US$ 300.0 million 4.75% Fixed-Rate Notes due October 22,
September September 350,812 September 2, 140,464 2008
2004 22, 2004 2004 The following US dollar denominated Medium Term Notes issued
October October 2,240,043 October 11, 188,986 by us in August 2004 has been listed on the Luxembourg Stock
2004 29, 2004 2004 Exchange:
US$ 300 million 5.00% Fixed-Rate Notes issued by the Singapore
November November 517,851 November 01, 57,844 Branch under the Medium- Term Notes Programme due August
2004 30, 2004 2004 18, 2009
December December 264,187 December 01, 283,091 Promise vs. Performance
2004 27, 2004 2004
We have not made any projections in the offer document of any of
January January 04, 1,30,532 January 27, 234,643 our previous capital issues during the last five years. The funds
2005 2005 2005 raised from these capital issues have been utilised for our business
February February 15, 3,13,292 February 07, 105,059 as mentioned in the respective Prospectuses.
2005 2005 2005
Servicing Behaviour
The following table sets-forth, for the period indicated, total volume
of Equity Shares traded on the BSE during the six months preceding There has been no default in payment of statutory dues or of interest
or principal in respect of our borrowings or deposits.
69
March 2005
MANAGEMENT
Board of Directors (March 5, 2005)
Name, Description, Age Qualifications Particulars of other Directorship(s)
Address & Business (years)
Mr. Narayanan Vaghul 68 B.Com. (Hons.), Chairman

Chairman C.A.I.I.B. Asset Reconstruction Company (India) Limited
ICICI Bank Limited GIVE Foundation
ICICI Bank Towers Himatsingka Seide Limited
10th Floor ICICI Knowledge Park
No.93, Santhome High Road Mahindra Industrial Park Limited
Chennai 600 028 Pratham India Education Initiative
Development Banker Director
Air India Limited
Air India Air Transport Services Limited
Air India Engineering Services Limited
Apollo Hospitals Enterprise Limited
Azim Premji Foundation
Hemogenomics Private Limited
Ispat Caribbean
Ispat Europe Group S.A., Luxembourg
Ispat International N.V., Rotterdam, The Netherlands
Ispat Mexicana, S.A. de C.V., Mexico
Mahindra & Mahindra Limited
Nicholas Piramal India Limited
Pratham Tamilnadu Education Initiative
Technology Network (India) Private Limited
Wipro Limited
Mr. Uday Madhav Chitale 55 B.Com., F.C.A. Partner

Senior Partner M.P. Chitale & Company
M.P. Chitale & Company M.P. Chitale & Associates
Chartered Accountants Director
Hamam House, 1st Floor Crossdomain Solutions Private Limited
Ambalal Doshi Marg DFK Consulting Services (India) Private Limited
Fort, Mumbai 400 001 DFK International (the Netherlands)
Chartered Accountant Indian Council for Dispute Resolution
Vemagiri Power Generation Limited
Mr. Prabhas Chandra Ghosh 60 B.Sc. - Phy. Director

(Hons.) Southern Petrochemical Industries Corporation Limited
114/1B St. Xaviers’
Raja S C Mallick Road College, Kolkata
Kolkata 700 047 B.Tech. (Mech.)
Retired Executive Indian Institute
of Technology,
Chennai
70
March 2005

Mr. Lakshmi Niwas Mittal 54 B.Com. Director

Summer Palace (Magna-cum- Artha Limited
46 Bishops Avenue Laude) Caribean Ispat Limited
Hampstead St. Xavier’s Galmatias Limited
London N2 0BA, U.K. Calcutta Grupo Ispat International SA de CV
Industrialist Irish Ispat Limited
Iscor Limited
Ispat (US) Holdings Inc
Ispat Annaba Spa
Ispat Europe Group SA
Ispat Inland Holdings Inc
Ispat Inland Inc
Ispat Inland LP
Ispat International Investments SL
Ispat International Limited
Ispat International NV
Ispat Karmet JSC
Ispat Mexicana SA de CV
Ispat Sidbec Inc
Ispat Sidex Holdings BV
Ispat Sidex SA
Ispat Tebessa Spa
LNM Capital Limited
LNM Holdings BV
LNM Holdings NV
LNM Internet Ventures Limited
Lucre Limited
Nestor Limited
Nuav Limited
Pratham UK Limited
PT Ispat Indo
Tommyfield Limited
Chairman – Supervisory Board
Ispat Nova Hut a.s.
President – Supervisory Board
Ispat Polska Stal S.A.
Mr. Anupam Pradip Puri 59 BA (Eco.) Director

17 East, 16 Street St. Stephen’s Dr. Reddy’s Laboratories Limited
New York College, Godrej Consumer Products Limited
NY 10003, USA Delhi University Mahindra-British Telecom Limited
Management Consultant BA (M.Phil.) Mahindra & Mahindra Limited
Oxford University Patni Computer Systems Limited
Mr. Vinod Rai 56 B.A. (Eco. - Director

Additional Secretary (FS) Hons.) Bank of Baroda
Ministry of Finance M.A. (Eco.) IFCI Limited
Department of Economic MPA (Harvard) Infrastructure Development Finance Company Limited
Affairs (Banking Division) IAS (72-Kerala) Small Industries Development Bank of India
Government of India
Jeevan Deep
Parliament Street
New Delhi 400 001
Government Service
Mr. Somesh Ramchandra Sathe 59 B.Sc. (Mechanical Managing Director

Managing Director Engineering) Arbes Tools Private Limited
Arbes Tools Private Limited ESSP Meditek Private Limited
B-4, Udyog Sadan No.1 Sukeshan Equipments Private Limited
MIDC Marol Partner
Andheri (East) Tooltronics
Mumbai 400 093
Technocrat Entrepreneur
71
March 2005

Mr. Mahendra Kumar Sharma 57 B.A. (Hons.) Vice-Chairman

Vice-Chairman LL.B, PGDM Hindustan Lever Limited
Hindustan Lever Limited Chairman
Hindustan Lever House Vasishti Detergents Limited
165/166, Backbay Reclamation Director
Mumbai 400 020 Hind Lever Chemicals Limited
Business Executive Hind Lever Trust Limited
Indexport Limited
Lever India Exports Limited
Nepal Lever Limited
Toc Disinfectants Limited
Mr. Priya Mohan Sinha 64 B.A. Chairman

B-787 Sushant Lok Phase I Bata India Limited
Gurgaon 122 002 Director
Haryana Azim Premji Foundation
Professional Manager Indian Oil Corporation Limited
Lafarge India Limited
Quadra Advisory Private Limited
Wipro Limited
Prof. Marti Gurunath 58 B.Tech. Director

Subrahmanyam PGDBA, Ph.D. Infosys Technologies Limited
Professor Nexgen Financial Holdings Limited
Stern School of Business Nexgen Re Limited
New York University Nomura Asset Management (U.S.A.), Inc.
44 West 4th Street Supply Chainge Inc.
Suite 9-190, NEW YORK The Animi Offshore Fund Limited
NY 10012-1126, U.S.A. The Animi Offshore Concentrated Risk Fund
Professor Usha Communication Inc.
Director – Board of Governors
National Institute of Securities Markets
Mr. V. Prem Watsa 54 Bachelor of Chairman & CEO

Chairman & CEO Technology in Crum & Foster Holdings Corp.
Fairfax Financial Chemical Fairfax Financial Holdings Limited
Holdings Limited Engineering Chairman
95, Wellington Street West (IIT, Madras), 4129768 Canada Inc.
Suite 800 MBA (University Federated Insurance Company of Canada
Toronto of Western Federated Life Insurance Company of Canada
Ontario M5J 2N7 Ontario) Northbridge Financial Corporation
Canada Chartered TIG Holdings, Inc.
Company Executive Financial Analyst President
1109519 Ontario Limited
810679 Ontario Limited
FFHL Share Option 1 Corp.
The Sixty Two Investment Company Limited
Vice-President
FFHL Group Limited
Vice-President & Secretary
Hamblin Watsa Investment Counsel Limited
Director
Commonwealth Insurance Company
Cunningham Lindsey U.S., Inc.
Hudson Insurance Company
Lindsey Morden Acquisitions
Lindsey Morden Group Inc.
Lombard General Insurance Company of Canada
Lombard Insurance Company
Markel Insurance Company of Canada
Odyssey Re Holdings Corp.
The Sixty Four Foundation
The Sixty Three Foundation
Zenith Insurance Company
72
March 2005

Mr. Kundapur Vaman Kamath 57 B.E., PGDBA Chairman

Managing Director & CEO ICICI Bank Canada
ICICI Bank Limited ICICI Bank UK Limited
ICICI Bank Towers ICICI Lombard General Insurance Company Limited
Bandra-Kurla Complex ICICI Prudential Life Insurance Company Limited
Mumbai 400 051 ICICI Securities Limited
Company Executive ICICI Venture Funds Management Company Limited
Director
Indian Institute of Management, Ahmedabad
Director - Asia Pacific Regional Board
Visa International
Director - Board of Governors
Indian Institute of Information Technology
Member – Court of Governors
Administrative Staff College of India
Member – Governing Board
Indian School of Business
Ms. Lalita Dileep Gupte 56 B.A. (Hons.), Director

Joint Managing Director MMS ICICI Bank Canada
ICICI Bank Limited ICICI Bank UK Limited
ICICI Bank Towers ICICI Lombard General Insurance Company Limited
Mumbai 400 051 ICICI Securities. Limited
Company Executive ICICI Venture Funds Management Company Limited
Ms. Kalpana Morparia 55 B.Sc., LLB Chairperson

Deputy Managing Director ICICI Investment Management Company Limited
ICICI Bank Limited Director
ICICI Bank Towers ICICI Home Finance Company Limited
Bandra-Kurla Complex ICICI Lombard General Insurance Company Limited
Mumbai 400 051 ICICI Prudential Life Insurance Company Limited
Company Executive ICICI Securities Limited
ICICI Venture Funds Management Company Limited
Ms. Chanda D. Kochhar 43 MMS, ICWA Chairperson

Executive Director ICICI Home Finance Company Limited
ICICI Bank Limited ICICI Distribution Finance Private Limited
ICICI Bank Towers Director
Mumbai 400 051
Company Executive
Dr. Nachiket Mor 40 B.Sc. (Physics) Director

Executive Director PGDM (Finance) ICICI Home Finance Company Limited
ICICI Bank Limited Ph.D (Financial ICICI Securities Limited
ICICI Bank Towers Economics) ICICI Venture Funds Management Company Limited
Bandra-Kurla Complex Pratham India Education Initiative
Mumbai 400 051
Company Executive
(1) In terms of section 20(1) of the Banking Regulation Act, a banking company is prohibited from entering into any commitment for
granting any loans or advances to or on behalf of any of its directors, or any firm in which any of its directors is interested as partner,
manager, employee or guarantor, or any company (not being a subsidiary of the banking company or a company registered under
section 25 of the Act, or a Government company) of which, or the subsidiary or the holding company of which any of the directors of
the bank is a director, managing agent, manager, employee or guarantor or in which he holds substantial interest, or any individual
in respect of whom any of its directors is a partner or guarantor.There are certain exemptions in this regard as the explanation to the
section provides that ‘loans or advances’ shall not include any transaction which the RBI may specify by general or special order as
not being a loan or advance for the purpose of such section. We are in compliance with these requirements.
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March 2005
KEY MANAGERIAL PERSONNEL

The following table sets-forth certain details of our senior management.
Name Age Date Designation Qualifications Details of previous employment Work Compensation
(yrs) of joining experience (FY 2004)(1)
(dd/mm/yyyy) (years)
K.V. Kamath 57 1/5/1996 Managing Director & B.E (Mech.), Advisor to the Chairman, Bakrie Group, 33 146,68,116
CEO PGDBA Indonesia
Lalita D. Gupte(Ms.) 56 15/6/1971 Joint Managing B.A. (Hons.) — 33 123,18,771
Director MMS
Kalpana Morparia(Ms.) 55 5/11/1975 Deputy Managing B.Sc., LLB Legal Asst., Matubhau, Jamiatram 29 78,76,735
Director & Madon
Chanda D. Kochhar(Ms.) 43 17/4/1984 Executive Director B.A., MMS, ICWAI — 20 61,35,383
Nachiket Mor(Dr.) 40 4/5/1987 Executive Director BSc, PGDM, PhD — 17 61,51,568

N.S. Kannan 39 2/5/1991 Chief Financial B.E.(Hons), PGDM, Executive, SRF Limited 16 53,93,608
Officer & Treasurer CFA
Sanjiv Kerkar 53 26/11/1996 Senior General Manager B.Tech (Chem), MFM Director-Operations, Asian Finance and 28 61,25,936
Investment Corp. Ltd.
Ramni Nirula(Ms.) 52 1/12/1975 Senior General Manager B.A., MBA — 29 65,61,076
P. H. Ravikumar 52 15/7/1994 Senior General Manager B.Com, CAIIB, Bank of India 31 47,49,534
CAIB (London),
Dip. in French
Balaji Swaminathan 39 1/8/2001 Senior General Manager B.Com, CA, ICWA Partner, KPMG 15 69,76,576
Madhabi Puri Buch(Ms.) 38 2/1/1997 Senior General Manager B.A., PGDM, DPR(U.K.) Research Director, ORGMARG 16 55,75,805
V. Vaidyanathan 36 6/3/2000 Senior General Manager B.Com, MBA Citibank N.A. 14 53,73,467
M. N. Gopinath 55 1/6/1995 Senior General Manager B. Com, MBA, AGM, Bank of India 35 45,36,776
CAIIB
Bhargav Dasgupta 38 18/5/1992 Senior General Manager BE, PGDM Gr. Engineer Trainee,TELCO 14 49,93,917
Ramkumar 43 02/07/2001 Senior General Manager B.Sc., PGDPM&IR GM(HR), ICI India Ltd. 19 50,48,878
Krishnaswamy
N. D.Pinge 46 06/04/1998 Senior General Manager B.Com, BGL, ACA Director, Anik Financial 20 54,92,916
Vishakha Mulye (Ms.) 35 01/03/1993 Senior General Manager B.Com,CA Officer, Deutsche Bank 12 41,31,275
(1) As per section 217(2A) of the Act.

(2) All the above employees are on our rolls as permanent employees unless otherwise specified.
(3) The senior management includes those employees who have become our employees pursuant to the amalgamation. The details of
previous employment of these employees relate to that of prior to joining ICICI.
(4) Of the above employees, Mr. V. Vaidyanathan holds the additional charge of ICICI Home Finance Company Limited as Managing
Director and Mr. P. H. Ravikumar is on deputation to National Commodities & Derivatives Exchange of India Limited.
(5) The date of joining mentioned in respect of the aforesaid managerial personnel/executives is the date of joining of ICICI except Mr.
P.H.Ravikumar and Mr. M.N. Gopinath who joined us on the date mentioned above.
Changes In Key Managerial Personnel In The Last Three Years
Following are the changes in the key managerial personnel in the last three years:
Transfers
Ms. Shikha Sharma was transferred to ICICI Prudential Life Insurance Company Limited with effect from April 1, 2002. Mr. Sandeep Bakhshi
was transferred to ICICI Lombard General Insurance Company Limited with effect from April 1, 2002. Mr. Ananda Mukerji was transferred
to ICICI OneSource Limited with effect from April 1, 2003. Ms. Renuka Ramnath was transferred to ICICI Venture Funds Management
Company Limited with effect from April 1, 2003.
Mr. S. Mukherji stepped down from the Board of Directors pursuant to his appointment as Managing Director & CEO of ICICI Securities with
effect from February 1, 2004.
Resignation
Mr. Devdatt Shah, Senior General Manager resigned from the services of ICICI Bank effective December 31, 2002.
Retirement
Mr. H. N. Sinor completed his term as Joint Managing Director on May 31, 2003 and retired with effect from June 1, 2003. Mr. A. Karati,
Senior General Manager retired from the services of ICICI Bank effective March 31, 2004.
Compensation of our Directors
For details of compensation of our wholetime Directors, please see “Main Provisions of Articles of Association of ICICI Bank Limited –
74
March 2005
Remuneration - Salary and Tenure” on page 233. The non-wholetime management function and monitors the quality of the internal and
Directors are entitled to sitting fees as permitted under the Act. statutory audit. The responsibilities of the Audit Committee include
overseeing of the financial reporting process to ensure fairness,
Corporate Governance sufficiency and credibility of financial statements, recommendation
Our corporate governance policies recognise the accountability of of appointment and removal of central and branch statutory auditors
the Board and the importance of making the Board transparent to all and fixation of their remuneration, review of the annual financial
its constituents, including employees, customers, investors and the statements before submission to the board, review of the adequacy
regulatory authorities, and to demonstrate that the shareholders are of internal control systems and the internal audit function, review of
the ultimate beneficiaries of our economic activities. compliance with the inspection and audit reports of the RBI and
reports of statutory auditors, review of the findings of internal
Our corporate governance framework is based on an effective investigations, discussion on the scope of audit with external auditors
independent board, the separation of the board’s supervisory role and examination of reasons for substantial defaults, if any, in payment
from the executive management and the constitution of board to stakeholders.
committees, generally comprising a majority of independent
directors and chaired by an independent director, to oversee critical Board Governance & Remuneration Committee
areas and functions of executive management.
The Board Governance & Remuneration Committee comprises five
Our corporate governance philosophy encompasses not only independent directors - Mr. N. Vaghul, Mr. Anupam Puri, Mr. M K.
regulatory and legal requirements, such as the terms of listing Sharma, Mr. P. M. Sinha and Prof. Marti G Subrahmanyam. The
agreements with stock exchanges, but also several voluntary Committee is chaired by Mr. N. Vaghul.
practices aimed at a high level of business ethics, effective
The functions of the Board Governance & Remuneration Committee
supervision and enhancement of value for all shareholders.
include recommendation of appointments to the Board, evaluation
Our Board’s role, functions, responsibility and accountability are of the performance of the Managing Director & CEO and other
clearly defined. In addition to its primary role of monitoring wholetime Directors on pre-determined parameters,
corporate performance, the functions of our Board include: recommendation to the Board of the remuneration (including
z approving corporate philosophy and mission; performance bonus and perquisites) to wholetime Directors,
approving the policy for and quantum of bonus payable to the
z participating in the formulation of strategic and business plans;
members of the staff, framing guidelines for the employees stock
z reviewing and approving financial plans and budgets; option scheme and recommendation of grant of stock options to
z monitoring corporate performance against strategic and the staff and our wholetime Directors and those of our subsidiary
business plans, including overseeing operations; companies.
z ensuring ethical behavior and compliance with laws and Business Strategy Committee
regulations;
The Business Strategy Committee comprises five directors – Mr. N.
z reviewing and approving borrowing limits; Vaghul, Mr. Anupam Puri, Mr. M. K. Sharma, Mr. P. M. Sinha and Mr.
z formulating exposure limits; and K. V. Kamath. The majority of the members of this Committee are
z keeping shareholders informed regarding plans, strategies and independent directors and it is chaired by Mr. N. Vaghul.
performance. The functions of the Business Strategy Committee are to approve the
To enable the Board of Directors to discharge these responsibilities annual income and expenditure and capital expenditure budgets
effectively, executive management gives detailed reports on our for presentation to the Board for final approval and to review and
performance on a quarterly basis. recommend to the Board our business strategy.
The Board functions either as a full board or through various Credit Committee
committees constituted to oversee specific operational areas. These
The Credit Committee comprises four directors – Mr. N. Vaghul, Mr.
board committees meet regularly. The constitution and main
Somesh R. Sathe, Mr. M. K. Sharma and Mr. K. V. Kamath. The
functions of the various committees are given below.
majority of the members of this Committee are independent directors
Agriculture & Small Enterprises Business Committee and it is chaired by Mr. N. Vaghul.
The Agriculture & Small Enterprises Business Committee comprises The functions of this Committee include review of developments in
four independent directors - Mr. N. Vaghul, Mr. Somesh R. Sathe, Mr. key industrial sectors and approval of credit proposals in accordance
M.K. Sharma and Mr. P.M. Sinha. The Committee is chaired by Mr. N. with the authorisation approved by the Board.
Vaghul. Fraud Monitoring Committee
The functions of the Agriculture & Small Enterprises Business
The Fraud Monitoring Committee was constituted by the Board
Committee include review of our business strategy in the agri-
effective May 1, 2004. The Committee comprises five directors - Mr.
business and small enterprises segments and review of the quality
Uday M. Chitale, Mr. M.K. Sharma, Mr. K.V. Kamath, Ms. Kalpana
of the agricultural lending and small enterprises finance credit
Morparia and Ms. Chanda D. Kochhar. Mr. Uday Chitale is the
portfolio.
Chairman of the Committee.
Audit Committee The functions of the Fraud Monitoring Committee include monitoring
The Audit Committee comprises three independent directors – Mr. and review of all instances of frauds involving Rs.1 crore and above.
Uday M. Chitale, who is a Chartered Accountant, Mr. M.K. Sharma Risk Committee
and Mr. Somesh R. Sathe. The Committee is chaired by Mr.Uday M.
Chitale. Mr. M.K. Sharma was appointed as Alternate Chairman of The Risk Committee comprises five directors – Mr. N. Vaghul, Mr.
the Committee effective July 22, 2004. The Board of Directors has Uday M. Chitale, Prof. Marti G. Subrahmanyam, Mr. V. Prem Watsa
determined that Mr. Uday M. Chitale qualifies as an audit committee and Mr. K. V. Kamath. The majority of the members of this Committee
financial expert. are independent directors and it is chaired by Mr. N. Vaghul.
The Audit Committee provides direction to the audit and risk This Committee reviews our risk management policies in relation to
various risks (credit, portfolio, liquidity, interest rate, off-balance
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March 2005
sheet and operational risks), investment policies and strategy and Mr. S. Mukherji Appointed May 3, 2002
regulatory and compliance issues in relation thereto. Mr. S. K. Purkayastha Nominated May 3, 2002
Share Transfer & Shareholders’/Investors’ Grievance Committee Mr. D. Sengupta Ceased June 30, 2002
The Share Transfer & Shareholders’/Investors’ Grievance Committee Mr. S. K. Purkayastha Ceased July 19, 2002
comprises four directors – Mr. Uday M. Chitale, Mr. Somesh R. Mr. D. C. Gupta Nominated July 19, 2002
Sathe, Ms. Kalpana Morparia and Ms. Chanda D. Kochhar. The
Mr. D. C. Gupta Ceased October 31, 2002
Committee is chaired by an independent director, Mr. Uday M.
Chitale. Ms. Vineeta Rai Nominated October 31, 2002
The functions and powers of the Share Transfer & Shareholders’/ Ms. Vineeta Rai Ceased January 3, 2003
Investors’ Grievance Committee include approval and rejection of Mr. Vinod Rai Nominated January 3, 2003
transfer or transmission of equity and preference shares, bonds, Mr. P. C. Ghosh Appointed January 31, 2003
debentures and securities, issue of duplicate certificates, allotment
of shares and securities issued from time to time, including those Mr. M. K. Sharma Appointed January 31, 2003
under stock options, review and redressal of shareholders’ and From April 2003 to March 2004
investors’ complaints, delegation of authority for opening and Mr. H. N. Sinor Retired June 1, 2003
operation of bank accounts for payment of interest, dividend and
redemption of securities and the listing of securities on stock Mr. R. Seshasayee Resigned October 31, 2003
exchanges. Mr. S.B. Mathur Appointed January 29, 2004
Committee of Directors Mr. V. Prem Watsa Appointed January 29, 2004

Mr. S. Mukherji Resigned February 1, 2004
The Committee of Directors comprises all five wholetime Directors
and is chaired by Mr. K.V. Kamath, Managing Director & CEO. From April 2004 to date
The powers of the Committee of Directors include review of Dr. Satish C. Jha Retired September 20,
performance against targets for various business segments, credit 2004
approvals as per authorisation approved by the Board, approvals Mr. S. B. Mathur Resigned March 4, 2005
in respect of borrowing and treasury operations and premises and
property related matters.
Mr. H. N. Sinor completed his term as Joint Managing Director on
Asset Liability Management Committee May 31, 2003 and retired with effect from June 1, 2003. Mr. S.
The Asset Liability Management Committee comprises the Joint Mukherji, who was appointed as Executive Director effective May 3,
Managing Director, Deputy Managing Director and two Executive 2002 has ceased to be a member of the Board effective February 1,
Directors and is chaired by Ms. Lalita D. Gupte, Joint Managing 2004, consequent to his appointment as Managing Director & CEO
Director. of ICICI Securities, our subsidiary.
The functions of the Committee include management of our balance The Board at its Meeting held on March 23, 2001 appointed Ms.
sheet, review of our asset-liability profile with a view to manage the Chanda D. Kochhar and Dr. Nachiket Mor as Executive Directors of
market risk exposure assumed by us and deciding our deposit rates ICICI Bank with effect from April 1, 2001 for a period upto March 31,
and prime lending rate. 2006. The shareholders at the Annual General Meeting held on June
11, 2001 approved their appointments.
Changes in our Board of Directors and Auditors during the last
The Board at its Meeting held on April 26, 2002 appointed Mr. K. V.
four years
Kamath as the Managing Director & Chief Executive Officer of ICICI
Changes in Directors Bank with effect from May 3, 2002 for a period upto April 30, 2006.
The changes that took place in the Board of Directors since April The Board at its Meeting held on April 26, 2002 appointed Ms. Lalita
D. Gupte as the Joint Managing Director with effect from May 3,
2000 are as follows: Effective
2002 for a period upto June 23, 2004. The Board at its Meeting held
From April 2000 to March 2001 on January 29, 2004 re-appointed Ms. Lalita D. Gupte as Joint
Ms. Chanda D. Kochhar Appointed April 1, 2001 Managing Director of the Bank upto October 31, 2006 on completion
Dr. Nachiket Mor Appointed April 1, 2001 of her term on June 23, 2004, subject to the approval of the RBI and
our shareholders. The shareholders approved the re-appointment
From April 2001 to March 2002 of Ms. Lalita D. Gupte at the EGM held on March 12, 2004. RBI vide
Mr. P. M. Sinha Appointed January 22, 2002 its letter dated April 7, 2004 also approved the said re-appointment.
Mr. N. Vaghul Appointed March 27, 2002 The Board at its Meeting held on April 26, 2002 appointed Ms.
From April 2002 to March 2003 Kalpana Morparia as Executive Director of ICICI Bank with effect
from May 3, 2002 for a period upto April 30, 2006. The Board of
Mr. B. V. Bhargava Ceased April 26, 2002 Directors, at its Meeting held on January 29, 2004, elevated Ms.
Mr. R. Rajamani Ceased April 26, 2002 Kalpana Morparia to the position of Deputy Managing Director
Mr. R. Seshasayee Appointed May 3, 2002 effective February 1, 2004.
Mr. D. Sengupta Appointed May 3, 2002 The Government of India nominated Mr. S.K. Purkayastha effective
May 3, 2002 and withdrew his nomination and nominated Mr. D.C.
Prof. Marti G. Subrahmanyam Appointed May 3, 2002
Gupta in his place effective from July 19, 2002. Subsequently,
Mr. Lakshmi N. Mittal Appointed May 3, 2002 Ms. Vineeta Rai was nominated by the Government of India effective
Mr. Anupam Puri Appointed May 3, 2002 October 31, 2002 in place of Mr. D.C. Gupta. Further, the Government
Ms. Kalpana Morparia Appointed May 3, 2002 of India withdrew the nomination of Ms. Vineeta Rai and nominated
Mr. Vinod Rai in her place effective January 3, 2003.
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March 2005
Changes in Auditors ICICI (which subsequently, alongwith two of its subsidiaries merged
into us) held equity holdings in certain companies (namely ICICI
The Members at their Eighth Annual General Meeting held on
OneSource Limited, 3i Infotech Limited, ICICI KINFRA Limited, ICICI
September 16, 2002 appointed N. M. Raiji & Co. and S. R. Batliboi &
Co., both Chartered Accountants, in place of retiring auditors S.B. Webtrade Limited, ICICI West Bengal Infrastructure Development
Billimoria & Co., Chartered Accountants, to audit our accounts for Corporation Limited and ICICI Knowledge Park) and due to the role
fiscal 2003. of ICICI in their establishment and also pursuant to trademark license
agreements between ICICI and such companies, such companies
RBI vide its letter dated July 4, 2003 and our Members, at their Ninth (and their subsidiaries, if any) are permitted in terms of such
Annual General Meeting held on August 25, 2003 approved the agreements to use “ICICI” in their name.
appointment of S. R. Batliboi & Co., Chartered Accountants as
Auditors to audit our accounts for fiscal 2004. Further, our Board of ICICI OneSource Limited and its subsidiaries carry out IT-enabled
Directors at its Meeting held on April 30, 2004 had proposed the outsourcing activities like inbound/outbound call processing,
appointment of S. R. Batliboi & Co., Chartered Accountants as transaction processing, outbound telemarketing, inbound customer
Auditors to audit our accounts for fiscal 2005, subject to the approval care and back office transaction processing, collections, billing,
of RBI and our Members. RBI vide its letter dated May 31, 2004 has remittances, investment and business research and financial
approved the said appointment. The Members have approved the analytics. It services clients from multiple verticals like banking,
said appointment at the Annual General Meeting held on September financial services, insurance, telecommunications, media. ICICI Web
20, 2004. Trade Limited is registered with SEBI as a Stock Broker and is a
member of BSE on the Equity segment, as a member of NSE on the
Interest of Directors and Key Managerial Personnel Equity & Derivatives segments and as a dealer of the Over the Counter
Exchange (OTCEI). ICICI Web Trade Limited is also registered with
Except as stated in “Related Party Transactions” on page 93 and to
SEBI as a Portfolio Manager. ICICI Web Trade Limited provides
the extent of shareholding in us, the Directors and Key Managerial
internet based online broking services through its website located at
Personnel do not have any other interest in our business other than to
the url www.icicidirect.com. It also provides these services over the
the extent of the remuneration or benefits to which they are entitled
phone through the facility called CallNTrade. ICICI Comm Trade
to as per their terms of appointment and reimbursement of expenses
incurred by them during the ordinary course of business and to the Limited, a subsidiary of ICICI Web Trade Limited, has been established
extent of the Equity Shares held by them in ICICI Bank, if any, and to provide web and telephone based broking services in the
options granted to them under the ESOS (for details of options commodities and commodity derivatives market and is a member
granted to management, see “Capital Structure” on page 6. of NCDEX. ICICI Knowledge Park has been established with the
object of providing world class infrastructure to corporates for
Except as stated otherwise in this Prospectus, we have not entered conducting research & carrying on of emerging technology related
into any contract, agreement or arrangement during the preceding activities. ICICI KINFRA Limited has been established with a view to
two years from the date of this Prospectus in which the Directors are developing infrastructure projects in the state of Kerala. ICICI West
interested directly or indirectly and no payments have been made Bengal Infrastructure Development Corporation Limited has been
to them in respect of such contracts, agreements or arrangements or established to promote, develop, structure and eventually fund/
are proposed to be made to them. arrange for funding of infrastructure projects in the State of West
Bengal.
SUBSIDIARIES AND OTHER GROUP COMPANIES
Currently, we directly hold equity shares in ICICI OneSource Limited,
We have 14 subsidiaries - ICICI Securities Limited, ICICI Brokerage 3i Infotech and ICICI Webtrade Limited to the extent of 29.9%, 29.5%
Services Limited, ICICI Securities Holdings Inc, ICICI Securities Inc, and 0.02% respectively and have no equity shareholding in ICICI
ICICI Prudential Life Insurance Company Limited, ICICI Lombard KINFRA Limited, ICICI West Bengal Infrastructure Development
General Insurance Company Limited, ICICI Venture Funds Corporation Limited and ICICI Knowledge Park. All of the aforesaid
Management Company Limited, ICICI Home Finance Company companies are professionally managed companies under the
Limited, ICICI Bank UK Limited, ICICI Bank Canada, ICICI International supervision of their respective Board and none of the aforesaid
Limited, ICICI Trusteeship Services Limited, ICICI Investment companies are our related parties for accounting purposes under
Management Company Limited and ICICI Distribution Finance Private Indian GAAP and we exercise no control over the aforesaid
Limited. We have the following other group companies within the companies other than to the extent of our shareholding, if any, in
meaning of the SEBI guidelines: Prudential ICICI Asset Management such companies or in terms of the trademark licensing agreements
Company Limited and Prudential ICICI Trust Limited. In addition, we entered into with the aforesaid companies. Separately, there may be
are the sponsors or co-sponsors of Prudential ICICI Mutual Fund, the independent commercial transactions in the ordinary course of
asset management company of which is Prudential ICICI Asset business between one or more of the aforesaid companies and us.
Management Company Limited and the trustee of which is Prudential
ICICI Trust Limited, and ICICI Securities Fund, the asset management We do not enjoy any other special rights or privileges vis-à-vis any
company of which is ICICI Investment Management Company of the aforesaid companies, other than those available to us in terms
Limited and the trustee of which is ICICI Trusteeship Services Limited. of the trademark licensing agreements entered into with the aforesaid
None of our subsidiaries or other group companies have any shares companies and additionally in case of ICICI OneSource, in terms of
listed on any stock exchange. 3i Infotech filed a Red Herring a shareholder agreement amongst us, ICICI OneSource and other
Prospectus with SEBI on March 9, 2005, for the initial public offering key shareholders. Our rights under the trademark licensing
of its equity shares. Pursuant to a request by 3i Infotech, we are agreements with the aforesaid companies allow us to terminate the
named as promoter in the said Red Herring Prospectus. use of ‘ICICI’ if our holding falls below such levels as we determine
and/or upon serving of notice of a certain period. Irrespective of our
We also own the entire or majority of the units and/or have made shareholdings in any of the aforesaid companies, we have a right to
entire or majority of the contributions in certain trust funds, private terminate the use of ‘ICICI’ by giving a notice of a certain period. We
equity funds and venture capital funds, namely, ICICI Property Trust, have so far not exercised these rights in respect of any of the aforesaid
ICICI Eco-net Internet & Technology Fund, ICICI Emerging Sectors companies. Other than in case of ICICI OneSource where the Articles
Fund, ICICI Strategic Investments Fund and ICICI Equity Fund. Such of Association reflect some of the relevant terms of the shareholder
trust funds, private equity funds and venture capital funds and/or agreement amongst us, ICICI OneSource and other key shareholders,
their investee companies are not our subsidiaries under the Act or we have no special rights or privileges under the Memorandum of
group companies under the SEBI guidelines. Under the accounting
Association and Articles of Association of the aforesaid companies.
standards, these trust funds, private equity funds and venture capital
Under the Articles of Association of ICICI OneSource Limited, we
funds are treated as associates.
(along with other key investors) have the right to nominate directors
77
March 2005
on the board of ICICI OneSource Limited (though under no obligation 2. ICICI Brokerage Services Limited (“ICICI Brokerage”)
to exercise such right) and to participate in any further raising of
capital by ICICI OneSource Limited and additionally, the Articles of ICICI Brokerage is a wholly-owned subsidiary of ICICI Securities and
Association recognizes the principles agreed amongst the was incorporated on March 9, 1995. It is a member of the NSE and
shareholders which would govern their respective conduct inter se BSE. ICICI Brokerage provides broking services primarily, to
in relation to ICICI OneSource including providing the other with a institutional investor clients.
right of first refusal in the event that any one of them desires to sell A summary of the financial performance of ICICI Brokerage is as
their shares. follows: (Rs. in crore)
In the event any of the aforesaid companies seeks our consent to Particulars For the year ended March 31, For the nine
specify us as its promoter, and we do provide such consent, and such month ended
company in its prospectus names us as its promoter, we shall then 2002 2003 2004 Dec. 31 2004
constitute such company’s promoters, and which company would
(unaudited)
then constitute our affiliate. 3i Infotech filled a Red Herring Prospectus
with SEBI on March, 2005, for the initial public offering of its equity Income 9.58 13.52 37.60 31.06
shares. Pursuant to a request by 3i Infotech, we are named as promoter Expenditure 7.93 4.64 7.73 23.43
in the said Red Herring Prospectus. We have so far not received any Profit before
such request from any of the other aforesaid companies. Tax 1.65 8.88 29.87 7.63
1. ICICI Securities Limited (formerly ICICI Securities and Finance Profit after Tax 1.10 5.48 19.08 4.79
Company Limited) (ICICI Securities) Share Capital 4.50 4.50 4.50 4.50
Reserves &
ICICI Securities was set up on February 22, 1993 to provide investment
Surplus 8.92 14.41 33.48 38.27
banking services to investors. ICICI Securities has three main business
lines - corporate advisory and mergers and acquisitions, fixed Face value
income and equities. ICICI Securities is a merchant banker, underwriter per share (Rs.) 10.00 10.00 10.00 10.00
and portfolio manager registered with the SEBI. ICICI Securities is Book value
registered with the RBI as a Primary Dealer in Government of India per share (Rs.) 29.83 42.01 84.40 95.03
securities. It is actively involved in money market operations, and Note: Reserves as disclosed above are after deducting miscellaneous
trading in various fixed income securities. ICICI Securities offers a
expenditure not written off or adjusted.
wide range of investment banking services including issue
management, underwriting, placement of debt and equity, corporate Board of Directors
advisory services including mergers, acquisitions and corporate
restructuring, valuations and fairness opinion reports. It also provides Mr. S. Mukherji (Chairman)
specialised services in the areas of private equity syndication and Mr. Nitin Jain
privatisation of government entities. ICICI Securities has an equity Mr. Devesh Kumar
research team, which identifies investment opportunities and Ms. Meher Baburaj
provides investment advice to clients. We, the parent of the company,
own 99.92% of the share capital of ICICI Securities. Mr. Paresh Shah
A summary of the financial performance of ICICI Securities is as Mr. T. S. Baskaran
follows: 3. ICICI Securities Holdings Inc.
(Rs. in crore)
ICICI Securities Holdings Inc. is incorporated in the United States on
Particulars For the year ended March 31, For the nine June 12, 2000 and is a wholly-owned subsidiary of ICICI Securities.
month ended ICICI Securities Holdings Inc. was incorporated to render corporate
2002 2003 2004 Dec. 31, 2004 advisory services for cross border transactions.
(unaudited) A summary of the financial performance of ICICI Securities Holdings
Inc. is as follows:
Total Income 378.81 305.32 321.15 96.32
(Rs. in crore)
Expenditure 191.19 155.96 141.79 73.45
Particulars For the year ended March 31, For the nine
Profit before
month ended
Tax 187.62 149.36 190.22 22.87
2002 2003 2004 Dec 31, 2004
Profit after Tax 127.89 102.94 143.90 14.47 (unaudited)
Share Capital 203.00 203.00 203.00 203.00 Total Income 2.00 3.06 2.68 1.67
Reserves 116.18 148.08 189.50 197.08 Expenditure 1.99 2.76 2.63 2.74
Face value Net Profit /
per share (Rs.) 10.00 10.00 10.00 10.00 (Loss) 0.02 0.31 0.05 (1.07)
Share Capital 5.06 7.50 7.50 7.50
Book value Reserves (0.96) (0.71) (0.81) (1.85)
per share (Rs.) 15.72 17.29 19.33 19.71 Face value
Note: Reserves as disclosed above are after deducting per share (US$) 1.00 1.00 1.00 1.00
miscellaneous expenditure not written off or adjusted. Book value 37.29 42.47 41.82 35.32
per share (Rs.)
Board of Directors
Note: Reserves as disclosed above are after deducting miscellaneous
Mr. K.V. Kamath (Chairman) expenditure not written off or adjusted.
Ms. Lalita D. Gupte
Board of Directors
Ms. Kalpana Morparia
Mr. Sripat Pandey (President)
Dr. Nachiket Mor
Mr. Joseph H. Bosco
Mr. S. Mukherji (Managing Director & CEO) Mr. Nitin Jain
78
March 2005
4. ICICI Securities Inc. significant growth. ICICI Prudential Life Insurance has written over
ICICI Securities Inc. was incorporated in the United States on June 12 lakh policies (as on February 2, 2005) and has established its
13, 2000 to provide brokerage, research and investment banking position as a clear leader amongst the private life insurers in India
services to investors who wish to invest in the Indian financial markets. with a retail market share of 31% during the period ended December
ICICI Securities Inc. is a wholly-owned subsidiary of ICICI Securities 31, 2004.
Holdings, Inc. ICICI Securities Inc. is registered as a broker-dealer A summary of the financial performance of ICICI Prudential is as
with the United States Securities Exchange Commission and is a follows:
member of the National Association of Securities Dealers Inc. in the (Rs. in crore)
United States. ICICI Securities Inc. is permitted to deal in securities
market transactions in the United States and provide research and Particulars For the year ended March 31, For the nine
investment advice to institutional investors based in the United States. month ended
2002 2003 2004 Dec. 31, 2004
A summary of the financial performance of ICICI Securities Inc. is as (unaudited)
follows:
Total Income 141.47 454.47 1,067.08 1,385.16
(Rs. in crore)
Expenditure 244.69 601.65 1,290.98 1,571.02
month ended Profit /(Loss)
2002 2003 2004 Dec. 31, 2004 before Tax (103.22) (147.18) (223.90) (185.86)
(unaudited) Profit /(Loss)
Total Income 0.78 1.00 3.53 2.63 after Tax (105.10) (147.18) (221.57) (185.86)
Expenditure 2.20 1.55 1.92 2.93 Share Capital 190.00 425.00 675.00 825.00
Net Profit/ Reserves
(Loss) (1.42) (0.55) 1.61 (0.30) (excluding
policy
Share Capital 4.83 4.83 4.83 4.83 Holders’
Reserves (1.58) (2.20) (0.88) (1.19) funds) (105.32) (253.58) (474.07) (659.94)
Face value per Face value
share (US$) 1.00 1.00 1.00 1.00 per share (Rs.) 10.00 10.00 10.00 10.00
Book value per Book value
share (Rs.) 30.97 25.02 37.62 34.65 per share (Rs.) 4.46 4.03 2.98 2.00
Note: Reserves as disclosed above are after deducting miscellaneous Board of Directors
Mr. K. V. Kamath (Chairman)
Board of Directors
Ms. Lalita D. Gupte
Mr. Sripat Pandey (President)
Mr. Kevin Holmgren
Mr. Devesh Kumar
Mr. Joseph H. Bosco
Ms. Chanda D. Kochhar
Mr. Sanjeev Patni
Mr. M. P. Modi
Mr. Nitin Jain
Mr. R. Narayanan
5. ICICI Prudential Life Insurance Company Limited (“ICICI Mr. Mark Norbom
Prudential Life Insurance”)
Ms. Shikha Sharma (Managing Director)
ICICI Prudential Life Insurance was incorporated on July 20, 2000.
6. ICICI Lombard General Insurance
The authorised capital of ICICI Prudential Life Insurance is Rs. 1,200
crore and its paid-up capital is Rs. 825 crore. ICICI Prudential Life ICICI Lombard General Insurance was incorporated on October 30,
Insurance was incorporated as a 74:26 joint venture between us and 2000 as a 74:26 joint venture between ICICI and Fairfax Financial
Prudential plc of the United Kingdom. We own 74.0% of the paid-up Holdings Limited. The authorised and paid-up share capital of ICICI
share capital of ICICI Prudential Life Insurance. The main objects of Lombard General Insurance is Rs. 220 crore. Pursuant to the
ICICI Prudential Life Insurance are to carry on the business of life amalgamation, we own 74.0% of the paid-up share capital of ICICI
insurance, effecting contracts of insurance dependent upon human Lombard General Insurance. ICICI Lombard General Insurance is
life where payment of money is assured on death (except death only registered with the Insurance Regulatory and Development Authority.
by accident), to grant annuities of all kinds and to carry on all forms ICICI Lombard General Insurance offers a wide range of general
of life insurance business. ICICI Prudential Life Insurance is registered insurance products for both corporate and retail customers. ICICI
with the Insurance Regulatory and Development Authority. ICICI Lombard General Insurance achieved financial breakeven in fiscal
Prudential Life Insurance commenced operations in December 2000, 2003 and an underwriting profit in fiscal 2004. It had written 4,10,351
becoming one of the first few private sector players in life insurance policies during the nine months ended December 31, 2004 and had
sector. Since then ICICI Prudential Life Insurance has registered a market share of 24.6% among the private sector general insurance
companies during the eight months period ended November, 2004
(Source: IRDA)
79
March 2005
A summary of the financial performance of ICICI Lombard is as A summary of the financial performance of ICICI Venture is as follows:
follows: (Rs. in crore)
(Rs. in crore) Particulars For the year ended March 31, For the nine
Particulars For the year ended March 31, For the month ended
nine month 2002 2003 2004 Dec. 31, 2004
ended (unaudited)
2002 2003 2004 Dec. 31, Total Income 20.31 35.66 106.71 48.70
2004
Expenditure 11.36 17.09 75.32 17.04
(unaudited)
Profit before
Total Income 11.61 59.85 210.05 283.14
Tax 8.95 18.57 31.39 31.66
Expenditure 22.74 55.66 167.81 247.00
Profit after Tax 5.58 12.50 25.97 19.98
Profit/ (Loss)
before Tax (11.13) 4.19 42.24 36.14 Share Capital 3.13 3.13 3.13 2.34
Profit/ (Loss) Reserves 25.44 28.88 38.10 28.54
after Tax (8.48) 3.30 31.78 30.31 Face value
Share Capital 110.00 110.00 220.00 220.00 per share (Rs.) 10.00 10.00 10.00 10.00
Reserves (9.84) (6.38) 5.93 23.81 Book value
Face value per share (Rs.) 91.42 102.40 131.91 131.97
per share (Rs.) 10.00 10.00 10.00 10.00 Note: Reserves as disclosed above are after deducting miscellaneous
Book value expenditure not written off or adjusted.
per share (Rs.) 9.11 9.42 10.27 11.09
Board of Directors
Note : Reserves as disclosed above are after deducting
miscellaneous expenditure / preliminary expenditure not written off Mr. K. V. Kamath (Chairman)
or adjusted. Ms. Lalita D. Gupte
Board of Directors Ms. Kalpana Morparia
Mr. K. V. Kamath (Chairman) Dr. Nachiket Mor
Ms. Lalita D. Gupte Mr. Gopal Srinivasan
Mr. H. N. Sinor
Mr. Balu Doraisamy
Mr. James Dowd
Mr. R. Rajamani
Mr. Chandran Ratnaswami
Ms. Renuka Ramnath (Managing Director & CEO)
Mr. S. Mukherji 8. ICICI Home Finance Company Limited (“ICICI Home Finance”)
Mr. Dileep Chokshi ICICI Home Finance was incorporated on May 28, 1999 as a wholly-
Mr. R. Athappan owned subsidiary of ICICI Personal Financial Services. Subsequently,
Mr. B.V. Bhargava it became a wholly-owned subsidiary of ICICI w.e.f. November 22,
1999. The authorised share capital of the Company is Rs. 300 crore
Mr. Sandeep Bakhshi (Managing Director & CEO)
and its paid-up capital is Rs.155 crore. Pursuant to the Scheme of
7. ICICI Venture Funds Management Company Limited (“ICICI Amalgamation, we hold the entire share capital of ICICI Home
Venture”) Finance. ICICI Home Finance has issued privately placed bonds
ICICI Venture (formerly TDICI Limited) is a venture capital company listed on the wholesale debt market segment of the NSE aggregating
and was founded in 1988 as a joint venture between ICICI Limited Rs. 750 crore. ICICI Home Finance was set up with the objective of
and The Unit Trust of India. ICICI Venture was incorporated on January providing housing/property loans to individuals and corporates.
5, 1998. Subsequently, ICICI bought out Unit Trust of India’s stake in ICICI Home Finance has also launched other innovative products
1998 and ICICI Venture became a subsidiary of ICICI. Pursuant to with features like free personal accident insurance and nil part
amalgamation, we hold almost the entire share capital of ICICI prepayment charges etc. ICICI Home Finance offers loans at about
Venture. ICICI Venture currently oversees nine domestic and offshore 1,000 locations in the country and offers doorstep service to
funds that collectively have a corpus of over Rs. 3,000 crore. ICICI
customers. Since November 2001, as a strategic initiative, the home
Venture has invested in over 300 companies in a wide spectrum of
loan disbursal are made by the holding company and the functions
industries.
relating to sanction of assistance, disbursement and other procedures
for the same are carried out by ICICI Home Finance as Origination
80
March 2005
and Administrative Agent. expenditure not written off or adjusted.

(Rs. in crore) Board of Directors
Particulars For the year ended March 31, For the nine Mr. K. V. Kamath (Chairman)
month ended
2002 2003 2004 Dec. 31, 2004 Ms. Lalita D. Gupte
(unaudited) Mr. Sonjoy Chatterjee
Total Income 192.21 197.82 146.29 170.59 Mr. Bhargav Dasgupta
Expenditure 179.58 157.24 135.76 163.44 Mr. W. Michael T. Fowle
Profit before Mr. Richard M. J. Orgill
Tax 12.63 40.58 10.53 7.15 Dr. M. L. Kaul
Profit after Tax 9.58 28.65 9.85 5.75 Mr. Martin Errington
Share Capital 155.00 155.00 155.00 155.00
10. ICICI Bank Canada
Reserves 6.89 13.64 26.54 30.93
Pursuant to the Bank Act of Canada, the Office of the Superintendent of
Face value Financial Institutions granted Letters Patent of Incorporation to ICICI
per share (Rs.) 10.00 10.00 10.00 10.00 Bank Canada, on September 12, 2003, and an Order to Commence
Book value and Carry On Business, on November 25, 2003. In addition, on
per share (Rs.) 14.44 14.93 15.79 13.28 September 24, 2003, the Canada Deposit Insurance Corporation
Note: Reserves as disclosed above are after deducting miscellaneous admitted ICICI Bank Canada to its membership, giving it the ability to
expenditure not written off or adjusted. mobilise retail deposits across Canada. As a wholly-owned subsidiary
of ICICI Bank Limited (the “Parent”), it will initially open and operate
Board of Directors five full-service branches in Canada; four of these branches will be
located in the Greater Toronto Area and one of them is expected to be
Ms. Chanda D. Kochhar (Chairperson)
in the Greater Vancouver Area. The Subsidiary launched its operations,
Ms. Kalpana Morparia at a Toronto downtown branch, on December 19, 2003, and at a
Dr. Nachiket Mor Brampton branch, on April 16, 2004. Operations are expected to
Mr. M. N. Gopinath commence at a Scarborough branch on February 7, 2005.
Ms. Madhabi Puri Buch Based in Toronto, Ontario, ICICI Bank Canada has received an initial
Mr. V. Vaidyanathan (Managing Director & CEO) capital injection of Canadian Dollar 25 million and provides a full
range of personal and commercial financial services, including NRI
Mr. Rajiv Sabharwal (Chief Operating Officer)
services, to retail and commercial customers through its branch
9. ICICI Bank UK Limited (“ICICI Bank UK”) network, ATMs and the internet. Further, capitalising on our
leadership, the ICICI Bank Canada offers a fsuite of trade finance
ICICI Bank UK was incorporated on February 11, 2003 with the
products and other innovative products using our network in India
Registrar of Companies of England and Wales and is our wholly-
and around the world to its domestic and overseas customers.
owned subsidiary. The authorised share capital of the company is
US$ 500 million and Euro 500 million and UK Sterling 100 million. A summary of the financial performance of ICICI Bank Canada is as
The paid-up capital is US$ 100 million and UK Sterling 2. ICICI Bank follows:
UK is authorised and regulated by the Financial Services Authority (Canadian Dollars in thousands)
in the UK and seeks to provide banking products and services to Particulars For the period ended For the nine
corporate and retail customers, primarily based in the United March 31, 2004 month ended
Kingdom, with trading or personal links to India. ICICI Bank UK Dec. 31, 2004
commenced operations during November 2003. (unaudited) (unaudited)
A summary of the financial performance of ICICI Bank UK is as Total Income 289 1,502
follows:
Expenditure 1,621 8,141
(US$ in thousands) Profit before Tax (1,332) (6,639)
Particulars For the year ended For the nine Profit after Tax (930) (4,752)
March 31, 2004 month ended Share Capital 25,000 25,000
Dec. 31, 2004 Retained Earnings (930) (5,682)
(unaudited)
Face value
Total Income 1,552 12,076 per share (CA$) 1.00 1.00
Expenditure 3,799 (11,814) Book value
Profit before Tax (2,247) 262 per share (CA$) 0.96 0.78
Profit after Tax (2,247) 262 Board of Directors
Share Capital 50,000 100,000 Mr. K. V. Kamath (Chairman)
Reserves (2,247) (1,985) Ms. Lalita D. Gupte
Face value Mr. Bhargav Dasgupta
per share (US$) 1.00 1.00
Mr. Madan Bhayana
Book value
per share (US$) 0.96 0.98 Mr. Robert G. Long
Note: Reserves as disclosed above are after deducting miscellaneous Senator David P. Smith
81
March 2005
Mr. John Thompson A summary of the financial performance of ICICI Trusteeship is as

Mr. Hari Panday (President & CEO) follows:
(Rupees)
11. ICICI International Limited (“ICICI International”)
ICICI International (formerly TDICI Investment Management Company) month ended
was originally incorporated on January 18, 1996 as a wholly-owned 2002 2003 2004 Dec. 31, 2004
subsidiary of ICICI Venture in Mauritius to carry on the business of (unaudited)
offshore fund management. Subsequently, ICICI Venture transferred
Total Income 251,100 392,155 348,058 2,30,635
its entire shareholding to ICICI. Pursuant to the amalgamation, ICICI
International has become our wholly owned subsidiary. ICICI and Expenditure 35,229 35,975 34,492 26,889
TCW (Trust Company of the West, USA) had jointly set up an asset Profit before
management company named “TCW/ICICI Investment Partners, Tax 215,871 356,180 313,566 203,746
L.L.C.” to pursue investment management opportunities in the private Profit after
equity business. TCW/ICICI Investment Partners, L.L.C. is domiciled Tax 135,871 225,180 193,566 128,746
in Mauritius and has a share capital of US$ 600,000. Pursuant to the Share Capital 8,000 500,000 500,000 500,000
amalgamation, we hold 50.0% of the share capital of TCW/ICICI Reserves &
Investment Partners, L.L.C. through ICICI International. The balance Surplus 181,368 421,077 632,106 771,749
50.0% of the share capital of TCW/ICICI Investment Partners is held Face value
by TCW. per share 10.00 10.00 10.00 10.00
A summary of the past financial performance of ICICI International is Book value
as follows: per share 236.71 18.42 22.64 25.21
(US$) Note: Reserves as disclosed above are after deducting miscellaneous
Particulars For the year ended March 31, For the nine expenditure not written off or adjusted.
month ended Board of Directors
2002 2003 2004 Dec. 31, 2004
(unaudited) Mr. Sanjiv Kerkar (Chairman)
Mr. Girish Mehta
Total Income 952,130 333,996 160,698 76,128
Mr. N. D. Shah
Expenditure 828,951 333,720 160,698 69,619
Dr. S. D. Israni
Net Profit
before 13. ICICI Investment Management Company Limited (“ICICI
dividend 155,641 276 - 6,509 Investment Management”)
Share Capital 400,000 400,000 400,000 400,000 ICICI Investment Management was incorporated on March 9, 2000
as a wholly-owned subsidiary of ICICI. The authorised share capital
Reserves 148,816 129,092 129,092 1,35,601 of ICICI Investment Management is Rs. 25 crore and the paid-up
Face value share capital is Rs. 100,007,000. Pursuant to the amalgamation, ICICI
Investment Management has become our wholly-owned subsidiary.
per share 10.00 10.00 10.00 10.00
The main object of ICICI Investment Management is to carry on the
Book value business of management of mutual funds, unit trusts, offshore funds,
per share 13.72 13.27 13.23 13.40 pension funds, provident funds, venture capital funds, insurance
funds, and to act as managers, consultants, advisors, administrators,
Note: Reserves as disclosed above are after deducting miscellaneous
attorneys, agents, or representatives of these entities and to act as
financial advisors and investment advisors.
Board of Directors A summary of the financial performance of ICICI Investment
Ms. Renuka Ramnath Management is as follows:
Mr. Suresh Kumar (Rs. in crore)
Mr. Couldip Basanta Lala Particulars For the year ended March 31, For the nine
month ended
Mr. Kapil Dev Joory 2002 2003 2004 Dec. 31, 2004
12. ICICI Trusteeship Services Limited (“ICICI Trusteeship”) (unaudited)
ICICI Trusteeship was incorporated on April 29, 1999 as a wholly- Total Income 1.13 1.09 0.75 0.54
owned subsidiary of ICICI. The authorised share capital of ICICI Expenditure 0.91 0.28 0.33 0.27
Trusteeship is Rs.1 crore and the paid-up share capital is Rs. 500,000. Profit before
Pursuant to the amalgamation, ICICI Trusteeship has become our Tax 0.21 0.81 0.42 0.27
wholly-owned subsidiary. The main object of ICICI Trusteeship is to Profit after Tax 0.14 0.52 0.30 0.16
act as trustee of mutual funds, off-shore funds, pension funds, Share Capital 10.00 10.00 10.00 10.00
provident funds, venture capital funds, insurance funds, collective or
private investment schemes, employee welfare or compensation Reserves 0.69 1.24 1.56 1.74
schemes etc., and to devise various schemes for raising funds in any Face value
manner in India or abroad and to deploy funds so raised and earn per share (Rs.) 10.00 10.00 10.00 10.00
reasonable returns on their investments and to act as trustees generally Book value
for any purpose and to acquire, hold, manage, dispose-off all or any per share (Rs.) 10.69 11.24 11.56 11.75
securities or money market instruments or property or assets and Note: Reserves as disclosed above are after deducting miscellaneous
receivables or financial assets or any other assets or property. expenditure not written off or adjusted.
82
March 2005
Board of Directors the induction of Prudential Plc. (Prudential Corporation Plc.), of UK

Ms. Kalpana Morparia (Chairperson) (Prudential) as the new joint venture partner.
Mr. A. J. Advani Prudential plc. of UK, through its wholly-owned subsidiary, Prudential
Corporation Holdings Limited has been issued and allotted shares
Mr. Chandrashekhar Lal aggregating 55% stake in the share capital of the AMC, whereas the
Mr. Ashish Dalal balance 45% shareholding in the AMC is being held ICICI Group.
Out of the total 45% of the paid-up capital of the AMC held by the
14. ICICI Distribution Finance Private Limited ( “ICICI Distribution ICICI Group, 30% is held by ICICI Bank and the balance 15% is held
Finance“) by a subsidiary of ICICI Bank Ltd. viz. ICICI Venture Funds Management
ICICI Distribution Finance incorporated on October 14, 1996, was Company Limited. The AMC is acting as the Investment Manager for
acquired by us effective May 7, 2003 and is our wholly-owned the 20 schemes of Prudential ICICI Mutual Fund - “ICICI Premier”,
subsidiary. Prior to the acquisition, ICICI Distribution Finance was “Prudential ICICI Power”, “Prudential ICICI Growth Plan”, “Prudential
known by the name “Transamerica Apple Distribution Finance Private ICICI Income Plan”, “Prudential ICICI Liquid Plan”, “Prudential ICICI
Limited” which was changed to ICICI Distribution Finance Private FMCG Fund”, “Prudential ICICI Tax Plan”, “Prudential ICICI Balanced
Limited effective June 3, 2003. The main object of ICICI Distribution Fund”, “Prudential ICICI Gilt Fund”, “Prudential ICICI Technology
Finance is to carry on consumer credit activities, including by way Fund”, “Prudential ICICI Monthly Income Plan”, “Prudential ICICI
of lease, hire purchase, loan and instalment sales or any other method Fixed Maturity Plan”, “Prudential ICICI Child Care Plan”, “Prudential
of financing consumer durables, both brown as well as white goods, ICICI Index Fund – Nifty Plan”, “Prudential ICICI Dynamic Plan”,
electronic goods of all types, electrical appliances of all types, “SENSEX Prudential ICICI Exchange Traded Fund”, “Prudential ICICI
vehicles, machinery and equipments. Advisor Series”, “Prudential ICICI Income Multiplier Fund”
A summary of the financial performance of ICICI Distribution Finance “Prudential ICICI Discovery Fund” and “Prudential ICICI Emerging
is as follows: S.T.A.R. (Stocks Targeted At Returns) Fund”. The AMC is also
registered with SEBI under SEBI (Portfolio Managers) Rules, 1993.
(Rs. in crore)
A summary of the financial performance of the AMC is as follows:
Particulars For the year ended For the nine month
March 31, 2004 ended Dec. 31, 2004 (Rs. in crore)
(unaudited) Particulars For the year ended March 31, For the nine
Total Income 17.70 2.97 month ended
2002 2003 2004 Dec. 31, 2004
Expenditure 11.69 2.12 (unaudited)
Profit before Tax 6.01 0.85 Total Income 61.52 61.97 99.73 69.84
Profit after Tax 3.36 0.54
Expenditure 45.19 43.06 59.27 51.34
Share Capital 8.75 8.75
Profit before
Reserves 43.49 44.03 Tax 16.33 18.91 40.46 18.50
Face value Profit after Tax 11.43 12.15 27.28 12.31
per share (Rs.) 10.00 10.00
Share Capital 18.52 18.52 18.52 18.52
Book value
per share (Rs.) 59.70 60.32 Reserves 51.38 55.26 61.63 73.96
Note: Reserves as disclosed above are after deducting miscellaneous Face value
expenditure not written off or adjusted. per share (Rs.) 10.00 10.00 10.00 10.00
Book value
Board of Directors
per share (Rs.) 37.74 39.80 43.27 49.94
Ms. Chanda D. Kochhar (Chairperson) Note: Reserves as disclosed above are after deducting miscellaneous
Mr. V. Vaidyanathan expenditure to the extent not written off or adjusted.
Mr. Maninder Juneja
Board of Directors
Mr. M. N. Gopinath (Managing Director)
Mr. Mark Norbom (Chairman)
15. Prudential ICICI Asset Management Company Limited, (“AMC”) Mr. Ajay Srinivasan
the asset management company of Prudential ICICI Mutual Fund
Mr. Ananda Mukerji
The AMC, a company registered under the Act, was originally
Mr. N. S. Kannan
incorporated as ICICI Asset Management Company Limited by ICICI
as its wholly-owned subsidiary, to act as the investment manager of Mr. Dadi Engineer
the ICICI Mutual Fund vide the Investment Management Agreement Mr. K. S. Mehta
dated September 3, 1993. Consequent to a joint venture agreement Mr. Pradip Shah
dated June 29, 1994 entered into between ICICI and Morgan Guaranty
International Finance Corporation (MGIFC), a subsidiary of JP Morgan Mr. B. R. Gupta
of USA, MGIFC was issued and allotted shares aggregating 40.0% Mr. Pankaj Razdan (Managing Director)
of the equity capital of ICICI Asset Management Company.
16. Prudential ICICI Trust Limited (“Trustee Company”), the trustee
The management of ICICI Asset Management Company reviewed of Prudential ICICI Mutual Fund
its long-term business strategy and decided to further strengthen its
commitment to the individual investor segment. As a part of this The Trustee Company, a company registered under the Act was
plan, MGIFC and ICICI agreed to restructure their partnership. As a originally incorporated as ICICI Trust Limited by ICICI as its wholly-
part of the restructuring plan, MGIFC divested its entire holdings to owned subsidiary, to act as Trustee of ICICI Mutual Fund vide Trust
ICICI and the Board of ICICI Asset Management Company approved Deed dated August 25, 1993.
83
March 2005
Prudential plc. of UK, through its wholly owned subsidiary, Prudential in the banking, financial services and insurance (BFSI) domain. 3i
Corporation Holdings Limited, has been issued and allotted shares Infotech also offers ERP products and services and caters to a wide
aggregating 55% stake in the share capital of the Trustee Company, range of global clientele. 3i Infotech Limited has four subsidiaries 3i
whereas the balance 45% shareholding in the Trustee Company is Infotech Inc (USA), 3i Infotech Pty (Australia), 3i Infotech Pte
being held by ICICI Group. Out of the total 45% of the paid-up (Singapore), which has a subsidiary 3i Infotech SDN BDH (Malaysia).
capital of the Prudential ICICI Trust Limited held by the ICICI Group, It also has 50% ownership in Semantik GmbH (Germany), a joint
30% is held by ICICI Bank and the balance 15% is held by a subsidiary venture with Innova Business Development and Holding GmbH,
of ICICI Bank Ltd. viz. ICICI Venture Funds Management Company Germany 3i Infotech and its subsidiaries and joint venture have
Limited. established physical presence in the U.S., U.K., Singapore, Malaysia,
A summary of the financial performance of Prudential ICICI Trust is Germany, Australia and U.A.E and have set up software development
as follows: infrastructure in Navi Mumbai, Bangalore, Chennai and New Jersey.
(Rs. in crore) A summary of the financial performance of the 3i Infotech is as
follows:
month ended (Rs. in crore)
2002 2003 2004 Dec. 31, 2004 Particulars For the year ended March 31, For the nine
(unaudited) month ended
Total Income 0.41 0.37 0.40 0.27 2002 2003 2004 Dec. 31, 2004
Expenditure 0.05 0.02 0.27 0.21 Total Income 151.95 181.40 182.47 151.75
Profit before Expenditure 118.66 175.90 174.91 136.66

Tax 0.36 0.35 0.13 0.06 Profit before
Profit after Tax 0.24 0.22 0.09 0.06 Tax 33.29 5.50 7.56 15.09
Share Capital 0.10 0.10 0.10 0.10 Profit after Tax 23.67 12.57 11.90 12.92
Reserves 0.56 0.67 0.76 0.71 Share Capital 160.59 180.98 180.98 180.99
Face value Reserves 50.98 27.98 29.06 33.98

per share (Rs.) 10.00 10.00 10.00 10.00 Face value
Book value per share (Rs.) 5.00 5.00 5.00 5.00
per share (Rs.) 65.75 76.27 76.92 81.00 Book value
Note: Reserves as disclosed above are after deducting miscellaneous per share (Rs.) 11.10 9.30 9.52 10.33
expenditure to the extent not written off or adjusted. Note: Reserves as disclosed above are after deducting miscellaneous
expenditure to the extent not written off or adjusted.
Board of Directors
Board of Directors
Mr. V. B. Haribhakti
Mr. S. P. Subhedar Mr. Hoshang Sinor (Chairman)
Mr. E. B. Desai Mr. V Srinivasan (MD and CEO)

Mr. Manoj Kunkalienkar
Mr. D. J. Balaji Rao
Mr. Hari Padmanabhan
Mr. Nagesh Pinge
Mr. Suresh Kumar
17. 3i Infotech Limited
Mr. Vijay Thacker
3i Infotech was incorporated in 1993 as a wholly-owned subsidiary Ms. Ramni Nirula
of ICICI Limited. In March 2002, ICICI Limited divested majority its
equity shareholding in 3i Infotech, by virtue of which it ceased to be Mr. Balaji Swaminathan
a subsidiary of ICICI Limited. Mr. Vincent Addonisio
3i Infotech Limited is engaged in providing software solutions mainly
84
March 2005
OPERATIONAL & FINANCIAL PERFORMANCE FOR THE LAST FIVE YEARS AND MANAGEMENT DISCUSSION
Our financial and other data for the fiscal years 2000, 2001, 2002, 2003, 2004 and nine month period ended December 31, 2004 included in
this Prospectus have been derived from our unconsolidated financial statements prepared in accordance with Indian GAAP, guidelines
issued by the RBI from time to time and practices generally prevailing in the banking industry in India. The financial statements for fiscal
2000, 2001 and 2002 were audited by S. B. Billimoria and Co., Chartered Accountants, for fiscal 2003 jointly by N. M. Raiji and Co., Chartered
Accountants and S. R. Batliboi and Co., Chartered Accountants and for fiscal 2004 and nine year period ended December 31, 2004 by S.
R. Batliboi and Co., Chartered Accountants. You should read the following discussion and analysis of our selected financial and operating
data with the more detailed information contained in our audited financial statements. The following discussion is based on our audited
financial statements and accompanying notes prepared in accordance with Indian GAAP.
The amalgamation was accounted for using the purchase method of accounting. The effective date of the amalgamation was May 3, 2002.
However, the date of the amalgamation for accounting purposes under Indian GAAP was the Appointed Date under the Scheme of
Amalgamation approved by the High Courts of Bombay and Gujarat and the RBI, which was March 30, 2002. Accordingly, our profit and
loss account (hereinafter referred to as income statement) for fiscal 2002 includes the results of operations of ICICI, ICICI Personal Financial
Services and ICICI Capital Services for only two days i.e. March 30 and 31, 2002, although our balance sheet for fiscal 2002 reflects the full
impact of the amalgamation. As a result of the above, the income statement for fiscal 2003 is not comparable with the income statements
for fiscal 2002 and prior years. The balance sheets at year-end fiscal 2001 and year-end fiscal 2002 are also not comparable, as the fiscal
2002 balance sheet reflects the amalgamation which is not reflected in the fiscal 2001 balance sheet. The balance sheets at year-end fiscal
2002 and year-end fiscal 2003 are, however, comparable.
In fiscal 2001, we acquired Bank of Madura. The effective as well as appointed date of the merger of Bank of Madura with us was March 10,
2001. Accordingly, our income statement for fiscal 2001 included the results of operations of Bank of Madura for only 21 days. Our income
statement for fiscal 2002 is therefore not comparable with the income statement for fiscal 2001.
85
March 2005
OPERATING RESULTS DATA

(Rs. in Crore)
Year ended March 31 For the nine
month ended
2000 2001 2002 2003 2004 Dec. 31, 2004
(A) Interest Earned
- Interest/discount on advances/bills (1) 347.91 570.91 771.67 6,016.24 6,073.85 4,867.73
- Income on investments (2) 409.71 555.72 1,233.80 2,910.44 2,431.74 1,637.10
- Interest on balances with RBI and
other inter-bank funds 94.61 108.67 122.62 235.57 210.64 166.15
- Others 0.64 6.83 23.84 205.81 177.81 133.68
Total (A) 852.87 1,242.13 2,151.93 9,368.06 8,894.04 6,804.66
(B) Interest Expended
- Interest on deposits 580.50 725.44 1,388.92 2,479.71 3,023.02 2,270.52
- Interest on Reserve Bank of India /
inter-bank borrowings 23.55 32.05 47.84 183.37 229.37 156.70
- Others [including interest on borrowing
on erstwhile ICICI Limited] (3) 62.89 80.18 122.16 5,280.92 3,762.86 2,328.53
Total (B) 666.94 837.67 1,558.92 7,944.00 7,015.25 4,755.75
(C) Net Interest Income (C) = (A) - (B) 185.93 404.46 593.01 1,424.06 1,878.79 2,048.91
(D) Other Income
- Commission, exchange and brokerage (4) 67.07 139.53 229.79 791.79 1,071.80 1,397.61
- Profit/ (Loss) on sale of investments (net) 101.14 19.21 305.71 492.33 1,224.63 294.37
- Profit/ (Loss) on foreign exchange transactions
(net) (including premium amortisation) 22.39 41.61 37.30 10.24 192.63 235.34
- Profit/ (Loss) on revaluation of investments (net) - 13.77 (14.60) 0.11 - -
- Lease Income 3.58 4.62 10.69 537.42 422.35 305.90
- Profit on sale of shares of ICICI Bank Limited
held by erstwhile ICICI Limited - - - 1,191.05 - -
- Miscellaneous Income (5) (0.13) 1.60 5.77 135.88 153.51 150.62
Total other income (D) 194.05 220.34 574.66 3,158.82 3,064.92 2,383.84
(E) Total Income (C) + (D) 379.98 624.80 1,167.67 4,582.88 4,943.71 4,432.75
Less: Operating Expenses (6) 151.15 332.22 611.08 1,697.22 2,292.72 2,129.99
Less: Depreciation on leased assets 2.16 2.41 11.50 314.47 278.51 223.93
Operating profit before provisions 226.67 290.17 545.09 2,571.19 2,372.48 2,078.83
Less: Provision and contingencies (7) 121.37 129.07 286.79 1,365.01 735.38 688.33
Net profit for the year/ period 105.30 161.10 258.30 1,206.18 1,637.10 1,390.50
Dividend per Share of Rs. 10 (Rs.) 1.50 2.00 2.00 7.50 7.50 -
Dividend tax per Share of Rs. 10 (Rs.) 0.17 0.20 0.20 0.96 0.96 -
-
86
March 2005
Adjustments as per SEBI Guidelines
(Rs. in Crore)
Year ended March 31 For the nine
month ended
2000 2001 2002 2003 2004 Dec. 31, 2004
Profit for the period 105.30 161.10 258.30 1,206.18 1,637.10 1,390.50
Add/(Less) :-
1) Adjustment for change in accounting policy relating
to depreciation on improvements to leased premises
[Refer Note 8(a)] 3.36 - - - - -
to depreciation on premises and other fixed assets - (9.48) - - - -
[Refer Note 8(b)]
3) Adjustment for change in rates of depreciation
on premises and other fixed assets [Refer Note 8(c)] - - (6.43) - - -
4) Adjustment for change in methodology for ascertaining
carrying cost of investments, accounting for repurchase
transactions and review of useful life of ATMs
[Refer Note 8(d)] - - - (16.12) - -
5) Adjustment for change in accounting policy relating to
Unrealised gains on rupee derivatives
(net of provisions) [Refer Note 9] (63.65)
to commission paid to direct marketing agent of auto
loans [Refer Note 10]
7) Tax effect for the above adjustments (1.29) 3.75 2.30 5.92 - 23.29
Adjusted profit after tax 107.37 155.37 254.17 1,195.98 1,637.10 1,350.14
Notes: Operating results data
1 Income from loans represents interest on rupee and foreign currency loans and advances (including bills) & hire purchase activity and
gains on sell-down of loans
2 Interest income from investments represents primarily amounts earned on SLR investments, debentures ,bonds and dividend income
from equity and other investments in companies other than subsidiaries.
3 Interest expense ‘others’ includes primarily interest expense on deposits taken over from erstwhile ICICI Limited, Commercial Paper
bonds and debentures, subordinated debt and bills rediscounted and borrowings outside India
4 Commission, exchange and brokerage includes income from commissions on guarantees, letters of credit, cash management
services, loan processing fees, credit and debit card activities and demat. It also includes commission on bills for collection and bills
purchased / discounted .
5 Miscellaneous income for year ended March 31, 2003 & 2004 and for nine months ended December 31, 2004 includes primarily
dividend income from subsidiaries/ affiliates .
6 Operating expenses include primarily employee expenses, establishment, depreciation on fixed assets and other general office
expenses.
7 Provisions and contingencies includes provisions/ write offs as per RBI guidelines, additional depreciation / write-back of depreciation
on investments, provision for taxes (net of deferred tax), tax on interest income imposed by Indian Law. The tax on interest income is
separate from corporate income tax.
8 (a) With effect from April 1, 1999, improvements (including fixtures / fittings) to leased premises have been depreciated over the
primary lease period instead of at the rates specified in Schedule XIV of the Companies Act, 1956.
(b) With effect from April 1, 2000, premises and other fixed assets have been depreciated over their estimated useful life on a straight
line basis instead of on WDV basis.
(c) With effect from April 1, 2001, arising from the merger of ICICI Limited with the Bank, the useful lives of certain categories of fixed
assets were reviewed to align the depreciation rates followed by ICICI Limited and the Bank.
Accordingly, the Bank changed its rates of depreciation on certain categories of fixed assets. of fixed assets with effect from April
1, 2001.
(d) Effective April 1,2002, the Bank has changed the methodology for ascertaining the carrying cost of fixed income bearing
securities from Weighted Average method to First-In-First-Out Method.
During the year ended March 31, 2003 , the Bank has accounted for repurchase transactions as a sale and a forward purchase or
purchase and a forward sale transaction as against borrowing or lending transaction.
The Bank depreciated Automated Teller Machines (ATMs) over its useful life estimated at 6 years or over lease period for ATMs taken
on lease. Effective April 1,2002, the Bank revised the useful lives of the ATM’s to 8 years based on an evaluation done by management.
87
March 2005
9 Effective April 01,2004 the bank has accounted for unrealised gains on rupee derivatives (net of provisions) as compared to it earlier
policy of ignoring the unrealised gains. As a result profit after tax for the current period is higher by Rs. 40.36 crores.
10 Effective April 1, 2004 the commissions paid to direct marketing agents (DMAs) of auto loans, net of subvention income received from
them, is recorded upfront in the profit and loss account. For disbursements made till March 31, 2004, the gross commissions paid to
direct marketing agents (DMAs) of auto loans were recorded upfront in the profit and loss account and subvention income received
from them is being amortised over the life of the loan. The impact of the change is not significant
11 Effective June 30, 2004 the Bank have reclassified the Premium Amortisation on HTM securities from “Interest Income on Investments”
i.e. Profit and loss account schedule 13 to schedule 17 “ Provisions and contingencies” under the head “Additional depreciation/
(write-back of depreciation) on investments”.
12 It has not been possible to determine the effect on profits if changes in accounting policies stated above had been made in each of the
accounting years preceding the change and accordingly adjustments to profits for those items have not been made.
13 Consequent upon Accounting Standard 22 on “Accounting for Taxes on Income” becoming mandatory effective April 1, 2001, the
defered tax effect of timing differences arising during the year ended March 31, 2002 has been recognised in the Profit and Loss
Account for the period . The deferred tax adjustment for March 31, 1999,2000 and 2001 has not been determined and consequently,
no adjustments have been carried out in the Statements of Profits shown above.
For other notes to accounts please refer to Auditors’ Report under Part II of the Prospectus.
TAXATION STATEMENT
(Rs. in Crore)
Year ended Year ended
March 31, 2003 March 31, 2004
Tax at marginal rate on income 285.97 681.52
Adjustments
Difference in book and tax Depreciation (17.00) 49.58
Bad Debts written off through provision/Reserve 1,682.40 124.14
Special Reserve under Section 36(1)(viii) - -
Surplus on sale of Property/assets 7.00 1.85
Dividend exempt under Section 10(33)/10(34) - (223.74)
Tax – free Income exempt under Section 10(15)(iv)(h) & 10(23G) (71.00) (63.92)
Dividend exempt under Section 80M (183.00) -
Capital Gains on sale of shares (1,291.00) (401.34)
F/Value write back (1,183.00) (866.38)
Other Adjustments 501.00 115.12
Net Adjustments (554.60) (1,264.69)
Tax (Savings)/outgo thereon - other than Capital gains (203.82) (453.71)
Other tax provisions 41.45 20.64
Capital Gains on sale of shares 91.00 21.13
Tax (Savings)/outgo thereon (71.37) (411.94)
Add/(Less) : Deferred tax adjustments (642.59) (6.88)
Total Income Tax (A) (428.0) 262.7
Wealth Tax (B) 2.25 2.40
Interest Tax (C)
TOTAL TAXATION (425.74) 265.11
NOTES
Adjusted profit before taxation 778.14 1,899.72
Rates of tax - other than capital gains 36.75% 35.88%
- Long Term capital gains 10.50% 10.25%
88
March 2005
BALANCE SHEET DATA

(Rs. in Crore)
As on
2000 2001 2002 2003 2004 Dec. 31, 2004
ASSETS
Cash in Hand and Balance with RBI 721.89 1,231.66 1,774.47 4,886.14 5,408.00 7,448.16
Balance with Banks and Money at call
and short notice 2,693.28 2,362.03 11,011.88 1,602.86 3,062.64 5,122.42
Investments [net of provisions]
- Government and other approved securities 2,814.94 4,111.93 22,792.78 25,583.03 29,917.80 30,228.31
- Debentures & Bonds 1,137.22 3,070.08 6,436.36 5,689.92 5,549.10 4,280.76
- Others 464.52 1,004.85 6,661.94 4,189.35 7,275.96 8,759.50
Advances (1) 3,657.34 7,031.46 47,034.87 53,279.41 62,095.52 76,092.46
Fixed Assets 222.12 384.75 4,239.34 4,060.73 4,056.41 3,861.75
Others Assets (2) 361.31 539.83 4,158.28 7,520.52 7,863.44 10,420.82
Total Assets 12,072.62 19,736.59 104,109.92 106,811.96 125,228.87 146,214.18
LIABILITIES AND CAPITAL
Deposits
- Demand Deposits 1,587.47 2,621.86 2,736.15 3,689.44 7,259.06 9,193.48
- Saving Deposits 533.26 1,880.64 2,497.00 3,793.21 8,372.03 10,714.79
- Term Deposits 7,745.28 11,875.71 26,851.96 40,686.65 52,477.49 62,020.01
Borrowings (3) 491.47 1,032.79 49,218.66 34,302.42 30,740.24 32,945.30
Unsecured Redeemable Debenture/Bonds
(Subordinated Debt) (4) 168.00 168.00 9,751.31 9,749.53 9,105.86 8,176.36
Other Liabilities & Provisions (5) 397.63 844.97 6,456.27 7,307.40 8,913.63 10,179.09
Preference Share Capital Suspense (6) - - - 350.00 - -
Preference Share Capital (6) - - - 350.00 350.00 350.00
Equity Capital (7) 196.82 220.36 613.03 612.66 616.40 735.83
Equity Share Capital Suspense (8) - - - - - 0.06
Reserves and Surplus (9)
- Statutory Reserves 103.86 184.43 249.43 551.43 960.73 960.73
- Debenture Redemption Reserve - - 10.00 - - -
- Special Reserve - - 1,094.00 1,144.00 1,169.00 1,169.00
- Capital Reserves - - - 200.00 465.00 465.00
- Share Premium (10) 769.03 804.54 804.54 802.16 852.33 3,975.96
- Investment Fluctuation Reserve 4.84 11.34 27.34 127.34 730.34 730.34
-Revenue & Other Reserves 74.82 91.12 3,430.67 3,490.67 3,163.67 3,163.67
-Balance in Profit & Loss Account 0.14 0.83 19.56 5.05 53.09 1,434.56
Total Liabilities and Capital 12,072.62 19,736.59 104,109.92 106,811.96 125,228.87 146,214.18
Contingent Liabilities
i) Claim against Bank not acknowledged as debts 25.10 54.79 1,023.26 2,025.15 2,501.79 2,245.37
ii) Liability for partly paid investments - 34.00 261.52 180.49 124.14 16.84
iii) Liability on account of outstanding forward
exchange contracts 7,354.97 8,846.82 15,254.59 25,103.05 55,704.38 62,501.21
iv) Guarantees given on behalf of constituents
in India 756.44 1,345.98 9,351.60 10,634.83 12,028.99 14,556.12
v) Acceptances, endorsements & other obligations 848.96 1,286.91 1,739.11 4,325.19 6,514.20 9,573.49
vi) Currency Swaps 765.75 871.03 2,041.47 2,901.32 4,448.48 7,326.63
vii) Interest rate Swaps - 1,138.03 7,854.16 41,354.47 117,764.08 150,494.91
viii) Other items for which Bank is
contingently liable 29.25 270.44 1,920.88 2,914.01 3,855.83 8,045.97
Total 9,780.47 13,848.00 39,446.59 89,438.51 202,941.90 254,760.54
Bills for collection 761.44 1,229.80 1,323.42 1,336.78 1,510.94 2,050.10
89
March 2005
Notes: Balance sheet data

1 Includes rupee / foreign currency loans, assistance by way of securitisation, loans under retail finance operations and receivable
under finance lease.
2 Includes primarily interest accrued but not due at period end, advances paid for capital assets, advance taxes paid, deposits for
utilities outstanding fees and other income, exchange fluctuation suspense with Government of India inter office adjustments [net] and
non-banking assets acquired in satisfaction of claims and deferred tax asset.
3 Borrowings include call borrowings and refinance from RBI, banks and other financial institutions, deposits taken over from erstwhile
ICICI Limited, bonds and debentures, commercial paper and borrowings outside India from multilateral and bilateral credit agencies,
international banks, Institutions and consortiums.
4 Represents unsecured borrowings eligible for inclusion in Tier-II capital for capital adequacy purposes.
5 Other liabilities primarily include bills payable, interest accrued but not due, creditors for expenses, unclaimed refunds, brokerage
and interest, deferred tax liability , proposed dividend, dividend tax thereon, inter-office adjustments [net], prudential provision on
standard assets as per RBI norms and security deposits from clients.
6 As on March 31, 2002, preference share capital suspense represents face value of 350 preference shares to be issued to preference
shareholders of ICICI Limited on amalgamation redeemable at par on April 20, 2018. The notification from Ministry of Finance has
currently exempted the Bank from the restriction of section 12(1) of the Banking Regulation Act, 1949, which prohibits issue of
preference shares by banks. These shares were subsequently issued on June 11,2002.
7 As on March 31, 2001, equity capital includes Rs. 23.54 crore to be allotted to the equity shareholders of Bank of Madura, consequent
to its merger with the Bank, effective March 10, 2001. Subsequently these shares have been issued on April 17, 2001. As on March 31,
2002 equity capital includes Rs. 392.67 crore to be allotted to the equity shareholders of erstwhile ICICI Limited, consequent to its
merger with the Bank, effective March 30, 2002.Subsequently these shares have been issued on June 11,2002.
8 62,750 equity shares of Rs. 10/- each, represents application money received on exercise of employee stock option as on December
31, 2004.
9 Reserves and surplus at March 31, 2002 include Rs. 4,300.82 crore on amalgamation with erstwhile ICICI Limited, erstwhile ICICI
Personal Financial Services Limited and erstwhile ICICI Capital Services Limited.
10 Share issue expense amounting to Rs. 52.89 crore, written-off from the share premium amount as per the object of the issue.
For other notes to accounts please refer to Auditors’ Report under Part II of the Prospectus.
FIXED & FLOATING RATE ASSETS AND LIABILITIES
(Rs. in Crore)
As at March 31, 2004
LIABILITIES Floating Fixed Total
Deposits
Rupee Deposits 0.00 65,805.20 65,805.20
Foreign Currency 0.00 2,303.38 2,303.38
Borrowings
Rupee Borrowings 0.45 22,001.78 22,002.23
Foreign Currency Borrowings 4,798.06 3,939.96 8,738.01
Subordinated Debt
Rupee Borrowings 0.00 9,105.86 9,105.86
Foreign Currency Borrowings 0.00 0.00 0.00
TOTAL 4,798.50 103,156.18 107,954.69
ASSETS
Loans and Advances
Rupee 24,772.57 34,643.64 59,416.21
Foreign Currency 3,989.48 2,556.54 6,546.02
Less : NPA Provision (3,866.71) (3,866.71)
TOTAL ADVANCES 28,762.05 33,333.47 62,095.52
90
March 2005
Average Interest Earning Assets and Average Interest Bearing Liabilities

(Rs. in Crore)
Year ended March 31,
2000 2001 2002 2003 2004
(a) Average interest earning assets (1) 7,547.76 11,388.22 22,239.21 90,516.50 97,969.21
(b) Average Interest bearing liabilities 7,410.20 10,430.19 20,737.25 89,161.82 98,965.62
(c) Ratio of interest earning assets to
interest bearing liabilities 1.02 1.09 1.07 1.02 0.99
(d) Total interest expense (2) and (3) 666.94 837.67 1,558.92 7,944.00 7,015.25
(e) Interest expense apportioned to
Interest earning assets (4) 679.32 914.61 1671.83 8064.70 6944.62
(1) Interest-earning assets consist of loans & advances (including non-performing loans and advances), investments (excluding dividend
earning assets), call money lent, term deposits with banks in India, RBI balance and deposit placed with SIDBI & NABARD.
(2) Averages data has been computed on a daily average basis, except for the year ended March 31, 2003 where averages of portfolios
of ICICI, ICICI Capital Services Limited and ICICI Personal Financial Services Limited have been computed on a monthly basis.
(3) Total interest expense does not include interest tax.
(4) Interest expense apportioned to interest earning assets is calculated notionally by multiplying total interest expense by the ratio of
average interest earning assets to average interest bearing liabilities, and therefore the apportioned interest is higher than the actual
interest expense.
(Rs. in Crore)
During year ended March 31, 2004 Amount Interest Cost
Average Foreign Currency interest bearing liabilities 9,021.89 262.55 2.91%
Average Rupee interest bearing liabilities 89,943.72 6,752.70 7.51%
FINANCIAL RATIOS
(Rs. in crore except percentage data)
2000 2001 2002 2003 2004
Financial Ratios (1)
Average Interest Earning Assets (2) 7,547.76 11,388.22 22,239.21 90,516.50 97,969.21
Interest Income (3) 852.87 1,242.13 2,151.93 9,368.06 8,894.04
Average Interest Bearing Liabilities 7,410.20 10,430.19 20,737.25 89,161.82 98,965.62
Total interest expense (4) 666.94 837.67 1,558.92 7,944.00 7,015.25
Average Share Capital & Reserves 401.51 1,258.66 1,454.92 6,589.14 7,471.94
Average total Assets 8,037.54 12,068.97 23,392.67 105,027.56 113,835.59
Net Profit 105.30 161.10 258.30 1,206.18 1,637.10
Net Interest Income 185.93 404.46 593.01 1,424.06 1,878.79
Net Interest Margin (%) (5) 2.46% 3.55% 2.67% 1.57% 1.92%
Gross Yield (%) (6) 11.30% 10.91% 9.68% 10.35% 9.08%
Average Cost of Loan Funds (%) (7) 9.00% 8.03% 7.52% 8.91% 7.09%
Yield Spread (%) (8) 2.30% 2.88% 2.16% 1.44% 1.99%
Return on Average Assets (%) (9) 1.31% 1.33% 1.10% 1.15% 1.44%
Average Share Capital & Reserves to Average
Total Assets (%) (10) 5.00% 10.43% 6.22% 6.27% 6.56%
Notes :
1. Average data has been computed on a daily average basis, except for the year ended March 31, 2004, where averages of portfolios
of ICICI, ICICI Capital Services Limited and ICICI Personal Financial Services Limited have been computed on a monthly basis.
Average Share Capital & Reserves for the year March 2004 is average of opening and closing balances.
2. Interest-earning assets consist of loans & advances, Investments, call money lent, term deposits with banks in India, RBI balance and
deposit placed with SIDBI & NABARD
3. Interest income consists of income from the interest-earning assets, as defined above. Interest income is presented without deducting
interest tax.
4. Total interest expense does not include interest tax.
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March 2005
5. Net interest margin represents net interest income divided by The liabilities recorded on amalgamation of ICICI, ICICI PFS
average interest earning assets. and ICICI Capital included aggregate carried forward deferred
6. Gross yield equals interest income divided by average interest tax liabilities of those companies amounting to Rs. 277.82 crore.
earning assets. 2 Arising from the merger of ICICI with the Bank, the Bank reviewed
the estimated useful life of certain categories of fixed assets to
7. Average cost of loan funds is the total interest expense (including
align the depreciation rates followed by ICICI and the Bank.
interest tax) divided by average interest-bearing liabilities. Accordingly, the Bank has changed its rates of depreciation on
8. Yield spread represents the difference between gross yield and the following categories of its fixed assets with effect from April
average cost of loan funds. 1, 2001 :-
9. Return on average assets represents profit after tax for the year Premises from 5 % to 1.63 %
divided by average total assets. Furniture and Fixtures from 20 % to 15 %
10. Average share capital and reserves do not include preference Motor Car from 25 % to 20 %
capital.
3 With effect from March 31, 2002, investments are valued in
11. Average daily balances of earlier years have not been regrouped accordance with the extant RBI guidelines on investment
or reclassed classification and valuation as under :
CAPITAL ADEQUACY a All investments are classified under three categories, viz.,
‘Held to Maturity‘, ’Available for sale’ and ‘Trading‘. Under
We are subject to the capital adequacy requirements of RBI, which each category the investments are further classified under
requires a minimum total capital adequacy ratio of 9 per cent, of (a) Government Securities (b) Other approved securities
which at least 4.5 per cent must be Tier I capital. Tier I capital (c) Shares (d) Bonds and Debentures (e) Subsidiaries and
comprises paid-up capital and free reserves. Our Management seeks Joint Ventures and (f) Others.
to maintain capital adequacy comfortably above the minimum b ‘Held to Maturity’ securities are carried at acquisition cost
requirement of RBI. or at amortised cost if acquired at a premium over the face
The table below gives our capital adequacy ratio for the periods value. A provision is made for diminution other than
indicated: temporary.
In percentage as at March 31 As on c ‘Available for sale’ and ‘Trading’ securities are valued
periodically as per Reserve Bank of India guidelines.
2000 2001 2002 2003 2004 Dec. 31 The market value of SLR securities for the purpose of
2004 periodical valuation of investments included in the
Total capital Available for Sale and Trading categories is as per the
rates put out by Fixed Income Money Market and
adequacy 19.64 11.57 11.44 11.1 10.36 13.50
Derivatives Association (“FIMMDA”).
-Of which The valuation of non-SLR securities other than quoted on
Tier I 17.42 10.42 7.47 7.05 6.09 8.62 the stock exchanges, wherever linked to the YTM rates, is
ICICI had outstanding preference share capital of Rs. 350 crore, with a mark-up (reflecting associated credit risk) over the
YTM rates for government securities put out by FIMMDA.
representing 350, 0.001% preference shares of Rs. 1,00,00,000 each
issued under the scheme of amalgamation of erstwhile ITC Classic d Depreciation/Appreciation for each basket within
Finance with ICICI Limited. These preference shares are redeemable ‘Available for Sale’ and ‘Trading’ category is aggregated.
in the year 2018. RBI vide letter dated April 21, 1999, permitted ICICI Net appreciation in each basket if any, being unrealised, is
Limited to include the “grant element” of such preference shares in ignored, while net depreciation is provided for.
Tier I capital subject to the creation of a corpus to be invested in e Costs such as brokerage, commission etc., pertaining to
Government of India securities of equivalent maturity. ICICI had created investments, paid at the time of acquisition, are charged to
a corpus of Rs. 46.51 crore on May 3, 1999 and invested the amount revenue.
in Government of India securities. Consequent to the merger of ICICI f Broken period interest on debt instruments is treated as a
with us, these preference shares have now been transferred to us, as revenue item.
permitted by the Government notification exempting us from the
g Profit on sale of investment in the ‘Held to Maturity’ category
provisions of Section 12(1)(ii) of the Banking Regulation Act, 1949
is credited to the revenue account and thereafter is
for a specified period. Accordingly, the grant element of this appropriated to Capital Reserve.
preference share capital has now been included in our Tier-I capital.
At March 31, 2002, Tier I capital includes “grant element” of Rs. 4 Effective April 1,2002, the Bank has changed the methodology
234.26 crore out of the face value of Rs. 350.00 crore of these non- for ascertaining the carrying cost of fixed income bearing
cumulative preference shares. Grant element” means the face vale securities from Weighted Average method to First-In-First-Out
Method.
of the preference shares less the corpus of government securities
earmarked against the same. 5 The Bank depreciated Automated Teller Machines (ATMs) over
its useful life estimated as 6 years or over lease period for ATMs
CHANGES IN THE ACCOUNTING POLICIES taken on lease. Effective April 1, 2002, the Bank revised the
There has been no change in the accounting policy in the last three useful life of the ATMs to 8 years based on an evaluation done
years except the following by management.
6 During the year ended March 31, 2003, the Bank has changed
1 Consequent upon Accounting Standard 22 on Accounting for
its method of accounting repurchase transactions and reverse
Taxes on Income becoming mandatorily effective from tax
repurchase transactions.
asset of Rs. 32.73 crores upto March 31, 2001 by credit to
“General Reserve” in accordance with the transitional provisions These transactions have been accounted for as a sale and
of the Standard. Further, a deferred tax asset of Rs. 90.33 crore forward purchase, or purchase and a forward sale transactions
for timing differences arising during the year has been recognised in the current year as against a borrowing or lending transaction
by credit to the Profit and Loss account for the year. in the previous year.
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March 2005
7 Effective April 01,2004 the Bank have accounted for unrealised facilities and other administrative costs to subsidiaries and joint
gains on rupee derivatives (net of provisions) as compared to ventures.
it earlier policy of ignoring the unrealised gains. As a result
profit after tax for the current period is higher by Rs. 40.36 Sale of housing loan portfolio
crores. During the period ended December 31, 2004, we sold housing loan
8 Effective April 1, 2004 the commissions paid to direct marketing portfolio to our subsidiaries amounting to Rs. 305.97 crore (March
agents (DMAs) of auto loans, net of subvention income received 31, 2004: Rs. 1,831.72 crore, December 31, 2003: Rs. 646.24 crore).
from them, is recorded upfront in the profit and loss account.
Secondment of employees
For disbursements made till March 31, 2004, the gross
commissions paid to direct marketing agents (DMAs) of auto During the period ended December 31, 2004, we received Rs. 0.76
loans were recorded upfront in the profit and loss account and crore (March 31, 2004: Rs. 1.42 crore, December 31, 2003: Rs. 1.17
subvention income received from them is being amortised crore) from subsidiaries and joint ventures for secondment of
over the life of the loan. The impact of the change is not significant employees.
Other Disclosures Sale of investments
Other than elsewhere mentioned in the Prospectus: During the period ended December 31, 2004, we sold certain
1. There have been no unusual or infrequent events or transactions investments to our subsidiaries, joint ventures and associates
materially affecting our operations. amounting to Rs. 1,039.19 crore (March 31, 2004: Rs. 323.41 crore,
2. There are no significant economic changes that materially affect December 31, 2003: Rs. 987.32 crore). On the sales made to the
or are likely to affect the income from continuing operations. associates, we accounted for a gain/(loss) of Rs. 9.14 crore (March
3. There are no known trends or uncertainties that have or had or 31, 2004: Rs. 19.92 crore, December 31, 2003: Rs. 15.28 crore).
are expected to have a material adverse impact on revenue or
Reimbursement of expenses
income from continuing operations.
4. There are no known factors which will affect the future During the period ended December 31, 2004, we reimbursed
relationship between the costs and revenues which will have a expenses to our subsidiaries amounting to Rs. 167.19 crore (March
material impact on our operations and finances. 31, 2004: Rs. 207.57 crore, December 31, 2003: Rs. 143.51 crore)
5. Increase in our revenue is on account of increased income Brokerage paid
from both interest and fee income. For details refer “Operational During the period ended December 31, 2004, we paid brokerage to
and Financial Performance” in the Prospectus.
our subsidiaries amounting to Rs. 0.47 crore (March 31, 2004: Rs.
6. Total turnover of each major industry segment in which we 0.57 crore, December 31, 2003: Rs. 0.30 crore)
operate is given under the heading “Operational and Financial
Performance”. Custodial charges received
7. Our business is not seasonal. During the period ended December 31, 2004, we received custodial
8. No material part of our income is dependent upon a single or charges from its subsidiaries, joint ventures and associates
few major customers. No foreign customer constitutes a amounting to Rs. 0.82 crore (March 31, 2004: Rs. 0.47 crore,
significant portion of our business. December 31, 2003: Rs. 0.67 crore)
9. We expect competition from commercial banks in our product
markets. Interest paid
RELATED PARTY TRANSACTIONS During the period ended December 31, 2004, we paid interest to
our subsidiaries and joint ventures amounting to Rs. 10.97 crore
We have transactions with our related parties comprising of (March 31, 2004: Rs. 6.79 crore, December 31, 2003: Rs. 6.15 crore)
subsidiaries (including joint ventures), associates (including joint and to our associates amounting to Rs. 0.11 crore (March 31, 2004:
ventures) and key management personnel. The following represent Rs. 0.95 crore, December 31, 2003: Rs. 1.46 crore).
the significant transactions between us and such related parties:
Interest received
Insurance services
During the period ended December 31, 2004, we received interest
During the period ended December 31, 2004, we paid insurance from our subsidiaries and joint ventures amounting to Rs. 20.22
premium to insurance joint ventures amounting to Rs. 13.55 crore crore (March 31, 2004: Rs. 32.72 crore, December 31, 2003: Rs.
(March 31, 2004: Rs. 15.72 crore, December 31, 2003: Rs. 7.18 27.37 crore) and from our key management personnel@ Rs. 0.02
crore). During the period ended December 31, 2004 we received crore (March 31, 2004: Rs. 0.04 crore, December 31, 2003: Rs. 0.03
payments under claims made from insurance subsidiaries amounting crore).
to Rs. 0.77 crore (March 31, 2004: Rs. 8.56 crore, December 31,
2003: Rs. 0.03 crore). Dividend received
Fees During the period ended December 31, 2004, we received dividend
from our subsidiaries and joint ventures amounting to Rs. 37.17
During the period ended December 31, 2004, we received fees crore (March 31, 2004: Rs. 128.97 crore, December 31, 2003: Rs.
from our insurance joint ventures amounting to Rs. 24.33 crore (March 84.06 crore) and from our associates amounting to Rs. 122.18 crore
31, 2004: Rs. 6.53 crore, December 31, 2003: Rs. 2.29 crore). (March 31, 2004: Rs. Nil, December 31, 2003: Rs. Nil).
Lease of premises and facilities Remuneration to whole-time directors
During the period ended December 31, 2004, we charged an Remuneration paid to our whole-time directors during the period
aggregate amount of Rs. 39.90 crore (March 31, 2004: Rs. 36.19 ended December 31, 2004 was Rs. 5.00 crore (March 31, 2004:Rs.
crore, December 31, 2003: Rs. 25.23 crore) for lease of premises, 5.85 crore, December 31, 2003: Rs. 4.56 crore)
93
March 2005
Related party balances

The following balances payable to/receivable from subsidiaries/ joint ventures/ associates/ key management personnel are included in the
balance sheet as on December 31, 2004:
Rupees in crore
Items Subsidiaries / Associates Key Total
Joint ventures management
personnel @
Deposits with ICICI Bank 470.47 0.30 3.41 474.18
Deposits of ICICI Bank* 674.83 .. .. 674.83
Advances 30.91 .. 1.07 31.98
Investments of ICICI Bank 1,754.71** 1,361.90 .. 3,116.61
Investments of related parties in ICICI Bank 1.66 .. 0.23 1.89
Receivables 22.13 0.40 .. 22.53
Payables 103.18 0.06 .. 103.24
@
whole-time directors and relatives
*includes call money lent
** includes an amount of Rs. 217.30 crore towards investment in preference shares of ICICI Bank UK Limited during current financial year
balance sheet as on March 31, 2004:
Rupees in crore
personnel @
Advances 242.60 .. 1.02 243.62
Investments of ICICI Bank 1,430.36 1,594.25 .. 3,024.61
Receivables 31.51 80.80 .. 112.31
Payables 73.94 0.05 .. 73.99
@
Rupees in crore
personnel @
Advances 90.32 .. 1.46 91.78
Investments of ICICI Bank 1,393.36 640.89 .. 2,034.25
Receivables 32.00 0.17 .. 32.17
Payables 2.01 .. .. 2.01
@
94
March 2005
Subsidiaries and joint ventures of Judicature at Bombay on April 11, 2002 and by RBI on April 26,
2002.
ICICI Venture Funds Management Company Limited, ICICI Securities
Limited, ICICI Brokerage Services Limited, ICICI International Limited, Consequent to the amalgamation, the businesses formerly conducted
ICICI Trusteeship Services Limited, ICICI Home Finance Company by ICICI became subject for the first time to various regulations
Limited, ICICI Investment Management Company Limited, ICICI applicable to banks. These include the prudential reserve and liquidity
Securities Holdings Inc., ICICI Securities Inc., ICICI Bank UK Limited, requirements, namely the statutory liquidity ratio under Section 24
ICICI Bank Canada, ICICI Prudential Life Insurance Company Limited, of the Indian Banking Regulation Act, 1949 and the cash reserve ratio
ICICI Distribution Finance Private Limited, ICICI Lombard General under Section 42 of the Reserve Bank of India Act, 1934. The statutory
Insurance Company Limited, Prudential ICICI Asset Management liquidity ratio is required to be maintained in the form of Government
Company Limited and Prudential ICICI Trust Limited. of India securities and other approved securities, currently a minimum
of 25.0% of our net demand and time liabilities. The cash reserve
Associates ratio is required to be maintained in the form of cash balances with
ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund, ICICI RBI, which has increased the cash reserve ratio from 4.50% to 4.75%
Emerging Sectors Fund, ICICI Strategic Investments Fund, ICICI of our net demand and time liabilities, excluding inter-bank deposits,
Property Trust and TCW/ICICI Investment Partners L.L.C. effective September 18, 2004 and to 5.00% effective October 2,
2004. In addition to the above, the directed lending norms of RBI
Affiliate require commercial banks to lend 40.0% of their net bank credit to
We have been named as promoter pursuant to request by 3i Infotech, specific sectors (known as priority sectors), such as agriculture, small-
in its Red Herring Prospectus filed with SEBI on March 9, 2005. scale industry, small businesses and housing finance. Prior to the
amalgamation, the advances of ICICI were not subject to the
Capitalisation Statement requirement applicable to banks in respect of priority sector lending.
(Rs. in crore) Pursuant to the terms of RBI’s approval of the amalgamation, we are
required to maintain a total of 50.0% of our net bank credit on the
Pre-Issue Adjusted for residual portion of our advances (i.e., the portion of our total
December the present advances excluding advances of ICICI at year-end fiscal 2002) in the
2004 Issue form of priority sector advances. This additional requirement of
Borrowings (1) 10.0% by way of priority sector advances will apply until such time
Short-Term Debt (2) 16,257.28 16,257.28 as the aggregate priority sector advances reach a level of 40.0% of
our net bank credit. We seek to adopt proactive strategies to meet
Long Term Debt (3) 24,864.38 25,214.38
the priority sector lending requirement stipulated by RBI while
Total Debts (A) 41,121.66 41,471.66 adequately mitigating credit risk, by focusing on housing finance,
Shareholders’ Funds : which partly qualifies as priority sector lending and structured
financing mechanisms for emerging corporates and the agricultural
Share Capital (4) 1,085.89 1,085.89
sector. Compliance with the SLR and CRR norms on ICICI’s liabilities
Reserves 11,899.26 11,899.26 has had an adverse impact on our profitability in fiscal 2003 and
Less : Unamortised Deferred fiscal 2004 and the nine-month period ended December 31, 2004
Revenue expenditure (5) 136.60 136.60 and is likely to have an adverse impact on our profitability in fiscal
Total Shareholders’ 2005.
Funds (B) 12,848.55 12,848.55 The following discussion is based on our audited financial statements,
Total Capitalisation which have been prepared in accordance with guidelines issued by
(A) + (B) 53,970.21 54,320.21 RBI and the generally accepted accounting policies within the banking
industry in India. The following discussion and analysis of the
Long-term Debt / Equity Ratio 1.94 1.96 financial condition and results of operations should be read together
Notes :- with the audited financial statements.
1. Borrowings do not include deposits. Nine-month period ended December 31, 2004 compared with nine-
2. Short-term debt is debt maturing within the next one year from month period ended December 31, 2003
the date of above statement [includes bonds in the nature of Our profit after tax for the nine-month period ended December 31,
subordinated debt (excluded from Tier-II capital) of Rs. 2,193.24 2004 was Rs. 1,390.50 crore, reflecting a growth of 17.7% over Rs.
crore] . 1,181.70 crore for the nine-month period ended December 31, 2003.
3. Includes Rs. 5,983.12 crore of unsecured redeemable debentures
Net interest income
and bonds in the nature of subordinated debt eligible for
inclusion in Tier-II capital. Net interest income increased 42.3% to Rs. 2,048.91 crore for the
4. Includes preference share capital of Rs. 350 crore. nine-month period ended December 31, 2004 from Rs. 1,440.12
crore for the nine-month period ended December 31, 2003, reflecting
5 Unamortised expenses on account of the early retirement option mainly the following:
scheme offered to the employees
● an increase of Rs. 15,023.36 crore or 15.8% in the average
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF volume of interest-earning assets; and
OPERATIONS AND FINANCIAL CONDITION ● an increase in the spread to 2.4% in the nine-month period
Merger of ICICI with us ended December 31, 2004 from 2.0% in the nine-month period
ended December 31, 2003.
The Scheme of Amalgamation of ICICI, ICICI PFS and ICICI Capital
Our spread is lower than that of other Indian banks due to the high-
with us became effective on May 3, 2002, with the Appointed Date
cost liabilities of ICICI and the maintenance of Statutory Liquidity
being March 30, 2002. The Scheme was approved by the High
Ratio (SLR) and Cash Reserve Ratio (CRR) on these liabilities, which
Court of Gujarat at Ahmedabad on March 7, 2002, by the High Court
were not subject to these ratios prior to the merger. While our cost of
deposits (4.4% for the nine-month period ended December 31, 2004)
95
March 2005
is comparable to the cost of deposits of other banks in India, our December 31, 2003 was Rs. 320.51 crore and the related lease
total cost of funding (5.7% for the nine-month period ended depreciation was Rs. 210.65 crore.
December 31, 2004) is higher compared to other banks as a result of
these high-cost liabilities. Further, we have to maintain SLR and CRR Others
on these liabilities, resulting in a negative impact on the spread. Other non-interest income in the nine-month period ended December
The total interest income (including dividend income) increased to 31, 2004 includes dividend income received from subsidiaries of
Rs. 6,804.66 crore in the nine-month period ended December 31, Rs. 153.80 crore as compared to Rs. 81.26 crore for the nine-month
2004 compared to Rs. 6,725.32 crore in the nine-month period ended period ended December 31, 2003.
December 31, 2003, primarily due to increase of 15.8% in the average Operating expense
interest-earning assets to Rs. 110,272.77 crore from Rs. 95,249.41
crore, partially offset by decline in yield by 1.2%. Yield on average Operating expense (excluding DMA expense and lease depreciation)
interest-earning assets decreased to 8.1% for the nine-month period for the nine-month period ended December 31, 2004 was Rs. 1,795.28
ended December 31, 2004 compared to 9.3% for the nine-month crore compared to Rs. 1,469.67 crore for the nine-month period
period ended December 31, 2003 primarily due to lower yields on ended December 31, 2003. The increase in operating expense was
government securities portfolio and the impact of the declining primarily due to 36.7% increase in employee expenses and a 16.9%
interest rate environment during fiscal 2004. increase in other administrative expenses. This increase was mainly
due to the growth in retail operations.
Effective the nine-month period ended December 31, 2004, premium
amortisation on SLR securities has been regrouped from interest We had implemented an Early Retirement Option Scheme (ERO) for
income to provisions and contingencies. Comparative figures for our employees in July 2003. In accordance with the accounting
the nine-month period ended December 31, 2003 have been treatment approved by RBI, the ex-gratia payments under ERO,
regrouped/rearranged. termination benefits and leave encashment in excess of the provisions
made (net of tax benefits), aggregating to Rs. 191.00 crore are being
Total interest expense decreased 10.0% to Rs. 4,755.75 crore in the
amortised over a period of five years commencing August 1, 2003
nine-month period ended December 31, 2004 from Rs. 5,285.20
(the date of retirement of employees exercising the option being
crore in the nine-month period ended December 31, 2003, primarily
July 31, 2003). An amount of Rs. 28.80 crore has been charged to
due to decline in the total cost of funds to 5.7% in the nine-month
revenue on account of ERO scheme being the proportionate amount
period ended December 31, 2004 as compared 7.3% in the nine-
amortised for the nine-month period ended December 31, 2004.
month period ended December 31, 2003 partially offset by a 13.6%
increase in average interest-bearing liabilities to Rs. 109,699.41 crore DMA expense
for the nine-month period ended December 31, 2004 from Rs.
96,538.69 crore for the nine-month period ended December 31, We incurred DMA expenses of Rs. 334.71 crore on the retail asset
portfolio (other than auto loans). These commissions are expensed
2003. The decrease in cost of funds was primarily due to reduction
upfront and not amortized.
in the cost of deposits to 4.4% for the nine-month period ended
December 31, 2004 from 5.6% for the nine-month period ended Provisions and write-offs
December 31, 2003 and repayments of high-cost borrowings of
ICICI during this period. Total provisions decreased by 34.1% to Rs. 348.77 crore in the nine-
month period ended December 31, 2004 from Rs. 529.31 crore in
As a result of the 1.6% decline in the cost of funds, offset partially by the nine-month period ended December 31, 2003.
a 1.2% decline in yield, our net interest margin increased to 2.4% in
the nine-month ended December 31, 2004 from 1.9% in the nine- All non-performing retail loans (other than home loans) are fully
month ended December 31, 2003. written-off or provided for over a period of 180 days. Non-performing
home loans are fully written-off or provided for over a period of two
Non-interest income years. In respect of corporate assets, till fiscal 2004 we had adopted
a provisioning policy whereby provisions aggregating 50.0% of
Non-interest income increased to Rs. 2,383.84 crore in the nine-
the secured portion of corporate non-performing assets were made
month period ended December 31, 2004 as compared to Rs. 2,319.05
crore in the nine-month period ended December 31, 2003. The over a three-year period instead of a five-and-a-half year period
components of non-interest income are discussed below: prescribed by RBI. Effective the nine-month period ended December
31, 2004, we provide for corporate non-performing assets in line
Fee income with the revised RBI guidelines applicable from March 31, 2005
requiring 100% provision over a five-year period. Loss assets and
Fee and commission income (including income from foreign
the unsecured portion of doubtful assets are fully provided for or
exchange transactions) increased to Rs. 1,512.51 crore in the nine-
written off. Additional provisions are made against specific non-
month period ended December 31, 2004 as compared to Rs. 800.62
performing assets if considered necessary by the management. Non-
crore in the nine-month period ended December 31, 2003.
performing assets acquired from ICICI in the merger were fair valued
Treasury income and additional provisions were recorded to reflect the fair valuation.
We do not distinguish between provisions and write-offs while
The total income from treasury-related activities decreased to Rs.
assessing the adequacy of our loan loss coverage, as both provisions
414.81 crore in the nine-month period ended December 31, 2004
and write-offs represent a reduction of the principal amount of a
from Rs. 1103.33 crore in the nine-month period ended December
non-performing asset. In compliance with regulations governing
31, 2003, due to adverse market conditions. Capital gains on shares
the presentation of financial information by banks, we report non-
was Rs. 239.98 crore for the nine-month period ended December
performing assets net of cumulative write-offs in its financial
31, 2004.
statements. For restructured assets, provisions are made in
Lease income accordance with guidelines issued by RBI.
Our total leased assets were Rs. 1,500.05 crore at December 31, Effective the nine-month period ended December 31, 2004, premium
2004 compared to Rs. 1,670.33 crore at December 31, 2003. Gross amortisation on SLR securities has been regrouped from interest
lease income for the nine-month period ended December 31, 2004 income to provisions and contingencies. Comparative figures for
was Rs. 305.90 crore and the related lease depreciation was Rs. the nine-month period ended December 31, 2003 have been
223.93 crore. Gross lease income for the nine-month period ended regrouped/rearranged.
96
March 2005
Income tax expense ICICI Bank Shares Trust. During fiscal 2003, the Trust’s shareholding
in us was divested at an average price of approximately Rs. 130 per
Provision for tax (including wealth tax) was Rs. 339.56 crore for
share (the average acquisition cost of erstwhile ICICI Limited being
nine-month period ended December 31, 2004 compared to Rs.
approximately Rs. 12.27 per share), resulting in capital gains of Rs.
167.54 crore for the nine-month period ended December 31, 2003.
1,191.05 crore for the Bank. During fiscal 2003, we made accelerated
The lower tax provision in the nine-month period ended December
/ additional provisions and write-offs against loans and investments,
31, 2003 was due to deferred tax asset created on account of
primarily relating to ICICI’s portfolio. Our operating profit (profit
provisions. Deferred tax asset has been accounted for in accordance
before provisions and tax) increased 71.9% to Rs. 2,372.48 crore in
with the provisions of Accounting Standard 22 issued by the Institute
fiscal 2004 as compared to Rs. 1,380.14 crore (excluding capital
of Chartered Accountants of India, which requires recognition of
gain of Rs. 1,191.05 crore on sale of our shares) in fiscal 2003. During
deferred tax assets and liabilities for the expected future tax
fiscal 2004, we made total provisions and write-offs of Rs. 470.26
consequences of the events that have been included in the financial
crore as compared to Rs. 1,790.81 crore (including accelerated/
statements or tax returns.
additional provisions) in fiscal 2003. Provision for tax (including
Financial condition wealth tax) was Rs. 265.11 crore for fiscal 2004 as compared to a net
credit of Rs. 425.79 crore (mainly on account of deferred tax asset
Our total assets increased 25.1% to Rs. 146,214.18 crore at December
created against provisions) for fiscal 2003. Profit after tax for fiscal
31, 2004 from Rs. 116,857.21 crore at December 31, 2003. Net
2004 was Rs. 1,637.11 crore reflecting a growth of 35.7% over Rs.
advances increased to Rs. 76,092.46 crore at December 31, 2004
1,206.18 crore for fiscal 2003.
from Rs. 57,812.11 crore at December 31, 2003. Retail assets
increased to Rs. 46,194.12 crore at December 31, 2004 constituting Net interest income
about 31.6% of total assets as compared to about 24.2% of total
Net interest income increased 31.9% to Rs. 1,878.79 crore for fiscal
assets at December 31, 2003. Cash, balances with Reserve Bank of
2004 from Rs. 1,424.06 crore for fiscal 2003, reflecting mainly the
India and banks and money at call and short notice at December 31,
following:
2004 were Rs. 12,570.58 crore compared to Rs. 8,454.21 crore at
December 31, 2003. Total investments at December 31, 2004 z an increase of Rs. 7,452.71 crore or 8.2% in the average volume
increased 13.7% to Rs. 43,268.57 crore from Rs. 38,052.58 crore at of interest-earning assets; and
December 31, 2003. Investments in government and other approved z an increase in the spread to 1.9% in fiscal 2004 from 1.3% in
securities were Rs. 30,228.31 crore at December 31, 2004 compared fiscal 2003.
to Rs. 27,088.06 crore at December 31, 2003. Other assets increased
ICICI Bank’s spread is lower than that of other Indian banks due to the
to Rs. 10,420.82 crore at December 31, 2004 from Rs. 8,514.23 crore high-cost liabilities of ICICI and the maintenance of Statutory Liquidity
at December 31, 2003. Ratio (SLR) and Cash Reserve Ratio (CRR) on these liabilities, which
The net worth at December 31, 2004 increased to Rs. 12,848.55 were not subject to these ratios prior to the merger. While ICICI
crore (net of unamortised ERO expenses of Rs. 136.60 crore) from Bank’s cost of deposits (5.4% in fiscal 2004) is comparable to the
Rs. 8,325.10 crore (net of unamortised ERO expenses of Rs. 174.92 cost of deposits of other banks in India, ICICI Bank’s total cost of
crore) at December 31, 2003. Total deposits increased 34.6% to Rs. funding (7.1% in fiscal 2004) is higher compared to other banks as a
81,928.28 crore at December 31, 2004 from Rs. 60,871.84 crore at result of these high-cost liabilities. Further, ICICI Bank has to maintain
December 31, 2003. ICICI Bank’s savings account deposits increased SLR and CRR on these liabilities, resulting in a negative impact on
to Rs. 10,714.79 crore at December 31, 2004 from Rs. 6,764.75 crore the spread.
at December 31, 2003, while current account deposits increased to The total interest income (including dividend income) decreased
Rs. 9,193.48 crore at December 31, 2004 from Rs. 6,158.70 crore at 5.1% to Rs. 8,894.04 crore in fiscal 2004 compared to Rs. 9,368.06
December 31, 2003. Term deposits increased to Rs. 62,020.01 crore crore in fiscal 2003, primarily due to decline in yield by 1.2%, partially
at December 31, 2004 from Rs. 47,948.39 crore at December 31, offset by an increase of 8.2% in the average interest earning assets to
2003. Of the term deposits, value added savings/ current account Rs. 97,969.21 crore from Rs. 90,516.50 crore. Yield on average
deposits were about Rs. 10,954.39 crore at December 31, 2004 interest-earning assets decreased to 9.0% for fiscal 2004 compared
compared to about Rs. 9,899.55 crore at December 31, 2003. Total to 10.2% for fiscal 2003 primarily due to fall in the yield on
deposits at December 31, 2004 constituted 66.6% of ICICI Bank’s government securities investments and declining interest rate
funding (i.e. deposit, borrowings and subordinated debts). environment. Till fiscal 2004, we reduced the amortization of premium
Borrowings (including subordinated debt) increased to Rs. 41,121.66 on government securities in the “Held-to-Maturity” category from
crore at December 31, 2004 from Rs. 40,446.22 crore at December the interest income.
31, 2003. Total interest expense decreased 11.7% to Rs. 7,015.25 crore in
Our total capital adequacy ratio at December 31, 2004 at 13.50% fiscal 2004 from Rs. 7,944.00 crore in fiscal 2003, primarily due to
(including Tier I capital adequacy of 8.62%) was higher than the decline in the total cost of funds to 7.1% in fiscal 2004 as compared
minimum requirement of 9% as per regulatory norms. Deferred tax to 8.9% in fiscal 2003 partially offset by a 11.0% increase in average
asset of Rs. 319.82 crore has been deducted from Tier-1 capital in interest-bearing liabilities to Rs. 98,965.62 crore for fiscal 2004 from
compliance with RBI guidelines. In accordance with RBI guidelines, Rs. 89,161.82 crore for fiscal 2003. The decrease in cost of funds was
Tier-1 capital includes Rs. 160 crore out of the face value of Rs. primarily due to reduction in the cost of deposits to 5.4% for fiscal
350.00 crore of 20-year non-cumulative preference shares issued to 2004 from 6.8% for fiscal 2003 and repayments of higher-cost
ITC Limited as a part of the scheme for merger of ITC Classic Finance borrowings of ICICI during this period.
Limited with ICICI. On April 21, 2004 we issued 108,928,571 equity As a result of 1.8% decline in the cost of funds, offset partially by a
shares of Rs. 10 each at a premium of Rs. 270 per share aggregating 1.2% decline in yield, our net interest margin increased to 1.8% in
to Rs. 3,050.00 crore. We also allocated 6,992,187 equity shares of fiscal 2004 from 1.4% in fiscal 2003. Net interest margin is, however,
Rs. 10 each at a price of Rs. 280 per equity share (fully paid up) by expected to continue to be lower than other banks in India until the
exercising green shoe option. borrowings of ICICI are repaid.
Fiscal 2004 compared to Fiscal 2003 Non-interest income
In accordance with the Scheme of Amalgamation of ICICI with us, Non-interest income increased to Rs. 3,064.92 crore in fiscal 2004 as
10.14 crore of our shares held by ICICI had been transferred to the compared to Rs. 1,967.77 crore (excluding capital gain of Rs. 1,191.05
97
March 2005
crore on sale of our shares) in fiscal 2003. The components of non- 50.0% of the secured portion of corporate non-performing assets
interest income are discussed below: were made over a three-year period instead of a five-and-a-half
year period prescribed by RBI. Effective half year ended September
Fee income 30, 2004, the Bank provides for corporate non-performing assets in
Fee and commission income (including income from foreign line with the revised RBI guidelines applicable from March 31, 2005
exchange transactions) increased 38.7% to Rs. 1,174.79 crore in requiring 100% provision over a five-year period. Loss assets and
fiscal 2004 as compared to Rs. 847.18 crore in fiscal 2003. the unsecured portion of doubtful assets are fully provided for or
written off. Additional provisions are made against specific non-
Treasury income performing assets if considered necessary by the management. Non-
The total income from treasury-related activities increased to performing assets acquired from ICICI in the merger were fair valued
Rs. 1,314.26 crore in fiscal 2004 from Rs. 447.29 crore in fiscal 2003, and additional provisions were recorded to reflect the fair valuation.
due to the increase in trading profits on government securities and The Bank does not distinguish between provisions and write-offs
corporate debt securities as a result of the declining interest rate while assessing the adequacy of the Bank’s loan loss coverage, as
environment and capital gains realized on the sale of investments both provisions and write-offs represent a reduction of the principal
relating to our project finance portfolio. Capital gains on shares was amount of a non-performing asset. In compliance with regulations
Rs. 397.48 crore for fiscal 2004. governing the presentation of financial information by banks, the
Bank reports non-performing assets net of cumulative write-offs in
Lease income its financial statements.
Our total leased assets were Rs. 1,663.19 crore at March 31, 2004 The Bank has adopted a conservative general provisioning policy
compared to Rs. 1,770.15 crore at March 31, 2003. Gross lease for its standard asset portfolio. While RBI’s guidelines require only a
income for fiscal 2004 was Rs. 422.35 crore and the related lease 0.25% general provision against standard assets, the Bank makes
depreciation was Rs. 278.51 crore. Gross lease income for fiscal additional general provisions against standard assets having regard
2003 was Rs. 537.42 crore and the related lease depreciation was to overall portfolio quality, asset growth, economic conditions and
Rs. 314.47 crore. other risk factors. The corporate and project finance portfolio
acquired from ICICI in the merger were fair valued and additional
Others
provisions were recorded to reflect the fair valuation. During fiscal
Other non-interest income in fiscal 2004 includes dividend income 2003, the Bank also made additional/accelerated provisions against
received from subsidiaries of Rs. 126.17 crore as compared to loans and other assets, primarily relating to ICICI’s portfolio. For
Rs. 109.42 crore for fiscal 2003. restructured assets, provisions are made in accordance with
guidelines issued by RBI.
Operating expense
Operating expense (excluding DMA expense and lease depreciation) Income tax expense
for fiscal 2004 was Rs. 1,999.02 crore compared to Rs. 1,534.91 Provision for tax (including wealth tax) was Rs. 265.11 crore for
crore for fiscal 2003. The increase in operating expense was primarily fiscal 2004 compared to a net credit of Rs. 425.79 crore (on account
due to 35.5% increase in employee expenses and 28.4% in other of deferred tax asset created against provisions) for fiscal 2003.
administrative expenses. The number of savings accounts increased Deferred tax asset has been accounted for in accordance with the
to about 58 lakh at March 31, 2004 from about 42 lakh at March 31, provisions of Accounting Standard 22 issued by the Institute of
2003. The credit and debit cards increased to about 101 lakh at Chartered Accountants of India, which requires recognition of
March 31, 2004 from about 65 lakh at March 31, 2003. The number of deferred tax assets and liabilities for the expected future tax
ATMs increased to 1,790 at March 31, 2004 from 1,675 at March 31, consequences of the events that have been included in the financial
2003. statements or tax returns.
We had implemented an Early Retirement Option Scheme (ERO) for Financial condition
our employees in July 2003. In accordance with the treatment
approved by RBI, the ex-gratia payments under ERO, termination Our total assets increased 17.2% to Rs. 125,228.87 crore at March
benefits and leave encashment in excess of the provisions made (net 31, 2004 from Rs. 106,811.97 crore at March 31, 2003. Net advances
of tax benefits), aggregating to Rs. 191.00 crore are being amortised increased to Rs. 62,095.52 crore at March 31, 2004 from Rs. 53,279.41
over a period of five years commencing August 1, 2003 (the date of crore at March 31, 2003. Retail assets increased to Rs. 33,423.92
retirement of employees exercising the option being July 31, 2003). crore at March 31, 2004 constituting about 26.7% of total assets as
compared to about 17.9% of total assets at March 31, 2003. Cash,
An amount of Rs. 25.60 crore has been charged to revenue on
balances with Reserve Bank of India and banks and money at call
account of ERO scheme being the proportionate amount amortised
and short notice at March 31, 2004 were Rs. 8,470.63 crore
for the period.
compared to Rs. 6,489.00 crore at March 31, 2003. Total investments
DMA expense at March 31, 2004 increased 20.5% to Rs. 42,742.86 crore from
Rs. 35,462.30 crore at March 31, 2003. Investments in government
We incurred DMA expenses of Rs. 293.70 crore on the retail asset
and other approved securities were Rs. 29,917.79 crore at March 31,
portfolio (other than auto loans). These commissions are expensed
2004 compared to Rs. 25,583.02 crore at March 31, 2003. Other
upfront and not amortized.
assets increased to Rs. 7,863.44 crore at March 31, 2004 from
Provisions and write-offs Rs. 7,520.52 crore at March 31, 2003.
Total provisions decreased by 73.7% to Rs. 470.26 crore in fiscal The net worth at March 31, 2004 increased to Rs. 7,845.16 crore (net
2004 from Rs. 1,790.81 crore in fiscal 2003 reflecting the additional/ of unamortised ERO expenses of Rs. 165.40 crore) from Rs. 6,933.31
accelerated provision made on ICICI’s portfolio in fiscal 2003. crore at March 31, 2003. Total deposits increased 41.4% to
Rs. 68,108.58 crore at March 31, 2004 from Rs. 48,169.31 crore at
All non-performing retail loans (other than home loans) are fully March 31, 2003. ICICI Bank’s savings account deposits increased to
written-off or provided for over a period of 180 days. Non-performing Rs. 8,372.03 crore at March 31, 2004 from Rs. 3,793.21 crore at
home loans are fully written-off or provided for over a period of two March 31, 2003, while current account deposits increased to
years. In respect of corporate assets, till fiscal 2004 the Bank had Rs. 7,259.06 crore at March 31, 2004 from Rs. 3,689.44 crore at
adopted a provisioning policy whereby provisions aggregating March 31, 2003. Term deposits increased to Rs. 52,477.49 crore at
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March 2005
March 31, 2004 from Rs. 40,686.65 crore at March 31, 2003. Of the income in accordance with RBI norms, but is excluded for the
term deposits, value added savings/ current account deposits were purpose of spread analysis.
about Rs. 10,042.73 crore at March 31, 2004 compared to about Aggregate interest expense increased to Rs. 7,944.00 crore in fiscal
Rs. 8,574.00 crore at March 31, 2003. Total deposits at March 31, 2003 from Rs. 1,558.92 crore in fiscal 2002, due to increase in average
2004 constituted 63.1% of ICICI Bank’s funding (i.e. deposit, interest bearing liabilities to Rs. 89,161.82 crore for fiscal 2003 from
borrowings and subordinated debts). Borrowings (including Rs. 20,737.25 crore for fiscal 2002 and an increase in total cost of
subordinated debt) decreased to Rs. 39,846.10 crore at March 31, funds to 8.91% in fiscal 2003 from 7.52% in fiscal 2002. The increase
2004 from Rs. 44,051.95 crore at March 31, 2003. in cost of funds was primarily due to the impact of the higher cost
Our total capital adequacy ratio at March 31, 2004 at 10.36% borrowings of ICICI transferred to us on merger. This was partially
(including Tier I capital adequacy of 6.09%) was higher than the offset by the repayment of about Rs. 22,400 crore of ICICI’s liabilities
minimum requirement of 9% as per regulatory norms. Deferred tax and reduction in the cost of deposits. The average cost of deposits
asset of Rs. 442.97 crore has been deducted from Tier-1 capital in declined to 6.77% for fiscal 2003 from 7.28% for fiscal 2002.
compliance with RBI guidelines. In accordance with RBI guidelines, Our net interest margin and interest spread were adversely impacted
Tier-1 capital includes Rs. 204.49 crore out of the face value of (decreased by 86 basis points to 1.30% in fiscal 2003 from 2.16% in
Rs. 350.00 crore of 20-year non-cumulative preference shares issued fiscal 2002) by the large investments made in Government securities and
to ITC Limited as a part of the scheme for merger of ITC Classic cash balances with RBI in the latter half of fiscal 2002 to comply with
Finance Limited with ICICI. Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) requirements
Fiscal 2003 compared to Fiscal 2002 on ICICI’s outstanding higher cost liabilities transferred to the us on
merger. The average volume of investment in SLR investments increased
The Appointed Date for the merger of ICICI (ICICI) and two of its by about Rs. 16,149.69 crore to Rs. 24,619.05 crore in fiscal 2003.
wholly-owned subsidiaries, ICICI Personal Financial Services Limited
(ICICI PFS) and ICICI Capital Services Limited (ICICI Capital) with us Non-Interest Income
(“the merger”) was March 30, 2002. Accordingly, our profit and loss Non-interest income increased to Rs 1,967.77 crore in fiscal 2003 as
account for fiscal 2003 includes the full impact of the merger, whereas compared to Rs. 574.66 crore in fiscal 2002. The components of
our profit and loss account for fiscal 2002 included the results of non-interest income are discussed below:
operations of ICICI, ICICI PFS and ICICI Capital for only two days i.e.
March 30 and 31, 2002. Our profit and loss account for fiscal 2003 is Fee Income
therefore not comparable with the profit and loss account for fiscal Fee and commission income increased to Rs. 847.18 crore in fiscal
2002. 2003 as compared to Rs. 271.95 crore in fiscal 2002. Retail banking
Our operating profit (profit before provisions and tax, excluding fee income increased to Rs. 321.13 crore in fiscal 2003 as compared
gain on sale of our) increased to Rs. 1,380.14 crore in fiscal 2003 as to Rs. 107.10 crore in fiscal 2002, primarily due to the growth in loan
compared to Rs. 545.09 crore in fiscal 2002. During fiscal 2003, processing fees, income from credit and debit cards and other retail
10.14 crore of our shares (transferred to a Trust by ICICI prior to the banking services. The number of credit cards increased to about
merger in accordance with the Scheme of Amalgamation) were 0.11 crore at March 31, 2003 from about 0.06 crore at March 31,
divested to strategic and institutional investors, resulting in capital 2002. The number of debit cards increased to about 0.34 crore at
gains of Rs. 1,191.05 crore for us. During fiscal 2003, we made total March 31, 2003 from about 0.07 crore at March 31, 2002. Corporate
provisions and write-offs (including accelerated/ additional banking fee income increased to Rs. 526.05 crore in fiscal 2003 from
provisions and write-offs against loans and investments, primarily Rs. 164.86 crore in fiscal 2002.
relating to ICICI’s portfolio) of Rs. 1,790.80 crore. On account of
deferred tax asset arising out of provisions made in fiscal 2003 and Treasury Income
utilisation of fair value provisions against ICICI’s portfolio created at The total income from treasury-related activities increased to Rs.
the time of the merger and taking into account the tax charge for the 447.29 crore (net of forward premium expenses of Rs. 63.68 crore
period, there was a net credit of Rs. 425.79 crore on account of on foreign currency liabilities) in fiscal 2003 from Rs. 292.01crore in
income tax. Profit after tax for fiscal 2003 was Rs. 1,206.18 crore fiscal 2002, due to the increase in trading profits on Government
compared to Rs. 258.30 crore for fiscal 2002. securities and corporate debt trading as a result of the declining
The total interest income (excluding all dividend income) increased interest rate environment.
to Rs. 9,238.92 crore in fiscal 2003 compared to Rs. 2,151.93 crore in
Lease Income
fiscal 2002, due to an increase in the average volume of interest-
earning assets to Rs. 90,516.50 crore in fiscal 2003 from Rs. 22,239.21 Leased assets of Rs. 2,227.06 crore were transferred to us from ICICI
crore in fiscal 2002. The yield on average interest earning assets was on merger. Leased assets of Rs. 1,770.15 crore were outstanding at
10.21% for fiscal 2003 compared to 9.68% for fiscal 2002. We reduce March 31, 2003. Gross lease income for fiscal 2003 was Rs. 537.42
the amortisation of premium on SLR investments in the “Held-to- crore and the related lease depreciation was Rs. 314.47 crore.
Maturity” category from the interest income. This amortisation
Others
charge was Rs. 136.32 crore for fiscal 2003. We also reduce DMA
commissions on auto loans from the interest income. These Other non-interest income in fiscal 2003 includes dividend income
commissions are expensed upfront and not amortised. The auto received from subsidiaries of Rs. 109.42 crore.
DMA commissions reduced from the interest income in fiscal 2003
were Rs. 156.90 crore. Interest income also includes Rs. 24.29 crore Operating Expense
of interest on income tax refunds. During fiscal 2003, we adopted a Operating expense (excluding DMA expense and lease depreciation)
revised accounting policy for income recognition on certain loans, for fiscal 2003 was Rs. 1,534.91 crore compared to Rs. 597.48 crore
including assistance to projects under implementation where the for fiscal 2002. The increase in operating expense was primarily due
implementation has been significantly delayed and in the opinion of to inclusion of the operations of ICICI, ICICI Capital and ICICI PFS and
the management significant uncertainties exist as to the final financial the growth in the retail franchise, including lease and maintenance
closure and/ or date of completion of the project, although such of ATMs, credit card expenses, call centre expenses and technology
non-accrual is not required by RBI norms. Dividend income (other expenses. The number of savings accounts increased to about
than from subsidiaries) of Rs. 129.14 crore (including Rs. 53.38 crore 4,260,000 at March 31, 2003 from about 2,210,000 at March 31,
of dividend income from mutual fund units) is included in interest 2002. The credit and debit cards increased to about 4,500,000 at
99
March 2005
March 31, 2003 from about 1,300,000 at March 31, 2002. The number 1,531.97 crore of application money on shares and debentures,
of ATMs increased to 1,675 at March 31, 2003 from 1,000 at March while at March 31, 2002, application money on shares debentures
31, 2002. The operating expenses, as a percentage to average assets (aggregating Rs. 921.12 crore at that date) were included in
was 1.46%for fiscal 2003 compared to 2.55% for fiscal 2002. investments.
The net worth at March 31, 2003 increased to Rs. 6,933.31 crore
DMA Expense
from Rs. 6,244.96 crore at March 31, 2002. Total deposits increased
We incurred DMA expenses of Rs. 162.31 crore on the retail asset 50.1% to Rs. 48,169.31 crore at March 31, 2003 from Rs. 32,085.11
portfolio (other than auto loans). Retail assets increased to about Rs. crore at March 31, 2002. ICICI Bank’s savings account deposits
19,132 crore at March 31, 2003 from about Rs. 6,125 crore at March increased to Rs. 3,793.21 crore at March 31, 2003 from Rs. 2,497.00
31, 2002. crore at March 31, 2002, while current account deposits increased
to Rs. 3,689.45 crore at March 31, 2003 from Rs. 2,736.15 crore at
Provisions and Write-offs March 31, 2002. Term deposits increased to Rs. 40,686.66 crore at
Till fiscal 2004, we made provisions/ write-offs aggregating 50% of March 31, 2003 from Rs. 26,851.96 crore at March 31, 2002. Of the
the secured portion of non-performing assets over a three-year term deposits, value added savings/ current account deposits were
about Rs. 8,574 crore at March 31, 2003 compared to about Rs.
period instead of the five-and-a-half year period prescribed by RBI.
5,342 crore at March 31, 2002. Total deposits at March 31, 2003
Loss assets and the unsecured portion of doubtful assets are fully
constituted 52.2% of ICICI Bank’s funding (i.e. deposit, borrowings
provided for / written off. Additional provisions are made against
and subordinated debts). Borrowings (including subordinated debt)
specific non-performing assets if considered necessary by the decreased to Rs. 44,051.95 crore at March 31, 2003 from Rs. 58,969.97
management. For restructured or rescheduled assets, provision is crore at March 31, 2002. Of the total borrowings, borrowings raised
made in accordance with the guidelines issued by the RBI, which by ICICI prior to the merger declined from about Rs. 58,210 crore at
require that the difference between the present values of the future March 31, 2002 to about Rs. 37,250 crore at March 31, 2003. We
interest as per the original loan agreement and the present values of raised about Rs. 2,500 crore through bond issues in the last quarter
future interest on the basis of rescheduled terms be provided at the of fiscal 2003.
time of restructuring.
Our total capital adequacy ratio at March 31, 2003 at 11.10%
We have adopted a conservative general provisioning policy for its (including Tier I capital adequacy of 7.05%), was significantly higher
standard asset portfolio. We had already created fair valuation than the minimum requirement of 9% as per regulatory norms.
provisions against the corporate and project finance portfolio Deferred tax asset of Rs. 487.83 crore has been deducted from Tier-
acquired from ICICI in the merger. While RBI guidelines require only 1 capital in compliance with RBI guidelines. In accordance with RBI
a 0.25% general provision against standard assets, we make guidelines, Tier-1 capital includes Rs. 231.21 crore out of the face
additional general provisions against standard assets having regard value of Rs. 350.00 crore of 20-year non-cumulative preference shares
to overall portfolio quality, asset growth, economic conditions and issued to ITC Limited as a part of the scheme for merger of ITC
other risk factors. During the year, we also made additional/ Classic Finance Limited with ICICI.
accelerated provisions against loans and other assets, primarily Fiscal 2002 compared to Fiscal 2001
relating to ICICI’s portfolio.
The effective date of the merger of ICICI, ICICI PFS and ICICI Capital
We made aggregate provisions and write-offs of Rs. 1,790.80 crore,
with us (“the merger”) was May 3, 2002. However, the Appointed
net of write-backs, in fiscal 2003.
Date was March 30, 2002 as provided in the Scheme of
Income Tax Expense Amalgamation. Accordingly, our profit and loss account for fiscal
2002 includes the results of operations of ICICI, ICICI PFS and ICICI
On account of deferred tax asset arising out of provisions made in Capital for only two days i.e. March 30 and 31, 2002. In fiscal 2001,
fiscal 2003 and utilization of fair value provisions against ICICI’s we had acquired Bank of Madura. The effective as well as appointed
portfolio created at the time of the merger and taking into account date of the merger of Bank of Madura with us was March 10, 2001.
the tax charge for the period, there was a net credit of Rs. 425.79 Accordingly, our profit and loss account for fiscal 2001 included the
crore on account of income tax [including wealth tax]. Deferred tax results of operations of Bank of Madura for only 21 days. Our profit
asset has been accounted for in accordance with the provisions of and loss account for fiscal 2002 is therefore not comparable with the
Accounting Standard 22 issued by the Institute of Chartered profit and loss account for fiscal 2001.
Accountants of India, which requires recognition of deferred tax Our operating profit increased 87.8% to Rs. 545.09 crore in fiscal
assets and liabilities for the expected future tax consequences of the 2002 as compared to Rs. 290.17 crore in fiscal 2001. Our profit after
events that have been included in the financial statements or tax tax increased 60.3% to Rs. 258.30 crore in fiscal 2002 from Rs.
returns. Charge to profit for tax expense in fiscal 2002 was Rs. 31.00 161.10 crore in fiscal 2002. The profit after tax for fiscal 2002 includes
crore after deferred tax credit of Rs. 90.33 crore about Rs. 8 crore attributable to ICICI, ICICI PFS and ICICI Capital for
March 30 and 31, 2002.
Financial Condition
Net Interest Income
Our total assets increased marginally to Rs. 106,811.97 crore at
March 31, 2003 from Rs. 104,106.30 crore at March 31, 2002. Net Our average yield, net interest margin and yield spread were
advances increased to Rs. 53,279.41 crore at March 31, 2003 from adversely impacted by the large investments in Government
Rs. 47,034.87 crore at March 31, 2002. Retail assets increased to securities to comply with Statutory Liquidity Ratio (SLR) requirements
about Rs. 19,132.38 crore at March 31, 2003 constituting about 18% on ICICI’s outstanding liabilities that were transferred to ICICI Bank
of total assets as compared to about 6% of total assets at March 31, on merger. Government securities typically have lower rates of
2002. Cash, balances with RBI and banks and money at call and interest. Yields on advances were also impacted by the overall
short notice at March 31, 2003 were Rs. 6,489.00 crore compared to decline in interest rates in the economy. However, the total interest
Rs. 12,786.35 crore at March 31, 2002. Total investments at March income and net interest income increased due to the increase in the
31, 2003 decreased marginally to Rs. 35,462.30 crore compared to average interest earning assets. They also reflected the full-year
Rs. 35,891.08 crore at March 31, 2002. SLR investments included in impact of acquisition of Bank of Madura compared to less than a
total investments were Rs. 25,583.06 crore at March 31, 2003 month in fiscal 2001. Interest income increased 73.2% to Rs. 2,151.93
compared to Rs. 22,792.77 crore at March 31, 2002. Other assets crore in fiscal 2002 as compared to Rs. 1,242.13 crore in fiscal 2001,
increased to Rs. 7,520.52 crore at March 31, 2003 from Rs. 4,154.66 due to an increase of 95.3% in the average volume of interest-
crore at March 31, 2002. Other assets at March 31, 2003 include Rs. earning assets. This was offset in part by decline of 123 basis points
100
March 2005
in yield on average interest earning assets to 9.68% in fiscal 2002 Provisions and write-offs
from 10.91% in fiscal 2001.The average volume of investments in
All credit exposures are classified as per the RBI guidelines into
Government securities increased by 186.9% to Rs. 8,469.36 crore in
performing and non-performing assets. Non-performing assets are
fiscal 2002 from fiscal 2001. Interest expense increased 86.1% to Rs.
1,558.92 crore in fiscal 2002 from Rs. 837.67 crore in fiscal 2001, due further classified into sub-standard, doubtful and loss assets. We
to an increase of 98.8% in the average interest bearing liabilities had a policy of making provisions as per RBI guidelines. We also
offset, in part, by a decline of 51 basis points in cost of funds. Net made additional provisions against specific non-performing assets
interest income increased 46.6% to Rs. 593.01 crore in fiscal 2002 if considered necessary by the management. Loss assets and the
primarily due to an increase of 95.3% in average interest-earning unsecured portion of doubtful assets are fully provided for/ written
assets, offset, in part, by a decline of 88 basis points in net interest off. We made aggregate provisions and write-offs against assets of
margin to 2.67%. The yield spread decreased by 72 basis points to Rs. 268.29 crore in fiscal 2002 as compared to Rs. 63.55 crore in
2.16% in fiscal 2002 from 2.88% in fiscal 2001. fiscal 2001. In fiscal 2002 write-back of depreciation on investments
was Rs. 15.70 crore as compared to Rs. 6.49 crore in fiscal 2001.
Non-interest Income Provision for other contingencies was Rs. 2.70 crore. In fiscal 2001,
Non-interest income increased 160.8% to Rs. 574.66 crore in fiscal ICICI had adopted an accelerated provisioning policy whereby
2002 as compared to Rs 220.34 crore in fiscal 2001. The components provisions aggregating 50% of the secured portion of non-
of non-interest income are discussed below: performing assets are made over a three-year period instead of a
five-and-a-half year period prescribed by RBI. Subsequent to the
Fee income merger, we have adopted the same accelerated provisioning policy.
Fee income increased 65.0% to Rs. 282.64 crore in fiscal 2002 as Income Tax Expense
compared to Rs. 171.30 crore in fiscal 2001. Retail banking fee
income increased 153.7% to Rs. 107.10 crore in fiscal 2002 as Income tax expense in fiscal 2002 was lower at Rs. 31.50 crore as
compared to Rs. 42.22 crore in fiscal 2001, primarily due to the compared to Rs. 65.42 crore in fiscal 2001, due to deferred tax
growth in income from credit and debit cards. The number of credit credit of Rs. 90.33 crore. Deferred tax was accounted for in
cards increased to about 610,000 in fiscal 2002 from about 220,000 accordance with the provisions of Accounting Standard 22 issued
in fiscal 2001. The number of debit cards increased to about 600,000 by the Institute of Chartered Accountants of India, which requires
in fiscal 2002 from only about 10,000 in fiscal 2001. Corporate banking recognition of deferred tax assets and liabilities for the expected
fee income increased 36.0% to Rs. 175.54 crore in fiscal 2002 from future tax consequences of the events that have been included in the
Rs. 129.08 crore in fiscal 2001, driven primarily by a 74.0% increase financial statements or tax returns. Our effective tax rate for fiscal
in income from foreign exchange services, a 41.6% increase in 2002 was 10.9%1.
income from guarantees and a 33.3% increase in income from cash (1) Tax provision as a percentage of profit before Tax
management services.
Financial Condition
Treasury income
The merger has been accounted for under the purchase method of
The total income from treasury related activities increased to Rs. accounting. Accordingly, we have recorded the assets acquired
292.02 crore in fiscal 2002 from Rs. 49.04 crore in fiscal 2001, due to from ICICI at carrying values adjusted to fair values wherever fair
the increase in trading profits on Government securities and
values are lower than the carrying values. The fair values of assets
corporate debt portfolio as a result of the declining interest rate
have been determined to our satisfaction, mainly based on valuations
environment.
conducted by independent valuers. The key areas of fair valuation
Non-interest Expense included loans and all credit substitutes which were fair valued by
Deloitte Haskins & Sells; investments (including investments in venture
Non-interest expense increased 86.1% to Rs. 622.58 crore in fiscal
capital funds) which were marked to market in accordance with the
2002 from Rs. 334.63 crore in fiscal 2001 primarily due to the full
year’s impact of the amalgamation of Bank of Madura, expenditure RBI guidelines; and fixed assets which have been incorporated at
on refurbishment of branches taken over from Bank of Madura and revalued amounts accounted for in the books of ICICI at June 30,
growth in the retail franchise, including lease and maintenance of 2001 based on a report by an independent firm of valuers. Subsidiaries
ATMs, credit card expenses, call centre expenses and technology where the management does not have an established intent to sell or
expenses. where regulatory constraints exist in reducing our stake have been
recorded at their carrying cost.
Non-interest expense as a percentage of average total assets
decreased marginally to 2.66% in fiscal 2002 from 2.77% in fiscal Liabilities have been considered at values to our satisfaction having
2001. regard to the nature of the liabilities. These are primarily of fixed
The following table sets forth, for the periods indicated, the break- tenure and are generally contracted at fixed rates without repricing
up of the principal components of non-interest expense. options. These cannot be either ordinarily sold in the open market
or over the counter due to contractual obligations between ICICI
Rs. in crore, except percentages (now transferred to us) and the liability holder.
Fiscal Fiscal Growth Our total assets increased to Rs. 104,109.92 crore at March 31, 2002
2001 2002 % compared to Rs. 19,736.59 crore at March 31, 2001 primarily due to
Staff Cost 51.71 147.18 184.6 the merger. The increase in investments and cash and balances with
Repairs & Maintenance 27.11 78.33 188.9 RBI was due to compliance with SLR and Cash Reserve Ratio (CRR)
requirements on ICICI’s liabilities.
Rentals, taxes and lighting 36.48 66.28 81.7
Total deposits increased 95.9% to Rs. 32,085.11 crore at March 31,
Depreciation on Fixed assets 36.76 64.09 74.4
2002 from Rs.16,378.21 crore at March 31, 2001. This increase was
Advertisement and publicity 14.33 7.97 (44.4) achieved through a strong focus on deposit mobilisation and fully
Communications expense 20.84 37.72 81.0 leveraging the branch network acquired in the amalgamation of
Other 147.40 221.01 49.9 Bank of Madura, supported by migration of customer transaction
volumes to non-branch channels. Savings account deposits
Total non-interest expense 334.63 622.58 86.1 increased 32.7% to Rs. 2,497.00 crore in fiscal 2002 from Rs. 1,880.64
101
March 2005
crore in fiscal 2001. Time deposits increased 126.1% in fiscal 2002. 31, 2001 from 175 as on March 31, 2000.
The greater increase in time deposits as compared to demand The following table sets forth, for the periods indicated, the principal
deposits was due to the large requirement of resources for components of non-interest expense:
compliance with SLR and CRR requirements in less than six months.
Borrowings primarily reflect transfer of ICICI’s liabilities aggregating Rs. in crore, except percentages
Rs. 56,079.69 crore (including subordinated debt of Rs. 9,356.31 Year ended March 31,
crore). 2000 2001 2001/2000 %
Fiscal 2001 compared to Fiscal 2000 Change
Salaries 36.37 51.71 42.2
Operating profit for fiscal 2001 increased 28.0% to Rs. 290.17 crore
from Rs. 226.67 crore in fiscal 2000 due to a117.5% increase in net Repairs & Maintenance 10.09 27.11 168.7
interest income, a 13.5% increase in non-interest income offset by a Rentals, taxes and
118.3% increase in non-interest expense. Profit after tax in fiscal lighting 18.01 36.48 102.6
2001 was Rs. 161.10 crore, an increase of 53.0% as compared to Rs. Depreciation on
105.30 crore in fiscal 2000. Fixed Assets 24.79 36.76 48.3
Net Interest Income Advertisement and
Net interest income increased by 117.5% in fiscal 2001 to Rs. 404.46 publicity 3.88 14.33 269.3
crore as compared to Rs. 185.93 crore in fiscal 2000 primarily due Communications expense 6.88 20.84 202.9
to an increase of 50.9% in the average volume of interest-earning Other 53.29 147.40 176.6
assets, and an increase of 109 basis points in the net interest margin
Total non-interest
to 3.55% in fiscal 2001 from 2.46% in fiscal 2000.
expense 153.31 334.63 118.3
Interest income increased 45.6% to Rs. 1,242.13 crore in fiscal 2001
compared to Rs. 852.87 crore in fiscal 2000 reflecting a 50.9%
On the increase of 269.3% in advertisement and publicity expenses
increase in the average volume of interest-earning assets, principally
in fiscal 2001, was primarily due to the focus on brand building in
loans, offset by a decline in the gross yield on interest earning assets
line with ICICI group’s strategy of building long term sustainable
to 10.91% in fiscal 2001 from 11.30% in fiscal 2000. The average
competitive advantage with respect to its retail and other banking
volume of loans increased by Rs. 1,916.49 crore or 77.5% to Rs.
products. Other operating expenses including postage and
4,390.58 crore in fiscal 2001 compared to fiscal 2000. The growth in
telephone, stationery etc. also increased in keeping with the general
loans was due to an increase in working capital loans and credit
growth in business volumes and increased thrust on retail segment
substitutes primarily to higher rated large corporate clients acquired
which typically entail higher operational costs. During fiscal 2001,
through joint marketing efforts with ICICI Limited through Major
our customer base increased to 3.2 million from 0.6 million in fiscal
Clients Group and Growth Clients Group. The increased volume of
2000. We undertook several initiatives on the retail front like expansion
loans to higher rated clients, which typically earn lower yields due
of credit cards, launch of debit cards, setting up of call centers and
to the lower credit risk, lead to a decline in yield on interest-earning
regional processing centers. Non-interest expense as a percentage
assets. The yield on advances was also impacted by non-performing
of average total assets increased to 2.77% in fiscal 2001 from 1.91%
loans on which the Bank does not accrue interest.
in fiscal 2000.
The interest expense increased 25.6% to Rs. 837.67 crore in fiscal
2001 from Rs. 666.94 crore in fiscal 2000 due to a 40.8% increase in Income Tax Expense
average interest bearing liabilities in fiscal 2001 over fiscal 2000, Income tax expense increased 142.0% in fiscal 2001 to Rs. 65.42
offset by a 97 basis points decline in cost of funds. The average crore from Rs. 27.03 crore in fiscal 2000 primarily due to the higher
volume of interest-bearing liabilities increased primarily due to an level of income in fiscal 2001 and also due to reduction in dividend
increase in time de)posits of 32.5% to Rs. 7,239.05 crore in fiscal income, which was then exempt from tax. The effective tax rate in
2001 from Rs. 5,465.09 crore in fiscal 2000 fiscal 2001 was 28.9%1 as compared to 20.4%1 in fiscal 2000.
Non-interest Income (1) Tax provision as a percentage of profit before Tax
Non-interest income increased by 13.5% in fiscal 2001 to Rs. 220.34 Provisions and Write-offs
crore from Rs. 194.05 crore in fiscal 2000. In fiscal 2001, increase in
fee and commission income and income from foreign exchange The aggregate provisions and write-offs on assets in fiscal 2001
transactions was offset by decrease in profit on sale of investments amounted to Rs. 63.55 crore as compared to Rs. 75.50 crore in fiscal
(net). 2000. The ratio of net NPA to net consumer assets increased to
1.44% in fiscal 2001 from 1.14% in fiscal 2000. Gross NPA went up in
Commission, exchange and brokerage income increased by 108.0% fiscal 2001 primarily due to NPA accounts taken over from erstwhile
in fiscal 2001 to Rs. 139.53 crore from Rs. 67.08 crore primarily due Bank of Madura Ltd. Net write-back of depreciation on investments
to the increase in income from cash management services, credit was Rs. 6.49 crore in fiscal 2001 as compared to a provision for
cards and commissions on bills and guarantees. Apart from these, depreciation on investments of Rs. 12.84 crore in fiscal 2000.
income from depositary share account services and commission Provisions for other contingencies for fiscal 2001 was Rs. 6.60 crore.
on investment also increased in fiscal 2001. In view of the limited
market opportunities during the year, ICICI Bank’s profit on sale of Financial Condition
investments (net) declined in fiscal 2001 to Rs. 19.21 crore from Rs. Total assets increased 63.5% to Rs. 19,736.59 crore at March 31,
101.14 crore in fiscal 2000. 2001 compared to Rs. 12,072.62 crore at March 31, 2000. Net
Non-interest Expense advances increased 92.3% in fiscal 2001 compared to at March 31,
2000, due to the growth in corporate lending and acquisition of loan
Non-interest expense increased 118.3% in fiscal 2001 to Rs. 334.63 portfolio of erstwhile Bank of Madura. The growth in cash and balance
crore from Rs. 153.31 crore in fiscal 2000 primarily due to various with RBI was due to acquisition of the assets of erstwhile Bank of
retail business initiatives taken during the year and expansion of the Madura as also increased reserve requirements resulting from a
ATM Network. The number of ATMs increased to 510 as on March 66.0% increase in deposits in fiscal 2001.
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March 2005
Fixed assets increased by 71.7% in fiscal 2001 to Rs. 384.75 crore population of less than 10,000. A semi-urban area is defined as a
from to Rs. 224.02 crore in fiscal 2000 primarily due to acquisition of centre with a population of greater than 10,000 but less than 100,000.
assets of erstwhile Bank of Madura and significant investments in Population criteria will be as per latest census report figures of the
technology and ATMs. centre (revenue unit and not locality).
The total deposits increased 66.0% in fiscal 2001 to Rs. 16,378.21 The banks can open ECs at the premises of the institutions of which
crore from to Rs. 9,866.01 crore at March 31, 2000. This increase is they are the principal bankers after obtaining license from the
attributable to deposits acquired through merger of erstwhile Bank concerned Regional Office of RBI for the purpose. The banks need
of Madura with us as well as deposits mobilised through increased not obtain permission of the RBI for installation of ATMs at branches
focus on retail customers by offering various products. The savings and ECs for which they hold licenses issued by the Reserve Bank.
account deposits increased 252.7% in fiscal 2001 as compared to The banks should, however, report to the Central Office of Department
fiscal 2000 due to the continued thrust on building a strong retail of Banking Operations and Development (DBOD), the concerned
depositor base as well as savings deposits acquired during merger Regional Offices and Department of Statistical Analysis and Computer
of erstwhile Bank of Madura. The time deposits increased 53.3% in Services (DESACS) of RBI as and when ATM is installed at a branch
fiscal 2001 as compared to fiscal 2000. Our non-interest-bearing or an EC. Banks may also install offsite ATMs at other places identified
deposits increased 65.2% in fiscal 2001 as compared to fiscal 2000, by them without approval of RBI, but they should obtain a license
primarily due to the development and marketing efforts to mobilise from the concerned Regional Office of RBI before operationalising
current account deposits from key corporates. the ATM so as to be in conformity with Section 23 of the Banking
Our borrowings increased by 110.1% to Rs. 1,032.79 crore as on Regulation Act.
March 31, 2001 from Rs. 491.47 crore as on March 31, 2000 primarily Banks are also permitted to set up service branches such as Central
due to increase in call borrowings from banks and other institutions Processing Centres, Core Banking Centres, etc. to perform back-
as well as refinance borrowings from RBI and other institutions. office functions such as data / document processing, issuance of
cheque books etc on obtaining License from RBI. A common feature
VII. REGULATIONS AND POLICIES in all such arrangements is that there is no interface with the customers.
The main legislation governing commercial banks in India is the
Capital Adequacy Requirements
Banking Regulation Act. Other important laws include the RBI Act,
the Negotiable Instruments Act and the Banker’s Books Evidence We are subject to the capital adequacy requirements of the RBI,
Act. Additionally, the RBI, from time to time, issues guidelines to be which, based on the guidelines of the Basel Committee on Banking
followed by the bank. Compliance with all regulatory requirements Regulations and Supervisory Practices, 1998, require every
is evaluated with respect to financial statements under Indian GAAP. scheduled commercial bank to maintain a minimum ratio of capital
to risk weighted assets (including off balance sheet items)of 9.0%.
RBI Regulations
The total capital of a banking company is classified into Tier 1 and
Commercial banks in India are required under the Banking Regulation Tier 2 capital. Tier 1 capital, the core capital, provides the most
Act to obtain a license from the RBI to carry on banking business in permanent and readily available support against unexpected losses.
India. Before granting the license, the RBI must be satisfied that It comprises paid-up capital and reserves consisting of any statutory
certain conditions are complied with, including (i) that the bank has reserves, free reserves and capital reserve pursuant to the Indian I.T.
the ability to pay its present and future depositors in full as their Act as reduced by equity investments in subsidiaries, intangible
claims accrue; (ii) that the affairs of the bank will not be or are not assets and losses in the current period and those brought forward
likely to be conducted in a manner detrimental to the interests of from the previous period. In fiscal 2003, the RBI issued a guideline
present or future depositors; (iii) that the bank has adequate capital requiring a bank’s deferred tax asset to be treated as an intangible
and earnings prospects; and (iv) that the public interest will be served asset and deducted from its Tier 1 capital.
if such license is granted to the bank. The RBI can cancel the license Tier 2 capital consists of undisclosed reserves, revaluation reserves
if the bank fails to meet the above conditions or if the bank ceases to (at a discount of 55.0%), general provisions and loss reserves (allowed
carry on banking operations in India. up to a maximum of 1.25% of risk weighted assets), hybrid debt
We, being licensed as a banking company, are regulated and capital instruments (which combine certain features of both equity
supervised by the RBI. The RBI requires us to furnish statements, and debt securities) and subordinated debt. Any subordinated debt
information and certain details relating to our business. It has issued is subject to progressive discounts each year for inclusion in Tier 2
guidelines for commercial banks on recognition of income, capital and total subordinated debt considered as Tier 2 capital can
classification of assets, valuation of investments, maintenance of not exceed 50.0% of Tier 1 capital. Tier 2 capital can not exceed
capital adequacy and provisioning for impaired assets. The RBI has Tier 1 capital.
set up a Board for Financial Supervision, under the chairmanship of Risk adjusted assets and off-balance sheet items considered for
the Governor of the RBI. The appointment of the auditors of banks is determining the capital adequacy ratio are the risk weighted total of
subject to the approval of the RBI. The RBI can direct a special audit specified funded and non-funded exposures. Degrees of credit risk
in the interest of the depositors or in the public interest. expressed as percentage weighting are assigned to various balance
sheet asset items and conversion factors to off-balance sheet items.
Regulations relating to the Opening of Branches, Extension The value of each item is multiplied by the relevant weight or
Counters (ECs) and ATMs: conversion factor to produce risk-adjusted values of assets and off-
The opening of branches by banks is governed by the provisions of balance-sheet items. Standby letters of credit/ guarantees and
Section 23 of the Banking Regulation Act. In terms of these provisions, documentary credits are treated as similar to funded exposure and
banks are required to obtain licenses from the RBI to open new are subject to similar risk weight. All foreign exchange and gold
branches. Permission is granted based on factors such as the financial open position limits of the bank carry a 100.0% risk weight.
condition and history of the company, its management, adequacy Effective March 31, 2001, banks and financial institutions were
of capital structure and earning prospects and the public interest. required to assign a risk weight of 2.5% in respect of the entire
The RBI may cancel the license for violations of the conditions under investment portfolio to cover market risk, over and above the existing
which it was granted. Under the banking license granted to us by the risk weights for credit risk in non-government and non-approved
RBI, we required to have at least 25.0% of our branches located in securities. In fiscal 2002, with a view to the building up of adequate
rural and semi-urban areas. A rural area is defined as a centre with a reserves to guard against any possible reversal of the interest rate
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March 2005
environment in the future due to unexpected developments, the RBI highly questionable and improbable.
advised banks to build up an investment fluctuation reserve of a Loss Assets. Assets on which losses have been identified by the
minimum of 5.0% of the bank’s investment portfolio within a period bank or internal or external auditors or the RBI inspection but the
of five years, by fiscal 2006. This reserve has to be computed with amount has not been written off fully.
respect to investments in held for trading and available for sale
categories. Investment fluctuation reserve is included in Tier 2 capital. There are separate guidelines for projects under implementation,
In June 2004, the RBI issued guidelines on capital for market risk. which are based on the achievement of financial closure and the
The guidelines prescribe the method of computation of risk-weighted date of approval of the project financing.
assets in respect of market risk. The aggregate risk weighted assets The RBI also has separate guidelines for restructured loans. A fully
are required to be taken into account for determining the capital secured restructured standard asset can be restructured by
adequacy ratio. Banks would be required to maintain a capital charge reschedulement of principal repayment and/ or the interest element,
for market risk in respect of their trading book exposure (including but must be separately disclosed as a restructured asset. The amount
derivatives) by year-end fiscal 2005 and securities included under of sacrifice, if any, in the element of interest, measured in present
available for sale category by year-end fiscal 2006. value terms, is either written off or provision is made to the extent of
the sacrifice involved. Similar guidelines are applicable to sub-
Loan Loss Provisions and Non-Performing Assets standard assets. The sub-standard accounts which have been
In April 1992, the RBI issued formal guidelines on income recognition, subjected to restructuring, whether in respect of principal instalment
asset classification, provisioning norms and valuation of investments or interest amount, by whatever modality, are eligible to be upgraded
applicable to banks, which are revised from time to time. These to the standard category only after the specified period, i.e., a period
guidelines are applied for recognition of impaired loan assets and of one year after the date when first payment of interest or of principal,
for provisioning of the same under Indian GAAP. whichever is earlier, falls due, subject to satisfactory performance
during the period.
The principal features of these RBI guidelines, which have been
implemented with respect to our loans, debentures, lease assets, To put in place an institutional mechanism for the restructuring of
hire purchases and bills are set forth below. corporate debt, the RBI has devised a corporate debt restructuring
system.
Asset Classification
Provisioning and Write-Offs
Until year-end fiscal 2003, an impaired asset (also called non-
performing assets pursuant to the RBI guidelines) was an asset in Provisions are based on guidelines specific to the classification of
respect of which any amount of interest or principal was overdue for the assets. The following guidelines apply to the various asset
more than two quarters. In particular, an advance was an impaired classifications:
asset where: z Standard Assets. A general provision of 0.25% is required.
z interest and/or instalment of principal remained overdue for a z Sub-Standard Assets. A general provision of 10.0% is required.
period of more than 180 days in respect of a term loan; However, the ‘unsecured exposures’, which are identified as
z the account remained “out-of-order” for a period of more than ‘substandard’ would attract an additional provision of 10 per
180 days in respect of an overdraft or cash credit; cent, i.e., a total of 20 per cent on the outstanding balance.
z the bill remained overdue for a period of more than 180 days in z Doubtful Assets. A 100.0% write-off is required to be taken
case of bills purchased and discounted; against the unsecured portion of the doubtful asset and charged
against income. The value assigned to the collateral securing a
z interest and/or principal remained overdue for two harvest
loan is the amount reflected on the borrower’s books or the
seasons but for a period not exceeding two half years in the
realisable value determined by third party appraisers. Till year-
case of an advance granted for agricultural purposes; and
end fiscal 2004, in cases where there was a secured portion of
z any amount to be received remained overdue for a period of the asset, depending upon the period for which the asset
more than 180 days in respect of other accounts. remained doubtful, a 20.0% to 50.0% provision was required
Effective fiscal 2004, banks are now required to classify an asset as to be taken against the secured asset as follows:
non-performing when principal or interest has remained overdue z Up to one year: 20.0% provision
for more than 90 days. Interest in respect of non-performing assets is
z One to three years: 30.0% provision
not recognised unless collected.
z More than three years: 50.0% provision
In line with the RBI master circular on income recognition, asset
classification and provisioning pertaining to advances portfolio of In July 2004, the RBI introduced additional provisioning requirements
banks, issued in July 2004 for banks, non-performing assets are for non-performing assets classified as ‘doubtful for more than three
classified as follows: years’. Effective year-end fiscal 2005, 100.0% provision will have to
be made for the secured portion of assets classified as doubtful for
Sub-Standard Assets. Assets that are non-performing assets for a
more than three years on or after April 1, 2004. For the secured
period not exceeding 18 months (12 months effective year-end fiscal
portion of assets classified as doubtful for more than three years at
2005). In such cases, the current net worth of the borrower / guarantor
March 31, 2004, a provision of 60.0% will have to be made by year-
or the current market value of the security charged is not enough to
end fiscal 2005, 75.0% by year-end fiscal 2006 and 100.0% by year-
ensure recovery of dues to the banks in full. Such an asset has well-
end fiscal 2007.
defined credit weaknesses that jeopardise the liquidation of the debt
and are characterised by the distinct possibility that the bank will z Loss Assets. The entire asset is required to be written off or
sustain some loss, if deficiencies are not corrected. provided for.
Doubtful Assets. Assets that are non-performing assets for more z Restructured Assets. A provision is made equal to the net
than 18 months (12 months effective year-end fiscal 2005) are classified present value of the reduction in the rate of interest on the loan
as doubtful assets. A loan classified as doubtful has all the weaknesses over its maturity.
inherent in assets that are classified as sub-standard, with the added While the provisions indicated above are mandatory, a higher
characteristic that the weaknesses make collection or liquidation in provision in a loan amount is required if considered necessary by
full, on the basis of currently known facts, conditions and values, the management.
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March 2005
Regulations relating to Making Loans for purchase of financial assets by an asset reconstruction company,
in consortium or multiple banking arrangements where more than
The provisions of the Banking Regulation Act govern the making of
75.0% by value of the banks or financial institutions accept the offer,
loans by banks in India. The RBI issues directions covering the loan
the remaining banks or financial institutions are obliged to accept
activities of banks. Some of the major guidelines of RBI, which are
the offer. Consideration for the sale may be in the form of cash,
now in effect, are as follows:
bonds or debentures or security receipts or pass through certificates
z The RBI has prescribed norms for bank lending to non-bank issued by the asset reconstruction company or trusts set up by it to
financial companies and financing of public sector acquire the financial assets.
disinvestment.
Directed Lending
z Banks are free to determine their own lending rates but each
bank must declare its prime lending rate as approved by its Priority Sector Lending
board of directors. Banks are required to declare a benchmark The RBI requires commercial banks to lend a certain percentage of
prime lending rate based on various parameters including cost their net bank credit to specific sectors (the priority sectors), such as
of funds, operating expenses, capital charge and profit margin. agriculture, small-scale industry, small businesses and housing
Each bank should also indicate the maximum spread over the finance. Total priority sector advances should be 40.0% of net bank
prime-lending rate for all credit exposures other than retail credit with agricultural advances required to be 18.0% of net bank
loans. The interest charged by banks on advances up to Rs. credit and advances to weaker sections required to be 10.0% of net
200,000 to any one entity (other than certain permitted types of bank credit, and 1.0% of the previous year’s net bank credit required
loans including loans to individuals for acquiring residential to be lent under the Differential Rate of Interest scheme. Any shortfall
property, loans for purchase of consumer durables and other in the amount required to be lent to the priority sectors may be
non-priority sector personal loans) must not exceed the prime required to be deposited with the National Bank for Agriculture and
lending rate. Banks are also given freedom to lend at a rate the Rural Development. These deposits can be for a period of one
below the prime lending rate in respect of creditworthy year or five years.
borrowers and exposures. Interest rates for certain categories
of advances are regulated by the RBI. The RBI requires banks to lend up to 3.0% of their incremental
deposits in the previous fiscal year towards housing finance. This
z In terms of section 20(1) of the Banking Regulation Act, a banking can be in the form of home loans to individuals or subscription to
company is prohibited from entering into any commitment for the debentures and bonds of the National Housing Bank and housing
granting any loans or advances to or on behalf of any of its development institutions recognised by the government of India.
directors, or any firm in which any of its directors is interested
as partner, manager, employee or guarantor, or any company Prior to the amalgamation, the advances of ICICI were not subject to
(not being a subsidiary of the banking company or a company the requirement applicable to banks in respect of priority sector
registered under section 25 of the Act, or a government company) lending. Pursuant to the terms of the RBI’s approval of the
of which, or the subsidiary or the holding company of which amalgamation, we are required to maintain a total of 50.0% of our
any of the directors of the bank is a director, managing agent, net bank credit on the residual portion of its advances (i.e., the
manager, employee or guarantor or in which he holds substantial portion of its total advances excluding advances of ICICI at year-end
interest, or any individual in respect of whom any of its directors fiscal 2002) in the form of priority sector advances. This additional
is a partner or guarantor. There are certain exemptions in this requirement of 10.0% by way of priority sector advances will apply
regard as the explanation to the section provides that ‘loans or until such time as the aggregate priority sector advances reach a
advances’ shall not include any transaction which RBI may level of 40.0% of our total net bank credit.
specify by general or special order as not being a loan or Export Credit
advance for the purpose of such section. ICICI Bank is in The RBI also requires commercial banks to make loans to exporters
compliance with these requirements. at concessional rates of interest. This enables exporters to have
There are guidelines on loans against equity shares in respect of access to an internationally competitive financing option. Pursuant
amount, margin requirement and purpose. to existing guidelines, 12.0% of a bank’s net bank credit is required
to be in the form of export credit. We provide export credit for pre-
Regulations relating to Sale of Assets to Asset Reconstruction shipment and post-shipment requirements of exporter borrowers in
Companies rupees and foreign currencies.
The Securitisation Act provides for sale of financial assets by banks
Credit Exposure Limits
and financial institutions to asset reconstruction companies. RBI has
issued guidelines to banks on the process to be followed for sales of As a prudent measure aimed at better risk management and
financial assets to asset reconstruction companies. These guidelines avoidance of concentration of credit risk, the RBI has prescribed
provide that a bank may sell financial assets to an asset reconstruction credit exposure limits for banks and long-term lending institutions in
company provided the asset is a non-performing asset. A bank may respect of their lending to individual borrowers and to all companies
sell a standard asset only if the borrower has a consortium or multiple in a single group (or sponsor group).
banking arrangement, at least 75.0% by value of the total loans to The limits currently set by the RBI are as follows:
the borrower are classified as non-performing and at least 75.0% by
value of the banks and financial institutions in the consortium or 1. Exposure ceiling for a single borrower is 15.0% of capital
multiple banking arrangement agree to the sale. The banks selling funds and group exposure limit is 40.0% of capital funds. In
financial assets should ensure that there is no known liability case of financing for infrastructure projects, the exposure limit
devolving on them and that they do not assume any operational, to a single borrower is extendable by another 5.0%, i.e., up to
legal or any other type of risks relating to the financial assets sold. 20.0% of capital funds and the group exposure limit is
Further, banks may not sell financial assets at a contingent price with extendable by another 10.0%, i.e., up to 50.0% of capital funds.
an agreement to bear a part of the shortfall on ultimate realisation. Banks may, in exceptional circumstances, with the approval of
However, banks may sell specific financial assets with an agreement their board of directors, consider enhancement of the exposure
to share in any surplus realised by the asset reconstruction company to a borrower up to a maximum of further 5.0% of capital
in the future. While each bank is required to make its own assessment funds, subject to the borrower consenting to the banks making
of the value offered in the sale before accepting or rejecting an offer appropriate disclosures in their annual reports.
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March 2005
2. Capital funds for the purpose of exposure would be as defined adequacy purposes. Further, banks and financial institutions cannot
under capital adequacy norms (Tier 1 and Tier 2) as per the acquire any fresh stake in a bank’s equity shares, if by such acquisition,
published accounts as on March 31 of the previous year. the investing bank’s or financial institution’s holding exceeds 5.0%
(Addition to the capital during the year to be included) of the investee bank’s equity capital. Banks with investments in excess
3. Non-fund based exposures are calculated at 100.0% and in of the prescribed limits were required to apply to the RBI with a
addition, banks include forward contracts in foreign exchange roadmap for reduction of the exposure. We have equity shareholding
and other derivative products, like currency swaps and options, in excess of the prescribed limits in two Indian private sector banks,
at their replacement cost value in determining individual or Federal Bank Limited and South Indian Bank Limited, and are in
group borrower exposure ceilings, effective April 1, 2003. discussion with RBI to bring the shareholding within the prescribed
limits.
At year-end fiscal 2004, we were in compliance with these limits. We
had received specific approval from the RBI for exceeding the limit Consolidated Supervision Guidelines
in the case of one borrower group exposure and three single
In fiscal 2003, the RBI issued guidelines for consolidated accounting
borrower exposures.
and consolidated supervision for banks. These guidelines became
To ensure that exposures are evenly spread, the RBI requires banks effective April 1, 2003. The principal features of these guidelines
to fix internal limits of exposure to specific sectors. These limits are are:
subject to periodical review by the banks. We have fixed a ceiling of
Consolidated Financial Statements. Banks are required to prepare
15.0% of total exposure in respect of exposure to any one industry
consolidated financial statements intended for public disclosure.
(other than retail loans) and monitor the same accordingly.
Consolidated Prudential Returns. Banks are required to submit to
Regulations relating to Investments and Capital Market Exposure the RBI, consolidated prudential returns reporting their compliance
Limits with various prudential norms on a consolidated basis, excluding
Pursuant to the RBI guidelines, the exposure of banks to capital insurance subsidiaries. Compliance on a consolidated basis is
markets by way of investments in shares, convertible debentures, required in respect of the following main prudential norms:
units of equity oriented mutual funds and loans to brokers, should z Single borrower exposure limit of 15.0% of capital funds (20.0%
not exceed 5.0% of total advances (including commercial paper) at of capital funds provided the additional exposure of up to
March 31 of the previous fiscal year. Investments in shares, convertible 5.0% is for the purpose of financing infrastructure projects);
debentures and units of equity oriented mutual funds should not z Borrower group exposure limit of 40.0% of capital funds (50.0%
exceed 20.0% of the bank’s net worth. Pursuant to the terms of the of capital funds provided the additional exposure of up to
RBI’s approval for the amalgamation, ICICI’s project finance related 10.0% is for the purpose of financing infrastructure projects);
investments are excluded from the computation of these limits for a
z Deduction from Tier 1 capital of the bank, of any shortfall in
period of five years from the amalgamation. In addition, the RBI has
approved the exclusion of specific equity investments acquired by capital adequacy of a subsidiary for which capital adequacy
conversion of debt under restructuring schemes approved by the norms are specified; and
Corporate Debt Restructuring Forum. z Consolidated capital market exposure limit of 2.0% of
In November 2003, RBI issued guidelines on investments by banks consolidated advances and 10.0% of consolidated net worth.
in non-SLR securities issued by companies, banks, financial We are in compliance with these guidelines, except for the
institutions, central and state government sponsored institutions and consolidated capital market exposure limits. We have submitted to
special purpose vehicles. These guidelines apply to primary market the RBI that the limit of 2.0% of consolidated advances and 10.0% of
subscriptions and secondary market purchases. Pursuant to these consolidated net worth effectively reduces the standalone capital
guidelines, banks are prohibited from investing in non-SLR with an market exposure limit of 5.0% of advances and 20.0% of net worth.
original maturity of less than one year, other than commercial paper On a consolidated basis, we have exceeded the exposure limits in
and certificates of deposits. Banks are also prohibited from investing respect of one borrower group exposure and three single borrower
in unrated securities and unlisted securities and shares of All-India exposures. The RBI has granted approval for exceeding the norms
Financial Institutions. A bank’s investment in unlisted non-SLR in these cases on a standalone basis.
securities may not exceed 10.0% of its total investment in non-SLR In June 2004, the RBI published the report of a working group on
securities as at the end of the preceding fiscal year. These guidelines monitoring of financial conglomerates, which proposed the following
will not apply to investments in security receipts issued by framework:
securitisation or reconstruction companies registered with RBI and z identification of financial conglomerates that would be subjected
asset backed securities and mortgage backed securities with a to focused regulatory oversight;
minimum investment grade credit rating. These guidelines are
z monitoring intra-group transactions and exposures and large
effective April 1, 2004, with provision for compliance in a phased
exposures of the group to outside counter parties;
manner by January 1, 2005.
z identifying a designated entity within each group that would
In April 1999, the RBI, in its monetary and credit policy, stated that
collate data in respect of all other group entities and furnish the
the investment by a bank in subordinated debt instruments,
same to its regulator; and
representing Tier 2 capital, issued by other banks and financial
institutions should not exceed 10.0% of the investing bank’s capital z formalising a mechanism for inter-regulatory exchange of
including Tier 2 capital and free reserves. In July 2004, the RBI information.
imposed a ceiling 10.0% of capital funds (Tier 1 plus Tier 2 capital) The proposed framework covers entities under the jurisdiction of
on investments by banks and financial institutions in equity shares, the RBI, the Securities and Exchange Board of India, the Insurance
preference shares eligible for capital status, subordinated debt Regulatory and Development Authority and the National Housing
instruments, hybrid debt capital instruments and any other instrument Bank and would in due course be extended to entities regulated by
approved as in the nature of capital, issued by other banks and the proposed Pension Fund Regulatory and Development Authority.
financial institutions. Investments in the instruments which are not The RBI has identified us and our related entities as a financial
deducted from Tier I capital of the investing bank or financial conglomerate with us as the designated entity responsible for
institution, will attract 100.0% risk weight for credit risk for capital reporting to the RBI.
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March 2005
Banks’ Investment Classification and Valuation Norms management practices in India, taking into account the unique
requirement applicable to banks in India of maintenance of a statutory
Based on the comments to the Report of the Informal Group on
liquidity ratio equal to 25.0% of their demand and time liabilities. In
Banks’ Investment Portfolio, the RBI finalised its guidelines on
the meanwhile, the RBI has permitted banks to exceed the limit of
categorisation and valuation of banks’ investment portfolio. These
25.0% of investments for the held to maturity category provided the
guidelines were effective from September 30, 2000 and are revised
excess comprises only statutory liquidity ratio investments and the
by RBI from time to time. The salient features of the guidelines are
aggregate of such investments in the held to maturity category do
given below.
not exceed 25.0% of the demand and time liabilities. The RBI has
z The entire investment portfolio is required to be classified under permitted banks to transfer additional securities to the held to maturity
three categories: (a) held to maturity, (b) held for trading and (c) category as a one time measure during fiscal 2005, in addition to the
available for sale. Held to maturity includes securities acquired transfer permitted under the earlier guidelines. The transfer would
with the intention of being held up to maturity; held for trading be done at the lower of acquisition cost, book value or market value
includes securities acquired with the intention of being traded on the date of transfer.
to take advantage of the short-term price/interest rate
Held to maturity securities are not marked to market and are carried
movements; and available for sale includes securities not
at acquisition cost or at an amortised cost if acquired at a premium
included in held to maturity and held for trading. Banks should
over the face value.
decide the category of investment at the time of acquisition.
Available for sale and held for trading securities are valued at market
z Held to maturity investments compulsorily include (a)
or fair value as at the balance sheet date. Depreciation or
recapitalisation bonds, (b) investments in subsidiaries and joint
appreciation for each basket within the available for sale and held
ventures and (c) investments in debentures deemed as advance.
for trading categories is aggregated. Net appreciation in each basket,
Held to maturity investments also include any other investment
if any, that is not realised is ignored, while net depreciation is provided
identified for inclusion in this category subject to the condition
for.
that such investments cannot exceed 25.0% of the total
investment excluding recapitalisation bonds and debentures. Investments in security receipts or pass through certificates issued
by asset reconstruction companies or trusts set up by asset
Vide a notification in September 2004, RBI advised that Banks
reconstruction companies should be valued at the net asset value
may exceed the limit of 25 per cent of total investments under
announced periodically by the asset reconstruction company based
Held to Maturity category provided the excess comprises only
on the valuation of the underlying assets.
of SLR securities. Further, the total SLR securities held in the
Held to Maturity category is not more than 25 per cent of their Limit on Transactions through Individual Brokers
DTL as on the last Friday of the second preceding fortnight. To
enable the above, as a one time measure, banks may shift SLR Guidelines issued by the RBI require banks to empanel brokers for
securities to the Held to Maturity category any time, once more, transactions in securities. These guidelines also require that a
during the current accounting year as provided in the guidelines. disproportionate part of the bank’s business should not be transacted
The non-SLR securities held as part of Held to Maturity may only through one broker or a few brokers. The RBI specifies that not
remain in that category. No fresh non-SLR securities are more than 5.0% of the total transactions through empanelled brokers
permitted to be included in the Held to Maturity category. can be transacted through one broker. If for any reason this limit is
breached, the RBI has stipulated that the board of directors of the
z Profit on the sale of investments in the held to maturity category bank concerned should ratify such action.
is appropriated to the capital reserve account after being taken
in the income statement. Loss on any sale is recognised in the Prohibition on Short-Selling
income statement.
The RBI does not permit short selling of securities by banks. The RBI
z The market price of the security available from the stock has permitted banks to sell Government of India securities already
exchange, the price of securities in subsidiary general ledger contracted for purchase provided the purchase contract is confirmed
transactions, the RBI price list or prices declared by Primary and the contract is guaranteed by Clearing Corporation of India
Dealers Association of India (PDAI) jointly with the Fixed Income Limited or the security is contracted for purchase from the RBI. Each
Money Market and Derivatives Association of India (FIMMDA) security is deliverable or receivable on a net basis for a particular
serves as the “market value” for investments in available for settlement cycle.
sale and held for trading securities.
z Investments under the held for trading category should be sold Regulations relating to Deposits
within 90 days; in the event of inability to sell due to adverse The RBI has permitted banks to independently determine rates of
factors including tight liquidity, extreme volatility or a interest offered on term deposits. However, banks are not permitted
unidirectional movement in the market, the unsold securities to pay interest on current account deposits. Further, banks may only
should be shifted to the available for sale category. pay interest of up to 3.5% per annum on savings deposits. In respect
z Profit or loss on the sale of investments in both held for trading of savings and time deposits accepted from employees, we are
and available for sale categories is taken in the income permitted by the RBI to pay an additional interest of 1.0% over the
statement. interest payable on deposits from the public.
z Shifting of investments from or to held to maturity may be done Until October 31, 2004, Domestic time deposits have a minimum
with the approval of the board of directors once a year, normally maturity of 15 days (seven days in respect of deposits over Rs. 15
at the beginning of the accounting year; shifting of investments lakh with effect from April 19, 2001) and a maximum maturity of 10
from available for sale to held for trading may be done with the years. However, effective November 1, 2004, in order to provide
approval of the board of directors, the Asset Liability uniformity in the tenor of term deposits, banks have been permitted
Management Committee or the Investment Committee; shifting by Reserve bank of India to reduce the minimum tenor of domestic/
from held for trading to available for sale is generally not NRO term deposits even below Rs.15 lakh from 15 days to 7 days.
permitted. Time deposits from non-resident Indians denominated in foreign
In September 2004, the RBI announced that it would set up an internal currency have a minimum maturity of one year and a maximum
group to review the investment classification guidelines to align maturity of three years. Starting April 1998, the RBI has permitted
them with international practices and the current state of risk banks the flexibility to offer varying rates of interests on domestic
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March 2005
deposits of the same maturity subject to the following conditions: The Indian Parliament has enacted the Prevention of Money
z Time deposits are of Rs. 15 lakh and above; and Laundering Act (PMLA), 2002 to deal with the money laundering in
India. The provisions of the PMLA are expected to be brought into
z Interest on deposits is paid in accordance with the schedule of effect shortly. The PMLA seeks to prevent money laundering and to
interest rates disclosed in advance by the bank and not pursuant provide for confiscation of property derived from, or involved in,
to negotiation between the depositor and the bank. money laundering and for incidental and connected matters. In
We stipulate a minimum balance of Rs. 10,000 for a non-resident addition the applicable exchange control regulations (including the
rupee savings deposit. Interest rates on non-resident rupee term FEMA and the Foreign Contributions Regulation Act) restrict inflow
deposits of one to three years maturity are not permitted to exceed and outflow of foreign exchange, prescribe reporting mechanisms
the LIBOR/SWAP rates for US dollar of corresponding maturity. for transactions in foreign exchange and require authorized dealers
Interest rates on non-resident rupee savings deposits are not permitted to report identified suspicious transactions to the Reserve Bank of
to exceed the LIBOR/SWAP rate for six months maturity on US dollar India. The Prevention of Terrorism Act, 2002 has been repealed and
deposits and are fixed quarterly on the basis of the LIBOR/SWAP the Unlawful Activities (Prevention) Act, 1967 has been amended to
rate of US dollar on the last working day of the preceding quarter. included terrorism. The Narcotic Drugs and Psychotropic Substances
Act, 1985 is also in force in India and deals with drug related proceeds
Regulations relating to Knowing the Customer and Anti-Money
of crime.
Laundering
The RBI has issued a notification dated November 29, 2004 wherein Regulations on Asset Liability Management
it has prescribed guidelines for Know Your Customer (KYC) procedures At present, the RBI’s regulations for asset liability management require
and Anti Money Laundering (AML). The highlights of the notification banks to draw up asset-liability gap statements separately for rupee
are as follows: and for four major foreign currencies. These gap statements are
prepared by scheduling all assets and liabilities according to the
Customer Acceptance Policy:
stated and anticipated re-pricing date, or maturity date. These
Banks should develop a clear Customer Acceptance Policy laying statements have to be submitted to the RBI on a quarterly basis. The
down explicit criteria for acceptance of customers and define the RBI has advised banks to actively monitor the difference in the amount
parameters for risk perception of the customers. A profile of the of assets and liabilities maturing or being re-priced in a particular
Customers is to be prepared based on the risk categorisation of the period and place internal prudential limits on the gaps in each time
customer and banks are advised to apply enhanced due diligence period, as a risk control mechanism. Additionally, the RBI has asked
for high-risk customers. banks to manage their asset-liability structure such that the negative
liquidity gap in the 1-14 day and 15–28 day time periods does not
Customer Identification Procedures: exceed 20.0% of cash outflows in these time periods. This 20.0%
Banks should undertake customer identification procedures while limit on negative gaps was made mandatory with effect from April
establishing a banking relationship; carrying out a financial 1, 2000. In respect of other time periods, up to one year, RBI has
transaction or when the bank has a doubt about the authenticity/ directed banks to lay down internal norms in respect of negative
veracity or the adequacy of the previously obtained customer liquidity gaps.
identification data. Banks need to obtain sufficient information
Foreign Currency Dealership
necessary to establish the identity of each new customer and the
purpose of the intended nature of banking relationship. The RBI has granted us a full-fledged authorised dealers’ license to
deal in foreign exchange through our designated branches. Under
Monitoring of transactions: this license, we have been granted permission to:
Banks are advised to undertake the monitoring of transactions z engage in foreign exchange transactions in all currencies;
depending on the risk sensitivity of the account. Banks should pay
z open and maintain foreign currency accounts abroad;
special attention to all complex, unusually large transactions and all
unusual patterns, which have no apparent economic or visible lawful z raise foreign currency and rupee denominated deposits from
purpose. In particular, bank may prescribe threshold limits for a non resident Indians;
particular category of accounts and pay particular attention to the z grant foreign currency loans to on-shore and off-shore
transactions, which exceed these limits. corporations;
Other Guidelines: z open documentary credits;
z Concurrent/ Internal Auditors should specifically check and z grant import and export loans;
verify the application of KYC procedures at the branches and z handle collection of bills, funds transfer services;
comment on the lapses observed in this regard
z issue guarantees; and
z Banks must have an ongoing employee-training programme
z enter into derivative transactions and risk management activities
so that the members of the staff are adequately trained in KYC
procedures. that are incidental to its normal functions authorised under its
organisational documents.
z Banks should prepare specific literature / pamphlets so as to
educate the customer of the objectives of the KYC programme Our foreign exchange operations are subject to the guidelines
specified by the RBI in the control manual. As an authorised dealer,
z Banks should apply KYC procedures to the existing accounts we are required to enrol as a member of the Foreign Exchange
also in a time bound manner Dealers Association of India, which prescribes the rules relating to
z The Guidelines are applicable to branches and majority owned foreign exchange business in India.
subsidiaries located abroad Authorised dealers are required to determine their limits on open
z Banks may appoint senior management officer to be designated positions and maturity gaps in accordance with the RBI’s guidelines
as Principal Officer for monitoring and reporting of all and these limits are approved by the RBI. Further, we are permitted
transactions and sharing of information as required under the to hedge foreign currency loan exposures of Indian corporations in
law the form of interest rate swaps, currency swaps and forward rate
agreements, subject to certain conditions.
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March 2005
Ownership Restrictions require the prior approval of the RBI for payment of dividends if any
The government of India regulates foreign ownership in Indian banks. of the following conditions are not satisfied:
The total foreign ownership in a private sector bank, like ours, cannot z The bank should have had a capital adequacy ratio of at least
exceed 74.0% of the paid-up capital and shares held by foreign 11.0% for preceding two completed years and the accounting
institutional investors under portfolio investment schemes through year for which it proposes to declare dividend;
stock exchanges cannot exceed 49.0% of the paid-up capital. z The bank should have a net non-performing asset ratio of less
The RBI’s acknowledgement is required for the acquisition or transfer than 3.0%;
of a bank’s shares which will take the aggregate holding (both direct z The dividend payout ratio (computed after excluding
and indirect, beneficial or otherwise) of an individual or a group to extraordinary income and before considering dividend
equivalent of 5.0% or more of its total paid up capital. RBI, while distribution tax) should not exceed 33.33%;
granting acknowledgement, may take into account all matters that it
z The proposed dividend should be payable out of the current
considers relevant to the application, including ensuring that
year’s profit; and
shareholders whose aggregate holdings are above specified
thresholds meet fitness and propriety tests. In determining whether z The financial statements should be free of any qualifications by
the acquirer or transferee is fit and proper to be a shareholder, RBI the statutory auditors, which have an adverse bearing on the
may take into account various factors including, but not limited to profit during that year. In case of any qualification to that effect,
the acquirer or transferee’s integrity, reputation and track record in the net profit should be suitably adjusted while computing the
financial matters and compliance with tax laws, proceedings of a dividend payout ratio.
serious disciplinary or criminal nature against the acquirer or Subsidiaries and Other Investments
transferee and the source of funds for the investment.
We require the prior permission of RBI to incorporate a subsidiary.
While granting acknowledgement for acquisition or transfer of shares
that takes the acquirer’s shareholding to 10.0% or more and up to We are required to maintain an “arms’ length” relationship in respect
30.0% of a private sector bank’s paid-up capital, RBI may consider of our subsidiaries and in respect of mutual funds sponsored by us
additional factors, including but not limited to: in regard to business parameters such as taking undue advantage in
borrowing/lending funds, transferring/ selling/buying of securities
z the source and stability of funds for the acquisition and ability at rates other than market rates, giving special consideration for
to access financial markets as a source of continuing financial securities transactions, in supporting/financing the subsidiary and
support for the bank, financing our clients through them when they themselves are not
z the business record and experience of the applicant including able or are not permitted to do so. We and our subsidiaries have to
any experience of acquisition of companies, observe the prudential norms stipulated by RBI, from time to time, in
z the extent to which the acquirer’s corporate structure is in respect of our underwriting commitments. Pursuant to such prudential
consonance with effective supervision and regulation of its norms, our underwriting or the underwriting commitment of our
operations; and subsidiaries under any single obligation shall not exceed 15% of an
issue. We also require the prior specific approval of RBI to participate
z in case the applicant is a financial entity, whether the applicant in the equity of financial services ventures including stock exchanges
is a widely held entity, publicly listed and a well established and depositories notwithstanding the fact that such investments may
regulated financial entity in good standing in the financial be within the ceiling (lower of 30.0% of the paid up capital of the
community. investee company and 30.0% of the investing bank’s own paid up
While granting acknowledgement for acquisition or transfer of shares capital and reserves) prescribed under section 19(2) of the Banking
that takes the acquirer’s shareholding to 30.0% or more of a private Regulation Act. Further investment by us in a subsidiary, financial
sector bank’s paid-up capital, RBI may consider additional factors, services company, financial institution cannot exceed 10.0% of our
including but not limited to whether or not the acquisition is in the paid-up capital and reserves and our aggregate investments in all
public interest and shareholder agreements and their impact on the such companies and financial institutions put together cannot exceed
control and management of the bank’s operations. 20.0% of our paid-up capital and reserves.
RBI has issued in February 2005, Guidelines on Ownership and
Deposit Insurance
Governance in private sector banks. These guidelines also deal with
‘fit and proper’ criteria for appointment of directors, well diversified Demand and time deposits of up to Rs. 100,000 accepted by Indian
ownership and control, minimum capital and ceiling on Foreign banks have to be mandatorily insured with the Deposit Insurance
Direct Investment. and Credit Guarantee Corporation, a wholly-owned subsidiary of
Under the RBI guidelines, as of February 3, 2004, private sector the RBI. Banks are required to pay the insurance premium for the
banks were required to amend their Memorandum and Articles of eligible amount to the Deposit Insurance and Credit Guarantee
Association to ensure that acquisitions of 5% or more of their total Corporation on a semi-annual basis. The cost of the insurance
paid-up share capital has been approved by the RBI. premium cannot be passed on to the customer.
The RBI guidelines, as of February 28, 2005, prescribe a policy Statutes Governing Foreign Exchange and Cross-Border Business
framework for the ownership and governance of private sector banks. Transactions
The objective of RBI is to ensure that no single entity or group of
entities has shareholding or control, directly or indirectly, in any The foreign exchange and cross border transactions undertaken by
bank in excess of 10% and any level of acquisition over 5% would banks are subject to the provisions of FEMA. All branches should
require prior RBI approval. The new RBI guidelines also provide monitor all non-resident accounts to prevent money laundering.
that any existing shareholding of any individual entity/group of related
In November 2003, RBI issued guidelines, which stated that no
entities in excess of 10% be reduced to 10% in a phased manner in
financial intermediary, including banks, will be permitted to raise
consultation with the RBI by the bank. Further, any bank having a
shareholding in excess of 5% in any other bank in India is required external commercial borrowings or provide guarantees in favour of
to indicate a timetable in which such shareholding would be reduced overseas lenders for external commercial borrowings. Eligible
to the permissible level of 5%. borrowers may raise external commercial borrowings in excess of
US$ 50 million only to finance the import of equipment and to meet
Restrictions on Payment of Dividends foreign exchange needs of infrastructure projects.
In April 2004, the RBI issued guidelines stating that a bank would
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March 2005
Legal Reserve Requirements Restriction on Share Capital and Voting Rights
Cash Reserve Ratio Banks can issue only ordinary shares. The Banking Regulation Act
specifies that no shareholder in a banking company can exercise
A banking company such as ours is required to maintain a specified voting rights on poll in excess of 10.0% of total voting rights of all
percentage of its net demand and time liabilities, excluding inter- the shareholders of the banking company.
bank deposits, by way of cash reserve with itself and by way of
balance in current account with the RBI. The cash reserve ratio can Only banks incorporated before January 15, 1937 can issue
be a minimum of 3.0% and a maximum of 20.0% pursuant to section preferential shares. Prior to the amalgamation, ICICI had preference
42 of the RBI Act. On September 11, 2004, the RBI announced an share capital of Rs. 350 crore. The government of India, on the
increase in the cash reserve ratio from 4.5% to 4.75% effective recommendation of the RBI, has granted an exemption to us which
September 18, 2004 and 5.0% effective October 2, 2004. allows the inclusion of preference capital in our capital structure for
The following liabilities are excluded from the calculation of the a period of five years, though we have been incorporated after
demand and time liabilities to determine the cash reserve ratio: January 15, 1937.
z inter-bank liabilities; Legislation recently introduced in the Indian Parliament proposes to
amend the Banking Regulation Act to remove the limit of 10.0% on
z liabilities to primary dealers; and
the maximum voting power exercisable by an shareholder in a
z refinancing from the RBI and other institutions permitted to banking company and allow banks to issue redeemable and non-
offer refinancing to banks. redeemable preference shares.
The RBI pays no interest on the cash reserves up to 3.0% of the
demand and time liabilities and effective September 18, 2004, pays Restrictions on Investments in a Single Company
interest on the balance at 3.5% per annum. Prior to that date, the rate No bank may hold shares in any company exceeding 30.0% of the
of interest paid was the bank rate (currently 6.0%). paid up share capital of that company or 30.0% of its own paid up
The cash reserve ratio has to be maintained on an average basis for share capital and reserves, whichever is less.
a fortnightly period and should not be below 70.0% of the required
cash reserve ratio on any day of the fortnight. Regulatory Reporting and Examination Procedures
Statutory Liquidity Ratio The RBI is empowered under the Banking Regulation Act to inspect
a bank. The RBI monitors prudential parameters at quarterly intervals.
In addition to the cash reserve ratio, a banking company such as To this end and to enable off-site monitoring and surveillance by the
ours is required to maintain a specified percentage of its net demand RBI, banks are required to report to the RBI on aspects such as:
and time liabilities by way of liquid assets like cash, gold or approved
z assets, liabilities and off-balance sheet exposures;
unencumbered securities. The percentage of this liquidity ratio is
fixed by the RBI from time to time, and it can be a minimum of 25.0% z the risk weighting of these exposures, the capital base and the
and a maximum of 40.0% pursuant to section 24 of the Banking capital adequacy ratio;
Regulation Act. At present, the RBI requires banking companies to z the unaudited operating results for each quarter;
maintain a liquidity ratio of 25.0%. The Banking Regulation
z asset quality;
(Amendment) and Miscellaneous Provisions Bill, 2003 recently
introduced in the Indian Parliament proposes to amend section 24 z concentration of exposures;
of the Banking Regulation Act to remove the minimum Statutory z connected and related lending and the profile of ownership,
Liquidity Ratio stipulation, thereby giving the RBI the freedom to fix control and management; and
the Statutory Liquidity Ratio below this level.
z other prudential parameters.
Requirements of the Banking Regulation Act The RBI also conducts periodical on-site inspections on matters
relating to the bank’s portfolio, risk management systems, internal
Prohibited Business controls, credit allocation and regulatory compliance, at intervals
The Banking Regulation Act specifies the business activities in which ranging from one to three years. We have been and at present also,
a bank may engage. Banks are prohibited from engaging in business are, subject to the on-site inspection by the RBI at yearly intervals.
activities other than the specified activities. The inspection report, along with the report on actions taken by us,
has to be placed before the Board of Directors. On approval by the
Reserve Fund
Board of Directors, we are required to submit the report on actions
Any bank incorporated in India is required to create a reserve fund taken by us to the RBI. The RBI also discusses the report with the
to which it must transfer not less than 25.0% of the profits of each management team including the Managing Director & CEO.
year before dividends. If there is an appropriation from this account,
the bank is required to report the same to the RBI within 21 days, The RBI also conducts on-site supervision of selected branches of
explaining the circumstances leading to such appropriation. The ours with respect to their general operations and foreign exchange
government of India may, on the recommendation of the RBI, exempt related transactions.
a bank from requirements relating to its reserve fund. Appointment and Remuneration of the Chairman, Managing
Payment of Dividend Director and Other Directors
Pursuant to the provisions of the Banking Regulation Act, a bank can We are required to obtain prior approval of the RBI before we
pay dividends on its shares only after all its capitalised expenses appoint our chairman and managing director and any other
(including preliminary expenses, share selling commission, wholetime directors and fix their remuneration. The RBI is
brokerage, amounts of losses and any other item of expenditure not empowered to remove an appointee to the posts of chairman,
represented by tangible assets) have been completely written off. managing director and wholetime directors on the grounds of public
The Indian government may exempt banks from this provision by interest, interest of depositors or to ensure proper management.
issuing a notification on the recommendation of the RBI. We have Further, the RBI may order meetings of the Board of Directors to
been exempted from this provision in respect of expenses relating discuss any matter in relation to us, appoint observers to such
to the Early Retirement Option offered by us in fiscal 2004. We have meetings and in general may make such changes to the management
obtained permission from the RBI to write off these expenses over a as it may deem necessary and may also order the convening of a
general meeting of our shareholders to elect new directors. We
five-year period in our Indian GAAP accounts.
cannot appoint as a director any person who is a director of another
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March 2005
banking company. In July 2004, the RBI issued guidelines on ‘fit and requirements.
proper’ criteria for directors of banks. Accordingly private sector z RBI may exempt a bank’s Offshore Banking Unit from statutory
banks should undertake a process of due diligence to determine the liquidity ratio requirements on specific application by the bank.
suitability of the person for appointment / continuing to hold
appointment as a director on the Board, based upon qualification, z An Offshore Banking Unit may not enter into any transactions in
expertise, track record, integrity and other ‘fit and proper’ criteria. foreign exchange with residents in India, unless such a person
Banks should obtain necessary information and declaration from is eligible to enter into or undertake such transactions under
the proposed / existing directors for that purpose.. FEMA.
z All prudential norms applicable to overseas branches of Indian
Issue of Bonus Shares banks apply to Offshore Banking Units.
We would require the prior permission of RBI and our shareholders’ z Offshore Banking Units are required to adopt liquidity and
approval to issue bonus shares. interest rate risk management policies prescribed by RBI in
Penalties respect of overseas branches of Indian banks as well as within
the overall risk management and asset and liability management
The RBI may impose penalties on banks and its employees in case framework of the bank subject to monitoring by the bank’s
of infringement of regulations under the Banking Regulation Act. board of directors at prescribed intervals,
The penalty may be a fixed amount or may be related to the amount z Offshore Banking Units may raise funds in convertible foreign
involved in any contravention of the regulations. The penalty may currency as deposits and borrowings from non-residents
also include imprisonment. A press release is issued by the RBI including non-resident Indians but excluding overseas corporate
giving details of the circumstances under which the penalty is bodies.
imposed on the bank along with the communication on the imposition
of penalty in public domain. Further, the penalty should also be Offshore Banking Units may operate and maintain balance
disclosed in the “Notes on Accounts” to the balance sheet in the sheets only in foreign currency.
concerned bank’s next Annual Report The loans and advances of Offshore Banking Units would
not be reckoned as net bank credit for computing priority
Assets to be Maintained in India sector lending obligations.
Every bank is required to ensure that its assets in India (including Offshore Banking Units must follow the Know Your
import-export bills drawn in India and RBI approved securities, Customer guidelines and must be able to establish the
even if the bills and the securities are held outside India) are not less identity and address of the participants in a transaction,
than 75.0% of its demand and time liabilities in India. the legal capacity of the participants and the identity of the
Restriction on Creation of Floating Charge beneficial owner of the funds.
Prior approval of the RBI is required for creating floating charge on Regulations and Guidelines of the Securities and Exchange Board
our undertaking or property. Currently, all our borrowings including of India
Bonds are unsecured. SEBI was established to protect the interests of public investors in
Secrecy Obligations securities and to promote the development of, and to regulate, the
Indian securities market. We are subject to SEBI regulations for our
Our obligations relating to maintaining secrecy arise out of common capital issuances, as well as our underwriting, custodial, depositary
law principles governing our relationship with our customers. We participant, investment banking, registrar and transfer agents, broking
cannot disclose any information to third parties except under clearly and debenture trusteeship activities. These regulations provide for
defined circumstances. The following are the exceptions to this our registration with the SEBI for each of these activities, functions
general rule: and responsibilities. We are required to adhere to a code of conduct
z where disclosure is required to be made under any law; applicable for these activities.
z where there is an obligation to disclose to the public; Public Financial Institution Status
z where we need to disclose information in our interest; and ICICI was a public financial institution under the Indian Companies
z where disclosure is made with the express or implied consent Act, 1913. The special status of public financial institutions is also
of the customer. recognised under other statutes including the Indian I.T. Act, 1961,
We are required to comply with the above in furnishing any Sick Industrial Companies (Special Provisions) Act, 1985 and
information to any parties. We are also required to disclose Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
information if ordered to do so by a court. The RBI may, in the public We are not a public financial institution. As a public financial institution,
interest, publish the information obtained from the bank. Under the ICICI was entitled to certain benefits under various statutes. These
provisions of the Banker’s Books Evidence Act, a copy of any entry benefits included the following:
in a bankers’ book, such as ledgers, day books, cash books and z For income tax purposes, ICICI’s deposits and Bonds were
account books certified by an officer of the bank may be treated as prescribed modes for investing and depositing surplus money
prima facie evidence of the transaction in any legal proceedings. by charitable and religious trusts. Since we are a scheduled
bank, our deposits and Bonds are also prescribed modes for
Regulations governing Offshore Banking Units investment by religious and charitable trusts.
The government and RBI have permitted banks to set up Offshore z The government of India had permitted non-government
Banking Units in Special Economic Zones, which are specially provident, superannuation and gratuity funds to invest up to
delineated duty free enclaves deemed to be foreign territory for the 40.0% of their annual accretion of funds in Bonds and securities
purpose of trade operations, duties and tariffs. We have an Offshore issued by public financial institutions. Further, the trustees of
Banking Unit located in the Santacruz Electronic Exports Promotion these funds could at their discretion invest an additional 20.0%
Zone, Mumbai. The key regulations applicable to Offshore Bank of such accretions in these Bonds and securities. These funds
Units include, but are not limited to, the following: can invest up to only 10.0% of their annual accretion in Bonds
z No separate assigned capital is required. However, the parent and securities issued by private sector banks, such as us.
bank is required to provide a minimum of US$10 million to its z Indian law provides that a public financial institution cannot,
Offshore Banking Unit. except as provided by law or practice, divulge any information
z Offshore Banking Units are exempt from cash reserve ratio relating to, or to the affairs of, its customers. We have similar
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March 2005
obligations relating to maintaining secrecy arising out of aggregate average advances made by its rural branches
common law principles governing our relationship with our computed in the manner prescribed. We have the option of
customers. claiming a deduction in respect of the provision made by us for
z The Recovery of Debts Due to Banks and Financial Institutions any assets classified pursuant to the RBI’s guidelines as doubtful
Act, 1993 provides for establishment of debt recovery tribunals or loss assets to the extent of 10.0% of the amount of such
for recovery of debts due to any bank or public financial assets as on the last day of the year.
institution or to a consortium of banks and public financial z We are eligible to issue tax saving Bonds approved in
institutions. Under this Act, the procedures for recoveries of accordance with the provisions of the Indian I.T. Act. The
debt were simplified and time frames were fixed for speedy subscription to such Bonds by certain categories of investors is
disposal of cases. Upon establishment of the debt recovery a prescribed mode of investing for the purposes of availing of
tribunal, no court or other authority can exercise jurisdiction in a tax rebate.
relation to matters covered by this Act, except the higher courts z For income tax purposes, our deposits and Bonds are prescribed
in India in certain circumstances. This Act applies to banks as modes of investing and depositing surplus money by charitable
well as public financial institutions and therefore applies to us. and religious trusts.
ICICI’s cessation as a public financial institution would have
constituted an event of default under certain of ICICI’s loan agreements Regulations governing Insurance Companies
related to its foreign currency borrowings. Prior to the amalgamation ICICI Prudential Life Insurance Company and ICICI Lombard General
becoming effective, such event of default was waived by the Insurance Company, the subsidiaries of ICICI Bank offering life
respective lenders pursuant to the terms of such foreign currency insurance and non-life insurance respectively, are subject to the
borrowing agreements. provisions of the Insurance Act, 1938 and the various regulations
prescribed by the Insurance Regulatory and Development Authority.
Special Status of Banks in India
These regulations regulate and govern, among other things,
The special status of banks is recognised under various statutes registration as an insurance company, investment, licensing of
including the Sick Industrial Companies Act, 1985, Recovery of Debts insurance agents, advertising, sale and distribution of insurance
Due to Banks and Financial Institutions Act, 1993, and the products and services and protection of policyholders’ interests. In
Securitisation Act. As a bank, we are entitled to certain benefits May 2002, the Indian parliament approved the Insurance
under various statutes including the following: (Amendment) Act 2002, which facilitates the appointment of
z The Recovery of Debts Due to Banks and Financial Institutions corporate agents by insurance companies and prohibits
Act, 1993 provides for establishment of Debt Recovery Tribunals intermediaries and brokers from operating as surrogate insurance
for expeditious adjudication and recovery of debts due to any agents.
bank or Public Financial Institution or to a consortium of banks Regulations governing International Operations
and Public Financial Institutions. Under this Act, the procedures
for recoveries of debt have been simplified and time frames Our international operations are governed by regulations in the
been fixed for speedy disposal of cases. Upon establishment countries in which we have a presence.
of the Debt Recovery Tribunal, no court or other authority can Overseas Banking Subsidiaries
exercise jurisdiction in relation to matters covered by this Act,
except the higher courts in India in certain circumstances. Our wholly-owned subsidiary in the United Kingdom, ICICI Bank UK
z The Sick Industrial Companies Act, 1985, provides for reference Limited is authorised by the Financial Services Authority, which
of sick industrial companies, to the Board for Industrial and granted our application under Part IV of the Financial Services and
Financial Reconstruction. Under the Act, other than the Board Markets Act, 2000 on August 8, 2003. Our wholly-owned subsidiary
of Directors of a company, a scheduled bank (where it has an in Canada, ICICI Bank Canada, was incorporated on September 12,
interest in the sick industrial company by any financial assistance 2003 as a Schedule II Bank in Canada. ICICI Bank Canada has obtained
or obligation, rendered by it or undertaken by it) may refer the the approval of the Canada Deposit Insurance Corporation (CDIC)
company to the BIFR. for deposit insurance and is regulated by the Office of the
Superintendent of Financial Institutions.
z The Securitisation Act focuses on improving the rights of banks
and financial institutions and other specified secured creditors Offshore Branches
as well as asset reconstruction companies by providing that In Singapore, we have an offshore branch, regulated by the Monetary
such secured creditors can take over management control of a Authority of Singapore. The Branch is allowed to accept deposits
borrower company upon default and/or sell assets without the from Singapore residents with a minimum size of US$ 100,000 or
intervention of courts, in accordance with the provisions of the Singapore $ 250,000. It is also subject to minimum reserve
Securitisation Act. requirements with respect to its Domestic Banking Unit book. The
Income Tax Benefits Asian Currency Unit book is not subject to reserve requirements, but
the Branch is required to maintain minimum adjusted capital funds
As a banking company, we are entitled to certain tax benefits under of Singapore$ 10 million. In Bahrain, we have an offshore branch,
the Indian I.T. Act including the following: regulated by the Bahrain Monetary Agency. The branch is permitted
z We are allowed a deduction of up to 40.0% of our taxable to transact banking business with approved financial institutions
business income derived from the business of long-term within Bahrain and individuals or institutions outside Bahrain. It is
financing (defined as loans and advances extended for a period also permitted to offer banking services to non-resident Indians in
of not less than five years) which is transferred to a special Bahrain.
reserve, provided that the total amount of this reserve does not
exceed two times the paid-up share capital and general reserves. Representative Offices
We are entitled to this benefit because we are a financial Our representative office in New York in the United States is licensed
corporation. Effective fiscal 1998, if a special reserve is created, and regulated by the State of New York Banking Department and the
it must be maintained and if it is utilised, it is treated as taxable Federal Reserve Board. Our representative office in Dubai in the
income in the year in which it is utilised. United Arab Emirates is regulated by the Central Bank of the United
z We are entitled to a tax deduction on the provisioning towards Arab Emirates. Our representative office in Shanghai in China is
bad and doubtful debts equal to 7.5% of our total business regulated by the China Banking Regulatory Commission. Our
income, computed before making any deductions permitted representative office in Bangladesh is regulated by the Bangladesh
pursuant to the Indian I.T. Act, to the extent of 10.0% of the Bank.
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March 2005
INDIAN LICENCES, APPROVALS, REGISTRATIONS AND z As a Portfolio Manager with SEBI vide registration number
PERMISSIONS PM/INP000000894 dated February 13, 2004.
We have the following licences and permissions from RBI: z As a Professional Clearing Member - BSE with SEBI vide
registration number INF011133446.
1. Licence to carry on banking business under section 22 of the
Banking Regulation Act: Licence No. A.H. 2 dated May 17, z As a Professional Clearing Member - NSE with SEBI vide
1994. registration number INF231134745.
2. Permission to set up subsidiaries which carry out businesses z As a Clearing House with BSE vide registration number
outside India under section 19(b): Code No: 813, with NSE vide registration number Code
No: ICICI and with OTC vide registration number Code No:
z RBI permission dated August 29, 2003 for a subsidiary in
ICICI.
Moscow, Russia;
5. In addition our subsidiaries, other group companies and mutual
z RBI permission dated December 2, 2002 for a subsidiary
funds, sponsored/co-sponsored by us have the following
in London, UK; and
registrations.
z RBI permission dated December 2, 2002 for a subsidiary
ICICI Venture Funds Management Company Limited:
in Toronto, Canada.
z Registered as a Stock Broker - OTCEI with SEBI vide
3. Permission from RBI to open new places of business/ branches
registration number INB 200 49 8332 dated January 29,
outside India under section 23(1)(b) of the Banking Regulation
1993.
Act:
z ICICI Venture Funds Management Company Limited is
z OBU- RBI Licence No. 1339 for SEEPZ, Mumbai dated
notified as a Public Financial Institution under section 4A
July 9, 2003;
of the Act through S.O. 321 (E) dated April 12, 1990.
z Branch – RBI permission dated May 24, 2004 for up
ICICI Securities Limited:
gradation of representative office to a branch in New York,
USA z Registered as a Merchant Banker with SEBI vide registration
number MB/INM 000001113 dated July 12, 2002.
z Branch – RBI permission dated May 24, 2004 for branch
office in Colombo, Sri Lanka; z Registered as an Underwriter with SEBI vide registration
number UND/INU 000001017 dated December 14, 2001.
z Branch – RBI permission dated August 29, 2003 for branch
office in Manama, Bahrain; z Registered as a Portfolio Manager with SEBI vide
registration number PM/INP000000696 dated October 16,
z Branch – RBI permission dated December 2, 2002 for
2002.
setting up of an Branch in Singapore
z Registered as a NBFC with RBI vide registration number B-
z Representative Office-RBI permission dated August 29,
13.01624 dated June 18, 2002.
2003 for setting up of a representative office in
Johannesburg, South Africa; z Authorised by RBI to act as a Primary Dealer. Registration
renewed vide letter dated June 21, 2004.
z Representative Office -RBI permission dated August 29,
2003 for setting up of a representative office in Dhaka, ICICI Brokerage Services Limited:
Bangladesh; z Registered as a Stock Broker with BSE vide registration
z Representative Office -RBI permission dated December 2, number INB 010773035 (Capital Market Segment) dated
2002 for setting up of a representative office in Shanghai, March 8, 1999 and registration number INF 010773035
China; and (Derivative Segment) dated June 8, 2000.
z Representative Office -RBI permission dated December 2, z Registered as a Stock Broker with NSE vide registration
2002 for setting up of a representative office in Dubai, number INB 230773037 (Capital Market and Wholesale
UAE. Debt Market Segment) dated September 14, 1995 and
registration number INF 230773037 (Futures and Options
z Representative Office -RBI permission dated December
Segment) dated June 8, 2000.
11, 2000 for setting up of a representative office in New
York, USA. ICICI Securities Fund:
4. We have the following other registrations; z Registered as a Mutual Fund with SEBI vide registration
number MF/043/00/3 , the trustee of which is ICICI Trusteeship
z As a Debenture Trustee with SEBI vide registration number
Services Limited and the asset management company of
IND000000004.
which is ICICI Investment Management Company Limited.
z As a Custodian with SEBI vide registration number IN/
CUS/005 dated January 8, 1999. ICICI Investment Management Company Limited:
z Asset Management Company of ICICI Securities Fund, a
z As an Underwriter to the Issue with SEBI vide registration
number INU000000456. Mutual Fund registered with SEBI, with Registration No.
MF/043/00/3.
z As a Depository Participant - NSDL with SEBI vide
z Registered with SEBI as Portfolio Manager with Registration
registration number IN-DP-NSDL-2097 dated February 12,
2002. No.INP000001025 (validity - August 16, 2004 to August 15,
2007)
z As a Depository Participant - CDSL with SEBI vide
registration number IN-DP-CDSL-4299 dated dated ICICI Trusteeship Services Limited:
September 24, 2004. z Trustee Company of ICICI Securities Fund, a Mutual Fund
z As a Banker to the Issue with SEBI vide registration number registered with SEBI, with Registration No. MF/043/00/3.
INBI00000004. ICICI Home Finance Company Limited:
z As a Merchant Banker with SEBI vide registration number z Registered as a Housing Finance Company with NHB vide
INM000010759 dated September 19, 2002. registration number 14-75-31.
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March 2005
z Registered “To carry out business of Housing Finance 5,631 crores. The DRT passed an order directing MCL to
Institution” with NHB vide registration number 01.0007.01. withdraw its counter-claim and forfeited the court fees paid by
ICICI Prudential Life Insurance Company Limited: MCL as the counter claim was wrongly filed in the application
made by the guarantor for MCL. This matter was dismissed.
z Registered as a Life Insurance Company with Insurance
MCL then made an application in the High Court of Gujarat to
Regulatory and Development Authority vide registration
seek extension of time for filing a counter claim in the DRT,
number 105, dated November 24, 2000.
Mumbai. The High Court of Gujarat held that it did not have
ICICI Lombard General Insurance Company Limited: jurisdiction in the matter and observed that the matter was to be
z Registered as a General Insurance Company with Insurance decided by the DRT, Mumbai on merits. The DRT, Mumbai has
Regulatory and Development Authority vide registration now admitted the counter claim filed by MCL for adjudication.
number 115 dated August 3, 2001. The proceedings are however presently stayed in view of the
ICICI Distribution Finance Private Limited: order of the DRT, Mumbai stating that as the fresh reference
filed by MCL before the Board of Industrial and Financial
z Registered as a NBFC (not accepting public deposits) with Reconstruction is pending, the DRT proceedings cannot be
RBI vide registration number B-13.00922. proceeded with. We have preferred an appeal against the said
ICICI Bank Canada order to the Debt Recovery Appellate Tribunal. The appeal is
z RBI permission dated May 24, 2004 for a subsidiary in to be listed for hearing on June 6, 2005.
Canada 2. The principal sponsor of the Dabhol Power Company has filed
Prudential ICICI Mutual Fund: for bankruptcy in the United States. The Indian lenders to the
project sought an injunction before the Indian courts in order to
z Registered as a Mutual Fund with SEBI vide registration preserve and protect the lenders’ security interests in the
number MF/003/93/6, the trustee of which is Prudential collateral. As a result of their guarantee (under the Power
ICICI Trust Limited and the asset management company of Purchase Agreement) to certain foreign lenders, the government
which is Prudential ICICI Asset Management Company of India and the state of Maharashtra are also involved in this
Limited.
matter. In addition, an arbitration proceeding in London has
Prudential ICICI Asset Management Company Limited been brought against ICICI and other Indian lenders in an
z Registered as a Portfolio Manager with SEBI vide aggregate amount of US$ 534 million. A number of significant
registration number PM/INP000000373. stakeholders are making efforts to resolve the overall situation
and bring the project into use. These include, among other
3i Infotech Limited
things, efforts for settlement of claims, including renegotiation
z Certified as Registrars to an Issue and Share Transfer Agent of the power tariff and the sale of the project to new sponsors.
in Category I, by SEBI vide registration code INR000001773
3. The guarantors for MCL, Mr. Rasiklal Mardia, Mr. Rakesh Mardia
z Importer-Exporter Code (IEC) issued by the Ministry of and Mr. Rajiv Mardia filed a suit against us (number 1431 of
Information Technology, Government of India vide IEC 2003) for recovery of dues in the City Civil Court, Ahmedabad
No. 5199003470. and have claimed an amount of Rs. 2,078 crores. We have filed
6. We will apply for and/or renew relevant licenses, approvals or our reply seeking dismissal of the suit. Our application for
permissions as may be requried on account of our business dismissal is pending hearing in the City Civil Court, Ahmedabad
from the relevant regulatory or other authorities, in India or 4. ICICI filed a recovery suit (number 105 of 2001) in the DRT,
abroad. Mumbai against Dynamic Logistics Limited (DLL) for Rs. 35
IX. OUTSTANDING LITIGATION OR DEFAULTS crores. DLL filed a counter-claim for Rs. 125 crores in the DRT,
Mumbai and the matter is pending disposal. DRT, Mumbai
There are no outstanding or pending litigations or suits or passed an order stating that the claim, except the interim
proceedings (whether criminal or civil), no defaults, non-payment recovery certificate, had to be tried at Pune. We have preferred
or overdues of statutory dues, no proceedings initiated for any an appeal against the order of the DRT, Mumbai and have got
economic or civil offences (including past cases if found guilty) and a stay against the transfer of the claim to DRT, Pune. On
no disciplinary action taken by SEBI or stock exchanges, pertaining September 29, 2004 the recovery officer has taken symbolic
to matters likely to affect the operations and finances (including possession of the property as per the DRT, Pune procedure of
those of our subsidiaries and other group companies) whose affixing Boards etc. and the same has been executed. We have
outcome could have a material adverse effect on our operations succeeded in our appeal before the DRAT in claiming that DRT,
except as disclosed and discussed in “Risk Factors” on pages (ii) to Mumbai has jurisdiction. The reasoned order has been issued.
(xii). However, the following are the outstanding or pending litigations Dynamic Logistics has preferred a writ petition (number 607 of
or suits or proceedings against us involving a claim of Rs. 10 lakhs 2005) against the order of the recovery officer which is listed for
and more, and criminal complaints or cases, defaults, non-payment hearing on March 10, 2005.
or overdues of statutory dues, proceedings initiated for any economic 5. ICICI filed an application (number 107 of 1999) in the DRT, Delhi
or civil offences (including past cases if found guilty) and disciplinary against Esslon Synthetics Limited (ESL) and its managing
action taken by SEBI or stock exchanges (during the past five years) director (in his capacity as guarantor) for recovery of dues
against us and our subsidiaries and other group companies, as on payable to ICICI. The guarantor filed a counter-claim in the
March 1, 2005. The position of claims against us involving amounts DRT, Delhi in 2001 for an amount of Rs. 100 crores against ICICI
less than Rs. 10 lakhs, as on December 31, 2004, is mentioned and others. ESL has moved an application for amending the
separately. counter-claim in January 2004. We have filed our reply to the
I. Claims against us where the amount claimed is more than Rs. application for amendment. The matter is pending disposal.
10 lakhs 6. ICICI filed a recovery suit (number 584 of 2000) for Rs. 7 crores
1. ICICI had instituted legal proceedings against Mardia Chemicals against Camson Agritech Limited (CAL) and its guarantor in the
Limited (MCL), for recovery of dues (number 3874 of 1999). DRT, Bangalore. CAL has made a counter-claim for Rs. 30 crores.
MCL filed a counter-claim (number 278 of 2002) in the Debt We have filed our objections. The DRT, Bangalore has posted
Recovery Tribunal (DRT), Mumbai in 2002 for an amount of Rs.
114
March 2005
the matter on March 31, 2005 for leading evidence of the dismissal of the suit on the grounds of limitation. The said
Applicant (ICICI Bank) on the main application. application filed by us has been rejected. We are in the process
7. ICICI filed a recovery suit (number 3635 of 2000) in the DRT, of filing an appeal against the same. In the meantime we are
Mumbai against Medtech Products Limited (MPL) for Rs. 27.06 also in the process of filing our written statement in the suit.
crores. MPL filed a counter claim for set-off of an amount of Rs. 15. Walsons Industries Products Incorporated (WIPL) filed a suit
27.06 crores in the DRT, Mumbai. We have filed a review (number 603711 of 2002) against ICICI in the High Court of
application before the DRT, Mumbai, as the DRT, Mumbai did Judicature at Bombay for recovery of US$ 653,000 alleging
not take our written statement on record. The matter is pending that three bills received through the Bank of Nova Scotia should
disposal. be paid by ICICI in terms of a letter of credit as was done in the
8. ICICI filed a recovery suit (number 3074 of 1987) in the High case of five previous bills, since they formed a part of the same
Court of Judicature at Bombay (since transferred to DRT) against transaction. ICICI, in its statement of defence, stated that all
Punalur Paper Mills Limited (PPL) for Rs. 3.6 crores. documents received through Bank of Nova Scotia were on a
Subsequently, PPL has claimed damages from certain lenders collection basis, and each one was an independent transaction
(including ICICI), for an aggregate amount of Rs. 23.64 crores. by itself without any supporting commitment from ICICI through
The matter has not come up for final hearing. the letter of credit. The court has granted us unconditional leave
to defend the case. The suit is pending disposal.
9. We filed a suit (number 192 of 2001) in the DRT, Ahmedabad
against Vision Organics Limited (VOL) for recovery of Rs. 31.27 16. We have filed a suit (number 373 of 2002) against C D Industries
crores. VOL has filed a counter claim against us for Rs. 23 and its guarantors before the DRT, Mumbai. The company and
crores to which we have filed our replies. The matter has been one of the guarantors Mr. Vinod Kumar Agarwal have filed set
argued for our part of the claim. The arguments of IDBI are off/counter claim of Rs. 3.41 crores. The defendants have also
going on. The suit is pending disposal. filed a written statement in the matter. We have also issued
notice under the Securitisation Act to the company and
10. The Peerless General Finance and Investment Company Limited,
guarantors. The company filed a writ petition before the High
a debenture holder of Essar Oil Limited, filed a suit (number 434
Court of Judicature at Bombay against the said notice, which
of 2001) against Essar Oil Limited and others in the City Civil
has been dismissed. We have filed an application under section
Court, Kolkata in 2001 for non-receipt of redemption amount
14 of the Securitisation Act wherein the Magistrate has issued a
and interest of Rs. 11.23 crores. ICICI in its capacity as debenture
notice for taking possession of the properties of the company
trustee was impleaded as a defendant. We are in the process of
and for taking actual physical possession in due course. Ms.
filing our written statement. The suit is pending disposal.
Shruti Agarwal, daughter-in-law of the guarantor has filed a
11. Kalpana Lamps and Components Limited (KLCL) had availed writ petition (number 576of 2005) challenging the order of the
of financial assistances from ICICI and other lenders. Anchor Magistrate and the High Court of Judicature at Bombay has
Electronics and Electricals Limited (AEEL) had paid the granted status quo till March 11, 2005.
outstanding dues to ICICI and other lenders on behalf of KLCL
17. M.B. Industries Limited (MBIL) filed a suit (number 130A of
and requested ICICI to assign the securities in its favour. AEEL
1997) in the High Court of Kolkata claiming an aggregate amount
filed a suit for specific performance. Subsequently, AEEL
of Rs. 10.25 crores from ICICI and other financial institutions,
amended the specific performance suit to a money suit claiming
out of which approximately Rs. 2 crores was claimed from
Rs. 10.67 crores with interest thereon from ICICI and the same is
ICICI. The High Court did not grant any relief to MBIL. However,
pending before High Court of Judicature at Bombay (number
ICICI, and other financial institutions were granted leave to file
1559 of 1998). AEEL has also filed an application for release of
recovery suits against MBIL. The matter was kept pending sine
title deeds of KLCL’s properties at Ranipet. ICICI has given its
die. The financial institutions including ICICI filed a joint suit in
No Objection Certificate (NOC) to the above. The other charge
the DRT, Kolkata against MBIL. Our claim in the suit is for Rs.
holders are yet to give their NOC for the release. We have
1.91 crores. The Board for Industrial and Financial
received a letter from the Office of the Official Liquidator, Chennai
Reconstruction has recently granted consent to continue with
that winding up order has been passed by the High Court of
the recovery proceedings against MBIL. The hearing of evidence
Judicature at Madras in respect of KLCL and they are proceeding
has been concluded and the matter has been fixed for judgment.
to take formal possession of the properties of KLCL.
18. Mr Sunil Joshi, an ex-employee, filed a suit (number 19 of 2002)
12. ICICI had filed a joint suit (number 3499 of 1993) in the High
before the District Judge, Alipore for alleged wrongful dismissal
Court of Judicature at Bombay along with other financial
from our services, praying for a decree of Rs. 1.55 crores and
institutions against Sima Hotels and Resorts Ltd. Our debt has
damages for a loss of Rs. 42,602.74 per day with effect from
been transferred to ARCIL. Some of the defendants have filed a
April 11, 2001 till the date of realisation. We have filed a written
suit against us and other lenders claiming a sum of Rs. 7.3
statement and the suit is pending disposal.
crores. The matter is pending for final hearing.
19. Bank of India has filed a suit against the erstwhile Bank of Madura
13. Anagram Finance Limited, subsequently amalgamated with
(number 2 of 2001) before High Court of Judicature at Madras
ICICI, filed a suit (number 3879 of 1998) in the City Civil Court,
against K S Computers and K A Systems for an amount of Rs.
Ahmedabad in 1998 for recovery of a sum of Rs. 6.83 crores
1.11 crores and has also made us a party to the suit alleging that
from Ezy Slide Fasteners Limited (ESFL). ESFL filed a separate
we have collected forged instruments. The suit has been
suit (number 2243 of 1999) in the City Civil Court, Ahmedabad
transferred to the DRT, Chennai and is pending. The matter is
for recovery of Rs. 7.18 crores from Anagram Finance Limited,
yet to be posted for final hearing.
being the loss allegedly suffered by ESFL on account of breach
of a subscription agreement dated April 4, 1995. The suit is 20. We granted lease finance of US $ 72 lakhs (Rs. 25.78 crores) on
pending disposal. May 22, 1997 to O. R. J. Electronic Oxides Ltd. The Enforcement
Directorate initiated proceedings against us under the Foreign
14. North Star Gems Limited (NSGL) filed a suit (number 53 of 2003)
Exchange Regulation Act, 1973 (FERA) for violation of FERA
in the City Civil Court, Ahmedabad, pertaining to an alleged
Rules and on adjudication imposed a fine of Rs. 10 lakhs on us.
transfer of funds from the current account maintained by NSGL
We have filed an appeal against this order (number 496 of 2004)
with the erstwhile Bank of Madura, of an amount of Rs. 7 crores.
before the Appellate Tribunal , Delhi. The Appellate Tribunal,
The suit is pending disposal. We have filed an application for
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March 2005
while granting stay, has directed us to deposit 50% of fine wrongful sale of her truck and has claimed compensation to
imposed by the Enforcement Directorate within 3 months. We the extent of Rs. 12.2 lakhs. The interim application filed by
have filed a writ petition (number 28992 of 2004) in the High Tasneem Adhikari, asking court to direct us to hand over
Court of Judicature at Madras against the said order and have vehicle to her and not transfer to any other person, has
obtained an interim stay. The appeal filed by us before the been dismissed. The matter is pending final disposal.
FERA Appellate Tribunal stands adjourned sine die. The Income 30. Kisan Sahakari Chini Mills Limited has filed a suit against ICICI
Tax Department has also disallowed certain depreciation (number 6 of 2001) before the State Commission, UP claiming
claimed by us. We have filed an appeal before the Income Tax interest and compensation amounting to Rs. 13 lakhs on delayed
Appellate Tribunal and have obtained a stay. payment of refund amount of Rs. 20.6 lakhs pursuant to the
21. Gokula Education Foundation (Medical) has filed a complaint ICICI Bond Issue. We have filed our written statement before
(number 88 of 2003) against us before the Karnataka State the State Commission. The matter is pending hearing.
Consumers Disputes Redressal Commission claiming Rs. 79.30 31. Vijay Bhargavi Chit Fund Private Limited filed a petition (number
lakhs. The complaint has been filed for refund of front end fees, 72 of 2002) before the Andhra Pradesh Consumer Disputes
guarantee commission etc. as the sanctioned loan was not Redressal Commission, Hyderabad for damages of Rs. 20 lakhs
disbursed. The matter is posted for framing of issues and for deficiency in service arising out of the wrongful dishonour
arguments on April 15, 2005. of a cheque. We have filed our written statement before the
22. J.G. Finance Ltd. made a public issue on May 23, 1995 and the State Commission. The matter has been posted for filing affidavit
erstwhile Bank of Madura was one of the collecting bankers to in evidence on our behalf.
the issue. A suit was filed in the High Court of Judicature at 32. Fidelity Finance Ltd. has filed a suit (number 523 of 1998) against
Madras (number 832 of 1996) by First Leasing Company of the erstwhile Bank of Madura in the High Court of Judicature at
India Ltd. against J.G. Finance Ltd and 11 others including the Madras claiming an amount of Rs. 12.72 lakhs for not honouring
Bank of Madura. The High Court passed an injunction restraining a letter of credit issued in favour of Vijaya Chemagro India P.
the bank from making any payment to J.G. Finance Ltd. with Ltd. The matter is pending disposal.
regard to the public issue, except for an amount of Rs. 70 lakhs
33. Mr. R M Kanappan, an ex-employee of ours has filed a writ
only. Accordingly on November 17, 1995 the erstwhile Bank of
petition (number 15127 of 1999) against erstwhile Bank of
Madura paid Rs. 23 lakhs. The matter is still pending at the High
Madura, in the High Court of Judicature at Madras for wrongful
Court.
dismissal from services. The writ petition is pending disposal.
23. Mr. Bhalchandra Shinde, Proprietor of Mandar Travels filed a
34. Mr. R.N. Shetty has filed a complaint (number 212 of 2003)
suit (number 5330 of 1999) against ICICI in the High Court of
before Consumer Dispute Redressal Forum, Pune against us
Judicature at Bombay for termination of bus services for
for deficiency of service and has claimed an amount of Rs.
transportation of the staff members. The amount involved is Rs.
12.28 lakhs. The matter is pending disposal.
66 lakhs. The services of Mandar Travels were temporarily hired
till the final selection of the contractor. The matter is pending 35. Mr. S Srinivasagam, an ex employee of erstwhile Bank of
disposal. Madura has filed a suit (number 465 of 1999) against the
erstwhile Bank of Madura, before the Sub Court, Madurai
24. Mr. Jitesh Pradhan has filed a case (number 313 of 2003) before
claiming an amount of Rs. 11 lakhs (notional claim) for wrongful
the State Commission, Cuttack for wrongful encashment of a
suspension from employment. The matter is pending disposal.
cheque of Rs. 30,000/-. He has claimed Rs. 60 lakhs towards
harassment and mental agony. The matter is pending disposal. 36. A joint application was filed by ICICI and another financial
institution (application number 35 of 2001) against Best Boards
25. Venkateswara Engineering Corporation filed a suit (number 785
Limited for recovery of dues in DRT, Delhi. The company filed
of 1990) against the erstwhile Bank of Madura at the High Court
a counter claim on June 14, 2001 of Rs. 10 lakhs against the
of Judicature at Madras claiming an amount of Rs. 52 lakhs
lenders. The matter is pending disposal.
towards fixed deposits. We have filed our written statement.
The matter has been posted for arguments. 37. G R Pharma has filed a complaint (number 45 of 1997) against
the erstwhile Bank of Madura before the State Consumer Forum,
26. Quality Foils Ltd has filed a complaint (number 75 of 1993)
Chennai claiming an amount of Rs. 11 lakhs from us towards
before the State Consumer Forum, on account of a return of
unauthorised debit from his current account. The matter is
letter of credit for wrong reasons. The forum allowed the
pending disposal.
complaint and directed us to pay Rs. 24 lakhs to the complainant.
We have filed an appeal (number 208/209 of 1998) before the 38. Mr. Muthu Meenal Alagappan has filed a complaint (number
National Commission, Delhi and have obtained a conditional 158 of 1999) before the District Consumer Forum, Chennai South
order on deposit of Rs. 24 lakhs. The case is pending for hearing. against the erstwhile Bank of Madura, against two officials of
ours and against us claiming Rs. 10 lakhs jointly and severally.
27. Mr. Kailashchand Deoli has filed a case (number 197 of 2002)
The complaint was dismissed for non appearance of the
before the District Consumer Forum, Dehradun against us
complainant.
alleging deficiency of service and claiming a sum of Rs. 20
lakhs as compensation on account thereto. The matter is pending 39. Dr. Virender Kumar Nim has filed a complaint (number 107 of
disposal. 2004) before Consumer Dispute Redressal Forum, Pondicherry
against us alleging deficiency of service in respect of payment
28. Mr. Mahendra Jogani has filed a complaint (number 131 of
made by him towards credit card dues not being reflected in
2004) for the wrongful dishonour of a cheque against us before
his credit card statement and claiming a sum of Rs. 15.30 lakhs
the District Consumer Forum, Chennai. The complaint has been
as compensation on account loss and injury suffered by him
filed claiming Rs. 10 lakhs towards negligence, deficiency in
including refund of amount of Rs.30,000/-. We have filed a
service and unfair trade practices, Rs. 10 lakhs towards mental
written statement contesting the claim. However the forum has
agony and medical expenses and a refund Rs. 200 which were
dismissed the matter on February 9, 2005since the customer
the debit charges for bouncing of cheques. The matter is posted
was not present. The customer has the liberty to file an appeal
for arguments.
within 45 days from the date of the order.
29. Mrs. Tasneem Adhikari has filed a civil suit against us (number
40. Dr. S. Jayachandra has filed a complaint (number 333 of 2004)
3585 of 2003) in the High Court of Judicature at Bombay for the
before Consumer Dispute Redressal Forum, South Chennai
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March 2005
against us for claiming a sum of Rs. 10.80 lakhs, for certain and doubtful debts under section 36(1)(vii), I.T. Act. The Finance
insurance benefits available on her credit card. The claim of the Act retrospectively amended the section in the year 2001 with
complainant is that her husband expired in a road accident due effect from April 1, 1989. The appeals are pending disposal.
to which she was entitled to receive Rs.5 lakhs, Rs. 1.80 lakhs as 3. Taxability under section 41(4A), I.T. Act of amounts withdrawn
interest on insurance amount and Rs. 4 lakhs in respect of interest from Special Reserve created up to Assessment Year 1997-98:
amount paid by her on debt borrowed from private parties. We Tax Rs. 297.1 crores (including interest)
have filed our written statement. The matter is pending disposal. ICICI had two special reserve accounts, “Special Reserve
41. Shri Sivarama V Anantuni & Smt. A.Kalavathi have filed a created up to Assessment Year 1997-98” and “Special Reserve
complaint (number 1447 of 2004) before the Consumer Disputes created and maintained from Assessment Year 1998-99”.
Redressal Forum – I, Hyderabad against us claiming Rs. 10 Withdrawal has been made from the “Special Reserve created
lakhs as damages for alleged deficiency of service for wrongful up to Assessment Year 1997-98”. The tax authorities had not
dishonour of cheques. The matter is pending disposal.. taxed the withdrawals in the original assessment. The
42. During SEBI’s investigation of debenture trustee operations of assessments were subsequently re-opened to tax the
ICICI, observations on certain shortcomings were made by withdrawal, and these have been taxed by the income tax
SEBI in its inspection report. ICICI had initiated suitable action authorities. No withdrawals have been made from “Special
based on the SEBI report and had submitted a detailed reply to Reserve created and maintained from Assessment Year 1998-
SEBI. The matter is being examined by SEBI. 99” account. The appeals filed against taxing withdrawal of
43. SEBI had issued a notice in the matter of North Star Gems special reserve are pending disposal.
(India) Ltd to show cause as to why the Bhadra, Ahmedabad 4. Allocation of expenses to earn dividend income: Rs. 195.5crores
branch of the erstwhile Bank of Madura should not be (Including interest)
suspended from conducting merchant banking activities for a The disputed issue involves computation of exemption under
period of 6 months. We [filed our detailed reply with SEBI. SEBI section 10(33), I.T. Act and deduction under section 80 M, I.T.
in terms of their Order dated October 10, 2002 took note of the Act on account of dividend income viz. the gross dividend be
fact that RBI had not indicated any malafide actions on the part exempted from tax or whether interest expenses are attributable
of our officials and also the fact that we had taken disciplinary to earning the exempt dividend income. The matter is pending
action against the concerned employees and had issued a disposal.
warning to the Bhadra Branch with further direction to that Branch
to act with due skill, care and diligence while acting as Banker 5. Appeals allowed in our favour disputed by Tax Department:
to an Issue. Rs. 107.4 crores
The major issues include non-levy of interest tax on debentures/
Taxation-related matters Government securities/bonds amounting to Rs. 40.46 crores,
The major disallowances disputed in appeal by us and allowances investment allowance on leased assets amounting to Rs. 3.2
disputed in appeal by the income tax authorities as on December crores and interest on interest amounting to Rs. 10.75 crores.
31,2004, are as under: The matter is pending disposal.
1. Lease Depreciation: Tax Rs. 1,112.3 crores (including interest) 6. Broken Period Interest: Rs. 37.5 crores (Including interest)
The tax authorities have treated lease transactions as loans and The broken period interest paid on purchase of securities held
have disallowed our depreciation claim. In the case of leasing as stock in trade by the Company was disallowed by applying
business, the tax authorities have consistently denied a Supreme Court decision, which is later distinguished by a
depreciation to the lessor who is the legal owner. In a recent High Court of Judicature at Bombay decision. The Special
judgement, the Income Tax Appellate Tribunal has held a sale Leave petition of the Income Tax Department against the
and lease back transaction between ICICI and Gujarat Electricity favourable Bombay High Court Decision has also been
Board as not genuine, stating that the bona fide intention of dismissed by the Supreme Court. The matter is pending
both the parties was not present while entering into the disposal.
transaction though the necessary documentation was in order,
7. Sales Tax: Rs. 86.5 crores (Including interest)
and has disallowed the depreciation treating the transaction as
a tax-planning tool. The appeals filed are pending disposal. The major issue under dispute is the taxing of interstate / import
leases by various State Government authorities in respect of
2. Retrospective amendment for provision for bad and doubtful lease transactions entered into by us and levy of sales tax on
debts: Tax Rs. 406.0 crores (including interest) local purchases in the state of Maharashtra. The matters are
ICICI was allowed a deduction for specific provision for bad pending disposal.
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March 2005
II. Claims where amount is less than Rs. 10 lakhs (as on December 31, 2004)
Nature of claim Cases with Monetary Amount of possible liability Cases with no
Claim on the basis of assessment of specific Monetary
the branch/ in house legal Claim
dept. opinion
Number Amount No. of cases Amount Number
(Rs. Crore) (Rs. Crore)
1 Suits/legal proceedings filed by
shareholders/bond holders of
ICICI Bank Limited. 83 0.03277 22 0.0144 429
2 Suits/legal proceedings filed by
debenture holders against
ICICI Bank Limited as Debenture
Trustees. 107 0.3063 91 0.2749 12
3 Suits filed by lessees/hirers seeking
injunction against ICICI Bank Limited
taking possession of vehicles
pursuant to lease/hire purchase
agreements and other suits filed
by retail customers. 186 1.2600 42 0.0800 207
4 Miscellaneous suits/ legal
proceedings in the course of business. 389 8.9784 155 3.2660 126
5 Counter claims filed by Borrower/s
or Guarantor/s. 7 0.9000 0 0 11
6 Writ Petitions filed by employees/
ex employees 0 0 0 0 13
7 Cases filed before the Banking
Ombudsman 10 0.0843 4 0.042 74
TOTAL 782 11.5618 314 3.6773 872
III. Against Our Subsidiaries and Other Group Companies process was over in April 2004, he neither received allotment
in response to his application nor the refund of application
Subsidiaries money. The complaint has been filed against GAIL (India)
ICICI Securities Limited (ICICI Securities) Limited and MCS Limited, the Registrar and Share Transfer
Agents and ICICI Securities . ICICI Securities was acting as one
1. The RBI reduced the liquidity support limit for ICICI Securities of the Lead Managers to the issue. The complainant’s bank has
by Rs. 25 crores vide its letter IDMC.PDRS. No.1409/03.64.00(I- informed the complainant that there was a mistake on its part
Sec)/1999-2000 dated October 12, 2000 for a period of three because of which it has wrongly dishonoured the cheque and
months from October 7, 2002 until January 6, 2003, for the therefore has requested the complainant to withdraw the suit.
delayed submission of a bid in the treasury bill auction
conducted on September 25, 2002. RBI has added back this ICICI Brokerage Services Limited (ICICI Brokerage)
amount of Rs. 25 crores with effect from January 7, 2003, to the 1. The NSE had, in its letter dated November 26, 2002 reference
liquidity support limit for ICICI Securities, thus re-setting the no NSE/INSP/ACT/2001-02/31487, reprimanded ICICI Brokerage
limits to the original level. Earlier, a reduction in the liquidity and levied a penalty of Rs. 30,000/- subsequent to an inspection
support limit by Rs. 1.5 crores was imposed for a shortfall in done by it. The penalty was with respect to the purported
bidding commitment on April 7, 2000, vide RBI’s letter violations of short sales (three instances on March 9, 2001 and
IDMC.PDRS. No.3710 /03.64.00(I-Sec)/1999-2000 dated April 8, one instance on March 12, 2001) and the transfer of client shares
2000 which was reset to original level with effect from October to own account (12 instances during February-March 2001).
9, 2000. However, ICICI Brokerage had made a representation to NSE
2. ICICI Securities was awarded two penalty points by SEBI for requesting a waiver of the penalties, since these arose from
non-submission of the Letter of Offer in the Rights issues of genuine technical difficulties in the internet trading systems of
Siroplast Limited and Thane Electricity Company Limited during ICICI Web Trade Limited, which had been using ICICI Brokerage
1995 and one penalty point for non-submission of post-issue to execute the trades on NSE. ICICI Brokerage had therefore
report in the public issue for Shree Rajasthan Texchem Limited. requested NSE for a review of the penalty and submitted all
3. Two warning letters were issued by SEBI on October 2, 1998 in necessary documents in support of this. NSE accepted ICICI
the public issue of Hindustan Motors Limited and on July 11, Brokerage’s representation and waived the above penalty.
2000 in the public issue of Cadilla Healthcare Limited 2. SEBI had issued a show cause notice to ICICI Brokerage with
respectively. regard to the agency business done on behalf of one of its
4. ICICI Securities has received a complaint dated November 17, clients in the shares of Global Trust Bank. ICICI Brokerage replied
2004 filed by one Mr. S. R. Kulkarni (the complainant) in Consumer to the show cause notice denying the allegations and findings
Disputes Redressal Forum, Mumbai. It has been alleged by the of SEBI. Thereafter, SEBI granted a personal hearing on
complainant that he had applied for 150 shares of GAIL (India) November 24, 2003. Subsequent to the hearing, SEBI vide its
Limited in the Offer for Sale in March 2004. While the issue letter dated February 5, 2004 issued a show cause notice to
118
March 2005
ICICI Brokerage as to why the penalty of suspension of Upon consideration of the voluntary disclosures and
registration of ICICI Brokerage Services Limited for a period of representations made by ICICI Venture, SEBI vide its letter dated
four months as recommended by the enquiry officer should not January 9, 2003 communicated that the above procedural lapse
be imposed. ICICI Brokerage had vide its letter dated February had been viewed seriously and advised ICICI Venture to take
23, 2004 submitted its reply to the said show cause notice due care in future and improve its compliance mechanisms
denying all the allegations and the findings of the enquiry officer and standards to avoid recurrence of such incidents.
and that the charges against ICICI Brokerage stated in the show
2. SEBI, Madras had issued a show cause notice dated May 31,
cause notice of February 5, 2004 be accordingly withdrawn.
2002 to ICICI Venture alleging contravention of sub-Regulation
Further, ICICI Brokerage was granted a personal hearing before
1 and sub-regulation 3 of Regulation 6 (for the year 1997) and
the Chairman, SEBI on March 18, 2004 wherein ICICI Brokerage
sub-regulation 1 and sub-regulation 2 of Regulation 8 (for the
was represented by its legal counsels. ICICI Brokerage re-iterated
years 1998, 1999, 2000 and 2001) of the Securities and Exchange
that it denied the allegations and findings of SEBI as stated in
Board of India (Substantial Acquisition of Shares and Takeovers)
their show cause notice and also that the findings of SEBI were
Regulation, 1997 for failure/delay in making the disclosure of its
based merely on inferences and surmises without any proof of
shareholding in Vimta Labs Limited. Adjudication proceedings
guilt or market manipulation part of ICICI Brokerage. A written
were held. Based on the submissions made by ICICI Venture,
submission of the arguments presented at the personal hearing
SEBI vide order dated November 1, 2002 exonerated ICICI
was also forwarded to SEBI. The Chairman, SEBI vide order
Venture from liability.
dated September 9, 2004 discharged ICICI Brokerage from the
proceedings in the said matter. 3. Based on an application made by an employee, the government
3. Mr. Sunil Kumar Gupta filed a case before the District Consumer of Karnataka made a reference to the Industrial tribunal at
Dispute Redressal Forum, Jaipur (Forum) against ICICI Bangalore. However, since the employee did not subsequently
Brokerage, and an order dated August 22, 2003 was received appear before the Tribunal, the Tribunal vide its order dated
by ICICI Brokerage from the Forum directing ICICI Brokerage to April 16, 2004 rejected the reference made by the Government.
pay Rs. 19,538/- within one month. ICICI Brokerage has filed an As such the matter stands closed now.
appeal in September 2003 before the Rajasthan State Consumer ICICI Investment Management Company Limited (ICICI Investment
Disputes Redressal Commission, Jaipur. The appeal was filed Management)
on September 20, 2003. The appeal was admitted on August
18, 2004. The next hearing is scheduled on March 18, 2005 1. ICICI Investment Management is the asset management
4. As per normal practise, the BSE/NSE and SEBI from time to company of “ICICI Securities Fund”, a mutual fund registered
time conduct inspections of its member/registered brokers. with the SEBI. SEBI had issued on May 22, 2000, a warning
Accordingly, a regular inspection was conducted by SEBI of letter to ICICI Investment Management Limited for the lack of
ICICI Brokerage’s books for the period April, 2001 to March, due diligence while submitting the offer document for ICICI
2003. The inspection report had brought out certain irregularities CBO Fund.
such as difference of trade details in under separate accounts ICICI Distribution Finance Private Limited (ICICI Distribution)
maintained by us; PAN not being quoted on contract notes in
some cases and non-segregation of clients and our own funds. 1. The owner of certain premises rented to ICICI Distribution has
In this regard SEBI has vide its letter dated March 23, 2004 filed a civil suit (number 617 of 2002) against ICICI Distribution
advised ICICI Brokerage to rectify the irregularities and warned in the court of the Civil Judge, Senior Division, Pune seeking
it not to repeat the same in future. possession of these premises. The matter is scheduled for
hearing on April 27, 2005.
5. The NSE levied a penalty of Rs. 1,22,500/- on ICICI Brokerage
for delayed submission of the ‘WDM segment’ Annual 2. For the year 1999-2000, sales tax returns were filed by ICICI
Compliance Report for 2002-2003. Whilst the fine has been Distribution declaring the taxable turnover as ‘Nil’ as ICICI
debited, ICICI Brokerage has replied to the NSE stating its factual Distribution had claimed the exemption of second sale on its
position and requested a reversal of the above penalty. The turnover of hire purchase transactions. The sales tax authority
NSE thereafter placed the matter before its Disciplinary Action disallowed the exemption claimed by ICICI Distribution for
Committee, which has reduced the penalty to Rs. 1 lakh. ICICI want of certain documents. The total tax assessed was Rs. 181.5
Brokerage has sought a review of the said penalty. Upon review, lakhs and the penalty levied by the authority was Rs. 272.2
NSE vide letter dated February 15, 2005 has absolved ICICI lakhs. ICICI Distribution has paid Rs. 90.74 lakhs of the demand
Brokerage of the iregularity and has waived the penalty. raised for the admission of the appeal and has also furnished a
bank guarantee for Rs.3.63 crores. The appeal filed has not yet
ICICI Venture Funds Management Company Limited (ICICI been disposed off by the authorities.
Venture)
3. For the year 2000-2001, sales tax returns were filed by ICICI
1. ICICI Equity Fund (the “Fund”), a fund managed by the ICICI Distribution declaring the taxable turnover as ‘Nil’ as the
Venture was originally registered with the SEBI as a Venture company had claimed the exemption of second sale on its
Capital Fund under the SEBI (Venture Capital Funds) Regulations, turnover of hire purchase transactions. The sales tax authority
1996 (hereinafter the “Regulations”). The Fund de-registered disallowed the exemption claimed by the company for want of
from SEBI in the year 2002. In this process, the Fund first amended certain documents. The total tax assessed was Rs. 91.19 lakhs
its Private Placement Memorandum (PPM) and pursued and the penalty levied by the authority was Rs. 136.78 lakhs.
investment objectives permitted under the amended PPM before ICICI Distribution has paid Rs. 45.60 lakhs of the demand raised
completing the de-registration formalities. During the course for admission of appeal and has also furnished a bank guarantee
of its investment activity, the Fund invested in certain securities, for Rs.1.82 crores. The appeal filed has not yet been disposed
which were in excess of the limitations and restrictions imposed off by the authorities.
by the then prevailing Regulations. SEBI was of the view that
the Fund should have completed the de-registration formalities ICICI Home Finance Company Limited (ICICI Home Finance)
before pursuing investments in the aforesaid securities. The 1. Ms. Dipali Gopani has filed a criminal complaint (number 1472
Fund suo moto communicated these developments to SEBI of 2002) before the Metropolitan Magistrate’s 26 th Court at
and initiated a dialogue to conclude and regularize this matter.
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March 2005
Borivali, Mumbai, against ICICI Home Finance, its directors 1. 117 cases have been filed against ICICI Lombard, with claims
(and also against some of our Directors) for the alleged wrongful aggregating approximately Rs. 1.45 crore. These claims have
recovery of Rs. 3,150/- and non-return of title deeds. A criminal been made by various policyholders and relate to settlement
application was filed on behalf of all the accused before the of claims against the insurance policies issued on Event
High Court of Judicature at Bombay on November 11, 2002 for Insurance, Motor and Group Personal Accident. These claims
quashing the complaint and in the interim for the stay of the have been made at various forums including District Consumer
complaint against the Directors. The High Court disposed of Forum, Kolkata, State Consumer Forum, Jaipur, District
this application after recording the statement of the complainant Consumer Forum, Faridabad, District Consumer Forum,
that she would withdraw the complaint against all Directors Ahmedabad, District Consumer Forum, Bharuch, District
except those who were Directors of ICICI Home Finance. Consumer Forum, Hyderabad, District Consumer Forum, Thane,
Accordingly, the complaint has been withdrawn against all the District Consumer Forum, Junagadh, District Consumer Forum,
Directors except the Directors of ICICI Home Finance and ICICI Jamshedpur, District Consumer Forum, Rajkot, District
Home Finance. An application for discharge of the Directors Consumer Forum, Meerut, District Consumer Forum, Valsad,
has been filed in the trial court, which is pending disposal. The District Consumer Forum, Guwahati, District Consumer Forum,
matter stands posted for recording of plea on March 18, 2005. Godhara, District Consumer Forum, Nadiad, Workmen
2. Ms. Aparna Anil Jadhav has filed a civil suit (number 272 of Compensation Commissioner, Bellary, District Consumer Forum,
2003) in the court of the Civil Judge, Thane for declaration and Ambala, District Consumer Forum, Gandhinagar, District
injunction restraining ICICI Home Finance from taking possession Consumer Forum, Rewari, District Consumer Forum, Delhi,
of her property. ICICI Home Finance is a proforma defendant District Consumer Forum, Chennai, District Consumer Forum
and no specific claim has been raised against ICICI Home Kanpur, District Consumer Forum, Sambalpur, District Consumer
Finance except the restraint order on the security. The matter is Forum, Mehsana, District Consumer Forum, Bokaro, District
scheduled for hearing on April 16, 2005. Consumer Forum, Amreli, District Consumer Forum, Gurgaon,
District Consumer Forum, Shimla, District Consumer Forum,
3. Vijaya Bank has filed a suit (number 563 of 2002) against Mustaq Jalandhar, District Consumer Forum, Nashik, Consumer Forum,
Husain Shawl and others before the court of the Civil Judge, Surendranagar, District Consumer Forum, Surat, District
Thane in which ICICI Home Finance has been named as a Consumer Forum, Thiruvanathapuram, District Consumer
defendant. A client of ICICI Home Finance had purchased a Forum. Davangere, District Consumer Forum, Ongole, District
property from Mustaq Husain, which Mustaq Husain had Consumer Forum, Bangalore, Workmen Compensation Court,
mortgaged in favour of Vijaya Bank. ICICI Home Finance has Salem, Workmen Compensation Court, Latur Workmen
filed its written statement. The matter is scheduled for hearing Compensation Court, Hyderabad and State Consumer Forum,
on April 16, 2005. Delhi. All these matters are pending disposal.
4. Mr. Babu R. Nadumani filed a suit (number 691 of 2002) against 2. Tariff Advisory Committee, a statutory body under the Insurance
ICICI Home Finance in the Court of Civil Judge, Junior Division, Act, 1938 has imposed fines as per breach of tariff norms
Belgaum for a permanent injunction restraining ICICI Home amounting to Rs.2,000 for fiscal 2004 and Rs.5,23,000 for fiscal
Finance from taking possession of his property. An order was 2005 (till February 28, 2005)
passed in favour of ICICI Home Finance in respect of the
interlocutory application for a temporary injunction restraining ICICI Prudential Life Insurance Company Limited (ICICI Prulife)
ICICI Home Finance from taking possession of the plaintiff’s 1. 23 cases have been filed against ICICI Prulife with claims
property. Mr. Nedumani has preferred an appeal (number 28 of aggregating approximately Rs. 47.87 lakhs. These claims have
2003) against the said order, the date for which is awaited. been made by different policyholders and deal with various
5. Mr. Sasanka Sengupta who was granted a loan by ICICI Home issues relating to life insurance policies. These claims have
Finance was unable to pay his monthly instalments but did not been made in various forums including District Consumer
surrender the financed property. ICICI Home Finance proceeded Disputes Redressal Forum, Mylapore, Chennai, Consumer
to take possession of the property against which Mr. Sengupta Disputes Redressal Forum-I, Union Territory Chandigarh, Court
filed a suit for injunction (number 172 of 2003), restraining ICICI of Administrative Civil Judge, Tis Hazari Courts, Delhi, District
Home Finance from forcibly taking possession of the property. Consumer Disputes Redressal Forum, Ludhiana, District
The court dismissed the interim injunction application and the Consumer Disputes Redressal Forum, Panipat, High Court, New
matter is pending final disposal. ICICI Home Finance would be Delhi, City Civil Court, Bangalore, District Consumer Disputes
filing its written statement on April 22, 2005. Redressal Forum, New Delhi, High Court, Mumbai, Office of
6. Mr. Avinash Sane who was granted a loan by ICICI Home Insurance Ombudsman, Chandigarh, District Consumer Forum,
Finance was unable to pay his monthly instalments but did not Lucknow, Office of Insurance Ombudsman, New Delhi, Office of
surrender the property. ICICI Home Finance proceeded to take Insurance Ombudsman, Mumbai, District Consumer Forum,
possession of the property against which Mr. Sane filed a suit Jalandhar, District Consumer Forum, Haryana, Civil Court,
for injunction (number 77 of 2002), restraining ICICI Home Alipore, and City Civil Court, Kolkata. All these matters are
Finance from forcibly taking possession of the property. The pending disposal.
matter is pending disposal. The court has granted a temporary ICICI Bank UK
injunction in favour of the customer. ICICI Home Finance had
preferred an appeal against the order of the court, which has 1. ICICI Bank UK has filed an appeal with the UK HM Customs &
been disposed off by the court with a liberty to file a suit for Excise. The dispute relates to a stance, which has been taken by
recovery. The original suit filed by the borrower is pending the sales tax authorities in the UK, in relation to a property
disposal. transaction. ICICI Bank UK, advised by Deloitte, has taken a
different stance and does not believe that VAT should apply to
7. There are 75 matters pending before various consumer redressal this transaction.
forums
Rs. 37 lakhs represents the approximate total amount of VAT in
ICICI Lombard General Insurance Company Limited (ICICI dispute. UK HM Customs & Excise have withdrawn from their
Lombard) previous assessment and a settlement is expected in due course
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March 2005
Other Group Companies were of the opinion that the prior approval of the board of
Prudential ICICI Mutual Fund, the asset management directors of the trust company and the AMC was not obtained
company of which is Prudential ICICI Asset Management before making the investment in un-rated debt securities. The
Company Ltd ( AMC) and trustee of which is Prudential ICICI AMC has replied to the letter.
Trust Limited 8. SEBI, vide its letter dated October 18, 2004, advised AMC to
1. Kwality Ice Cream India Pvt. Ltd (Investor), one of the investors take due care in adhering to the investment restriction of seventh
under Prudential ICICI Growth Plan, had made investments to Schedule of SEBI (Mutual Fund) Regulation, 1996.
the tune of Rs. 50 lakhs under section 54EB, I.T. Act. The Fund 9. Mr. K.S. Mehta, a director of AMC, has been made party to
was of the view that in case of investments under section 54EB, cases relating to the dishonour of cheques issued by Paam
I.T. Act read with CBDT notification number 10247 dated Pharmaceuticals Limited in which he was a director. The
December 19, 1996 and the offer document of Prudential ICICI dishonour occurred after Mr. Mehta had resigned from the board
Growth Plan, the units had to be locked-in for a period of seven of directors of Paam Pharmaceuticals Limited. The matters are
years from the date of investment. However, the Investor sub-judice.
disputed this stand and filed a petition against Prudential ICICI
Asset Management Company Limited as one of the respondents 3i Infotech Limited
in the Delhi High Court seeking the direction of the Court for 1. Complaint No.57 of 2001, was filed by an employee of a
premature redemption of units. SEBI vide its order dated contractor of 3i Infotech, Mr. Nikhil Prabhu, before the Labour
September 4, 2000, rejected the petitioner’s claim. Court, Bandra, for wrongful termination of their employment.
The Investor subsequently approached the Securities Appellate He has claimed re-instatement of services and full back wages
Tribunal (Tribunal) seeking the release of money due upon the with interest. 3i Infotech estimates that in the event of an adverse
redemption of units and payment of interest thereon. The matter ruling, such back wages as of January 31, 2005 is likely to be
was heard by the Tribunal, which dismissed the petition. The Rs. 2,25,000/-. 3i Infotech has denied the claims and has sought
Investor, once again, filed a writ in the Delhi High Court (number. for dismissal of the complaint. The matter is currently pending.
1794 of 2000) challenging the order of the Tribunal and for 2. Complaint No.382 of 1998, was filed by Mr. Narendra Parmar
release of its investment with interest @15% p.a. This matter is and other employees of a contractor of 3i Infotech, before the
listed before Delhi High Court for final arguments in the regular Labour Court, Bandra for wrongful termination of their
hearing list. employment. They have claimed re-instatement of services
and full back wages with interest. 3i Infotech estimates that in
2. A warning letter was issued by SEBI on July 14, 1999 for lack of the event of an adverse ruling, such back wages as of January
due diligence observed in the filing of the soft copy of the offer 31, 2005 is likely to be Rs. 19,68,000/-. The matter has been
document of Prudential ICICI Gilt Fund. placed for hearing arguments raised by 3i Infotech and is
3. A warning letter was issued by SEBI on January 5, 2000 as the currently pending.
draft offer document of Prudential-ICICI Technology Fund did 3. 3i Infotech is the Registrar and Transfer Agent (“R & T agents”)
not disclose the scheme specific risk factors as required in for us. As R & T agents, 3i Infotech provides services for
accordance with the standard offer document and one NAV registering, transferring and disbursement of funds in relation
figure was incorrect for April 1999. AMC subsequently rectified to various bond and equity issues by us.
the error. The table below summarizes the position in relation to cases
4. A warning letter was issued by SEBI on July 27, 2000 for not filed against 3i Infotech individually and cases filed against 3i
disclosing necessary supporting figures for calculation of returns Infotech jointly with us:
and for not compounding figures for returns since inception in Parties Cases where Amount Cases where
advertisements published in newspapers in the case of an claimed no been
Prudential-ICICI Income Plan. All the investors who invested in Lamount has amount
the plan after the said advertisement were given an option to claimed has been
exit without any exit load. AMC subsequently ensured claimed
compliance. 3i Infotech 5 Rs. 112,288 61
5. A warning letter was issued by SEBI on September 10, 2001
with respect to the inspection report for the period April 1, 1999 3i Infotech
to March 30, 2000, for errors of omission in various reports and ICICI Bank 2 Rs. 1,310,000 55
submitted to SEBI and for grossly overstating the annualised In one of the above cases, Kisan Sahakari Chini Mills Limited
return for the Fast Moving Consumer Goods (FMCG) Plan in the has filed a suit against us and the 3i Infotech before the State
offer document of the Gilt Fund, under the condensed financial Commission, Uttar Pradesh claiming interest and compensation
information for the period ended June 30, 1999. Further, the Gilt amounting to Rs. 13 lakhs on delayed payment of refund amount
Fund was also issued a deficiency letter by SEBI for printing/ of Rs. 25 lakhs of the bond issue by us. 3i Infotech has filed its
reporting errors in accounting statements for the year ended written statement before the Commission. The matter is currently
March 31, 2000 pointed out by the auditors in their inspection pending.
report. 4. An application was filed against 3i Infotech in the Consumer
Redressal Forum, Hyderabad District, by a shareholder of ours
6. SEBI, vide its letter dated November 27, 2003, has advised the
regarding transfer of five shares in spite of a stop transfer request
AMC that while issuing the performance based advertisements,
having been made by him which has since been disposed off.
the performance percentages should not be used in bold font
The complainant chose to appeal before the A.P State Consumer
in headlines in the advertisements. This advice was specifically
Disputes Redressal Commission at Hyderabad which
with reference to the advertisement for “Prudential ICICI Power”
subsequently rejected the appeal on October 29, 2003. A
Scheme.
Revision Petition was filed by the complainant before the National
7. A warning letter was issued by SEBI to Prudential ICICI Mutual Consumer Disputes Redressal Commission, New Delhi and was
Fund on June 22, 2004 with respect to the inspection report for again rejected on August 25, 2004. A criminal complaint was
the period from April 1, 2000 to June 30, 2002, where the auditors
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March 2005
filed in the year 2001 against us and 3i Infotech by the shareholder Additional Chief Metropolitan Magistrate, New Delhi by Mr.
. The Magistrate has referred the matter to the local police Anoop G. Chaudhury against Mr. K.V. Kamath for the sale of a
station for investigation. 3i Infotech and us have filed a petition vehicle, which had been involved in an accident. The
in the Andhra Pradesh High Court for quashing this criminal investigation officer has filed the investigation report in the
complaint and the High Court has granted a stay on the Court. The matter is pending hearing.
investigations being undertaken by the police department 4. A criminal complaint (number 64 of 2002) was filed against 36
against the Company till further orders individuals including Mr. K. V. Kamath before the Court of the
5. 3i Infotech received a legal notice from legal counsel of Advanta Chief Metropolitan Magistrate, Patiala House, New Delhi by Mr.
Corporation on January 12, 2005. Advanta Corporation claims M. M. Sehgal, the promoter of Sehgal Papers Limited (SPL).
to be the owner of trademark Advanta and has objected to the ICICI as part of a consortium of lenders led by IFCI Limited as
use of the word “Advanta” by 3i Infotech. It has also objected to lead institution had extended financial assistance to SPL . No
the 3i Infotech’s attempts to register the mark “Advanta” in USA. summons has been issued to ICICI so far. Only a copy of the
Advanta Corporation has demanded that 3i Infotech cease use complaint filed by the complainant has been served on ICICI.
of the mark Advanta and abandon its pending application with
the US trademark registry, and has threatened legal action, if 3i 5. A criminal complaint (number 1356 of 2003) was filed against
Infotech did not comply with the demands. 3i Infotech has one Ms. Urmil Gupta and Mr. Jyotin Mehta, General Manager
replied to this notice. and Company Secretary, before the Chief Judicial Magistrate,
6. Pursuant to filing of the application to register the “3i” trademark, Rampur, by Mr. Sudeep Kumar Aggarwal alleging inter alia,
3i Infotech has received objections from third parties to 3i that shares held by him had been illegally transferred to Ms.
Infotech’s use of the “3i” trademark in UK. Urmil Gupta. Summons had been issued to Mr. Mehta in this
regard. We have sought a recall of the order issuing summons
Pursuant to the change of its name to 3i Infotech Limited, and the to Mr. Mehta on the ground that Mr. Mehta was not in
change of its existing logo, 3i Infotech has received a notice from employment with us at the time of the alleged offence. Court
Devangshu Dutta relating to the use of its new logo in India. has adjourned matter for March 14, 2005
IV. Other cases/criminal complaints including claims and 6. Five criminal complaints (numbers 9419/S/2002 to 9423/S/2002)
complaints against working directors were filed against us before the XXXIX Court of Presidency
Metropolitan Magistrate at Mumbai by the Municipal
Litigations against Directors
Corporation of Greater Mumbai (BMC) for violation of Section
1. A suit (number 3874 of 1999) was filed against Mardia Chemicals 471 of the BMC Act read with Section 328-A thereof on grounds
Limited (MCL) in the High Court of Judicature at Bombay by of non-payment of licence fees for the illuminated signboards
ICICI for recovery of an outstanding amount of approximately at our ATM centres. We filed a writ petition (number 2377 of
Rs. 135 crores. Thereafter, in 2002, we issued a notice under the 2002) in the High Court of Judicature at Bombay challenging
Securitisation and Reconstruction of Financial Assets and the applicability of the provisions of Sections 328 and 328-A of
Enforcement of Security Interest Ordinance, 2002 demanding the BMC Act in respect of the ATM centres. The writ petition
payment of an outstanding amount of Rs. 293 crores. was dismissed. In appeal, we filed a special leave petition
Subsequently, a suit (number 3189 of 2003) was filed against Mr (special leave petition number 24215 of 2002) in the Supreme
K. V. Kamath (our Managing Director and Chief Executive Officer) Court. The Supreme Court has granted a stay against all
and Ms. Lalita D. Gupte by MCL in the City Civil Court at prosecutions and proceedings by BMC in this regard. The
Ahmedabad for a purported amount of Rs. 5,631 crores. An Metropolitan Magistrate stayed the proceedings before it till
application has been filed for the dismissal of the suit on the the final disposal of the special leave petition.
grounds of limitation, jurisdiction and no cause of action existing
against Mr. Kamath and Ms. Gupte. Matter is posted for March Further, the BMC has also filed two similar complaints (criminal
16, 2005. complaint numbers 88/M/2003 and 89/M/2003) before the XXVII
Court of Presidency Metropolitan Magistrate at Mumbai, against
2. A consumer complaint (complaint number 349 of 2003) was
us. We have submitted a copy of the Supreme Court’s order to
filed against Mr. K.V. Kamath, and all other working directors
the Magistrate. The matter is pending disposal.
before the District Consumer Disputes Redressal Forum,
Kolhapur, by Mr. Pradeep Balaso Kole claiming compensation 7. A criminal complaint (number 1472 of 2002) was filed against
for a sum of Rs. 11,772/- for taking back possession of his two ICICI Home Finance and some of our directors before the
wheeler without giving him proper notice. The matter is pending Metropolitan Magistrate’s XXVI Court at Borivali, Mumbai, by
disposal. Ms. Dipali Gopani for alleged wrongful recovery of Rs. 3,150/-
and non-return of title deeds. The complaint has been
Criminal and Miscellaneous Cases against us and / or our Directors subsequently withdrawn against certain directors but is still
1. A criminal complaint (number 614 of 2001) was filed before the pending against Ms. Lalita D. Gupte and Ms. Kalpana Morparia.
the 4th Additional Chief Metropolitan Magistrate, Bangalore An application for the discharge of the directors has been filed
against us by Pelicorp Limited upon termination of the Direct in the trial court, which is pending disposal.
Selling Agent Agreement between it and us pursuant to certain 8. An application (number 752 of 1997) was filed against 3i Infotech
RBI guidelines. We have filed a criminal petition for quashing Services Limited in the Consumer Redressal Forum, Hyderabad
the complaint in the Karnataka High Court, which has granted District, by a shareholder of ICICI (Shri. M.P.Jain) regarding
an interim stay in the matter. The matter is pending disposal. transfer of five shares in spite of a stop transfer request having
2. A criminal complaint (number 1648 of 2001) was filed against been made by him which has since been disposed off. A criminal
us by Rajiv Aggarwal before the Chief Judicial Magistrate, Jaipur complaint (number 152 of 2001 was also filed against ICICI and
for the wrongful dishonour of certain cheques. We have filed a 3i Infotech Limited before the XI Metropolitan Magistrate,
revision petition in the Rajasthan High Court at Jaipur for Secunderabad by that shareholder. The Magistrate has referred
quashing the order passed by the Magistrate. The High Court the matter to Marredpally Police Station, Secunderabad for
has stayed the proceedings at the Magistrate’s court. Final investigation. ICICI filed a petition in the Andhra Pradesh High
arguments in the revision petition are yet to take place. Court for quashing the criminal complaint filed before the XI
Metropolitan Magistrate, Secunderabad and the High Court
3. A criminal complaint (number 353 of 2003) was filed before the
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March 2005
has granted a stay on the investigations being undertaken by Greater Bombay & Thane District in the year 2000 against ICICI
the police department till further orders. and Mr. K. V. Kamath, before the Metropolitan Magistrate,
9. A criminal complaint (number 2887 of 2002) was filed before Mumbai, under the Maharashtra Private Security Guards Act,
the Judicial Magistrate First Class, Bhiwandi by a car insurance 1981 on the grounds that security guards were engaged from
policy holder for the alleged non-cognisable offences of exempted security agencies even though ICICI was registered
criminal intimidation etc., against three officers of ICICI Lombard with the Security Guards’ Board. The earlier notices in this regard
General Insurance Company Limited (ICICI Lombard). Mr. K. V. were replied to stating that registration was only in respect of
Kamath has also been named as an accused in the complaint residential quarters for employees and not in respect of other
though no specific allegations are made against him except establishments. We have filed a writ petition in the High of
describing him as one of the officers of ICICI Lombard and Judicature at Bombay for quashing the complaint, which is
making an allegation that all four officers conspired in pending disposal.
committing the offences. Mr. K.V Kamath is a non executive 16. Two criminal complaints (numbers 2415/S/2003 and 2416/S/
director on the board of ICICI Lombard. A writ petition was 2003) were filed by Inspector, Security Guards Board, Greater
filed before the High Court of Judicature at Bombay seeking a Bombay & Thane District in the year 2000 against us before the
quashing of the criminal complaint on the grounds. The High Metropolitan Magistrate, Mumbai, under the Maharashtra Private
Court passed an order, staying the proceedings before the Security Guards Act, 1981, on the grounds that security guards
Judicial Magistrate First Class, Bhiwandi. Thus, all the have been engaged from unexempted security agencies. We
proceedings in the criminal complaint filed against Mr. K.V. have taken a stand that the exemption of security agencies
Kamath and others have been stayed. continued on account of a previous High Court order in another
10. A debenture holder of Lloyds Finance and Investment Company writ petition filed by certain security agencies. The complaints
Limited filed a criminal complaint (number 2064(C) of 2000) for are pending disposal.
non receipt of interest and redemption amount in the Court of 17. Two criminal complaints (numbers 2347/S/2003 and 2349/S/
the Chief Judicial Magistrate, Patna against ICICI and its officials 2003) were filed by Inspector, Security Guards Board, Greater
and also impleaded Mr. K.V. Kamath. ICICI filed a criminal Bombay & Thane District against us before the Metropolitan
revision petition before the Sessions Judge, who has admitted Magistrate, Mumbai, under the Maharashtra Private Security
the revision application and called for the records from the Guards Act, 1981 on the grounds that security guards have
Magistrate Court. Thus, the proceedings in the Magistrate Court been engaged from unexempted security agencies. We have
have been stayed. The matter has been fixed for hearing on replied stating that the security guards were deployed on trial
March 25, 2005. basis and are being replaced by armed guards. The complaints
11. Mr. Madan Gopal, debenture holder of Modern Denim Limited are pending disposal.
(MDL) filed a criminal complaint for non receipt of interest and 18. A case (number 39 of 2002) was filed against ICICI in the Industrial
redemption amount (number 2175(C) of 2001) against ICICI and Court by the Union of Security Guards, of its corporate office at
its officials and also impleaded Mr. N Vaghul, our Chairman. Bandra-Kurla Complex, Mumbai for regularising and for claim
ICICI filed a criminal revision petition before the District Sessions for difference in wages on the ground that ICICI employed
Judge, who has admitted the petition and called for the records security guards. On dismissal of the case, the said Union
from the Magistrate Court. The proceedings in the Magistrate preferred an industrial dispute and thereafter the dispute has
Court, Patna have been stayed. The matter is fixed for hearing been referred to the Industrial Tribunal. The reference is pending
on March 29, 2005. disposal.
12. A criminal complaint has been filed (number C/3606/2003) 19. A writ petition has been filed in the High Court of Judicature at
before the Metropolitan Magistrate, Kolkata against Mr. K.V. Bombay by the Maharashtra Suraksha Rakshak Aghadi (number
Kamath for violation of the Equal Remuneration Act 1976. ICICI 2115 of 2004) challenging the Notification dated August 25,
Bank is taking up the matter with the concerned authorities for 2003 read with a Corrigendum dated July 5, 2004 granting
withdrawing the prosecution in view of compliance with the exemption to security guards employed with Premier Security
requirements of that Act. The matter is pending disposal. Services (PSS) and provided at our establishments. The writ
13. Seema Mungale has filed a criminal complaint (number 1876 petition is pending for final disposal and in the meantime status
of 2003) against us and all our Directors alleging that we had quo has been ordered.
filed a false criminal complaint under section 138 of Negotiable 20. A writ petition (number 2181 of 04) was also filed by Rajiv
Instruments Act, against her by making false statements. We Aggarwal in the Rajasthan High Court at Jaipur against SEBI
filed a writ petition in the High Court of Judicature at Bombay and us inter alia seeking directions against SEBI to initiate
for quashing the complaint against the Directors and an interim appropriate proceedings against us for failure to disclose details
order has been passed staying the criminal proceedings in the of the criminal proceedings filed by him in the prospectus We
Magistrate’s court at Pune against eleven Directors. A writ have filed the affidavit in reply. The writ petition is pending
petition for quashing of the complaint has been filed. The disposal.
criminal case before the Magistrate at Pune is pending disposal. 21. We have received show cause notices in the matter of alleged
14. Mr. Deobrat Prasad has filed a criminal complaint (number 153 excise duty evasion to the extent of Rs. 1.47 crores by Bannari
of 2004) in the court of the Judicial Magistrate First Class, Amman Sugars Limited (BASL) in respect of the equipment
Jamshedpur implicating, inter alia Mr. K. V. Kamath alleging purchased for their project funded by us under an ADB line of
conspiracy with other accused for taking forcible possession credit. BASL has paid the duty under protest and sought refund
of his vehicle. We have filed an application in the High Court of thereof. We have filed replies showing cause as to why the
Jharkhand at Ranchi for quashing the proceedings in the said penalty (of up to Rs. 1.47 crores) is not payable and have sought
criminal complaint. The said criminal complaint has been a personal hearing in the matter.
stayed by the Jharkhand High Court. The matter is pending 22. The Ranchi Branch received a notice on September 25, 2004
disposal. from the Regional Labour Commissioner (RLC) ,Ranchi stating
that ICICI Bank was not registered as Principal Employer under
15. Three criminal complaints (numbers 2412/S/2003, 2413/S/2003
Contract Labour (Regulation and Abolition) Act 1970 with RLC(C)
and 2414/S/2003) were filed by Inspector, Security Guards Board,
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March 2005
Ranchi. A reply was sent by the branch stating that all our X. COMPANIES UNDER THE SAME MANAGEMENT
branches/offices/establishments in Eastern India, were covered
by a Registration certificate taken by the Kolkata office and There are no companies under the same management within the
there was no requirement to obtain a separate registration meaning of Section 370(1)(B) of the Act.
certificate for the Ranchi Branch. The Ranchi branch also XI. CHANGES IN MEMORANDUM OF ASSOCIATION
submitted a copy of the registration certificate procured by the
Kolkata office. However, the Assistant Labour Commissioner, Date Details of Change
Ranchi, proceeded to file a criminal case inter alia against Ms. 10/09/1999 The name of the Company was changed
Chanda Kochhar, Executive Director in the court of Chief Judicial from ICICI Banking Corporation Limited to
Magistrate, Ranchi. The next date of hearing is May 30, 2005. ICICI Bank Limited
ICICI Bank is filing a writ petition for quashing of complaint 11/06/2001 The objects clause modified to facilitate
before Ranchi High Court. the Company to establish, maintain and
23. A writ petition (number 187 of 2005) has been filed in the High operate currency chests and small coins
Court of Judicature at Bombay by Consumer Action Network depot
inter alia against four banks including us, seeking directions for 03/05/2002 Increase in authorised capital from Rs. 300
prohibiting the said banks from engaging sale cum recovery crore to Rs. 2,250 crore pursuant to the
agents and other related reliefs. We are in the process of filing Scheme of Amalgamation of ICICI, ICICI
our affidavit in reply along with the particulars required by the Capital Services Limited and ICICI Personal
High Court. The matter is pending disposal. Financial Services Limited with ICICI Bank
24. A writ petition (number 35 of 2005) has been filed in the Supreme
Court by Dr. Harsh Pathak inter alia against mobile phone 16/01/2003 Reduction in authorised capital from Rs.
companies and five banks including us, seeking directions for 2,250 crore to Rs. 1,900 crore
regulating the unsolicited calls in the context of the right of 14/05/2004 Note (*)
privacy and other related reliefs. We are in the process of filing (*)
our affidavit in reply. The matter is pending disposal.
25. A writ petition has been filed (number 382 of 2005) in the High I. Clause III (A) modified and amended as follows:
Court of Judicature at Bombay by Satish Anant Naik and 28 (a) By inserting the following Clause as Clause 7A after Clause 7:
others inter alia against 3 banks including us challenging the 7A. To securitise, purchase, acquire, invest in, transfer, sell,
notification dated August 25, 2003 read with the corrigendum dispose of or trade in any financial asset whatsoever,
dated July 5, 2004 granting exemption to security guards receivables, debts, whether unsecured or secured by
employed with Premier Security Services and provided at the mortgage of immoveables or charge on movables or
establishments of the said banks. We are in the process of filing otherwise, securitised debts, asset or mortgaged backed
our affidavit in reply. The matter is pending disposal. securities or mortgage backed securitised debts and to
manage, service or collect the same and to appoint
managing, servicing or collection agent therefor and to
MATERIAL DEVELOPMENTS issue certificates or other instruments in respect thereof to
public or private investors and to guarantee and insure
To our knowledge, there have not arisen, since the date of the last
the due payment, fulfillment and performance of
financial statements disclosed in this Prospectus, any circumstances obligations in respect thereof or in connection therewith
that materially adversely affect or are likely to affect our profitability and to promote, establish, undertake, organise, manage,
or the value of our assets or our ability to pay our liabilities within the hold or dispose of any special purpose entity, body
next twelve months. corporate or vehicle for carrying on all or any such
Further we haves obtained the approval of the Foreign Investment activities.
and Promotion Board for a sponsored offering of American (b) By deleting Clause III(A)(18) and replacing it with the following:
Depositary Shares, proposed to be listed on the New York Stock 18. To provide credit, charge, debit, saving, investment or
Exchange, against its existing equity shares. ICICI Bank has dispatched other facilities to any person or persons (whether
an Invitation to Participate together with accompanying documents individuals, firms, companies, bodies, corporate or other
to its equity shareholders and between March 7, 2005 and March 11, entities), whether in the private or public sector by issuance
2005, all of ICICI Bank’s equity shareholders are, subject to the of credit, charge, debit, stored value, prepaid, smart or
Invitation to Participate, entitled to tender their equity shares in the other cards whether private label, co-branded, affinity or
sponsored offering of American Depositary Shares otherwise and to establish and maintain card acceptance
network (including physical, electronic, computer or
We have been named as promoters in the red herring prospectus automated machines network) and make payments or
filed by 3i Infotech Limited with the SEBI on March 9, 2005. provide settlement service to the merchants or issuing
In accordance with SEBI requirements, the Lead Managers and we banks on account of usage by the cardholders of the credit,
will ensure that investors are informed of material developments charge, debit, stored value, prepaid, smart or other cards
until as the grant of listing and trading permission by the Stock whether private label, co-branded, affinity or otherwise.
Exchanges. (c) By inserting the following Clauses after Clause III(A)(20) as Object
Clause Nos. 20A, 20B, 20C, 20D, 20E, 20F, 20G, 20H, 20I, 20J,
OTHER REGULATORY DISCLOSURES 20K:
Stock Market Data for our Equity Shares 20A.To carry on the business of assisting industrial infrastructure
and commercial enterprises :
See “Certain Corporate Matters” on page 69. in general by
Particulars Regarding Public Issues during the Last Five Years i) assisting in the creation, expansion and modernisation of
such enterprises;
See “Statutory and Other Information – Previous Rights and Public
ii) encouraging and promoting the participation of capital,
Issues” on page 218.
both internal and external in such enterprises;
and in particular by
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March 2005
i) providing finance in the form of long, medium or short corporate, public body or authority, supreme, local or otherwise,
term loans or equity participations ; trusts, pension funds, offshore funds, charities, other associations
or other entities), whether in the private or public sector.
ii) sponsoring and underwriting new issues of shares and
securities ; 20H To act as Trustee of any deeds, constituting or securing any
debentures, debenture stock, or other securities or obligations
iii) guaranteeing loans from other investment sources ;
and to undertake and execute any other trusts, and also to
iv) making funds available for re-investment by revolving undertake the office of or exercise the powers of executor,
investments as rapidly as prudent ; administrator, receiver, treasurer, custodian and trust corporation.
v) performing and undertaking activities pertaining to leasing, 20I To provide financial services, advisory and counselling services
giving on hire or hire-purchase, bill marketing, factoring and facilities of every description capable of being provided
and related fields; by share and stock brokers, share and stock jobbers, share
20B To lend money, with or without interest, (with or without security) dealers, investment fund managers and to arrange and sponsor
for any maturity, in any form whatsoever including by way of public and private issues or placement of shares and loan capital
loans, advances, instalment credit, trade finance, hire or and to negotiate and underwrite such issues.
otherwise to any person or persons (whether individuals, firms, II. Clause III (B) modified and amended by:
companies, bodies corporate, Government, State, Sovereign,
(a) By deleting Clause III (B)(61) and replacing it with the following:
public body or authority, supreme, local or otherwise or other
entities), whether in the private or public sector, for any purpose 61. To do all or any of the above things and all such other things as
whatsoever, including agriculture, industry, infrastructure, are incidental or as may be thought conducive to the attainment
export-import, housing, consumer or others. of the above objects or any of them in India or any other part of
the world either as principals, agents, trustees, contractors or
20C To lend money, with or without interest, (with or without security)
otherwise and either alone or in conjunction with others and
for any maturity, in any form whatsoever, to any person or
either by or through agents, contractors trustees or otherwise
persons (whether individuals, firms, companies, bodies
and to do all such things as are incidental or conducive to the
corporate, Government, State, Sovereign, public body or
attainment of the above objects.
authority, supreme, local or otherwise or other entities), whether
in the private or public sector, for : (b) By inserting the following Clauses after Clause III(B)(60) as Object
Clause Nos. 60A, 60B and 60C:
(i) Purchasing or acquiring any freehold or leasehold lands,
estate or interest in any land or property, 60A To develop, improve, design, software and programme
products of any and all descriptions in connection with or
(ii) Taking demise for any term or terms of years of any land
incidental or conducive to or in furtherance of the attainment of
or property, or
any of the objects of the Company.
(iii) Construction, erection, purchase, extension, alteration,
60B To appoint trustees (whether individuals or corporations) to hold
renovation, development or repair any house or building
securities on behalf of and to protect the interests of the Company.
or any form of real estate or any part or portion thereof.
20D To provide financial assistance to any person or persons 60C To promote, sponsor, organise, manage or undertake events,
(whether individuals, firms, companies, bodies corporate, exhibitions, conferences, lectures, seminars, printing, publication
Government, State, Sovereign, public body or authority, or distribution of any books, report, literature, newspapers,
supreme, local or otherwise or other entities), whether in the publicity or other materials in connections with or incidental or
private or public sector for any purpose whatsoever by means conducive to or in furtherance of the attainment of any of the
of leasing, giving on hire or hire-purchase, lending, selling, objects of the Company.
reselling, or otherwise disposing of all forms of immoveable XII. MECHANISM FOR REDRESSAL OF INVESTOR
and moveable properties and assets of any kind, nature or use,
whatsoever and for the purpose, purchasing or otherwise
GRIEVANCES
acquiring dominion over the same, whether new or used.
Status of complaints received from SEBI
20E To purchase, acquire, sell, dispose of, deal or trade in bullion
and specie and/or to issue, subscribe to, acquire, purchase, As on, March 4, 2005, 3 complaints was pending with SEBI which
sell, dispose of, deal or trade in derivative financial instruments pertains to the public issue of our equity shares and Bonds.
including futures, forwards, options, swaps, caps, collars, floors,
swap options, bond options or other derivative instruments Overall status of Investor Grievances
whether traded on any market or exchange or otherwise, for Opening balance of the pending complaints as on February 15, 2005
proprietary trading activities or for any person or persons was 163. Additional 209 complaints received till March 4, 2005. Out
(whether individuals, firms, companies, bodies corporate, of the above 282 complaints were attended to and 90complaints
Government, State, Sovereign, public body or authority, were pending as on March 4, 2005.
supreme, local or otherwise or other entities), whether in the
private or public sector. Investor grievances will be settled expeditiously and satisfactorily
20F To promote, organize, manage or undertake the activities of by us. The agreement between us and the Registrar will provide for
insurance intermediaries including insurance or reinsurance retention of records with the Registrar for a period of at least one
brokers, consultants, surveyors, loss assessors, loss control year from the last date of dispatch of Letters of Allotment/Share
engineers, risk managers, actuarial analyst and to promote, Certificates/Refund Orders to enable the investors to approach the
organize, manage or undertake, marketing, trading, distribution Registrar for redressal of their grievances.
or servicing of insurance and assurance products of all kinds, A separate cell has been set up for attending to complaints received
whether life or general; financial, investment or other products through SEBI, Stock Exchanges and other statutory bodies and all
including (without limitation) securities, stocks, shares, responses are given in their prescribed formats.
debentures, bonds, units, certificates or services offered by the All grievances relating to the Issue may be addressed to the Registrar
Company and/or by any person, firm, company, body giving full details such as name, address of the applicant, application
corporate, mutual fund, Government, State, public body or number, number of Bonds applied for, amount paid on application
authority, supreme, municipal, local or otherwise, through the and the bank branch/collection centre where the application was
Company’s branches or offices. submitted.
20G To promote, organise or manage funds or investments on a
discretionary or non-discretionary basis on behalf of any person Disposal of Investor Grievances
or persons (whether individual, firms, companies, bodies, The average time required by us/Registrar for the redressal of routine
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March 2005
investor grievances shall be 10 days from the date of receipt of the ACCOUNTING RATIOS
complaint. In case of non-routine complaints and where external
Year ended March 31
agencies are involved, we/Registrar would strive to redress these
complaints as expeditiously as possible. 2000 2001 2002 2003 2004
Investor can also call on 24 hours call centre (022 - 2830 7777) for Earning Per
their queries. Share (Rs.) 6.38 8.13 11.61 19.68 26.66
All investors are hereby informed that we have appointed a Book value
Compliance Officer (not being an “Officer in Default” under Section per share (Rs.) 57.41 59.11 101.92 113.10 127.27
5(f) of the Act) who may be contacted in case of any pre-issue/post-
issue related problems. Return on
Average
We have appointed Mr. Jyotin Mehta as the Compliance Officer and
Net Worth (%) 30.14 12.98 17.75 18.31 22.15
he may be contacted in case of any pre-issue or post-issue related
problems. He can be contacted at: ICICI Bank Limited, ICICI Bank Interest Service
Towers, Bandra-Kurla Complex, Mumbai 400 051. Tel: 91-22-2653 Coverage Ratio
1414; Fax: 91-22-2653 1122; Email: investor@icicibank.com (ISCR) (1) 1.33 1.31 1.37 1.36 1.38
(1) Formula for calculation of ISCR
Details of our borrowings
ISCR= ( Net profit after tax + Interest expense + provision
For details of our borrowings, please see “Funding” on page 54. for doubtful debts and other non cash charges
XIII. SPECIFIC DISCLOSURES including depreciation on assets) / Interest Expense
(Non-cash charges comprise provision for standard, bad &
(Rs. in Crore)
doubtful debts, depreciation, appreciation/depreciation on
Share Capital As on December 31, 2004 investments, provision for contingencies & others and loss on
Equity Share Capital (1) 735.83 sale of fixed assets)
Share Capital Suspense (net) (1) (b) 0.06 Computation of ‘Debt-Equity ratio’
Preference Share Capital (2) 350.00 March 31, March 31,
Securities Premium Account (3) 3,975.96 2003 2004
Notes Debt Equity Ratio (1) and (2) 4.28 3.44
1. Includes :- (1) Formula for calculation of Debt/Equity Ratio:-
a Rs. 392.67 crore for shares issued to shareholders of Debt/Equity Ratio = Long term debt (after reducing
erstwhile ICICI Limited on amalgamation. current maturities i.e. amount maturing within one year)
b Represents application money received for 62,750 equity Total Equity
shares of Rs. 10 each on exercise of employee stock option. (2) Total equity as on March 31, 2003 and March 31, 2004 includes
2. At December 31, 2004, preference share capital represents preference share capital of Rs. 350 crores.
face value of 350 preference shares issued to preference
shareholders of erstwhile ICICI Limited on amalgamation SERVICING BEHAVIOUR
redeemable at par on April 20, 2018. The notification from There has been no default in meeting statutory dues, institutional
Ministry of Finance has currently exempted the Bank from the dues and dues towards payment of interest or principal on due
restriction of section 12(1) of the Banking Regulation Act, 1949, dates to holders of Debentures, Bonds, Fixed Deposits and Preference
which prohibits issue of preference shares by banks. Shares.
3. Includes :-
ACCOUNTING POLICIES
a Rs. 2,938.42 crore (Net of share premium in arrears of Rs.
2.65 crore) consequent to public issue vide prospectus The accounts are prepared in accordance with accounting principles
dated April 12, 2004. generally accepted in India. The detailed Accounting Policies are
disclosed under the “Auditors’ Report” in Part II of this Prospectus.
b Rs. 188.79 crore on the exercise of the green shoe option.
There has been no change in such accounting policies save as
c Rs. 48.21 crore on exercise of employee stock options. stated in the Auditors’ Report as mentioned in Part II of the Prospectus.
d Rs. 1.09 crore on account of share application money on
exercise of employee stock options.
e Share issue expense amounting to Rs. 52.89 crore, written-
off from the share premium amount as per the object of the
issue.
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March 2005
PART II Minor and NRIs) who have applied for allotment of 50 or

less than 50 Bonds (not including Tax Saving Bond).
A. GENERAL INFORMATION In case of undersubscription in category 2(a), the
unsubscribed portion will be added to category 2(b).
CONSENTS
In case of oversubscription in category 2(a), allotment shall
Consents in writing of: (a) the Directors, the Company Secretary, the
be on a proportionate basis and the balance will be
Auditors, Solicitors and Advocates, Legal Advisors to the Issue and
considered for retention under the Over Subscription option
Bankers to the Issue; and (b) Lead Managers to the Issue, Trustees for
as hereafter referred.
the Bondholders and Registrars to the Issue to act in their respective
capacities, have been obtained and filed along with a copy of the (b) The balance 30 per cent of the net offer of Bonds shall be
Prospectus with the Registrar of Companies, as required under made available for allotment to individuals applying for
Section 60 of the Act and such consents have not been withdrawn up more than 50 Bonds (not including Tax Saving Bond) and,
to the time of delivery of the Prospectus for Registration. to all other categories of investors as follows:
Our Auditors, M/s. S. R. Batliboi & Co. have given their written consent (i) 67 per cent of the balance 30 per cent as mentioned
to the inclusion of their Report in the form and context in which it above, shall initially be made available for allotment
appears in the Prospectus and such consent and report have not to private/public religious/charitable trusts and to any
been withdrawn up to the time of delivery of the Prospectus for other investor requiring approved security status for
Registration. making investments.
EXPERT OPINION In case of undersubscription in category 2(b)(i), the
unsubscribed portion will be added to category
Save as stated elsewhere in the Prospectus, we have not obtained
2(b)(ii).
any expert opinion.
In case of Over Subscription in category 2(b)(i), after
ALLOTMENT/REFUND adjusting for undersubscription in 2(b)(ii), if any,
Our Board of Directors/Committee of Directors reserve, in their allotment will be in ascending order of application
absolute and unqualified discretion and without assigning any reason amount (i.e., smallest application allotted first) and
thereof, the right to reject any application in whole or in part. The the balance will be considered for retention under the
unutilised portion of the application money will be refunded to the Over Subscription option as hereafter referred.
applicant by an A/c Payee cheque/demand draft. In case the cheque (ii) The balance shall be made available for allotment to
payable at par facility is not available, we reserve the right to adopt all other investors.
any other suitable mode of payment.
The unsubscribed portion in 2(b)(ii) if any, will be
We shall credit the allotted securities to the respective beneficiary added to 2(b)(i). In case of oversubscription in category
accounts/despatch the Letter(s) of Allotment or Bond Certificate(s)/ 2(b)(ii) after adding for undersubscription in 2(b)(i)
Letter(s) of Regret/Refund Orders in excess of Rs.1,500/-, as the case allotment will be on proportionate basis.
may be, by Registered Post/Speed Post at the applicant’s sole risk,
within 10 weeks from the date of closure of the Issue. Refund Orders (c) The unsubscribed portion of the offer in either 2(a) or 2(b)
up to Rs. 1,500/- will be sent under certificate of posting. Further, may be made available for allotment to applicants in the
other category, if so required.
a) as far as possible, allotment of securities offered to the public
shall be made within 30 days of the closure of the Issue; Notes
b) we shall pay interest @15 per cent per annum if the allotment 1. The Over Subscription Option would be exercised to the extent
has not been made and/or the Refund Orders have not been of oversubscription in category 2(a) and 2(b)(i) as detailed
despatched to the investors within 30 days from the date of the above. However, in case subscription for the Tax Saving Bond
closure of the Issue, for the delay beyond 30 days. equals to or exceeds the Issue Size, the Over Subscription option
We will provide adequate funds to the Registrars to the Issue, for this would be exercised to the extent of oversubscription in category
purpose. firstly for (1) and thereafter if available for 2(a) and 2(b)(i) above.
2. After allotment to Tax Saving Bonds, if Over Subscription in
RETENTION OF OVER SUBSCRIPTION
category 2(a) and 2(b)(i), together exceed the balance amount
We are making a Public Issue of Unsecured Redeemable Bonds in permitted to be retained as per SEBI guidelines, allotment for
the nature of Debentures aggregating Rs. 350 crore with a right to category 2(a) and 2(b)(i) will be done on a proportionate basis.
retain Over Subscription of upto Rs. 350 crore, as per SEBI Guidelines 3. The exercise of the Over Subscription option in 2(b)(ii) would
and the preamble on page (i). be at our discretion.
BASIS OF ALLOTMENT : In the event of the Issue being
4. Allotment to NRIs will be made subject to the applicable ceiling
oversubscribed, the Issuer, Lead Manager and the Registrar to the
as prescribed by RBI Guidelines notwithstanding anything stated
Issue, in consultation with The Stock Exchange, Mumbai will do the
elsewhere in the prospectus.
allotments in the following manner:
1. Full and firm allotment shall be made to all the valid applicants Method of Proportionate Allotment
under the Tax Saving Bond. The balance amount after this firm Allotment will be made on a proportionate basis in lots of one Bond
allotment (‘net offer’) would be made available for allotment to as given below:
investors who have applied for the other categories of Bonds,
i.e. Regular Income Bond and Children Growth Bond. (a) The total amount to be allotted under each category as a whole
shall be arrived at based on the method explained above.
2. (a) A minimum of 70 per cent of the net offer of Bonds shall
initially be made available for allotment to valid individual (b) The total amount to be allotted to the successful allottees will
applicants (for basis of allotment, “Individual applicants” be arrived at on a proportionate basis (i.e., total amount applied
would include Individual, Karta of Hindu Undivided Family, for multiplied by the inverse of the oversubscription ratio for
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March 2005
that category). ISSUE OF CERTIFICATES

(c) The Bonds of each type to be allotted to successful allottees Bond Certificate(s) or in case the Company issues Letter(s) of
will be arrived at on a proportionate basis [i.e. total amount to Allotment, the Bond Certificate(s) relating thereto will be despatched
be allotted multiplied by (amount invested per type of Bond/ at the risk of the applicant, through Registered Post/Speed Post,
total application amount)] rounded off to the nearest multiple of within three months from the closure of the Issue, or such extended
one Bond. Balance amount, if any, would be refunded. time as may be permitted by the Company Law Board as per the
provisions of the Act, in exchange for Letter(s) of Allotment issued, if
(d) For applications where the proportionate allotment works out
any.
to less than one Bond the allotment will be made as follows:
(i) each successful applicant shall be allotted one Bond; and INTEREST ON DELAYED REFUND
(ii) the successful applicants out of the total applicants for that Payment of interest @ 15 percent p.a. on the excess application
category shall be determined by the draw of lots in such a money will be made to the applicant for the delayed period in
manner that the total amount allotted in that category to all refund, if any, beyond 10 weeks from the date of the closure of the
successful applicants is equal to the total amount to be Issue, as per the guidelines issued by the Government of India,
allotted under that category. Ministry of Finance vide letter No.F/8/6/SE/79 dated July 21, 1983
(e) If the proportionate allotment to an applicant works out to a and as amended vide letter No.F/14/2/SE/85 dated September 27,
number that is not a multiple of Bonds, the applicant would be 1985.
allotted Bonds by rounding off to the nearest multiple of one.
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March 2005
B. FINANCIAL INFORMATION
AUDITORS’ REPORT
The Board of Directors
ICICI Bank Limited
ICICI Towers
Bandra Kurla Complex
Mumbai 400 051.
Dear Sirs,
We are engaged to report on the financial information of ICICI Bank Limited (‘ICICI Bank’ or the ‘Bank’) annexed to this report, which has been
prepared in accordance with Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (the ‘Guidelines’)
issued by the Securities and Exchange Board of India (‘SEBI’) on January 19, 2000, in pursuance of section 11 of the Securities and Exchange
Board of India Act, 1992, to the extent they are not inconsistent with the Banking Regulation Act, 1949. The preparation and presentation of this
financial information is the responsibility of the Bank’s management. This financial information is proposed to be included in the offer document
of the Bank in connection with its proposed public issue of “Unsecured Redeemable Bonds in the nature of Debentures.”
A. For our examination, we have placed reliance on the following:
i) The financial statements of ICICI Bank for the year ended March 31, 2004 and for the nine months period ended December 31, 2004,
which have been audited and reported upon by us, vide our reports dated April 30, 2004 and January 21, 2005, respectively.
ii) The financial statements of ICICI Bank for the year ended March 31, 2003, which have been audited and reported upon by us, jointly
with M/s. N. M. Raiji & Co., Chartered Accountants, vide our joint audit report dated April 25, 2003.
iii) The financial statements of ICICI Bank for each of the three financial years ended March 31, 2002, which have been audited and
reported upon by M/s. S. B. Billimoria & Co., Chartered Accountants.
iv) The financial statements of the below mentioned subsidiaries of ICICI Bank which have been audited and reported upon by their
auditors, the names of which and the period of their audit are mentioned thereagainst.
Name of the Subsidiary Name of Auditors
1. ICICI Securities Limited M/s. N. M. Raiji & Co., for each of the five financial years ended
(formerly ICICI Securities & Finance Company Limited) March 31, 2004.
2. ICICI Brokerage Services Limited M/s. N. M. Raiji & Co., for each of the five financial years ended
March 31, 2004.
3. ICICI Home Finance Limited M/s. S. B. Billimoria & Co. and M/s. N. M. Raiji & Co., for each of the two
financial years ended March 31, 2001 and M/s. N. M. Raiji & Co., for
each of the three financial years ended March 31, 2004.
4. ICICI Securities Holdings Inc. M/s. Grant Thronton LLP, for the financial year ended March 31, 2001
and M/s. N.M. Raiji & Co., for each of the three financial years ended
March 31, 2004.
5. ICICI Securities Inc. M/s. Grant Thronton LLP, for the financial year ended March 31, 2001
and M/s. N.M. Raiji & Co., for each of the three financial years ended
March 31, 2004.
6. ICICI International Limited, Mauritius M/s. Horwath Mauritius, for each of the five financial years ended
(Formerly TDICI Investment Management Co.) March 31, 2004.
7. ICICI Trusteeship Services Limited M/s. C. C. Chokshi & Co., for each of the four financial years ended
March 31, 2004.
8. ICICI Investment Management Company Limited M/s. V. P. Thakkar & Co. for the financial year ended March 31, 2001
and M/s. S. B. Billimoria & Co., for each of the three financial years
ended March 31, 2004.
9. ICICI Prudential Life Insurance Company Limited M/s. Bharat S. Raut & Co. for each of the two financial years ended
March 31, 2002 and M/s. Bharat S. Raut & Co. and M/s. S. R. Batliboi &
Co., for each of the two financial years ended March 31, 2004.
10. ICICI Lombard General Insurance Company Limited M/s. Bharat S. Raut & Co., for each of the three financial years ended
March 31, 2003 and M/s. Bharat S. Raut & Co. and M/s. Lodha & Co., for
the financial year ended March 31, 2004.
11. ICICI Venture Funds Management Company Limited M/s. S. B. Billimoria & Co., for each of the five financial years ended
(formerly TDICI Limited) March 31, 2004.
12. ICICI Bank UK Limited M/s. K.P.M.G. from the period February 11, 2003 to March 31, 2004.
13. ICICI Distribution Finance Private Limited M/s. S.R.Batliboi & Associates for the financial year ended March 31,
2004.
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March 2005
v) The unaudited financial statements of ICICI Bank Canada for the period ended March 31, 2004. As informed to us by the management,
considering no operation of the Company, the accounts for the period ended March 31, 2004 are not audited.
vi) The unaudited financial statements of below mentioned subsidiaries of ICICI Bank for the nine months period ended December 31,
2004. As informed to us by the management, considering the current materiality of operation of such companies in connection to the
consolidated financial statements of ICICI Bank, the accounts for the nine months period ended December 31, 2004 are not audited.
1. ICICI Securities Limited
2. ICICI Brokerage Services Limited
3. ICICI Home Finance Limited
4. ICICI Securities Holdings Inc.
5. ICICI Securities Inc.
6. ICICI Trusteeship Services Limited
7. ICICI Investment Management Company Limited
8. ICICI Prudential Life Insurance Company Limited
9. ICICI Lombard General Insurance Company Limited
10. ICICI Bank UK Limited
11. ICICI Bank Canada
12. ICICI Distribution Finance Private Limited
13. ICICI International Limited, Mauritius
14. ICICI Venture Funds Management Company Limited
B. We have performed such tests and procedures, which in our opinion were necessary for the examination. These procedures comprised
comparison of the attached financial information with the Bank’s audited financial statements and/or unaudited statements compiled by the
Bank’s management and relied upon by us.
Our audit of the financial statements, referred to in paragraph A(i), A(ii) and A(iv) (9) of this report, comprise such audit tests and procedures
as were deemed necessary for the purpose of expressing an opinion or joint audit opinion, as the case may be, on such financial statements
taken as a whole. For none of the period or entities referred to in paragraph A(iii), A(iv), A(v) and A(vi) above, did we perform audit tests for
the purpose of expressing an opinion on individual balances of account or summaries of selected transactions and accordingly, we express
no opinion thereon.
C. In accordance with the requirements of clause B of Part II of Schedule II to the Companies Act, 1956 and the said Guidelines, we report as
follows:
a. (i) The profits of ICICI Bank for each of the five financial years ended March 31, 2004 and for the nine months period ended
December 31, 2004 are as set out in Part I of Annexure A, enclosed.
(ii) M/s. S.B. Billimoria & Co., Chartered Accountants, vide their Report dated August 29, 2002, attached herewith, have confirmed
that the profits of ICICI Bank for each of the three financial years ended March 31, 2002 and the assets and liabilities as at March
31, 2002 are as set out in Part I and Part II of Annexure A, and that these profits read together with the notes appearing under the
Statement of Profits and Loss and Statement of Assets and Liabilities, along with accounting policies followed, have been arrived
at after charging all expenses and making adjustments and regroupings and are, in their opinion, appropriate.
(iii) M/s. N. M. Raiji & Co., Chartered Accountants, jointly with us, have confirmed, vide our report dated July 24, 2003, attached
herewith, that the profits of ICICI Bank for the financial year ended March 31, 2003 and the assets and liabilities as at March 31,
2003, are as set out in Part I and Part II of Annexure A, and that these profits read together with the notes appearing under the
Statement of Profits and Loss and Statement of Assets and Liabilities, along with accounting policies followed, have been arrived
at after charging all expenses and making adjustments and regroupings and are, in their opinion, appropriate.
(iv) As mentioned in notes appearing under the Statement of Profits and Statement of Assets and Liabilities of Annexure A, it has not
been possible for the management to determine the effect on profits, if changes in accounting policies as stated in Part I of
Annexure A had been made in each of the accounting years preceding the change and accordingly, adjustments to profits for
those items have been made prospectively from the year of change.
(v) Subject to our comment in paragraph C (a) (iv) above, the effect whereof is not ascertainable, we confirm that the profits for the
year ended March 31, 2004 and for the nine months period ended December 31, 2004 and the assets and liabilities as at
December 31, 2004 are as set out in Part I and Part II of Annexure A, enclosed, and that these profits read together with the notes
appearing under the Statement of Profits and Statement of Assets and Liabilities, along with accounting policies followed have
been arrived at after charging all expenses and making adjustments and regroupings and are, in our opinion, appropriate.
(vi) The dividends (subject to deduction of tax at source where applicable) declared by ICICI Bank for the five financial years ended
March 31, 2004 and the nine months period ended December 31, 2004 are as set out in Part III of Annexure A enclosed.
b. (i) The profits/losses of the subsidiaries of ICICI Bank for each of the periods/years ended March 31, 2004 and for the nine months
period ended December 31, 2004 and the assets and liabilities of each subsidiary company of ICICI Bank as at December 31,
2004 are set out in Part I and Part II, respectively, of Annexures B to O, enclosed for each subsidiary.
(ii) M/s. S.B. Billimoria & Co., Chartered Accountants, vide their Report dated August 29, 2002, enclosed herewith, have confirmed
that the profits/losses of each of the subsidiaries relating to the periods/year for which the financial statements till March 31, 2002
are drawn up, as aforesaid, read together with the notes appearing under the Statement of Profits and Accounting Policies
followed have been arrived at, after charging all expenses and after making such adjustments and regroupings, as are appropriate,
based on the reports of auditors on the aforesaid financial statements of the subsidiary companies.
(iii) For the purpose of the said M/s. S.B. Billimoria & Co.’s report, the Bank had informed them that on an interpretation of provisions
of Section 4 of the Companies Act, 1956, the below mentioned entities would not constitute subsidiaries of ICICI Bank and
accordingly the profits/losses and assets and liabilities of the below mentioned entities have not been included in their report.
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March 2005
1. ICICI Web Trade Limited

2. ICICI Property Trust
3. ICICI Properties Private Limited
4. ICICI Real Estate Company Private Limited
5. ICICI Realty Private Limited
6. ICICI West Bengal Infrastructure Development Corporation Limited
7. ICICI KINFRA Limited
8. ICICI Knowledge Park
9. ICICI Technology Incubator Fund
10. ICICI Econet Internet and Technology Fund
11. ICICI Information Technology Fund
12. ICICI Equity Fund
(iv) M/s. N. M. Raiji & Co., Chartered Accountants, jointly with us, have confirmed, vide our report dated July 24, 2003, attached
herewith, that the profits/losses relating to the period/year ended March 31, 2003 of each of the subsidiaries (except for ICICI
Bank UK Ltd.) are drawn up, as aforesaid, read together with the notes appearing under the Statement of Profits and Accounting
Policies followed and have been arrived at, after charging all expenses and after making such adjustments and regroupings, as
are appropriate, based on the reports of auditors on the aforesaid financial statements of the subsidiary companies.
(v) For the purpose of the said joint report of M/s. N. M. Raiji & Co., Chartered Accountants, and ourselves, the Bank had informed
us that on an interpretation of provisions of Section 4 of the Companies Act, 1956, the below mentioned entities would not
constitute subsidiaries of ICICI Bank and accordingly the profits/losses and assets and liabilities of the below mentioned entities
have not been included in their report.
1. ICICI One Source Limited
2. 3I Infotech Limited formely known as ‘ICICI Infotech Limited’.
(vi) As mentioned in notes appearing under the Statement of Profits and Statement of Assets and Liabilities to Annexures B, C, D, J,
K and L, it has not been possible for the management to determine the effect on profits, if changes in accounting policies as stated
in Part I of Annexure B, C, D, J, K and L had been made in each of the accounting years preceding the change and accordingly,
adjustments to profits for those items have been made prospectively from the year of change.
(vii) Subject to our comment in paragraph C (b) (vi) above, the effect whereof is not ascertainable, we report that the profits of the
following subsidiary companies for the year ended March 31, 2004 and the assets and liabilities as at March 31, 2004 read
together with the notes appearing under the Statement of Profits and Statement of Assets and Liabilities, along with accounting
policies followed, have been arrived at after charging all expenses and making adjustments and regroupings and are appropriate,
based on the reports of the auditors on the accounts of respective subsidiary companies:
1. ICICI Securities Limited (Formerly ICICI Securities & Finance Company Limited) (Annexure B)
2. ICICI Brokerage Services Limited (Annexure C)
3. ICICI Home Finance Limited (Annexure D)
4. ICICI Securities Holdings Inc. (Annexure E)
5. ICICI Securities Inc. (Annexure F)
6. ICICI International Limited, Mauritius (Annexure G)
7. ICICI Trusteeship Services Limited (Annexure H)
8. ICICI Prudential Life Insurance Company Limited (Annexure J)
9. ICICI Lombard General Insurance Company Limited (Annexure K)
10. ICICI Venture Funds Management Company Limited (Annexure L)
11. ICICI Bank UK Limited (Annexure M)
12. ICICI Distribution Finance Private Limited (Annexure N)
13. ICICI Investment Management Company Limited (Annexure O)
(viii) The financial statements of the ICICI Bank Canada (Annexure I) have not been audited for the period ended March 31, 2004 by their
auditors. We report that the unaudited profits for the period ended March 31, 2004 and the unaudited assets and liabilities as at
March 31, 2004 read together with the notes appearing under the Statement of Profits and Statement of Assets and Liabilities,
along with accounting policies followed, have been arrived at, after charging all expenses and making such adjustments, as
deemed appropriate by the management of the company.
(ix) Subject to our comment in paragraph C (b) (vi) above, the effect whereof is not ascertainable, we report that the profits of the
following subsidiary companies for the nine months period ended December 31, 2004 and the assets and liabilities as at
December 31, 2004 read together with the notes appearing under the Statement of Profits and Statement of Assets and
Liabilities, along with accounting policies followed, have been arrived at, after charging all expenses and making adjustments
and making such adjustments, as deemed appropriate by the management of respective companies:
1. ICICI Securities Limited (Annexure B)
6. ICICI International Limited, Mauritius (Annexure G)
8. ICICI Bank Canada (Annexure I)
11. ICICI Venture Funds Management Company Limited (Annexure L)
12. ICICI Bank UK Limited (Annexure M)
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March 2005
13. ICICI Distribution Finance Private Limited (Annexure N)

14. ICICI Investment Management Company Limited (Annexure O)
c. For the purpose of this report, the Bank has informed us that on an interpretation of provisions of Section 4 of the Companies
Act, 1956, the below mentioned entities would not constitute subsidiaries of ICICI Bank and accordingly the profits/losses and
assets and liabilities of the below mentioned entities have not been included in this report.
14. 3I Infotech Limited formely known as ‘ICICI Infotech Limited’.
d. This report should not be in any way construed as a re-issuance or re-dating of any of the previous audit reports issued by us or
by other firms of chartered accountants nor should this report be construed as a new opinion on any of the financial statements
referred to herein.
e. This report has been issued solely in connection with the proposed offering of the “Unsecured Redeemable Bonds in the nature
of Debentures” covered by the Offering Circular, and it is not to be used, circulated, quoted or otherwise referred to for any other
purpose.
For S. R. Batliboi & Co.

Chartered Accountants
Per
Viren H. Mehta
a Partner
Membership No.: 048749
Mumbai, February 4, 2005
Attachment 1 : Auditor’s Report of M/s. S.B. Billimoria & Co., Chartered Accountants, dated August 29, 2002.
Attachment 2 : Auditor’s Report of M/s. N.M.Raiji & Co., Chartered Accountants and M/s. S.R. Batliboi & Co., Chartered Accountants, dated July
24, 2003.
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March 2005
AUDITORS’ REPORT

ICICI Bank Limited
ICICI Towers
Bandra-Kurla Complex
Bandra (East), Mumbai - 400 051.
Dear Sirs,
We have examined the audited accounts of ICICI Bank Limited (‘the Bank’) for the five financial years ended March 31, 2002.
The accounts of ICICI Bank for the four financial years ended on March 31, 2002 have been audited and reported upon by us. Further, accounts
of the below mentioned subsidiaries of ICICI Bank have also been audited and reported upon by us:
1. ICICI Venture Funds Management Company Limited (formerly TDICI Limited)
2. ICICI Home Finance Limited (Jointly with M/s. N. M. Raiji & Co. up to financial year ended March 31, 2001)
3. ICICI Investment Management Company Limited
For our examination, we have accepted relevant accounts and statements in respect of:
(i) ICICI Bank Ltd. for the financial year ended March 31, 1998 which have been audited and reported upon by Lodha & Company, Chartered
Accountants.
(ii) The below mentioned subsidiaries of ICICI Bank Limited (for the period of five years from the date of incorporation/ date of becoming a
subsidiary) which have been audited and reported by the auditors mentioned thereagainst.
Name of the Subsidiary Companies Name of the Auditors
1. ICICI Securities and Finance Company Limited M/s. N. M. Raiji & Co.
2. ICICI Brokerage Services Limited M/s. N. M. Raiji & Co.
3. ICICI Securities Holdings Inc. M/s. Grant Thronton LLP upto March 31, 2001 and
M/s. N. M. Raiji & Co. thereafter
4. ICICI Securities Inc. M/s. Grant Thronton LLP upto March 31, 2001 and
M/s. N. M. Raiji & Co. thereafter
5. ICICI International Limited M/s. Horwath Mauritius
6. ICICI Trusteeship Services Limited M/s. C. C. Chokshi & Co.
7. ICICI Lombard General Insurance Company Limited M/s. Bharat S. Raut & Co.
8. ICICI Prudential Life Insurance Company Limited M/s. Bharat S. Raut & Co.
9. ICICI Home Finance Limited M/s. N. M. Raiji & Co.
(for the year ended March 31, 2002)
In accordance with the requirements of clause B of Part II of Schedule II to the Companies Act, 1956, we report as follows:
(i) The profits of ICICI Bank for each of the five financial years ended March 31, 2002 and the assets and liabilities as at March 31, 2002 are as
set out in Part I and Part II of Annexure A enclosed. These profits read together with the notes appearing under the Statement of Profits and
Statement of Assets and Liabilities along with accounting policies followed have been arrived at after charging all expenses and making
adjustments and regrouping as are, in our opinion, appropriate.
(ii) The dividends (subject to deduction of tax at source where applicable) declared by ICICI Bank for the five financial years ended March 31,
2002 are as set out in Part III of Annexure A enclosed.
(iii) The profit/losses of each subsidiary company of ICICI Bank for period/years ended March 31, 2002 and the assets and liabilities of each
subsidiary company of ICICI Bank as at March 31, 2002 are as set out in Part I and Part II respectively of Annexures B to L enclosed for each
Subsidiary Company.
(iv) These profits/losses relating to the periods for which the accounts are drawn up, as aforesaid, read together with the notes appearing under
the Statement of Profits and Accounting Policies followed have been arrived at, after charging all expenses and after making such
adjustments and regroupings, as are appropriate, based on the reports of auditors on the aforesaid accounts of the subsidiary companies.
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March 2005
(v) In reporting the Consolidated financial statements of ICICI Bank Limited and its subsidiaries (‘the Group’) for the year ended March 31, 2002
prepared in accordance with Accounting Standard 21 – ‘Consolidated Financial Statements’ issued by the Institute of Chartered Accountants
of India, the results of the following entities were included:
For the purpose of this Report, the Bank has informed us that on an interpretation of provisions of Section 4 of the Companies Act, 1956 the above
mentioned entities would not constitute subsidiaries of ICICI Bank and accordingly the profit/losses and assets and liabilities of the above
mentioned entities have not been included in the report.
For S. B. BILLIMORIA & CO.

Chartered Accountants
P. R. Ramesh
Partner
Mumbai,
August 29, 2002
134
March 2005
N. M. Raiji & Co. S. R. Batliboi & Co.

Chartered Accountants Chartered Accountants
Universal Insurance Building Vaswani Mansion,
6th Floor, Sir P. M. Road Dinsha Vachha Road,
Fort, Mumbai - 400 001. Churchgate, Mumbai - 400 020.
AUDITORS’ REPORT

ICICI Bank Limited
ICICI Towers
Bandra-Kurla Complex
Bandra (East)
Mumbai - 400 051.
Dear Sirs,
We have examined the financial information of ICICI Bank Limited (‘ICICI Bank’ or ‘the Bank’) which has been prepared in accordance with Part II
of Schedule II to the Companies Act, 1956 (the ‘Act’) and Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines
2000 (the ‘Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) on January 19, 2000 in pursuance of Section 11 of the
Securities and Exchange Board of India Act, 1992 and annexed to this report. The preparation and presentation of this financial information is the
responsibility of the Bank’s management. This financial information is proposed to be included in the offer document of the Bank in connection
with its proposed public issue of “Unsecured Redeemable Bonds in the nature of Debentures.”
A. For our examination, we have placed reliance on the following:
i) The financial statements of ICICI Bank for the year ended March 31, 2003, which have been audited and reported upon jointly by us.
ii) The financial statements of ICICI Bank for the four financial years ended March 31, 2002, which have been audited and reported upon
by M/s. S. B. Billimoria & Co., Chartered Accountants.
iii) The financial statements of the below mentioned subsidiaries of ICICI Bank (for the period of five years ending March 31, 2003 from
the date of their incorporation or the date of their becoming a subsidiary) which have been audited and reported upon by their auditors,
the names of which are mentioned thereagainst.
Name of the Subsidiary Companies Name of Auditors
1. ICICI Securities Limited (formerly ICICI M/s. N. M. Raiji & Co.
Securities & Finance Company Limited)
2. ICICI Brokerage Services Limited M/s. N. M. Raiji & Co.
3. ICICI Home Finance Limited M/s. S. B. Billimoria & Co. and M/s. N. M. Raiji & Co. up to the
financial year ended March 31, 2001 and M/s. N. M. Raiji & Co.
for subsequent years.
4. ICICI Securities Holdings Inc. M/s. Grant Thronton upto the financial year ended March 31, 2001
and M/s. N. M. Raiji & Co. for subsequent years.
5. ICICI Securities Inc. M/s. Grant Thronton upto the financial year ended March 31, 2001
and M/s. N. M. Raiji & Co. for subsequent years.
6. ICICI International Limited, Mauritius M/s. Horwath Mauritius, Public Accountants
(formerly TDICI Investment Management Co.)
7. ICICI Trusteeship Services Limited M/s. C. C. Chokshi & Co.
8. ICICI Investment Management Company Limited M/s. V. P. Thakkar & Co. upto financial year ended March 31, 2001
and M/s. S. B. Billimoria & Co. for subsequent years
9. ICICI Prudential Life Insurance Company Limited M/s. Bharat S. Raut & Co. upto financial year ended March 31, 2002
and M/s. Bharat S. Raut & Co. and M/s. S. R. Batliboi & Co. for
subsequent years.
10. ICICI Lombard General Insurance Company Limited M/s. Bharat S. Raut & Co.
11. ICICI Venture Funds Management Company Limited M/s. S. B. Billimoria & Co.
(formerly TDICI Limited)
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March 2005
B. We have performed such other test and procedures, which, in our opinion, were necessary for the examination. These procedures, which
include comparison of the attached financial information with the Bank’s audited financial statements.
Our audit of the financial statements for the period referred to in paragraph A (i) of this report comprises audit tests and procedures deemed
necessary for the purpose of expressing an opinion on such financial statements taken as a whole. For none of the period referred to in
paragraph A (ii) and A (iii), did we perform audit tests for the purpose of expressing an opinion on individual balances of account or
summaries of selected transactions such as those enumerated above and accordingly, we express no opinion thereon.
C. In accordance with the requirements of clause B of Part II of Schedule II to the Companies Act, 1956 and the said Guidelines, we report as
follows:
a. (i) The profits of ICICI Bank for each of the five financial years ended March 31, 2003 are as set out in Part I of Annexure A, enclosed.
(ii) M/s. S. B. Billimoria & Co., Chartered Accountants, vide their Report dated August 29, 2002, attached herewith have confirmed
that the profits of ICICI Bank for each of the four financial years ended March 31, 2002 and the assets and liabilities as at March
31, 2002 are as set out in Part I and Part II of Annexure A, and that these profits read together with the notes appearing under the
Statement of Profits and Statement of Assets and Liabilities, along with accounting policies followed, have been arrived at after
charging all expenses and making adjustments and regroupings and are, in their opinion, appropriate.
(iii) As mentioned in notes appearing under the Statement of Profits and Statement of Assets and Liabilities to Annexure A, it has not
been possible for the management to determine the effect on profits, if changes in accounting policies as stated in Part I of
Annexure A had been made in each of the accounting years preceding the change and accordingly, adjustments to profits for
those items have been made only in the year of change.
(iv) Subject to our comment in paragraph C (a) (iii) above, we confirm that the profits for the year ended March 31, 2003 and the
assets and liabilities as at March 31, 2003 are as set out in Part I and Part II of Annexure A, enclosed, and that these profits read
together with the notes appearing under the Statement of Profits and Statement of Assets and Liabilities, along with accounting
policies followed have been arrived at after charging all expenses and making adjustments and regroupings and are, in our
opinion, appropriate.
(v) The dividends (subject to deduction of tax at source where applicable) declared by ICICI Bank for the five financial years ended
March 31, 2003 are as set out in Part III of Annexure A enclosed.
b. (i) The profits/losses of each subsidiary company of ICICI Bank for periods/years ended March 31, 2003 and the assets and liabilities
of each subsidiary company of ICICI Bank as at March 31, 2003 are as set out in Part I and Part II respectively of Annexures B to
L enclosed for each Subsidiary Company.
(ii) M/s. S. B. Billimoria & Co., Chartered Accountants, vide their Report dated August 29, 2002, enclosed herewith, have confirmed
that the profits/losses relating to the periods for which the financial statements of each of the subsidiaries are drawn up, as
aforesaid, read together with the notes appearing under the Statement of Profits and Accounting Policies followed have been
arrived at, after charging all expenses and after making such adjustments and regroupings, as are appropriate, based on the
reports of auditors on the aforesaid financial statements of the subsidiary companies.
(iii) For the purpose of the said Report, the Bank had informed M/s. S. B. Billimoria & Co. that on an interpretation of provisions of
Section 4 of the Companies Act, 1956, the below mentioned entities would not constitute subsidiaries of ICICI Bank and
accordingly the profits/losses and assets and liabilities of the below mentioned entities have not been included in their report:
Similarly, for the purpose of this Report, the Bank had informed us that on an interpretation of provisions of Section 4 of the
Companies Act, 1956, the below mentioned entities in addition to the above mentioned entities would not constitute subsidiaries
of ICICI Bank and accordingly the profits/losses and assets and liabilities of the below mentioned entities have not been included
in this report:
2. ICICI Infotech Limited
(iv) As mentioned in notes appearing under the Statement of Profits and Statement of Assets and Liabilities to Annexure B, C, D, J
and L, it has not been possible for the management to determine the effect on profits, if changes in accounting policies as stated
in Part I of Annexure B, C, D, J and L had been made in each of the accounting years preceding the change and accordingly,
adjustments to profits for those items have been made only in the year of change.
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March 2005
(v) Subject to our comment in paragraph C (b) (iv) above, we report that the profits for the year ended March 31, 2003 and the assets
and liabilities as at March 31, 2003 read together with the notes appearing under the Statement of Profits and Statement of
Assets and Liabilities, along with accounting policies followed, have been arrived at after charging all expenses and making
adjustments and regroupings and are appropriate, based on the reports of auditor on the accounts of following subsidiary
companies:
1. ICICI Securities Limited (Formerly ICICI Securities & Finance Company Limited) (Annexure B)
6. ICICI International Limited, Mauritius (Formerly TDICI Investment Management Co.) (Annexure G)
8. ICICI Investment Management Company Limited (Annexure I)
11. ICICI Venture Funds Management Company Limited (formerly TDICI Limited) (Annexure L)
For N. M. Raiji & Co. For S. R. Batliboi & Co.

Chartered Accountants Chartered Accountants
Jayesh M. Gandhi per Viren H. Mehta

Partner a Partner
Mumbai, July 24, 2003
Enclosed : Auditor’s Report of M/s. S. B. Billimoria & Co., Chartered Accountants, dated August 29, 2002.
137
March 2005
ANNEXURES TO THE AUDITORS’ REPORT

Annexure A - Statement of Accounts of ICICI BANK LIMITED
Part I - STATEMENT OF PROFITS
(Rs. in Crores)
Year ended March 31, For the nine
month ended
December
2000 2001 2002 2003 2004 31, 2004
Interest Earned
Interest / discount on advances / bills 347.91 570.91 771.67 6,016.24 6,073.85 4,867.73
Income on investments 409.71 555.72 1,233.80 2,910.44 2,431.74 1,637.10
Interest on balances with Reserve Bank of
India and other inter-bank funds 94.61 108.67 122.62 235.57 210.63 166.15
Others 0.64 6.83 23.84 205.81 177.81 133.68
Total (A) 852.87 1,242.13 2,151.93 9,368.06 8,894.04 6,804.66
Other Income
Commission, exchange and brokerage 67.08 139.53 229.79 791.79 1,071.80 1,397.61
Profit / (Loss) on sale of investments (net) 101.14 19.21 305.71 492.33 1,224.63 294.37
Profit / (Loss) on revaluation of
investments (net) - - - - - -
Profit / (Loss) on exchange transactions (net)
(including premium amortisation) 22.39 41.61 37.30 10.24 192.63 235.34
Profit on sale of shares of ICICI Bank Limited
held by erstwhile ICICI Limited - - - 1,191.05 - -
Miscellaneous Income 3.44 19.99 1.86 673.41 575.86 456.52
Total (B) 194.05 220.34 574.66 3,158.82 3,064.92 2,383.84
TOTAL INCOME (C) = (A) + (B) 1,046.92 1,462.47 2,726.59 12,526.88 11,958.96 9,188.50
Interest Expended
Interest on deposits 580.50 725.44 1,388.92 2,479.71 3,023.02 2,270.52
Interest on Reserve Bank of India /
inter-bank borrowings 23.55 32.05 47.84 183.37 229.37 156.70
Others (including interest on borrowings
of erstwhile ICICI Limited) 62.89 80.18 122.16 5,280.92 3,762.86 2,328.53
Total (D) 666.94 837.67 1,558.92 7,944.00 7,015.25 4,755.75
Operating Expenses
Employee expenses 36.37 51.71 147.18 403.02 546.06 531.50
Depreciation on fixed assets
(incl. Lease Assets) 24.79 36.76 64.09 505.94 539.44 438.86
Establishment and other expenses 92.15 246.16 411.31 1,102.73 1,485.73 1,383.56
Total (E) 153.31 334.63 622.58 2,011.69 2,571.23 2,353.92
TOTAL EXPENSES (F) = (D) + (E) 820.25 1,172.30 2,181.50 9,955.69 9,586.48 7,109.67
Net Income before provisions (C) - (F) 226.67 290.17 545.09 2,571.19 2,372.48 2,078.83
Less : Provision for taxes
(net of deferred tax) 27.03 65.42 31.50 (425.79) 265.11 339.56
Provision for non-performing assets (net)
and prudential provision on standard assets 75.50 63.55 268.29 1,474.98 459.12 73.41
Other provisions [including additional
depreciation / (write-back of depreciation)
on investments] 18.84 0.10 (13.00) 315.82 11.15 275.36
Total Provisions 121.37 129.07 286.79 1,365.01 735.38 688.33
NET PROFIT AFTER TAX 105.30 161.10 258.30 1,206.18 1,637.10 1,390.50
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March 2005
Adjustments as per SEBI Guidelines

(Rs. in Crores)
month ended
December
2000 2001 2002 2003 2004 31, 2004
Profit for the period 105.30 161.10 258.30 1,206.18 1,637.10 1,390.50
Add/(Less) :-
1) Adjustment for change in accounting
policy relating to depreciation on
improvements to leased premises 3.36 - - - - -
[Refer Note (1)]
policy relating to depreciation on
premises and other fixed assets - (9.48) - - - -
[Refer Note (2)]
3) Adjustment for change in rates of
depreciation on premises and other
fixed assets [Refer Note (3)] - - (6.43) - - -
4) Adjustment for change in methodology
for ascertaining carrying cost of
investments, accounting for
repurchase transactions and review
of useful life of ATMs [Refer Note (4)] - - - (16.12) - -
policy relating to Unrealised gains on
rupee derivatives (net of provisions) - - - - - (63.65)
[Refer Note (5)]
policy relating to commission paid to
direct marketing agent of auto loans - - - - - -
[Refer Note (6)]
7) Tax effect for the above adjustments (1.29) 3.75 2.30 5.92 - 23.29
Adjusted profit after tax 107.37 155.37 254.17 1,195.98 1,637.10 1,350.14
Notes to ‘Adjustments as per SEBI guidelines’

(1) With effect from April 1, 1999, improvements (including fixtures / fittings) to leased premises have been depreciated over the primary lease
period instead of at the rates specified in Schedule XIV of the Companies Act, 1956.
(2) With effect from April 1, 2000, premises and other fixed assets have been depreciated over their estimated useful life on a straight line basis
instead of on WDV basis.
(3) With effect from April 1, 2001, arising from the merger of ICICI Limited with the Bank, the useful lives of certain categories of fixed assets
were reviewed to align the depreciation rates followed by ICICI Limited and the Bank. Accordingly, the Bank changed its rates of depreciation
on certain categories of fixed assets.
(4) Effective April 1, 2002, the Bank has changed the methodology for ascertaining the carrying cost of fixed income bearing securities from
Weighted Average method to First-In-First-Out Method.
During the year ended March 31, 2003, the Bank has accounted for repurchase transactions as a sale and a forward purchase or purchase
and a forward sale transaction as against borrowing or lending transaction.
The Bank depreciated Automated Teller Machines (ATMSs) over its useful life estimated at 6 years or over lease period for ATMs taken on
lease. Effective April 1, 2002, the Bank revised the useful lives of the ATM’s to 8 years based on an evaluation done by management.
(5) Effective April 01, 2004 the bank have accounted for unrealised gains on rupee derivatives (net of provisions) as compared to its earlier
policy of ignoring the unrealised gains. As a result profit after tax for the current period is higher by Rs. 40.36 crores.
(6) Effective April 1, 2004 the commissions paid to direct marketing agents (DMAs) of auto loans, net of subvention income received from them,
is recorded upfront in the profit and loss account. For disbursements made till March 31, 2004, the gross commissions paid to direct
marketing agents (DMAs) of auto loans were recorded upfront in the profit and loss account and subvention income received from them is
being amortised over the life of the loan. The impact of the change is not significant.
(7) It has not been possible to determine the effect on profits if changes in accounting policies stated above had been made in each of the
accounting years preceding the change and accordingly adjustments to profits for those items have not been made.
(8) Consequent upon Accounting Standard 22 on Accounting for Taxes on Income becoming mandatory effective April 1, 2001, the deferred
tax effect of timing differences arising during the year ended March 31, 2002 has been recognised in the Profit and Loss Account for the
period. The deferred tax adjustment for March 31, 1999, 2000 and 2001 has not been determined and consequently, no adjustmenrts have
been carried out in the Statements of Profits shown above.
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March 2005
Part II - STATEMENT OF ASSETS AND LIABILITIES

(Rs. in Crores)
As on December 31, 2004
ASSETS
Cash in Hand (including foreign currency notes) 467.67
Balance with RBI in current accounts 6,980.49
Balance with Banks and Money at Call and Short Notice
I. In India
i) Balances with banks
a) in Current Accounts 484.47
b) in Other Deposit Accounts 783.80
ii) Money at call & short notice
a) with banks 1,153.00
b) with other institutions 6.00
[Total I] 2,427.27
II. Outside India
i) in Current Accounts 339.21
ii) in Other Deposit Accounts 2,077.79
iii) Money at call & short notice 278.15
[Total II] 2,695.15
Total (I + II) 5,122.42
Investments (net of provisions)
I. Investments in India
i) Government securities 30,198.19
ii) Other approved securities 30.12
iii) Shares 1,772.54
iv) Debentures and Bonds 4,280.76
v) Subsidiaries and/or joint ventures 1,210.81
vi) Others (CPs, Mutual Fund Units, etc.) 4,484.67
Total 41,977.09
II. Investments outside India 1,291.48
Total (I + II) 43,268.57
Advances (net of provisions)
I. In India 71,959.77
II. Outside India 4,132.69
Total (I + II) 76,092.46
Fixed Assets (incl. Lease Assets) 3,861.75

Other Assets 10,420.82
Total Assets (C) 146,214.18
LIABILITIES
Demand Deposits
- From Banks 185.44
- From Others 9,008.04
Saving Bank Deposits 10,714.79
Term Deposits
- From Banks 2,757.83
- From Others 59,262.18
Borrowings
I. In India
i) Reserve Bank of India -
ii) Other banks 3,251.88
iii) Other institutions and agencies
a) From Government of India 380.65
b) From Financial Institutions 5,664.96
iv) Borrowings in the form of :-
a) Deposits taken over from erstwhile ICICI Limited 262.80
b) Bonds & Debentures (excluding subordinated debt) :-
1) Debentures & Bonds guaranteed by the Government of India 1,481.50
2) Tax free Bonds -
3) Borrowings under private placement of bonds carrying
maturity of one to thirty years from the date of placement 3,259.20
4) Bonds issued under multiple option/safety bonds series 8,013.91
Total (I) 22,314.90
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March 2005
(Rs. in Crores)
II. Outside India 10,630.40
Total (I + II) 32,945.30
Other Liabilities & Provisions 10,179.09
Unsecured Redeemable Debenture/Bonds (Subordinated for Tier-II capital) 8,176.36
Total Liabilities ( D ) 133,229.03
Total ( C-D ) 12,985.15
A. SHARE CAPITAL :
i) Issued, Subscribed and Paid up (net of calls unpaid) [Refer note (1) (a) to (g)] 735.83
ii) Share Capital Suspense [Refer note (2)] 0.06
iii) Preference Share Capital [Refer note (3) and (4)] 350.00
350 Shares of Rs. 1,00,00,000/- each
Total (A) 1,085.89
RESERVES AND SURPLUS : [Refer note (5)]
(i) Statutory Reserves 960.73
(ii) Special Reserve 1,169.00
(iii) Share Premium [Refer note (6)] 3,975.96
(iv) Investment Fluctuation Reserve 730.34
(v) Capital Reserves 465.00
(vi) Revenue & Other Reserves 3,163.67
(vii) Balance in Profit & Loss Account 1,434.56
Total (B) 11,899.26
Total (A) + (B) 12,985.15
NOTES
(1) Includes :-
(a) 31,818,180 are underlying equity shares consequent on USD 175 million ADS issue in March 2000.
(b) 23,539,800 equity shares are allotted as fully paid towards consideration for amalgamation of erstwhile Bank of Madura Limited with
the Bank.
(c) 3,92,672,724 (including 128,207,142 underlying equity shares issued to ADS holders of erstwhile ICICI Limited) equity shares
allotted as fully paid towards consideration for amalgamation of erstwhile ICICI Limited with the Bank.
(d) 3,370,604 equity shares have been issued on exercise of employee stock options during year ended March 31, 2004.
(e) 3,615,486 equity shares have been issued on exercise of employee stock options during nine months ended December 31, 2004.
(f) 108,928,571 equity shares issued consequent to public issue vide prospectus dated April 12, 2004.
(g) 6,992,187 equity shares on exercise of the green shoe option.
(2) 62,750 equity shares of Rs. 10/- each, represents application money received on exercise of employee stock option as on December 31,
2004.
(3) The notification from Ministry of Finance has currently exempted the Bank from the restriction of section 12(1) of the Banking Regulation
Act, 1949, which prohibits issue of preference shares by banks.
(4) 350 preference shares of ICICI Bank allotted as fully paid preference shares to preference shareholders of erstwhile ICICI Limited on
amlagamation, redeemable at par on April 20, 2018.
(5) Reserves and surplus as on March 31, 2002 include Rs. 4,300.82 crore on amalgamation with ICICI Limited, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited.
(6) Net of share issue expense amounting to Rs. 52.89 crore, written-off as per object of the issue.
(Rs. in Crores)
CONTINGENT LIABILITIES
i) Claim against Bank not acknowledged as debts 2,245.37
ii) Liability for partly paid investments 16.84
iii) Liability on account of outstanding forward exchange contracts 62,501.21
iv) Guarantees given on behalf of constituents in India 14,556.12
v) Acceptances, endorsements & other obligations 9,573.49
vi) Currency Swaps 7,326.63
vii) Interest rate Swaps 150,494.91
viii) Other items for which Bank is contingently liable 8,045.97
Total 254,760.54
Bills for collection 2,050.10
141
March 2005
Part III of Annexure A

ICICI BANK LIMITED - DIVIDEND DATA
month ended
December
2000 2001 2002 2003 2004 31, 2004
Number of Equity Shares 196,818,880 196,818,880 220,358,680 613,034,404 616,391,905 735,928,149

(Face value of (Face value of (Face value of (Face value of (Face value of (Face value of
Rs. 10/- each) Rs. 10/- each) Rs. 10/- each) Rs. 10/- each) Rs. 10/- each) Rs. 10/- each)
Number of equity shares deemed - 23,539,800 - - - -

issued on merger of erstwhile (Face value of
Bank of Madura Rs. 10/- each)
Number of equity shares deemed issued - - 392,672,724 - - -

on merger of erstwhile ICICI Limited, (Face value of
erstwhile ICICI Personal Financial Services Rs. 10/- each)
Limited and erstwhile ICICI Capital
Services Limited
Number of equity shares representing

application money received on exercise
of employee stock options
Rate (Note 1 & 2) 15% 20% 20% 75% 75% -
Amount of dividend (Rupees in crore) (A) (Note 4) 24.75 44.07 44.07 459.85 550.81 -
Amount of dividend tax (Rupees in crore) (B) (Note 5) 2.72 4.50 4.50 58.92 71.99 -
Amount of total dividend (Rupees in crore) (A) + (B) 27.47 48.57 48.57 518.77 622.80 -
Note :-
(1) On a pro rata basis wherever applicable
(2) Represents interim dividend for year ended March 31, 2002
(3) Dividend for the year ended, March 31, 2001 represents dividend on 220,358,680 shares including 23,569,800 shares issued on merger
of erstwhile Bank of Madura
(4) Includes Rs. 6.75 crore of dividend on Green Shoe Options and Employee Stock Options exercised from April 1, 2004 to December 31,
2004 pertaining to the year ended, March 31, 2004 but proposed during the nine months ended December 31,2004.
(5) Includes Rs. 2.28 crore of dividend tax on account of the above.
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March 2005
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
OVERVIEW
ICICI Bank Limited (“ICICI Bank” or “the Bank”), incorporated in Vadodara, India is a publicly held bank engaged in providing a wide range of
banking and financial services including commercial banking and treasury operations. ICICI Bank is a banking company governed by the Banking
Regulation Act, 1949.
Basis of preparation
The accounting and reporting policies of ICICI Bank used in the preparation of these financial statements conform with Generally Accepted
Accounting Principles (“GAAP”) in India, the guidelines issued by the Reserve Bank of India (“RBI”) from time to time and practices generally
prevailing within the banking industry in India. The Bank follows the accrual method of accounting, except where otherwise stated, and the
historical cost convention.
The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the
reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future
results could differ from these estimates.
These financial statements have been prepared in accordance with Accounting Standard 25 on “Interim Financial Reporting” issued by the
Institute of Chartered Accountants of India (“ICAI”). Certain expenditure, including retirement benefits, are determined for the whole accounting
year and for the interim period accounts, the same are considered on a pro-rata basis.
Equity issue
Subsequent to March 31, 2004, the Bank made an issue of 115,920,758 equity shares (including 6,992,187 equity shares issued by exercise of
green shoe option) of Rs.10 each at a premium of Rs. 270 per share aggregating Rs. 3,245.78 crore under the Prospectus dated April 12, 2004.
The expenses of the issue have been charged to the Share Premium Account, in accordance with the objects of the Issue stated in the Prospectus.
A. SIGNIFICANT ACCOUNTING POLICIES

1. Revenue recognition
a) Interest income is recognised in the profit and loss account as it accrues except in the case of non-performing assets where it is
recognised, upon realisation, as per the prudential norms of RBI. Accrual of income is also suspended considering economic
conditions and other risk factors, on certain other loans, including certain projects under implementation, where the implementation
has been significantly delayed or in the opinion of the management significant uncertainties exist as to the final financial closure and/
or date of completion of the project.
b) Effective April 1, 2004 the commissions paid to direct marketing agents (DMAs) for auto loans, is recorded upfront in the profit and
loss account net of subvention income received from them. For disbursements made till March 31, 2004, the gross commissions
paid to direct marketing agents (DMAs) for auto loans were recorded upfront in the profit and loss account and subvention income
received from them were being amortised over the life of the loan.
c) Income from hire purchase operations is accrued by applying the interest rate implicit on outstanding balances.
d) Income from leases is calculated by applying the interest rate implicit in the lease to the net investment outstanding on the lease over
the primary lease period. Leases effected from April 1, 2001 have been accounted as per Accounting Standard 19 on “Accounting for
Leases” issued by ICAI. Accordingly, leases effected from April 1, 2001 are accounted as advances at an amount equal to the net
investment in the lease. The lease rentals are apportioned between principal and finance income based on a pattern reflecting a
constant periodic return on the net investment of outstanding in respect of finance lease. The principal amount is recognised as
repayment of advances and the finance income is reported as interest income.
e) Income on discounted instruments is recognised over the tenure of the instrument on a constant yield basis.
f) Dividend is accounted on an accrual basis when the right to receive the dividend is established.
g) Fees received as a compensation of future interest sacrifice is amortised over the remaining period of the facility.
h) Arranger’s fee is accrued proportionately where more than 75% of the total amount of finance has been arranged.
i) All other fees are recognised upfront on their becoming due.
j) Income arising from sell down/securitisation of loan assets is recognised upfront, net of future servicing cost for assets sold,
expected prepayment and projected delinquencies and included in interest income.
k) Guarantee commission is recognised over the period of the guarantee.
2. Investments
Investments are valued in accordance with the extant RBI guidelines on investment classification and valuation as under:
a) All investments are categorised into ‘Held to Maturity‘, ’Available for Sale’ and ‘Trading‘. Reclassifications, if any, in any category are
accounted for as per the RBI guidelines. Under each category, the investments are further classified under (a) government securities
(b) other approved securities (c) shares (d) bonds and debentures, (e) subsidiaries and joint ventures and (f) others.
b) ‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. A
provision is made for other than temporary diminution.
c) ‘Available for Sale’ and ‘Trading’ securities are valued periodically as per RBI guidelines. The market/fair value for the purpose of
periodical valuation of quoted investments included in the “Available for Sale” and “Trading” categories is the market price of the
scrip as available from the trades/quotes on the stock exchanges, SGL account transactions, price list of RBI or prices declared by
Primary Dealers Association of India jointly with Fixed Income Money Market and Derivatives Association (“FIMMDA”), periodically.
The market/fair value of unquoted SLR securities included in the ‘Available for Sale’ and ‘Trading’ categories is as per the rates
published by FIMMDA.
The valuation of non-SLR securities, other than those quoted on the stock exchanges, wherever linked to the Yield-to-Maturity
(“YTM”) rates, is with a mark-up (reflecting associated credit risk) over the YTM rates for government securities published by
FIMMDA.
Unquoted equity shares are valued at the book value, if the latest balance sheet is available or at Re. 1.
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March 2005
Securities are valued scrip-wise and depreciation/appreciation aggregated for each category. Net appreciation in each basket if any,
being unrealised, is ignored, while net depreciation is provided for.
d) Costs such as brokerage, commission etc., pertaining to investments, paid at the time of acquisition, are charged to revenue.
e) Broken period interest on debt instruments is treated as a revenue item.
f) Investments in subsidiaries/joint ventures are categorised as Held to Maturity in accordance with RBI guidelines.
g) Profit on sale of investments in the ‘Held to Maturity’ category is credited to the revenue account and is thereafter appropriated (net
of applicable taxes and statutory reserve requirements) to Capital Reserve. Such appropriation is made at the year-end.
h) At the end of each reporting period, security receipts issued by the asset reconstruction company are valued in accordance with the
guidelines applicable to non-SLR instruments prescribed by RBI from time to time. Accordingly, in case where the security receipts
issued by the asset reconstruction company are limited to the actual realisation of the financial assets assigned to the instruments
in the concerned scheme, the Bank reckons the Net Asset Value (“NAV”), obtained from the asset reconstruction company from time
to time, for valuation of such investments at each reporting period end.
3. Provisions/Write-offs on loans and other credit facilities
a) All credit exposures are classified as per RBI guidelines, into performing and non-performing assets. Further, non-performing assets
are classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. Provisions are made on substandard
and doubtful assets at rates equal to or higher than those prescribed by RBI. Loss assets and unsecured portion of sub-standard and
doubtful assets are provided/written off as per the extant RBI guidelines. Additional provisions are made against specific non-
performing assets over and above what is stated above, if in the opinion of the management, increased provisions are necessary.
In its circular dated DBOD.BP.BC 99/21.04.048/2003-2004 dated June 21, 2004 RBI has introduced graded higher provisioning
norms which would require a bank to make 100% provision on the secured portion of the doubtful assets outstanding for more than
three years in doubtful category instead of the earlier requirement of 50% provision. However, RBI has allowed banks to make 100%
provision on the assets classified as doubtful for over three years at March 31, 2004 in a graded manner over three years (i.e. 60%
by March 31, 2005, 75% by March 31, 2006 and 100% by March 31, 2007). Accordingly the Bank has adopted the revised RBI
guidelines.
b) For restructured/rescheduled assets, provision is made in accordance with the guidelines issued by RBI, which requires the present
value of the interest sacrifice be provided at the time of restructuring.
c) In the case of other than restructured loan accounts classified as NPAs, the account is reclassified as “standard” account if arrears of
interest and principal are fully paid by the borrower.
In respect of non-performing loan accounts subjected to restructuring, asset category is upgraded to standard if the borrower
demonstrates, over a minimum period of one year, the ability to repay the loan in accordance with the contractual terms.
d) The Bank has incorporated the assets taken over from erstwhile ICICI Limited (“ICICI”) in its books at carrying values as appearing in
the books of ICICI with a provision made based on a fair valuation exercise carried out by an independent firm. To the extent
provisions are required in respect of the assets taken over from ICICI, the provision created on fair valuation of the assets at the time
of the amalgamation is used.
e) Amounts recovered against other debts written off in earlier years and provisions no longer considered necessary in the context of
the current status of the borrower are recognised in the profit and loss account.
f) In addition to the general provision of 0.25% made on standard assets in accordance with RBI guidelines, the Bank maintains general
provisions to cover potential credit losses, which are inherent in any loan portfolio but not identified. For standard assets, additional
general provisions are determined having regard to overall portfolio quality, asset growth, economic conditions and other risk
factors.
g) In addition to the provisions required to be held according to the asset classification status, provisions are held for individual country
exposure (other than for home country). The countries are categorised into seven risk categories namely insignificant, low,
moderate, high, very high, restricted and off-credit and provisioning made on exposures exceeding 90 days on a graded scale
ranging from 0.25% to 100%. For exposures with contractual maturity of less than 90 days, 25% of the normal provision requirement
is held. If the country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded assets, no
provision is maintained on such country exposure.
4. Transfer and servicing of financial assets
The Bank transfers commercial and consumer loans through securitisation transactions. The transferred loans are de-recognised and gains
/ losses are recorded only if the Bank surrenders the right to benefits specified in the loan contract. Recourse and servicing obligations are
reduced from proceeds of the sale. Retained beneficial interests in the loans and servicing rights are measured by allocating the carrying
value of the loans between the assets sold and the retained interest, based on the relative fair value at the date of the securitisation.
5. Fixed assets and depreciation
a) Premises and other fixed assets are carried at cost less accumulated depreciation. Depreciation is charged over the estimated useful
life of a fixed asset on a “straight line” basis. The rates of depreciation for fixed assets, which are not lower than the rates prescribed
in Schedule XIV of the Companies Act, 1956, are as follows:
Asset Depreciation Rate
Premises owned by the Bank 1.63%
Improvements to leasehold premises 1.63% or over the lease period, whichever is higher
ATMs 12.50%
Plant and machinery like air
conditioners, xerox machines, etc. 10%
Furniture and fixtures 15%
Motor vehicles 20%
Computers 33.33%
EDC Terminals 16.67%
Others (including software and system development expenses) 25%
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March 2005
b) Depreciation on leased assets is made on a straight-line basis at the higher of the rates determined with reference to the primary
period of lease and the rates specified in Schedule XIV to the Companies Act, 1956.
c) Assets purchased/sold during the year are depreciated on the basis of actual number of days the asset has been put to use.
d) Items costing less than Rs. 5,000/- are depreciated fully over a period of 12 months from the date of purchase.
6. Foreign currency transactions
a) Income and expenditure items are translated at the exchange rates prevailing on the date of the transaction. Monetary assets and
liabilities are translated at closing exchange rates notified by the Foreign Exchange Dealers’ Association of India (“FEDAI”) at the
balance sheet date and the resulting profits/losses are included in the profit and loss account.
b) Outstanding forward exchange contracts are stated at contracted rates and are revalued at the exchange rates notified by FEDAI for
specified maturities and at interpolated rates for contracts of in-between maturities. The resultant gains or losses are recognised in
the profit and loss account.
c) Contingent liabilities on account of guarantees, endorsements and other obligations are stated at the exchange rates notified by
FEDAI at the balance sheet date.
7. Accounting for derivative contracts
The Bank enters into derivative contracts such as foreign currency options, interest rate and currency swaps and cross currency interest rate
swaps to hedge on-balance sheet/off-balance sheet assets and liabilities or for trading purposes.
The swap contracts entered to hedge on-balance sheet assets and liabilities are structured in such a way that they bear an opposite and
offsetting impact with the underlying on-balance sheet items. The impact of such derivative instruments are correlated with the movement
of underlying assets and accounted pursuant to the principles of hedge accounting.
Foreign currency and rupee derivatives, which are entered for trading purposes, are marked to market and the resulting gain/loss, (net of
provisions, if any) is recorded in the profit and loss account.
8. Employee Stock Option Scheme (“ESOS”)
The Bank has formulated an Employees Stock Option Scheme. The Scheme provides that employees are granted an option to acquire equity
shares of the Bank that vests in graded manner. The options may be exercised within a specified period. The Bank follows the intrinsic value
method for computing the compensation cost, if any, for all options granted.
9. Staff retirement benefits
For employees covered under group gratuity scheme of Life Insurance Corporation of India (“LIC”)/ICICI Prudential Life Insurance Company
Limited (“ICICI Prulife”), gratuity charge to profit and loss account is on the basis of premium charged. For employees covered under group
superannuation scheme of LIC, the superannuation charged to profit and loss account is on the basis of premium charged by LIC. Provision
for gratuity for other employees and leave encashment liability are determined as per actuarial valuation. Defined contributions for
provident fund are charged to the profit and loss account based on contributions made in terms of the scheme.
The Bank provides for pension, a deferred retirement plan, covering certain employees. The plan provides for a pension payment on a
monthly basis to these employees on their retirement based on the respective employee’s salary and years of employment with the Bank.
Employees covered by the pension plan are not eligible for benefits under the provident fund plan, a defined contribution plan. The pension
plan is funded through periodic contributions to a fund set-up by the Bank and administered by a Board of Trustees. Such contributions are
actuarially determined.
Certain expenditures, including retirement benefits, are determined for the whole accounting year and for the interim period accounts, the
same are considered on a pro-rata basis.
10. Income taxes
Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined in accordance with
the Income Tax Act, 1961. Deferred tax adjustments comprise of changes in the deferred tax assets or liabilities during the period.
Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences arising between the carrying values
of assets and liabilities and their respective tax basis and operating carry forward losses. Deferred tax assets are recognised only after giving
due consideration to prudence. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantially enacted by the balance sheet date. The impact on account of changes in the deferred tax assets and liabilities is also recognised
in the income statement.
Deferred tax assets are recognised and reassessed at each reporting date, based upon management’s judgement as to whether realisation
is considered reasonably certain. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if
there is virtual certainty that such deferred tax asset can be realised against future profits.
11. Translation of the financial statements of foreign offices
In accordance with the guidelines issued by RBI, all assets, liabilities, income and expenditure of the foreign representative offices and
branches of the Bank have been converted at the closing rate prevailing on the balance sheet date. The resultant gains or losses are
recognised in the profit and loss account.
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B. NOTES FORMING PART OF THE ACCOUNTS

1. Information about business and geographical segments
a) The Bank reports its operations under the following business segments:
z Consumer and Commercial Banking comprising the retail and corporate banking operations of the Bank.
z Investment Banking comprising the treasury of the Bank.
Inter-segment transactions are generally based on transfer pricing measures as determined by management. Income, expenses, assets and
liabilities are either specifically identified with individual segments or are allocated to segments on a systematic basis.
Based on such allocations, segmental balance sheet as on December 31, 2004 and December 31, 2003 and segmental profit & loss account
for the period ended December 31, 2004 and for the period ended December 31, 2003 have been prepared.
Rupees in crores
Consumer and Commercial Investment Banking Total
Banking
Particulars For the period ended For the period ended For the period ended
31.12.04 31.12.03 31.12.04 31.12.03 31.12.04 31.12.03
1. Revenue 7,686.13 7,140.63 2,139.85 2,777.76 9,825.98 9,918.39
2. Less : Inter segment revenue .. .. .. .. (637.48) (874.02)
3. Total revenue (1) – (2) .. .. .. .. 9,188.50 9,044.37
4. Operating profit
(i.e. Profit before unallocated expenses, and tax) 1,411.35 944.47 696.28 950.08 2,107.63 1,894.55
5. Unallocated expenses .. .. .. .. 28.80 16.00
6. Provisions (net) (124.17) (525.61) (224.60) (3.70) (348.77) (529.31)
7. Profit before tax 1,287.18 418.86 471.68 946.38 1,730.06 1,349.24
8. Income tax expenses (net) /
(net of deferred tax credit) .. .. .. .. 339.56 167.54
9. Net profit (7) - (8) 1,390.50 1,181.70
10. Segment assets 92,259.74 73,185.82 51,250.66 41,410.83 143,510.40 114,596.65
11. Unallocated assets .. .. .. .. 2,703.78 2,260.56
12. Total assets (10)+(11) 146,214.18 116,857.21
13. Segment liabilities 112,255.89 91,212.63 33,958.29 25,644.58 146,214.18 116,857.21
14. Unallocated liabilities .. .. .. .. .. ..
15. Total liabilities (13)+(14) 146,214.18 116,857.21
Rupees in crore
Consumer and Commercial Investment Banking Total
Banking
Particulars For the year ended For the year ended For the year ended
31.03.04 31.03.04 31.03.04
1. Revenue 9,581.93 3,590.28 13,172.21

2. Less: Inter segment revenue .. .. (1,104.90)
3. Total revenue (1) - (2) .. .. 12,067.31
4. Operating profit (i.e. Profit before unallocated expenses,
and tax) 1,298.42 1,208.01 2,506.43
5. Unallocated expenses .. .. 25.60
6. Provisions (net) 554.28 24.34 578.62
7. Profit before tax 744.14 1,183.67 1,902.21
8. Income tax expenses (net) / (net of deferred tax credit) .. .. 265.11
9. Net profit (7) - (8) 1,637.10
10. Segment assets 77,172.64 45,452.70 122,625.34
11. Unallocated assets .. .. 2,603.53
12. Total assets (10)+(11) .. .. 125,228.87
13. Segment liabilities 97,870.64 27,358.23 125,228.87
14. Unallocated liabilities .. .. ..
15. Total liabilities (13)+(14) 125,228.87
The business operations of the Bank are largely concentrated in India. The assets and income from foreign operations are not significant to
the overall operations of the Bank and have accordingly not been disclosed.
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March 2005
2. Preference shares
Certain government securities amounting to Rs. 190.00 crore (March 31, 2004: Rs. 145.51 crore, December 31, 2003: Rs.145.98 crore)
have been earmarked against redemption of preference share capital, which falls due for redemption on April 20, 2018, as per the original
issue terms.
3. Subordinated debt
Subordinated debt includes index bonds amounting to Rs. 12.05 crore (March 31, 2004: Rs. 11.04 crore, December 31, 2003: Rs. 10.74
crore) which carry a detachable warrant entitling bondholders to a right to receive an amount linked to the BSE Sensitive Index (“Sensex”)
per terms of the issue. The Bank has not issued any subordinated debt during the period.
In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial year shall not exceed
0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of all such options granted to the eligible
employees shall not exceed 5% of the aggregate number of the issued equity shares of the Bank on the date (s) of the grant options.
In terms of the Scheme, 19,107,645 options (March 31, 2004: 15,964,982 options, December 31, 2003: 17,234,594 options) granted to
eligible employees were outstanding at December 31, 2004.
A summary of the status of the Bank’s option plan is given below:
Period ended Year ended Period ended
December 31, March 31, December 31,
2004 2004 2003
Option shares Option shares Option shares
outstanding outstanding outstanding
Outstanding at the beginning of the period / year 15,964,982 12,610,275 12,610,275
Add : Granted during the period / year 7,554,500 7,491,800 7,491,800
Less : Forfeited/lapsed during the period / year 733,601 766,489 600,443
Exercised during the period / year * 3,678,236 3,370,604 2,267,038
Outstanding at the end of the period/year 19,107,645 15,964,982 17,234,594
* Includes options exercised but not allotted.
5. Early Retirement Option (“ERO”)
The Bank had implemented an Early Retirement Option Scheme 2003 for its employees in July 2003. All employees who had completed
40 years of age and seven years of service with the Bank (including period of service with entities amalgamated with the Bank) were eligible
for the ERO.
The ex-gratia payments under ERO and termination benefits and leave encashment in excess of the provision made (net of tax benefits),
aggregating to Rs. 191.00 crore (March 31, 2004: Rs. 191.00 crore, December 31, 2003: Rs. 190.98 crore) are being amortised over a
period of five years commencing August 1, 2003 (the date of retirement of employees exercising the Option being July 31, 2003).
On account of the above ERO scheme, an amount of Rs. 28.80 crore (March 31, 2004: Rs. 25.60 crore, December 31, 2003: Rs. 16.00 crore)
has been charged to revenue being the proportionate amount amortised for the nine month period ended December 31, 2004.
6. Deferred Tax
On December 31, 2004, the Bank has recorded net deferred tax asset of Rs. 319.82 crore (March 31, 2004: Rs. 442.97 crore, December 31,
2003: Rs. 483.86 crore) which has been included in Other Assets.
The analysis of deferred tax assets and liabilities into major items is given below:
Rupees in crore
Particulars December 31, 2004 March 31, 2004 December 31, 2003
Deferred tax asset
Amortisation of premium on investments .. .. ..
Provision for bad and doubtful debts 1,166.83 1,343.41 1,355.43
Others 24.12 20.24 53.21
1,190.95 1,363.65 1,408.64
Less: Deferred tax liability
Depreciation on fixed assets 846.71 897.06 901.16
Others 24.42 23.62 23.62
871.13 920.68 924.78
Net Deferred Tax Asset/ (Liability) 319.82 442.97 483.86
7. Related party transactions

The Bank has transactions with its related parties comprising of subsidiaries (including joint ventures), associates (including joint ventures)
and key management personnel. The following represent the significant transactions between the Bank and such related parties:
Insurance services
During the period ended December 31, 2004, the Bank paid insurance premium to insurance joint ventures amounting to Rs. 13.55 crore
(March 31, 2004: Rs. 15.72 crore, December 31, 2003: Rs. 7.18 crore). During the period ended December 31, 2004 the Bank received
payments under claims made from insurance subsidiaries amounting to Rs. 0.77 crore (March 31, 2004: Rs. 8.56 crore, December 31, 2003:
Rs. 0.03 crore).
Fees
During the period ended December 31, 2004, the Bank received fees from its insurance joint ventures amounting to Rs. 24.33 crore (March
31, 2004: Rs. 6.53 crore, December 31, 2003: Rs. 2.29 crore).
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March 2005
Lease of premises and facilities

During the period ended December 31, 2004, the Bank charged an aggregate amount of Rs. 39.90 crore (March 31, 2004: Rs. 36.19 crore,
December 31, 2003: Rs. 25.23 crore) for lease of premises, facilities and other administrative costs to subsidiaries and joint ventures.
Sale of housing loan portfolio
During the period ended December 31, 2004, the Bank sold housing loan portfolio to its subsidiaries amounting to Rs. 305.97 crore (March
31, 2004: Rs. 1,831.72 crore, December 31, 2003: Rs. 646.24 crore).
Secondment of employees
During the period ended December 31, 2004, the Bank received Rs. 0.76 crore (March 31, 2004: Rs. 1.42 crore, December 31, 2003:
Rs. 1.17 crore) from subsidiaries and joint ventures for secondment of employees.
Sale of investments
During the period ended December 31, 2004, the Bank sold certain investments to its subsidiaries, joint ventures and associates amounting
to Rs. 1,039.19 crore (March 31, 2004: Rs. 323.41 crore, December 31, 2003: Rs. 987.32 crore). On the sales made to the associates, the
Bank accounted for a gain/(loss) of Rs. 9.14 crore (March 31, 2004: Rs. 19.92 crore, December 31, 2003: Rs. 15.28 crore).
Reimbursement of expenses
During the period ended December 31, 2004, the Bank reimbursed expenses to its subsidiaries amounting to Rs. 167.19 crore (March 31,
2004: Rs. 207.57 crore, December 31, 2003: Rs. 143.51 crore).
Brokerage paid
During the period ended December 31, 2004, the Bank paid brokerage to its subsidiaries amounting to Rs. 0.47 crore (March 31, 2004:
Rs. 0.57 crore, December 31, 2003: Rs. 0.30 crore).
Custodial charges received
During the period ended December 31, 2004, the Bank received custodial charges from its subsidiaries, joint ventures and associates
amounting to Rs. 0.82 crore (March 31, 2004: Rs. 0.47 crore, December 31, 2003: Rs. 0.67 crore).
Interest paid
During the period ended December 31, 2004, the Bank paid interest to its subsidiaries and joint ventures amounting to Rs. 10.97 crore
(March 31, 2004: Rs. 6.79 crore, December 31, 2003: Rs. 6.15 crore) and to its associates amounting to Rs. 0.11 crore (March 31, 2004:
Interest received
During the period ended December 31, 2004, the Bank received interest from its subsidiaries and joint ventures amounting to Rs. 20.22
crore (March 31, 2004: Rs. 32.72 crore, December 31, 2003: Rs. 27.37 crore) and from its key management personnel@ Rs. 0.02 crore
(March 31, 2004: Rs. 0.04 crore, December 31, 2003: Rs. 0.03 crore).
Dividend received
During the period ended December 31, 2004, the Bank received dividend from its subsidiaries and joint ventures amounting to Rs. 37.17
crore (March 31, 2004: Rs. 128.97 crore, December 31, 2003: Rs. 84.06 crore) and from its associates amounting to Rs. 122.18 crore (March
31, 2004: Rs. Nil, December 31, 2003: Rs. Nil).
Remuneration to whole-time directors
Remuneration paid to the whole-time directors of the Bank during the period ended December 31, 2004 was Rs. 5.00 crore (March 31, 2004:
Rupees in crore
@
personnel
Deposits of ICICI Bank* 674.83 .. .. 674.83
Advances 30.91 .. 1.07 31.98
Investments of ICICI Bank 1,754.71** 1,361.90 .. 3,116.61
Investments of related parties in ICICI Bank 1.66 .. 0.23 1.89
Receivables 22.13 0.40 .. 22.53
Payables 103.18 0.06 .. 103.24
@
* includes call money lent
** includes an amount of Rs. 217.30 crore towards investment in preference shares of ICICI Bank UK Limited during current financial year
balance sheet as on March 31, 2004:
Rupees in crore
personnel @
Advances 242.60 .. 1.02 243.62
Investments of ICICI Bank 1,430.36 1,594.25 .. 3,024.61
Receivables 31.51 80.80 .. 112.31
Payables 73.94 0.05 .. 73.99
@
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March 2005
Rupees in crore
personnel @
Advances 90.32 .. 1.46 91.78
Investments of ICICI Bank 1,393.36 640.89 .. 2,034.25
Receivables 32.00 0.17 .. 32.17
Payables 2.01 .. .. 2.01
@
Subsidiaries and joint ventures
ICICI Venture Funds Management Company Limited, ICICI Securities Limited, ICICI Brokerage Services Limited, ICICI International Limited,
ICICI Trusteeship Services Limited, ICICI Home Finance Company Limited, ICICI Investment Management Company Limited, ICICI Securities
Holdings Inc., ICICI Securities Inc., ICICI Bank UK Limited, ICICI Bank Canada, ICICI Prudential Life Insurance Company Limited, ICICI
Distribution Finance Private Limited, ICICI Lombard General Insurance Company Limited, Prudential ICICI Asset Management Company
Limited and Prudential ICICI Trust Limited.
Associates
ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund, ICICI Emerging Sectors Fund, ICICI Strategic Investments Fund, ICICI
Property Trust and TCW/ICICI Investment Partners L.L.C.
8. Earnings Per Share (“EPS”)
The Bank reports basic and diluted earnings per equity share in accordance with Accounting Standard 20, “Earnings per Share”. Basic
earnings per share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding during the
period/year. Diluted earnings per share is computed using the weighted average number of equity shares and dilutive potential equity
shares outstanding during the period/year.
The computation of earnings per share is given below:
Rupees in crore except per share data
December 31, 2004 March 31, 2004 December 31, 2003
Basic (not annualised)
Weighted average no. of equity shares outstanding 724,943,677 614,157,868 613,509,250
Net profit 1,390.50 1,637.10 1,181.70
Basic earnings per share (Rs.) 19.18 26.66 19.26
Diluted (not annualised)
Net profit 1,390.50 1,637.10 1,181.70
Diluted earnings per share (Rs.) 19.03 26.44 19.10
Nominal value per share (Rs.) 10.00 10.00 10.00
The dilutive impact is mainly due to options granted to employees by the Bank.
9. Assets under lease
9.1 Assets under operating lease
The future lease rentals are given below:
Rupees in crore
Period December 31, 2004 March 31, 2004 December 31, 2003
Not later than one year 23.37 22.96 22.20
Later than one year and not later than five years 99.20 97.49 96.42
Later than five years 37.91 57.10 63.69
Total 160.48 177.55 182.31
9.2 Assets under finance lease
The future lease rentals are given below:
Rupees in crore
Total of future minimum lease payments 147.34 179.29 190.27
Present value of lease payments 119.49 141.78 149.10
Unmatured finance charges 27.85 37.51 41.17
Maturity profile of total of future minimum lease payments
- Not later than one year 38.18 39.70 39.90
- Later than one year and not later than five years 105.07 125.56 133.02
- Later than five years 4.09 14.03 17.35
Total 147.34 179.29 190.27
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March 2005
Rupees in crore
Maturity profile of present value of lease payments December 31, 2004 March 31, 2004 December 31, 2003
Total 119.49 141.78 149.10
10. Additional disclosures
The following additional disclosures have been made taking into account RBI guidelines in this regard.
10.1 Capital adequacy ratio
The capital to risk weighted assets ratio (CRAR) as assessed by the Bank on the basis of the attached financial statements and
guidelines issued by RBI is given in the table below:
Rupees in crore
Tier I capital* 10,125.10 5,525.09 6,253.68
Tier II capital 5,734.61 3,875.69 3,606.98
Total capital 15,859.71 9,400.78 9,860.66
Total risk weighted assets 117,463.73 90,734.02 87,125.07
Capital ratios (per cent)
Tier I 8.62% 6.09% 7.18%
Tier II 4.88% 4.27% 4.14%
Total capital 13.50% 10.36% 11.32%
* Tier I capital includes the preference shares, which are due for redemption in 2018, as reduced by the amount of corpus
created in accordance with RBI guidelines
10.2 Business/information ratios
The business/information ratios for the period/year ended December 31, 2004, March 31, 2004 and December 31, 2003 are given
in the table below:
Rupees in crore
(i) Interest income to working funds (per cent) 6.97% 7.83% 8.02%
(ii) Non-interest income to working funds (per cent) 2.44% 2.70% 2.80%
(iii) Operating profit to working funds (per cent) 2.13% 2.09% 2.16%
(iv) Return on assets (per cent) 1.27% 1.31% 1.35%
(v) Business per employee (average deposits plus
average advances) (not annualised for period end) 9.0 10.10 10.80
(vi) Profit per employee 0.11 0.12 0.13
(vii) Net non-performing advances (funded) to
net advances (per cent) 1.70% 2.21% 4.27%
For the purpose of computing the above ratios, working funds represent the average of total assets as reported to RBI under section
27 of the Banking Regulation Act, 1949.
10.3 Maturity pattern
a) Rupee denominated assets and liabilities as on December 31, 2004
The maturity pattern of rupee denominated assets and liabilities of the Bank as on December 31, 2004 is given below:
Rupees in crore
Maturity buckets Loans & Investment Deposits Borrowings
advances securities
1 to 14 days 3,376.92 4,357.73 7,364.58 3,226.93
15 to 28 days 310.83 2,799.18 2,004.80 374.38
29 days to 3 months 2,404.05 3,622.16 9,908.22 1,387.64
3 to 6 months 3,116.95 3,253.35 7,356.96 1,407.62
6 months to 1 year 6,355.56 4,573.75 12,729.78 3,310.80
1 to 3 years 22,342.31 11,135.45 36,166.72 8,201.99
3 to 5 years 8,583.16 2,643.98 1,343.94 1,791.56
Above 5 years 21,824.79 9,888.88 825.86 2,116.16
Total 68,314.57 42,274.48 77,700.86 21,817.08
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March 2005
b) Rupee denominated assets and liabilities as on March 31, 2004

The maturity pattern of rupee denominated assets and liabilities of the Bank as on March 31, 2004 is given below:
Rupees in crore
advances securities
1 to 14 days 2,186.31 5,223.57 5,357.22 568.93
15 to 28 days 424.37 2,754.83 1,659.53 626.42
29 days to 3 months 1,190.46 3,278.79 7,253.45 693.59
3 to 6 months 1,873.53 3,262.13 8,583.92 1,909.74
6 months to 1 year 7,424.24 4,153.78 10,758.12 3,295.64
1 to 3 years 16,724.78 11,720.79 29,447.50 10,211.29
3 to 5 years 8,646.74 2,244.77 1,955.69 2,222.45
Above 5 years 17,079.07 10,104.20 789.77 2,474.17
Total 55,549.50 42,742.86 65,805.20 22,002.23
c) Rupee denominated assets and liabilities as on December 31, 2003
The maturity pattern of rupee denominated assets and liabilities of the Bank as on December 31, 2003 is given below:
Rupees in crore
advances securities
1 to 14 days 1,770.02 2,571.98 3,841.45 712.93
15 to 28 days 346.54 2,197.26 1,468.57 498.63
29 days to 3 months 2,013.81 3,791.29 7,690.45 2,436.25
3 to 6 months 2,325.46 2,850.54 6,527.75 1,896.04
6 months to 1 year 4,390.48 4,328.88 11,263.48 2,815.56
1 to 3 years 16,530.47 11,411.79 25,401.41 10,135.48
3 to 5 years 8,513.83 2,442.27 1,962.24 2,114.59
Above 5 years 15,236.18 8,458.57 759.06 2,659.10
Total 51,126.79 38,052.58 58,914.41 23,268.58
d) Forex denominated assets and liabilities as on December 31, 2004
The maturity pattern of forex denominated assets and liabilities as on December 31, 2004 is given below:
Rupees in crore
Maturity buckets Loans & Investment Balances with Deposits Borrowings
advances securities banks and money
at call and short
notice
1 to 14 days 125.73 .. 1,556.24 426.14 724.17
15 to 28 days 168.28 .. 160.80 150.96 146.98
29 days to 3 months 1,426.59 13.54 371.68 431.31 1,497.22
3 to 6 months 1,204.19 .. 166.32 1,180.31 1,214.08
6 months to 1 year 448.61 43.46 304.22 764.29 774.22
1 to 3 years 1,446.91 8.18 .. 738.97 2,121.42
3 to 5 years 883.32 613.43 135.89 467.30 2,856.62
Above 5 years 2,074.26 315.48 .. 68.14 1,793.51
Total 7,777.89 994.09 2,695.15 4,227.42 11,128.22
e) Forex denominated assets and liabilities as on March 31, 2004
The maturity pattern of forex denominated assets and liabilities as on March 31, 2004 is given below:
Rupees in crore
Maturity buckets Loans & Balances with banks Deposits Borrowings
advances and money at call
and short notice
1 to 14 days 19.07 1,158.47 173.20 154.06
15 to 28 days 40.40 186.24 54.37 366.88
29 days to 3 months 209.12 253.56 162.31 666.42
3 to 6 months 181.00 99.34 365.55 800.73
6 months to 1 year 1,296.96 .. 513.16 1,151.93
1 to 3 years 1,535.03 .. 711.44 1,548.84
3 to 5 years 962.39 .. 166.35 2,298.55
Above 5 years 2,302.05 .. 157.00 1,750.60
Total 6,546.02 1,697.61 2,303.38 8,738.01
151
March 2005
f) Forex denominated assets and liabilities as on December 31, 2003

The maturity pattern of forex denominated assets and liabilities as on December 31, 2003 is given below:
Rupees in crore
Maturity buckets Loans & Balances with banks Deposits Borrowings
advances and money
at call and short
notice
1 to 14 days 19.27 644.12 134.21 210.29
15 to 28 days 56.82 231.60 52.75 145.92
29 days to 3 months 99.04 215.16 136.90 1,043.58
3 to 6 months 197.69 39.53 146.58 512.92
6 months to 1 year 620.18 72.37 830.79 555.31
1 to 3 years 1,640.86 20.62 369.87 1,286.51
3 to 5 years 929.81 .. 143.88 2,325.11
Above 5 years 3,121.65 .. 142.45 1,843.72
Total 6,685.32 1,223.40 1,957.43 7,923.36
Notes
z In compiling the information of maturity pattern (refer 10.3 (a), 10.3 (b), 10.3 (c), 10.3 (d), 10.3(e) and 10.3(f) above), certain
estimates and assumptions have been made by the management
z Assets and liabilities in foreign currency exclude off-balance sheet assets and liabilities
10.4 Advances
(i) Lending to sensitive sectors
The Bank has lending to sectors, which are sensitive to asset price fluctuations. Such sectors include capital market, real estate
and commodities. The net position of lending to sensitive sectors is given in the table below:
Rupees in crore
Capital market sector* 905.84 627.69 778.17
Real estate sector 3,628.33 2,517.23 2,201.12
Commodities sector 630.97 103.20 107.05
* represents loans to NBFCs, brokers and individuals against pledge of shares and includes an amount of Rs. 235.0 crore
as on December 31, 2004 (March 31, 2004: Rs. 302.65 crore, December 31, 2003 : Rs. 302.00 crore) pertaining to
guarantee issued to a corporate for the issue of non-convertible debentures, the proceeds of which have been utilised
for acquisition of shares by the corporate
(ii) Movement of gross non-performing advances during the period
Rupees in crore
April 1, 2004 to April 1, 2003 to April 1, 2003 to
Opening balance 3,047.59 5,027.38 5,027.38
Add: Additions during the period/ year 1,507.53 1,419.43 1,058.60
4,555.12 6,446.81 6,085.98
Less: Reductions during the period/ year (1,241.36) (3,399.22) 1,136.58
Closing balance * 3,313.76 3,047.59 4,949.40
* includes suspended interest and claims received from ECGC/DICGC of Rs. 35.77 crore (March 31, 2004: Rs. 50.18 crore,
December 31, 2003: Rs. 55.74 crore) on working capital loans
(iii) Provision for non-performing advances
The movement of provisions during the period/year is as follows:
Rupees in crore
Opening balance* 1,625.01 2,203.61 2,203.61
Add: Provisions made during the period /year
(including utilisation of fair value provisions) 1,071.31 731.81 361.59
2,696.32 2,935.42 2,565.20
Less: Write-offs/recovery (710.67) (1,310.41) 140.89
Closing balance * 1,985.65 1,625.01 2,424.31
* excludes technical write-off amounting to Rs. 1,842.75 crore (March 31, 2004: Rs. 2,369.62 crore, December 31, 2003:
Rs. 2,474.01 crore).
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March 2005
(iv) Financial assets transferred during the period/year to Securitisation Company (SC) / Reconstruction Company (RC)
The Bank has transferred certain assets to an asset reconstruction company (ARC) in terms of the guidelines issued by RBI
governing such transfer. For the purpose of the valuation of the underlying security receipts issued by ARC, for the year ended
March 31, 2004 NAV is taken at acquisition cost since ARC had not intimated the NAV and the transfers had been effected close
to the year end. For the period ended December 31, 2004, the security receipts were valued at their respective NAVs as
advised by the ARC. The details of the assets transferred for the relevant period/year are given in the table below:
Rupees in crore
A No. of accounts 7.1 5.4 0.6
B Aggregate value (net of provisions) of accounts
sold to SC / RC 539.88 1,250.62 287.52
C Aggregate consideration 494.61 1,243.95 287.52
D Additional consideration realised in respect of
accounts transferred in earlier years .. .. ..
E Aggregate gain/(loss) over net sale value (45.27) (6.67) NIL
(v) Information in respect of restructured assets
The Bank has restructured borrower accounts in standard, sub-standard and doubtful category. The gross amounts (net of write-
off) of restructuring during the period/year in respect of these accounts are given below:
Rupees in crore
Standard assets subjected to restructuring 1,306.72 4,946.94 2,309.07
Sub-standard assets subjected to restructuring 55.95 140.90 358.45
Doubtful assets subjected to restructuring 11.54 78.34 89.00
Total amount 1,374.21 5,166.18 2,756.52
Above details exclude cases that were restructured and disclosed in the earlier periods/years by the Bank and subsequently
were referred to and admitted under the Corporate Debt Restructuring (CDR) scheme during the current period/year. The
above table also includes cases which are restructured under CDR system during the current period/year.
Rupees in crore
Standard assets subjected to CDR 1,368.53 5,376.19 2,055.42
Sub-standard assets subjected to CDR 55.95 82.30 31.13
Doubtful assets subjected to CDR .. .. 37.77
Total amount 1,424.48 5,458.49 2,124.32
Above details exclude cases were approved by CDR Forum and disclosed in the earlier periods/years by the Bank and in
which certain terms and conditions have been modified by CDR Forum during the current period/year.
10.5 Investments
Rupees in crore
In India Outside India In India Outside India In India Outside India
Gross value 42,355.57 1,292.39 43,305.21 367.41 38,868.15 367.77
Less: Provision for
depreciation and fair value
provision 378.50 0.90 923.32 6.44 1,176.91 6.43
Net value 41,977.07 1,291.49 42,381.89 360.97 37,691.24 361.34
Provision for depreciation on investments
Rupees in crore
Opening balance 921.57 1,416.15 1,416.15
Add :Provision made during the period/year (including
utilisation of fair value provision) (542.17) (494.58) (355.53)
Less :Transfer from investment fluctuation reserve .. .. ..
Write-off during the period/year .. .. ..
Closing balance 379.40 921.57 1,060.62
153
March 2005
10.6 Investments in equity shares and equity like instruments

Rupees in crore
Equity shares* 810.17 738.39 840.45
Convertible debentures 59.90 61.44 122.16
Units of equity oriented mutual funds 5.27 20.27 20.27
Investment in venture capital funds** 1,025.85 1,160.66 1,163.22
Others (loans against collateral,
advances to brokers)*** 905.84 627.69 778.17
Total 2,807.03 2,608.45 2,924.27
* Includes advance application money pending allotment of Rs. 50.19 crore (March 31, 2004: Rs. 56.57 crore, December 31,
2003: Rs. 104.88 crore).
** Includes advance application money pending allotment of Rs. nil (March 31, 2004: Nil, December 31, 2003: Rs. 862.96 crore).
*** Includes unutilized limits sanctioned to brokers of Rs. 286.92 crore (March 31, 2004: Rs. 76.11 crore, December 31, 2003:
Rs. 133.65 crore)
10.7 Investment in non-SLR securities
i) Issuer composition of non-SLR investments
a) The issuer composition of non SLR investments of the Bank as on December 31, 2004 is given below:
Rupees in crore
No. Issuer Amount Extent Extent of ‘below Extent of Extent of
of private investment ‘unrated’ ‘unlisted’
placement grade’ securities securities
securities
(a) (b) (c) (d)
1 PSUs 886.68 633.90 .. 11.80 318.33
2 FIs 657.67 285.92 .. 10.13 10.13
3 Banks 175.73 37.81 .. .. 5.31
4 Private corporate 5,454.58 4,130.66 20.00 3,532.06 3,373.63
5 Subsidiaries/ Joint ventures 1,748.00 47.41 .. 15.00* 15.00*
6 Others 4,496.99 1,314.96 1,392.54 0.03 ..
7 Provision held towards
depreciation (379.40) .. .. .. ..
Total 13,040.25 6,450.66 1,412.54 3,569.02 3,722.40
Amounts reported under columns (a), (b), (c), and (d) above are not mutually exclusive
* This excludes investments, amounting to Rs. 249.71 crore, in preference shares of subsidiaries, namely ICICI Bank UK
Limited and ICICI Bank Canada.
ii) Non performing non-SLR investments
The non performing non-SLR investments of the Bank as on December 31, 2004 is given below:
Rupees in crore
Particulars Amount
Opening balance 1,213.44
Additions during the period 154.64
Reductions during the above period 477.46
Closing balance 890.62
Total provisions held 225.42
10.8 Repurchase transactions

The details of securities sold and purchased under repos and reverse repos during the period ended December 31, 2004 are given
below:
Rupees in crore
Minimum Maximum Daily average Balance as on
outstanding outstanding outstanding December 31, 2004
balance during balance during balance during
the period the period the period
Securities sold under repurchase
transaction - 2,376.38 798.63 -
Securities purchased under
reverse repurchase transaction - 1,410.00 49.60 -
154
March 2005
The details of securities sold and purchased under repos and reverse repos during the year ended March 31, 2004 are given below:
Rupees in crore
outstanding outstanding outstanding March 31, 2004
the year the year the year
transaction .. 2,551.90 641.63 ..
Securities purchased under
reverse repurchase transaction .. 585.00 85.88 243.18
The details of securities sold and purchased under repos and reverse repos during the period ended December 31, 2003 are given
below:
Rupees in crore
outstanding outstanding outstanding December 31, 2003
the period the period the period
transaction .. 2,480.00 631.80 1,430.00
Securities purchased under reverse
repurchase transaction .. 585.00 128.10 ..
10.9 Credit exposure

As at December 31, 2004 the Bank has taken single borrower exposure above 15% with the approval of the Board of Directors in the
following cases:
Name of Borrower % to Capital Funds
Borrower A 20.00%
Borrower B 17.43%
Borrower C 16.39%
10.10 Risk category-wise country-wise exposure

As per the extant RBI guidelines, the country exposure of the Bank is categorised into various risk categories listed in the following
table. Since the country exposure (net) of the Bank in respect of each country does not exceed 1% of the total funded assets, no
provision is required to be maintained on country exposures.
Rupees in crore
Risk category Exposure (net) as on Exposure (net) as Exposure (net) as on
December 31, 2004 on March 31, 2004 December 31, 2003
Insignificant 2,348.82 4,611.41 2,816.42
Low 259.69 64.35 82.99
Moderate 138.19 18.45 19.44
High 3.88 0.86 1.45
Very High .. .. ..
Off-Credit 121.78 .. ..
Total 2,872.36 4,695.07 2,920.30
10.11 Interest rate swaps (“IRS”)
The notional principal amount of Rupee IRS contracts as at December 31, 2004 is Rs. 8,150.00 crore for hedging contracts (March 31,
2004: Rs. 3,415.00 crore, December 31, 2003: Rs. 2,988.00 crore) and Rs. 109,163.61 crore for trading contracts (March 31, 2004:
Rs. 94,783.78 crore, December 31, 2003: Rs. 82,948.78 crore).
The fair value represents the estimated replacement cost of swap contracts as at balance sheet date. At December 31, 2004 the fair
value of trading rupee interest rate swap contracts is Rs. 67.18 crore (March 31, 2004 : Rs. 66.92 crore, December 31, 2003:
Rs. 71.49 crore).
Associated credit risk is the loss that the Bank would incur in case all the counter-parties to these swaps fail to fulfil their contractual
obligations. As at December 31, 2004, the associated credit risk on trading rupee interest rate swap contracts is Rs. 878.26 crore
Market risk is monitored as the loss that would be incurred by the Bank for a 100 basis points rise in the interest rates. As at December
31, 2004 the market risk on trading rupee interest rate swap contracts amounts to Rs. 62.39 crore (March 31, 2004: Rs. 6.32 crore,
December 31, 2003: Rs. 15.61 crore).
Credit risk concentration is measured as the highest net receivable under swap contracts from a particular counter party. As at
December 31, 2004 there is a credit risk concentration of Rs. 29.47 crore (March 31, 2004: Rs. 68.27 crore, December 31, 2003:
Rs. 71.99 crore) under rupee interest rate swap contracts, with Standard Chartered Bank, Mumbai. As per the prevailing market
practice, the Bank does not insist on collateral from the counter parties of these contracts.
155
March 2005
11. Investments in jointly controlled entities

Investments include Rs. 780.01 crore (March 2004: Rs. 669.01 crore, December 31, 2003: Rs. 632.01 crore) representing the Bank’s
interests in the following jointly controlled entities:
Sr. No. Name of the company Country/ residence Percentage holding*
1. ICICI Prudential Life Insurance Company Limited India 74.00%
2. ICICI Lombard General Insurance Company Limited India 74.00%
3. Prudential ICICI Asset Management Company Limited India *44.99%
4. Prudential ICICI Trust Limited India *44.80%
* indicates holding by ICICI Bank Limited along with its subsidiaries.
The aggregate amounts of assets and liabilities as on December 31, 2004 and income and expenses for the period then ended relating to
the Bank’s interests in the above entities are given below:
Rupees in crore
Liabilities Amount Assets Amount
Capital and reserves 357.31 Cash and bank balances 46.36
Other liabilities 486.01 Investments 1,075.37
Liabilities on life policies in force 549.23 Fixed assets 69.42
Other assets 201.40
Total 1,392.55 Total 1,392.55
Rupees in crore
Expenses Amount Income Amount
Interest expenses 0.03 Interest income 159.59
Other expenses Other income
- Premium ceded and change in - Insurance premium /
liability for life policies in force 1.72 commission 1,037.20
- Others 1,335.07 - Others 45.07
Provisions 11.83
Total 1,348.65 Total 1,241.86
The aggregate amounts of assets and liabilities as on March 31, 2004 and income and expenses for the year then ended relating to the
Bank’s interests in the above entities are given below:
Rupees in crore
Liabilities on life policies in force 1,061.05 Fixed assets 50.24
Other assets 150.75
Total 1,798.36 Total 1,798.36
Rupees in crore
liability for life policies in force 488.82 commission 1,117.60
- Others 866.25 - Others 82.42
Provisions 13.52
Total 1,368.81 Total 1,240.55
The aggregate amounts of assets and liabilities as on December 31, 2003 and income and expenses for the period then ended relating to
the Bank’s interests in the above entities are given below:
Rupees in crore
Liabilities on life policies in force 760.45 Fixed assets 49.12
Other assets 146.01
Total 1,437.64 Total 1,437.64
156
March 2005
Rupees in crore
liability for life policies in force 329.83 commission 618.52
- Others 493.13 - Others 87.09
Provisions 6.32
Total 829.39 Total 735.25
12. Provision for non-performing assets
In its circular dated DBOD.BP.BC 99/21.04.048/2003-2004 dated June 21, 2004 RBI has introduced graded higher provisioning norms which
would require a bank to make 100% provision on the secured portion of doubtful assets outstanding for more than three years in doubtful
category instead of the earlier requirement of 50% provision. However, RBI has allowed banks to make 100% provision on the existing
assets which are in doubtful category for more than three years as on March 31, 2004, till March 31, 2007 in a graded manner (i.e. 60% as
on March 31, 2005, 75% as on March 31, 2006 and 100% as on March 31, 2007). Accordingly the Bank has adopted the revised RBI
guidelines.
The impact of the adoption of the revised guidelines on the profit and loss account is not significant.
13. Rupee derivatives
Effective April 1, 2004, the Bank has accounted for the unrealised gain on interest rate derivatives (net of provisions, if any) as compared to
its earlier policy of ignoring such unrealised gains. As a result the profit after tax for the current period is higher by Rs. 40.36 crore.
14. Subvention income
Effective April 1, 2004 the commissions paid to direct marketing agents (DMAs) of auto loans, net of subvention income received from them,
15. Transfer of investments from AFS to HTM category
During the period ended December 31, 2004, the Bank has transferred investments amounting to Rs. 21,348.94 crore from Available for
Sale category to Held to Maturity category in accordance with RBI circular: DBOD.No.BP.BC.37/ 21.04.141/2004-05 dated September 2,
2004. The difference between the book value of each investment and the lower of its acquisation cost and market value on the date of
transfer amounting to Rs. 182.82 crore has been provided for in the profit and loss account.
16. Appropriation of net profit
The Bank intends to make appropriation of net profit at year-end. Accordingly, the financial statements do not include appropriations to
Statutory Reserve (Rs. 348.00 crore), Capital Reserve (Rs. 19.27 crore) and Investment Fluctuation Reserve (amount not ascertainable) out
of the current period profit.
17. Others
a. Exchange fluctuation
Exchange fluctuation aggregating Rs. 39.86 crore (March 31, 2004: Rs. 57.78 crore, December 31, 2003: Rs. 75.52 crore), which
arises on account of rupee-tying agreements with the Government of India, is held in “Exchange Fluctuation Suspense with
Government Account” pending adjustment at maturity on receipt of payments from the Government for repayments to foreign
lenders.
b. Swap suspense (net)
Swap suspense (net) aggregating Rs. 113.92 crore (debit) (March 31, 2004: Rs. 67.70 crore (debit), December 31, 2003: Rs. 69.30
crore (debit), which arises out of conversion of foreign currency swaps, is held in “Swap suspense account” and will be reversed at
conclusion of swap transactions with swap counter parties.
18. Contingent liability
The Income-tax authorities have disallowed deduction in respect of specific provisions for bad debts made by erstwhile ICICI Limited in
prior years on account of retrospective amendment to section 36(1)(vii) of the Income Tax Act, 1961 (the “Act”). The total potential tax impact
of such disallowances is Rs. 276.59 crore, which is included in the contingent liability and is disputed by the Bank in appeals. Based on a
legal opinion, the Bank is of the view that the disputed amount would alternatively be deductible under the provisions of the Act as business
loss. Further, as the provision is tax deductible in the year of write off, the Bank is eligible to create a deferred tax asset and accordingly, there
is no revenue impact.
19. Comparative figures
Figures of the previous period/year have been regrouped to conform to the current period presentation.
157
March 2005
Annexure B - Statement of Accounts of ICICI SECURITIES LIMITED (formerly ICICI Securities and Finance
Company Limited)
(Rs. in crores)
For the Year ended March 31, Nine months
ended December
31, 2004
2000 2001 2002 2003 2004 (unaudited)
INCOME FROM OPERATIONS

Income from Services 16.33 15.17 10.01 14.43 26.65 25.81
Interest Income 206.07 210.11 166.91 129.89 112.39 78.52
Profit/(loss) on Securities 35.63 61.78 161.54 123.18 133.72 (12.62)
Other Income 41.94 18.37 40.35 37.82 48.39 4.61
299.97 305.43 378.81 305.32 321.15 96.32
Less: Financial Charges and Operating Expenses 157.44 174.51 134.92 93.36 71.18 45.59
142.53 130.92 243.89 211.96 249.97 50.73
LESS: EXPENDITURE
Payment to and Provisions for Employees 6.96 11.27 22.85 23.12 29.92 11.64
Establishment and other Expenses 23.52 23.98 32.07 37.95 39.31 15.29
Interest Tax 3.55 - - - - -
Depreciation:
Assets Leased Out 3.50 3.46 - - - -
On Other Owned Assets 1.76 1.41 1.35 1.53 1.38 0.93
Other Expenses 0.06 - - - - -
39.35 40.12 56.27 62.60 70.61 27.86
Profit/(Loss) Before Taxation & Extraordinary items 103.18 90.80 187.62 149.36 179.35 22.87
Interest Tax reversal of earlier years - - - - 10.87 -
Profit/(Loss) Before Taxation 103.18 90.80 187.62 149.36 190.22 22.87
Less: Provision for Taxation 31.10 37.00 61.77 46.00 46.50 8.10
Deferred Tax Adjustment - - (2.04) 0.42 (0.18) 0.30
Profit After Taxation 72.08 53.80 127.89 102.94 143.90 14.47
Extent of interests of so far as it concerns members
of erstwhile ICICI Ltd. upto March 29, 2002 and
ICICI Bank thereafter, the Holding Company,
in the Capital
Of the Subsidiary 99.92% 99.92% 99.92% 99.92% 99.92% 99.92%
Amount of profit so far as it concerns the members
ICICI Bank Ltd. the Holding Company thereafter,
in the Capital of the Subsidiary 72.02 53.76 127.79 102.86 143.78 14.45
Notes:
1. Provision for Taxation for the year ended March 31, 2002 includes Rs. 8.47 crores pertaining to earlier years. The effect on earlier years,
however, cannot be determined.
2. The management decided to charge off the balance of Deferred Revenue Expenditure as of March 31, 2002. On account of this, Deferred
Revenue Expenditure Written Off in that year is higher by Rs. 2.90 crores and the profit for the year is lower to that extent. The effect on
earlier years, however, cannot be determined.
3. Consequent upon Accounting Standard 22 ‘Accounting for Taxes on Income’ becoming mandatory effective April 1, 2001, the Deferred Tax
on timing differences has been recognized during the year ended March 31, 2002. The Deferred Tax adjustments for each of the year ended
March 31, 2000 and 2001 has not been determined and consequently no adjustments have been carried out in the ‘Statement of Profits’
shown above.
4. The management decided to capitalize expenditure incurred on software from the year ended March 31, 2003. As a result of this change,
profit for the year is higher by Rs. 0.45 crore. The effect of the same for each of the years ended March 31, 2000, 2001 and 2002 has not
been determined and consequently, no adjustments have been carried out in the Statement of Profits shown above.
5. The company was accounting Repo transaction as lending and borrowing till March 31, 2003. From April 1, 2003 the company has changed
the method of accounting for Repo transaction as per revised guidelines issued by the RBI, and the same are given in Para 4 of the significant
accounting policies. Consequent to this change there is no impact on the profit for the year ended March 31, 2004. The effect on earlier
years, however, cannot be determined.
6. The Company has followed the same accounting policies in preparing the interim financial statements as were followed for the year ended
March 31, 2004, except for the method of accounting for interest rate swaps (IRS). Hitherto, mark-to-market gains on open IRS positions
were not recognized. From the current year, the Company has started recognizing gains on all open IRS positions. However, there is no
impact on the profits for the period ended December 31, 2004 since the Company does not have mark-to-market gains on open IRS positions
as at December 31, 2004. The effect on earlier years, however, cannot be determined.
158
March 2005

(Rs. in crores)
(unaudited)
ASSETS
Fixed assets, net of depreciation 11.11
Investments 12.00
Interest accrued 6.67
Securities held as stock-in-trade 623.99
Sundry debtors 76.13
Cash and bank balances 13.40
Loans and advances 44.84
Deferred tax asset 0.18
Total assets 788.32
LIABILITIES :
Loan funds
Secured Loans
Unsecured loans 323.49
Current liabilities and provisions:
Current liabilities 64.03
Provisions 0.72
Total liabilities 388.24
Net Worth 400.08
REPRESENTED BY
(A) SHARE CAPITAL:
20,30,02,800 equity shares of Rs.10/- each fully paid-up
Of the above 20,28,33,200 equity shares of Rs.10/- each are held by
ICICI Bank Ltd. (the holding company) 203.00
(B) RESERVES AND SURPLUS:
Share premium account 11.28
General reserve 63.58
Deferred tax credit reserve
Special reserve (maintained under section 451C of the RBI Act,1935) 104.18
Profit and loss account 18.04
197.08
400.08
Net assets so far as it concerns the members of ICICI Bank Ltd,
the holding company and its nominees 99.92% Rs.399.75
Notes:
1. Income Tax matters disputed by the Company Rs. 5.93 crores (As on March 31, 2004 Rs. 10.82 crores)
2. Interest Rate Swaps
(a) As the swaps are entered into with counter parties having high credit rating, no counter party default is expected. However, in case the
counter party to the swaps fail to fulfill their commitments, the gain will be to the extent of Rs.16.86 crores (As at December 31, 2003
gain of Rs.4.24 crores and as at March 31, 2004 loss of Rs.5.79 crores).
(b) The notional principal amount of IRS, which are valued on ‘marked-to-market’ basis as at December 31, 2004, aggregates to Rs.67,208
crores (As at December 31, 2003 Rs.34,619 crores and as at March 31, 2004 Rs.38,449 crores) and the fair value of these IRS as at
December 31, 2004 is Rs.Nil ( as at December 31, 2003 Rs. Nil and as at March 31, 2004 Rs.5.79 crores).
(c) In accordance with the market practice and considering the credit qualities of the counter parties, the Company has not taken any
collateral at the time of entering into the swaps.
3. Outstanding counter guarantee for subsidiary company, as at December 31, 2004 is Rs. Nil (as on March 31, 2004 Rs. 20.03 crores).
4. Repo sale aggregating to Rs. 101.11 crores was outstanding as at December 31, 2004 (as at December 31, 2003 - Rs. 140.50 crores and as
at March 31, 2004 - Rs.559.93 crores).
5. Fixed deposits under lien with ICICI Bank Ltd Rs.3.01 crores and ICICI Brokerage Services Ltd. Rs. 7.1 crores (as at December 31, 2003 - Nil
and as at March 31, 2004 - Nil).
6. The employee and establishment costs are net of recoveries/reimbursements.
159
March 2005
I. SIGNIFICANT ACCOUNTING POLICIES:

1. Method of Accounting
The accounts are prepared in accordance with accounting principles generally accepted in India. The Company follows accrual method of
accounting.
2. Revenue Recognition
In case of non-fund based activities such as issue management, loan syndication, financial advisory services etc., the revenue is recognized
based on the stage of completion of assignments and the bills raised for the recovery of fees.
Interest income is accounted on an accrual basis except that no interest income is recognized on Non Performing / Doubtful assets,
considering prudential norms for income recognition issued by Reserve Bank of India for Non-Banking Financial Companies. Interest
income on such assets is recognised when the amount is received and appropriated towards interest.
3. Stock-in-trade and Investments
(a) The securities acquired with the intention of short-term holding and trading positions are considered as stock-in-trade and shown as
current assets. Other securities acquired with the intention of long-term holding are considered as ‘Investments’.
(b) In respect of investments, brokerage and stamp duty payable are considered to arrive at the cost. However, in respect of securities held
as stock-in-trade, brokerage and stamp duty are written off as revenue expenditure. Commission earned in respect of securities held
as stock-in-trade and investments acquired from the primary market and on devolvement are adjusted from the cost of acquisition.
(c) The securities held as stock-in-trade under current assets are valued at cost or market/fair value, whichever is lower. In case of
investments transferred to Stock-in-trade, carrying amount on the date of transfer is considered as cost. In case of unquoted shares, fair
value is taken at break-up value of shares as per the latest audited balance sheet of the concerned company. In case of debt instruments,
fair value is worked out on the basis of yield to maturity rate selected considering quotes where available and credit profile of the
issuer.
(d) The Investments are shown in balance sheet at cost. In case of quoted investments, provision for diminution in value of investments
is made, if such diminution is of a permanent nature in the opinion of management.
4. Repurchase and Resale Transactions (Repo)
Repo transaction are treated as purchase and sale of the securities as per RBI Guidelines and accordingly disclosed in the financial
statements. The difference between purchase and sale consideration is treated as interest income or expenditure, as the case may be, over
the period of the contract.
The difference between the sale price of the security offered under repo and its book value are shown under Current Assets/ Liabilities in
the Balance Sheet, as the case may be. In case, the sale price is lower than the book value the same is provided as loss on security. In case,
the sale price is higher than the book value, the differential gain is not recognised. Securities under Repo/ Reverse Repo are marked to
market.
5. Zero Coupon Instruments
The difference between the acquisition price and maturity value of zero coupon instruments are treated as interest and is recognised as
income over the remaining life of the instrument.
6. Fixed Assets and Depreciation
Fixed assets are stated at historical cost. Expenditure incurred on plumbing, flooring and other civil works at leased premises prior to its
occupation by the company have been capitalized as “Improvement to Leasehold Property”.
Depreciation on value of improvements to leasehold property is provided on straight line method at the rate determined, considering the
period of lease or at the rate prescribed in Schedule XIV of the Companies Act, 1956, whichever is higher.
Depreciation on fixed assets other than the leased assets and improvement to leasehold property is provided on written down value method
at the rate prescribed in Schedule XIV of the Companies Act, 1956.
7. Deferred Tax
The tax effects of significant temporary differences are reflected through a Deferred Tax Asset / Liability, which has been reflected in the
Balance Sheet and the corresponding effect of the same is given in the Profit and Loss Account.
8. Provision for Doubtful Loans and Advances
The policy of provisioning against Non Performing Loans and Advances has been decided by the management considering prudential norms
issued by the Reserve Bank of India for Non Banking Financial Companies except that amounts recovered subsequent to the balance sheet
date have not been considered for provisioning. As per the policy adopted, the provisions against sub standard assets are fixed on a
conservative basis, taking into account management’s perception of the higher risk associated with the business of the company. Certain
Non Performing Loans and Advances are considered as loss assets and full provision has been made against such assets.
9. Miscellaneous Expenditure
Lease rentals and other revenue expenditure incurred on leased premises prior to occupation of the premises are amortized over the
balance period of the lease, starting from the date of occupation of leased premises.
10. Foreign Currency Transactions
Expenses and income are recorded at the exchange rate prevailing on the date of transaction. Assets and liabilities at the balance sheet date
are restated at the exchange rate prevailing on the Balance Sheet date. Exchange differences arising on settlement of the transaction and
on account of restatement of assets and liabilities are dealt with in the profit and loss account.
11. Retirement Benefits
Provident Fund contribution is paid to the Provident Fund Commissioners’ fund while gratuity is covered under schemes with Life Insurance
Corporation (LIC) and contribution is made to LIC.
12. Interest Rate Swaps and Forward Rate Agreements
(a) All open positions are marked to market. Mark-to-market gains/ losses are recognised.
(b) Debit/ credit balance on open position are shown as current assets / current liabilities, as the case may be.
13. Equity Derivatives
(a) Gains are recognized only on settlement / expiry of the derivative instruments.
(b) All open positions are marked to market. Mark-to-market gains are not recognised.
(c) Debit/ credit balance on open position are shown as current assets / current liabilities, as the case may be.
160
March 2005
Annexure C - Statement of Accounts of ICICI BROKERAGE SERVICES LIMITED

(Rs. in crores)
ended December
31, 2004
2000 2001 2002 2003 2004 (unaudited)
INCOME FROM OPERATIONS:
Brokerage Income 8.50 16.60 8.79 12.77 31.17 31.56
Interest Income - - 0.67 0.86 0.99 0.94
Other Income 1.06 3.30 0.17 0.14 0.07 0.14
Profit/(Loss) on Securities 4.02 0.73 (0.05) (0.25) 5.37 (1.57)
13.58 20.63 9.58 13.52 37.60 31.07
Less: Financial Charges & Operating Expenses 4.39 14.76 6.51 3.16 6.29 7.82
9.19 5.87 3.07 10.36 31.31 23.25
EXPENDITURE:
Payments to and Provisions for Employees 0.08 0.03 0.09 0.15 0.10 6.25
Establishment and Other Expenses 1.46 1.19 1.15 1.17 1.19 9.27
Depreciation 0.13 0.13 0.18 0.16 0.15 0.10
1.67 1.35 1.42 1.48 1.44 15.62
Profit/(Loss) before Taxation 7.52 4.52 1.65 8.88 29.87 7.63
Deferred Tax Adjustment - - 0.02 - (0.01) -
Profit/(Loss) after Taxation 4.61 2.77 1.10 5.48 19.08 4.78
Extent of interest so far as it concerns members
of ICICI Securities Limited, the Holding Company,
in the Capital of the Subsidiary 100% 100% 100% 100% 100% 100%
Extent of interest so far as it concerns members of
ICICI Ltd. upto March 29, 2002 and ICICI Bank
thereafter, the Holding Company, in the capital of
ICICI Securities Limited, the Subsidiary Company 99.92% 99.92% 99.92% 99.92% 99.92% 99.92%
Resultant interest so far as it concerns members of
ICICI Ltd. upto March 29, 2002 and ICICI Bank
thereafter, in the capital of ICICI Brokerage
Services Limited 99.92% 99.92% 99.92% 99.92% 99.92% 99.92%
of ICICI Ltd. upto March 29, 2002 and ICICI Bank
thereafter, the Holding Company 4.60 2.77 1.10 5.48 19.06 4.77
shown above.
2. The management decided to capitalise expenditure incurred on software from March 2003. As the result of this change, profit for the year
is higher by Rs. 0.01 crore. The effect of the same for each of the year ended March 31, 2000, 2001 and 2002 has not been determined and
consequently, no adjustments have been carried out in the Statement of Profits shown above.
(Rs. in crores)
(unaudited)
ASSETS :
Cash and Bank Balances 48.13
Securities held as Stock-in-trade -
Interest Accrued 0.42
Loans and Advances 5.30
Sundry Debtors 23.99
Fixed Assets 0.51
78.35
Less: Liabilities
Current Liabilities and Provisions 33.21
Deferred Tax Liability 0.10
Secured Loans 2.28
Net Worth 42.76
161
March 2005
(Rs. in crores)
(unaudited)
REPRESENTED BY :
SHARE CAPITAL 4.50
4,500,700 equity shares of Rs. 10/- each fully paid up.
The entire share capital of the company is held by ICICI Securities Limited
(the Holding Company) and its nominees
RESERVES AND SURPLUS 38.26
42.76
Net Assets so far as it concerns the members of ICICI Securities Limited,
the Holding Company 100 % 42.76
Net Assets so far as it concerns the members of ICICI Bank, the Holding Company of
ICICI Securities Limited, the subsidiary company 99.92% 42.72
Resultant interest so far as it concerns, the members of ICICI Bank, in the net assets
of ICICI Brokerage Services Limited 99.92% 42.72
Notes:
1. Contingent Liabilities :
Income tax matters disputed by the Company as at December 31, 2004 Rs. 2.20 crores (as at March 31, 2004 Rs. 2.06 crores).
2. Retirement Benefits:
At present, there is no liability towards retirement benefits.
SIGNIFICANT ACCOUNTING POLICIES

accounting.
Income from Brokerage activities is recognised as income on the trade date of the transaction. Related expenditure incurred for procuring
business is accounted for as procurement expenses.
3. Investments and stock-in-trade
a. The securities acquired with the intention of short-term holding and trading positions are considered as stock-in-trade and shown
under current assets. Other securities acquired with the intention of long-term holding are considered as ‘Investments’.
b. In respect of securities held as stock-in-trade, brokerage and stamp duty are written-off as revenue expenditure. The cost of investment
includes brokerage and stamp duty payable.
c. The securities held as stock-in-trade under current assets are valued at cost or market/realisable value, whichever is lower.
d. Investments are shown in the Balance Sheet at cost. In case of quoted investments, provision for diminution in value of investments
is made, if such diminution is of a permanent nature in the opinion of the management.
4. Derivatives
a. Gains are recognised only on settlement/ expiry of the derivative instruments.
b. All open positions are marked to market and the unrealized gains / loss are netted off on a scrip wise basis. Mark-to-market gains, if any,
are not recognised.
c. Debit/ credit balance on open position are shown as current assets/ current liabilities, as the case may be.
5. Fixed Assets and Depreciation / Amortisation
Fixed assets are stated at historical cost. Expenditure incurred on plumbing, flooring and other civil works at leased premises prior to its
occupation by the company have been capitalized as “Improvement to Leasehold Property”. Depreciation on value of improvements to
leasehold property is provided on straight line method at the rate determined, considering the period of the lease or at the rate prescribed
in Schedule XIV of the Companies Act, 1956, whichever is higher. Membership Rights of Stock Exchanges is treated as an asset and the
value paid to acquire such rights is amortised over a period of 10 years. Depreciation on fixed assets other than improvements to leasehold
property and Membership Rights of Stock Exchanges is provided on written down value method at the rates prescribed in Schedule XIV of
the Companies Act, 1956. Additionally, the written down value of an asset falls below Rs. 5,000 or the cost of which is less than Rs. 5,000
is fully depreciated.
6. Sundry Debtors and Creditors
Amounts receivable from and payable to clients for broking transactions are recognised on trade date basis and disclosed separately as
sundry debtors and creditors.
7. Deferred Tax
The tax effects of significant temporary differences are reflected through a deferred tax Asset /Liability, which has been reflected in the
8. Foreign Currency Transactions
Expenses and income are recorded at the exchange rate prevailing on the date of transaction. Assets and liabilities at the balance sheet date
are restated at the exchange rate prevailing on the Balance Sheet date. Exchange differences arising on settlement of the transaction and
on account of restatement of assets and liabilities are dealt with in the profit and loss account.
162
March 2005
Annexure D - Statement of Accounts of ICICI HOME FINANCE COMPANY LIMITED

(Rs. in crores)
ended December
31, 2004
2000 2001 2002 2003 2004 (unaudited)
INCOME
Income from operations 2.15 57.76 176.76 195.30 140.04 166.94
Other Income 0.36 0.05 15.45 2.53 6.25 3.65
2.51 57.81 192.21 197.83 146.29 170.59
LESS: EXPENSES
Interest and other financial charges 0.17 33.18 129.25 146.54 109.38 126.82
Staff expenses 0.22 3.05 12.45 0.57 15.79 15.18
Establishment and other expenses 2.05 19.13 35.88 3.07 193.68 172.28
Depreciation - 0.07 0.40 0.43 1.53 1.15
Provision for contingencies 17.73 12.00
Provision and Write off Against Non Performing Assets - 0.31 1.42 3.65 1.72 3.21
Provision for Standard assets - - - 2.80 3.33 (0.15)
Preliminary expenses written off - 0.13 0.18 0.18 0.18 0.14
2.44 55.87 179.58 157.24 343.34 330.63
Less: Expenses Recovered 207.58 167.19
135.76 163.44
Profit before Tax 0.07 1.94 12.63 40.59 10.53 7.15
Add: Deferred Tax - - 0.74 (9.21) 8.02 5.18
Profit after Tax 0.05 1.50 9.57 28.65 9.84 5.75
erstwhile ICICI Ltd. upto March 29, 2002 and
in the Capital of the Subsidiary 100% 100% 100% 100% 100% 100%
ICICI Bank the Holding Company thereafter,
in the Capital, of the Subsidiary 0.05 1.50 9.57 28.65 9.84 5.75
Notes:
1. The Company commenced business in November 1999 and period ended March 31, 2000 was the first period of operations.
shown above.
3. Expenses for the year ended March 31, 2001, 2002 and 2003 are reported net off amounts recovered from ICICI Bank Limited.
4. Income from securitisation of loans for December 31, 2004 includes Rs. 0.62 crore (March 31, 2004 – Rs. 4.29 crores), being write back of
servicing cost of portfolio securitised in earlier years.
163
March 2005

(Rs. in crores)
(unaudited)
ASSETS
1. Fixed Assets 4.80
2. Investments 12.88
3. Loans & Other Credit facilities 2,441.09
4. Current Assets, Loans & Advances
A. Current Assets
- Interest accrued 15.12
- Sundry Debtors 5.57
- Securities Held in Stock in trade 55.55
- Cash & Bank Balance 343.39
419.63
B. Loans & Advances 208.81
628.44
5. Deferred Tax Asset 26.61
3,113.82
LESS: LIABILITIES
6. Unsecured Loan 2,719.94
7. Current Liabilities and Provisions 207.95
NET WORTH 185.93
REPRESENTED BY :
SHARE CAPITAL :
140,000,000 Equity Shares of Rs. 10/- each fully paid-up 140.00
(All the above shares are held by ICICI Bank Limited, the Holding Company and its nominees)
15,000,000 0.01% Fully Convertible Cumulative
Preference Shares of Rs. 10/- each fully paid-up (All the above shares are held 15.00
by ICICI Bank Limited, the Holding Company and its nominees) (Refer Note 2)]
RESERVES AND SURPLUS :
General Reserves 2.15
Surplus in Profit and Loss Account 3.33
Special Reserve created and maintained in terms of section 36(1)(vii) of the Income Tax Act, 1961 26.81
Less: Miscellaneous Expenditure
(To the extent not written off or adjusted) 1.36
185.93
Net Assets so far as it concerns the members of ICICI Bank, the holding company and its nominees 100% 185.93
Notes:
1. Commitment towards part disbursement of sanctions amounted to Rs. 3.91 crores as on December 31, 2004 (as on March 31, 2004 at
Rs. 22.43 crores).
2. The Preference Shares were issued in two tranches. The first tranch of Preference Shares for Rs.25.00 crores was allotted on December
28, 2001 and are convertible into equity shares at the option of the Preference Shareholder after completion of one year but before
completion of three years from the date of allotment in the ratio of 1 : 1. However, the said Preference Shares shall be compulsorily and
automatically convertible into one Fully Paid-up Equity Share for every one Preference Share of Rs.10 held on December 27, 2004.
Accordingly, the said Preference Shares have been converted into One Fully Paid-up Equity Share for every One Preference Share of Rs.10
on December 27, 2004.The second tranche of Preference Shares for Rs.15.00 crores was allotted on March 14, 2002 and are convertible
into equity shares at the option of the Preference Shareholder after completion of one year but before completion of seven years from the
date of allotment in the ratio of 1 : 1. However, the said Preference Shares shall be compulsorily and automatically convertible into one Fully
Paid-up Equity Share for every one Preference Share of Rs.10 held on March 14, 2009.
3. Home Loans given by the company are secured by the underlying property.
4. As per the terms of appointment, the Managing Director and whole time director draw their remuneration and other benefits from the
holding company, ICICI Bank Ltd.
5. Contingent liability in respect of the difference between the cash collateral and expenses provided for the future cost in respect of the
securitisation is Rs. 13.49 crores (as on March 31, 2004 Rs. 24.14 crores).
6. During the nine month ended December 31, 2004, the company has made provision for contingencies of Rs. 12.00 crores (as on March 31,
2004 Rs. 17.73 crores) on account of additional risk of conversion and prepayment of loans against portfolio securitised in earlier years.
164
March 2005
SIGNIFICANT ACCOUNTING POLICIES:

The accounts are prepared in accordance with the accounting principles generally accepted in India and the directions issued by the National
Housing Bank (NHB) from time to time.
Interest income on housing loan is accounted for on accrual basis, other than interest on non-performing assets and charges for delayed
payments and cheque bouncing, if any, which is accounted for on cash basis. Further, interest income accounted in the past for Non-
Performing Assets is also reversed. Fees are recognised on due basis.
2. Investments
Investments have been classified as long-term and short-term investments. Long-term investments have been valued at cost and provision
is made to recognise any decline, other than temporary in the carrying value of investment. Short-term investments have been valued at cost
or market value whichever is lower.
3. Expenses
All expenses are provided for on accrual basis.
4. Preliminary and Share Issue Expenses
Preliminary and share issue expenses are amortised over a period of ten years.
5. Deferred Revenue Expenditure
a) Expenditure incurred on Business Process Re-engineering, the benefit of which is expected over a subsequent period(s) is treated as
Deferred Revenue Expenditure and amortised over the period of thirty six months.
b) The initial expenses on borrowings are amortised over the tenure of the borrowing facility.
6. Premium amount paid for buying the housing loan portfolio is amortised in proportion of loan outstanding.
7. Depreciation
Depreciation on assets is charged on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956, except in
case of Computer Software where depreciation is provided @ 20% per annum.
8. Deferred Tax
The tax effects of significant temporary differences are reflected through a deferred tax Asset/ Liability, which has been reflected in the
9. Provision for Non-Performing Assets
Provisions against Non Performing Assets (NPAs) are made based on norms decided by the management, which are more conservative as
compared to the prudential norms prescribed by National Housing Bank.
10. Provision for Standard Assets
General provision of 0.25% is made on all the standard assets.
11. Accounting for Swaps
The Company enters into derivative contracts such as interest rate swaps to hedge on balance sheet assets and liabilities. The swap contracts
entered to hedge on balance sheet assets and liabilities are structured such that they bear an opposite and offsetting impact with the
underlying on-balance sheet items. The impact of such derivative instruments are correlated with the movements of the underlying assets
and liabilities and accounted pursuant to the principles of hedge accounting whereby interest differential received/ paid adjusted from /to
interest expenses. The related amount receivable from and payable to the swap counter parties is included in the other assets or other
liabilities in the balance sheet.
165
March 2005
Annexure E - Statement of Accounts of ICICI SECURITIES HOLDINGS, INC.

(Rs. in Thousands)
ended December
31, 2004
2001 2002 2003 2004 (unaudited)
INCOME FROM OPERATIONS
Income from Services - - 16,062.64 12,934.12 6,500.97
Interest Income - - 28.10 104.93 -
Other Income 4,798.50 20,046.60 14,547.30 13,808.67 10,203.12
Less: Financial Charges and Operating Expenses 0.04 131.27 1,093.59 184.86 1,075.51
4,798.46 19,915.33 29,544.45 26,662.86 15,628.58
LESS: EXPENDITURE
Payments to and Provisions for Employees 977.80 9,979.92 14,324.31 15,206.58 17,803.51
Establishment and Other Expenses 13,103.49 9,643.57 11,998.02 10,746.68 8,491.78
Depreciation - On other owned Assets - 112.01 162.48 171.38 70.65
14,081.29 19,735.50 26,484.81 26,124.64 26,365.94
Profit before Taxation (9,282.83) 179.83 3,059.64 538.22 (10,737.36)
Less: Provision for Taxation - - - - -
Profit after Taxation (9,282.83) 179.83 3,059.64 538.22 (10,737.36)

Extent of interest so far as it concerns members of ICICI Securities
Limited, the Holding Company, in the Capital of the Subsidiary 100% 100% 100% 100% 100%
Extent of interest so far as it concerns members of ICICI Ltd. upto

March 29, 2002, and ICICI Bank thereafter the Holding Company,
in the capital of ICICI Securities Limited, the Subsidiary Company 99.92% 99.92% 99.92% 99.92% 99.92%
Resultant interest so far as it concerns members of ICICI Ltd., upto

March 29, 2002 and ICICI Bank the Holding Company thereafter,
in the capital of ICICI Securities Holding Inc. 99.92% 99.92% 99.92% 99.92% 99.92%
Amount of profit so far as it concerns the members of erstwhile

ICICI Ltd. upto March 29, 2002 and ICICI Bank, the Holding
Company thereafter, in the Capital of the Subsidiary (9,275.40) 179.69 3,057.19 537.79 (10,728.77)
Note :
ICICI Securities Holding Inc. was incorporated as a wholly owned subsidiary of ICICI Securities on June 12, 2000.

(Rs. in Thousands)
(unaudited)
ASSETS:
Cash and cash equivalents 4,601.65
Sundry Debtors 2,319.03
Loans and Advances 3,406.73
Fixed Assets 260.77
Investments 48,309.55
Total assets 58,897.73
LESS: LIABILITIES
Current Liabilities and Provisions 2,389.41
Net Worth 56,508.32
166
March 2005
(Rs. in Thousands)
(unaudited)
REPRESENTED BY :
SHARE CAPITAL :
Common Stock USD 1 par value; 1,600,000 shares 75,025.00
RESERVES AND SURPLUS
Profit and Loss Account (16,242.51)
Translation Reserve (2,274.17)
56,508.32
Net Assets so far as it concerns the members of ICICI Bank Ltd.
the holding company and its nominees 99.92% 56,463.11
Notes:
1. The Company is a wholly owned subsidiary of ICICI Securities Limited. The accounts have been prepared to comply with the provisions of
Indian Companies Act, 1956.
2. Deferred Tax asset resulting from accumulated losses have not been accounted because of uncertainty of availability of sufficient future
taxable income.
3. For the purpose of conversion of the local currency (USD) into Indian Currency (Indian Rupees), the exchange rate applied as per para 4 of
the significant accounting policies.

The accounts are prepared in accordance with accounting principles generally accepted in India. The company follows accrual method of
accounting.
3. Investments
The Investments are shown in Balance Sheet at cost. In case of quoted investments, provision for diminution in value of investments is
made, if such diminution is of a permanent nature in the opinion of management.
4. Conversion to Indian Rupees
For the purpose of the accounts, all income and expense items are converted at the average rate of exchange applicable for the year/quarter.
All assets and liabilities are translated at the closing rate as on the Balance Sheet date. The exchange difference arising out of the year-end/
quarter-end translation is being debited or credited to Translation Reserve.
The Equity Share Capital and Investments in subsidiary is carried forward at the rate of exchange prevailing on the transaction date. The
resulting exchange difference on account of translation at the year-end are transferred to Translation Reserve account and the said account
is being treated as “Reserves and Surplus”.
Fixed assets are stated at historical cost.
Depreciation on fixed assets is provided on written down value method at the rates, which are equal or higher than the rates prescribed in
Schedule XIV of the Companies Act, 1956. Such rates are fixed after considering applicable laws in the United States of America and
management estimation of the useful life of the asset.
Depreciation of Assets Estimate Life
Office Equipment & Computers 3 Years
Furniture & Fixtures 7 Years
6. Deferred Tax
The tax effects of significant temporary differences are reflected through a Deferred Tax Asset /Liability, which has been reflected in the
167
March 2005
Annexure F - Statement of Accounts of ICICI SECURITIES INC.

(Rs. in Thousands)
ended December
31, 2004
2001 2002 2003 2004 (unaudited)
INCOME FROM OPERATIONS:
Income from Services - 6,994.02 9,841.49 35,312.59 26,047.89
Interest Income 1,233.66 854.18 194.87 22.54 71.44
Other Income 170.67
Less: Financial Charges and Operating Expenses 4.57 29.51 - 345.83 11,454.31
1,229.09 7,818.69 10,036.36 34,989.30 14,835.69
EXPENDITURE:
Less: Administrative Expenditure
- Establishment and Other Expenses 5,170.22 22,011.05 15,525.58 18,877.42 17,835.78
5,170.22 22,011.05 15,525.58 18,877.42 17,835.78
Profit/(Loss) before Taxation (3,941.13) (14,192.36) (5,489.22) 16,111.88 (3,000.09)
Less: Provision for Taxation - - - -
Profit/(Loss) After Taxation (3,941.13) (14,192.36) (5,489.22) 16,111.88 (3,000.09)
Extent of interest so far as it concerns members of ICICI Securities
Holdings Inc., the Holding Company, in the Capital of the Subsidiary 100% 100% 100% 100% 100%
Extent of interest so far as it concerns members of ICICI Ltd. upto
March 29, 2002, and ICICI Bank thereafter the Holding Company,
in the capital of ICICI Securities Limited, the Subsidiary Company 99.92% 99.92% 99.92% 99.92% 99.92%
Resultant interest so far as it concerns members of ICICI Ltd., upto
March 29, 2002 and ICICI Bank the Holding Company thereafter,
in the Capital of ICICI Securities Inc. 99.92% 99.92% 99.92% 99.92% 99.92%
Company thereafter, in the Capital of the Subsidiary (3,937.98) (14,181.01) (5,484.83) 16,098.99 (2,997.68)
Note :
ICICI Securities Inc. was incorporated as a wholly owned subsidiary of ICICI Securities Holding Inc. on June 13, 2000

(Rs. in Thousands)
(unaudited)
ASSETS:
Cash and Bank Balances 5,544.55
Loans and Advances 1,335.11
Securities held as Stock-in-trade 17,550.09
Sundry Debtors 15,801.62
40,231.37
LESS: LIABILITIES
Current Liabilities and Provisions 3,851.30
Net Worth 36,380.07
168
March 2005
(Rs. in Thousands)
(unaudited)
REPRESENTED BY :
SHARE CAPITAL :
Common Stock USD 1 par value; 1,050,000 shares authorized 48,309.55
48,309.55
RESERVES AND SURPLUS
Profit and Loss Account (10,510.93
Translation Reserve (1,418.55)
36,380.07
Net Assets so far as it concerns the members of ICICI Bank Ltd.
the holding company and its nominees 99.92% 36,350.96
Notes:
1. The Company is a wholly owned subsidiary of ICICI Securities Holding Inc.
2. Deferred Tax asset resulting from accumulated losses have not been accounted because of uncertainty of availability of sufficient future
taxable income.
3. For the purpose of conversion of the local currency (USD) into Indian Currency (Indian Rupees) the exchange rate applied as per para 3 of
the accounting policies.

accounting.
3. Conversion to Indian Rupees
For the purpose of the accounts all income and expense items are converted at the average rate of exchange applicable for the year/quarter.
All assets and liabilities are translated at the closing rate as on the Balance Sheet date. The exchange difference arising out of the year-end/
quarter-end translation is being debited or credited to Translation Reserve.
The Equity Share Capital is carried forward at the rate of exchange prevailing on the transaction date. The resulting exchange difference on
account of translation at the year-end are transferred to Translation Reserve account and the said account is being treated as “Reserves and
Surplus”.
4. Deferred Tax
The tax effects of significant temporary differences are reflected through a Deferred Tax Asset /Liability, which has been reflected in the
169
March 2005
Annexure G - Statement of Accounts of ICICI INTERNATIONAL LIMITED

(Amount in US$)
ended December
31, 2004
2000 2001 2002 2003 2004 (unaudited)
REVENUE:
Management fee 625,050 1,116,165 944,273 330,302 159,491 74,000
Interest income 10,270 10,534 7,857 3,694 1,207 2,128
Profit on redemption of shares - 8,538 - - - -
635,320 1,135,237 952,130 333,996 160,698 76,128
EXPENDITURE:
Advisory Fee 618,000 900,000 815,000 322,300 146,400 60,000
Licence Fees 1,500 1,500 1,500 1,500 1,500 1,125
Administration & Professional Fees 6,967 49,232 7,922 4,610 6,785 4,665
Audit Fee 2,200 2,200 2,240 2,300 2,300 1,725
Directors Fees - - 1,063 1,250 1,250 937
Secretarial Fees - - 1,063 1,250 1,250 937
Bank Charges 389 - 63 300 365 230
Provision for investments written off - - 100 - - -
Provision for contingencies 80,000 - - - - -
General Expenses - - - 210 848 -
TOTAL EXPENSES 709,056 952,932 828,951 333,720 160,698 69,619
Profit from Operations (73,736) 182,305 123,179 276 - 6,509
Transfer from/(to) Contingency Reserve 120,000 - - - - -
Previous Year expenses written back (net) - - 32,462 - - -
Net Profit before Dividend 46,264 182,305 155,641 276 - 6,509

erstwhile ICICI Ltd. upto March 29, 2002 and ICICI
Bank thereafter, the Holding Company, in the Capital
of the Subsidiary 100% 100% 100% 100% 100% 100%

ICICI Bank, the Holding Company thereafter,
in the Capital of the Subsidiary 46,264 182,305 155,641 276 - 6,509
Note :
The Company became subsidiary of erstwhile ICICI Ltd. with effect from October 21, 1997 & of ICICI Bank with effect from March 29, 2002
170
March 2005

(Amount in US$)
(unaudited)
ASSETS :
Investments in Associates 300,000
Current Assets 263,566
563,566
Less: Current Liabilities 27,965
535,601
REPRESENTED BY :
SHARE CAPITAL :
40,000 ordinary shares of US $ 10 each. (The entire share capital of the company
is held by ICICI Bank Limited, the holding company) 400,000
Accumulated Profit 135,601
535,601
Net Assets so far as it concerns the members of ICICI Bank Limited,
the holding company 100% 535,601
Notes:
I. Taxation
Income tax
The Company is a tax incentive company in Mauritius and under current laws and regulations it is liable to pay income tax on its net income at a
rate of 15%. The Company is however entitled to a tax credit equivalent to the higher of actual foreign tax suffered and 80% of Mauritius tax
payable in respect of its foreign source income tax thus reducing its maximum effective tax rate to 3%.
The Company has received a certificate from the Mauritian authorities that it is a resident of Mauritius. In the absence of a permanent
establishment in India, the Company should not be subject to capital gains tax in India on the sale or redemption of securities.
No Mauritian capital gain tax is payable on profits arising from sale of securities, and any dividends and redemption proceeds paid by the Company
to its Shareholders will be exempt in Mauritius from any withholding tax.
Deferred tax
A deferred tax asset has not been recognised in respect of the tax losses carried forward as the directors consider that it is not probable that future
taxable profit will be available against which the unused tax losses can be utilised.
II. Reporting currency

The financial statements are presented in US Dollar, which is considered to be the Company’s principal trading currency.
III. SIGNIFICANT ACCOUNTING POLICIES:

The financial statements are prepared in accordance with and comply with International Financial Reporting Standards. A summary of the more
important accounting policies, which have been applied consistently, is set out below. The preparation of financial statements in accordance with
International Financial Reporting Standards requires the directors to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those estimates.
1. Basis of accounting
The financial statements are prepared under the historical cost convention.
2. Investments
The investment in the joint venture entity, TCW/ICICI Investment Partners, L.L.C. is viewed as a “strategic investment” and has, as a result,
been recorded at cost.
Available-for-sale investments are valued at fair value and the resulting temporary unrealised (gains) / losses (including unrealised foreign
exchange (gains) / losses on retranslation at the closing rate, if any) are reported as a separate component of equity as “Investment
Revaluation Reserve”, till the underlying investment is sold or permanently written off, when the total realised (gains) / losses are included
in the Income Statement.
3. Foreign currencies
Foreign currency transactions are accounted for at the exchange rates prevailing at the dates of the transactions. Monetary gains and losses
resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement. Such balances are translated at the year-end/quarter end exchange rates unless hedged
by forward exchange contracts, in which case the rates specified in such contracts are used.
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March 2005
4. Deferred tax
Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and
their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred tax.
The principal temporary differences arise from tax losses carried forward. Deferred tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which the temporary differences can be utilised.
5. Income tax
Income taxes currently payable are provided for in accordance with the existing legislation of the various countries in which the Company
operates.
6. Receivables
Receivables are stated at original invoice amount less allowance made for doubtful receivables based on a review of all outstanding amounts
at the year end. An allowance for doubtful receivables is made when there is objective evidence that the Company will not be able to collect
all amounts due according to original terms of receivables. Bad debts are written off when identified.
7. Share capital
Ordinary shares are classified as equity.
8. Cash and cash equivalents
Cash comprises cash at bank. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of change in value.
Revenue is recognised on the following basis:
Interest income and management fees as they accrue unless collectibility is in doubt.
10. Related parties
Related parties are individuals and companies where the individual or company has the ability, directly or indirectly, to control the other
party or exercise significant influence over the other party in making financial and operating decisions.
11. Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.
12. Financial instruments
Financial instruments carried on the balance sheet include investments, receivables, cash and cash equivalents, and trade and other
payables. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item.
13. Unquoted securities
Details of the investments as on December 31, 2004 are as follows:
(a) Unquoted Securities No. of Shares % holding Cost Directors’
(USD) Valuation
USD
TCW/ICICI Investment Partners LLC 300,000 50 300,000 300,000
(b) Investments as on December 31, 2004, which exceeds 10% of the issued share capital are:
Name of Company Description Proportion Held
TCW / ICICI Investment Partners LLC Ordinary shares 50%
14. Agreements
Administration Agreement
The Company has entered into an agreement with International Financial Services Limited (the “Mauritian Administrator”), a company
incorporated under the laws of Mauritius. In consideration of the services to be performed by the Mauritian Administrator, the latter shall
be entitled to receive from the Company a fee based on hours worked by the Mauritian Administrator in the performance of its duties.
172
March 2005
Annexure H - Statement of Accounts of ICICI TRUSTEESHIP SERVICES LIMITED

(Amount in Rupees)
For the Year ended March 31 Nine months
ended December
31, 2004
2001 2002 2003 2004 (unaudited)
INCOME :
Trusteeship Fees 150,000 251,100 390,100 300,100 187,576
Interest Income - - 1,255 46,828 41,809
Dividend - - 800 1,130 1,250
150,000 251,100 392,155 348,058 230,635
LESS: EXPENSES
Audit Fees 6,300 6,300 11,814 10,800 8,492
Director Fees - 9,000 5,000 4,000 3,500
Profession Tax - 4,900 2,500 2,500 2,500
Preliminary expenses written off 14,529 14,529 14,529 14,529 10,897
Interest on Income Tax - - - 2,663 -
Other Expenses - 500 2,132 - 1,500
20,829 35,229 35,975 34,492 26,889
Profit before Tax 129,171 215,871 356,180 313,566 203,746
Less: Provision for Taxation 51,087 80,000 131,000 120,000 75,000
Profit after Tax 78,084 135,871 225,180 193,566 128,746
Add: Excess provision for income tax of earlier years - - - 2,934 -
Net Profit 78,084 135,871 225,180 196,500 128,746
Extent of interest so far as it concerns members of erstwhile
ICICI Ltd. upto March 29, 2002 and ICICI Bank thereafter,
the Holding Company, in the Capital of the Subsidiary 100% 100% 100% 100% 100%
Company thereafter, in the Capital of the Subsidiary 78,084 135,871 225,180 196,500 128,746
Notes
The Company was incorporated on April 29, 1999

(Amount in Rupees)
(unaudited)
ASSETS :
Investments 200
Current Assets, Loans & Advances:
Cash & Bank Balances 1,349,220
Prepaid Expenses -
Income Accrued but not due -
Other Debts 77,668
Loans and Advances 321,359
1,748,447
LESS: LIABILITIES
Secured Loans -
Current Liabilities and Provisions 476,698
Net Worth 1,271,749
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March 2005
(Amount in Rupees)
(unaudited)
REPRESENTED BY :
SHARE CAPITAL :
50,000 Equity Shares of Rs.10/- each fully paid-up
All the above equity shares are held by ICICI Bank Limited - the Holding Company and its nominees 500,000
RESERVES AND SURPLUS 764,381
Corpus Fund (Refer Note 1) 11,000
Less: Miscellaneous Expenditure 3,632
(To the extent not written off or adjusted)
1,271,749
Net Assets so far as it concerns the members of ICICI Bank Ltd.,
the Holding Company and its nominees 100% 1,271,749
Notes:
1. The company in the earlier years, in terms of the Indenture of Trust, received Rs. 1,000/- as corpus fund from ICICI Prudential Life Insurance
Company Ltd. and Rs. 10,000/- from erstwhile ICICI Limited (ICICI), for setting up ICICI Securities Fund, which had been deposited in the
bank account and is included under Cash and Bank Balances.
2. Tax expenses for the half year is on the basis of current tax since there are no timing differences resulting into tax expenses/tax saving on
the deferred tax basis.

1. Basis of preparation of financial statements:
The accompanying financial statements have been prepared under the historical cost convention in accordance with generally accepted
accounting principles and the provisions of the Companies Act, 1956 and the applicable Accounting Standards issued by the Institute of
Chartered Accountants of India.
2. Use of Estimates:
The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the
period in which the results are known/materialise.
3. Revenue Recognition:
Income from Trusteeship Fees is accounted / accrued on the basis of the understanding / agreements with the concerned parties.
4. Income Taxes:
Tax expense represents the aggregate of the current tax and deferred tax. The deferred tax is computed in accordance with the requirements
of the Accounting Standard AS-22 “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.
5. Preliminary Expenses:
Preliminary Expenses towards the incorporation of the company are treated as miscellaneous expenditure and will be written off to the Profit
and Loss Account over a period of 5 years from the year in which the company commences operations.
6. Investments:
Investments classified as long-term investments are stated at cost. Provision is made to recognize a decline if any, other than temporary in
the value of investments.
7. Contingent liabilities:
These, if any, are disclosed in the Notes to Accounts. Provision is made in the accounts in respect of those contingencies, which are likely
to materialise into liabilities after the year-end till the finalisation of accounts and have material effect on the position stated in the Balance
Sheet.
8. Borrowing costs:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets.
A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs
are charged to revenue.
174
March 2005
Annexure I - Statement of Accounts of ICICI BANK CANADA

(Canadian Dollars in thousands)
For the period ended For the period ended
March 31, 2004 December 31, 2004
(unaudited) (unaudited)
INCOME
Interest and Non-interest Income 289 1,502
LESS: EXPENDITURE:
Interest and Administrative expenses 1,621 8,141
Profit/(loss) before tax (1,332) (6,639)
Less: Provision for federal capital tax and Future income tax benefit 402 1,887
Profit/(loss) after tax (930) (4,752)
Extent of interest so far as it concerns members of ICICI Bank, the
Holding Company, in the Capital of the Subsidiary 100% 100%
Amount of profit so far as it concerns the members of ICICI Bank,
the Holding Company in the Capital of the Subsidiary (930) (4,752)
Note:
The Bank is a wholly owned subsidiary of ICICI Bank Limited (the “Parent”). Office of the Superintendent of Financial Institutions, Canada granted
the Bank its Letters Patent of Incorporation on September 12, 2003, and an Order to Commence and Carry on Business (the “Order”) on November
25, 2003. The Bank launched its operations on December 19, 2003.
(Canadian Dollars in thousands)

(unaudited)
ASSETS :
Cash and deposits with regulated financial institutions 11,443
Loans 46,869
Fixed assets 2,214
Investments 60,681
Other assets 3,919
125,126
LESS: LIABILITIES
Deposits 43,572
Current liabilities and provisions 62,236
105,808
Net Worth 19,318
REPRESENTED BY :
(A) SHARE CAPITAL
15,000,000 Common Stock Shares of Canadian Dollar 1 each fully paid-up 15,000
All the above equity shares are held by ICICI Bank Limited, the holding
Company and its nominees
10,000,000 Preference Shares of Canadian Dollar 1 each fully paid-up 10,000
All the above preference shares are held by ICICI Bank Limited,
the holding Company and its nominees .
(B) RESERVES AND SURPLUS :
Profit & Loss Account (5,682)
19,318
the Holding Company and its nominees 100% 19,318
175
March 2005

Pursuant to the Bank Act, the financial statements of ICICI Bank Canada (the “Bank”) have been prepared in accordance with Canadian generally
accepted accounting principles (GAAP), including the accounting requirements of the Office of the Superintendent of Financial Institutions,
Canada (OSFI). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
The Bank is a wholly-owned subsidiary of ICICI Bank Limited (the “Parent”). OSFI granted the Bank its Letters Patent of Incorporation on September
12, 2003, and an Order to Commence and Carry on Business on November 25, 2003. The Bank launched its operations on December 19, 2003.
The significant accounting policies used in the preparation of these financial statements are summarized below:
1. Securities
Securities are classified, based on management’s intentions, as investment account securities or trading account securities.
Investment account securities comprise debt and equity securities, originally purchased with the intention of holding to maturity or for a pre-
determined period of time, which may be sold in response to changes in investment objectives arising from changing market conditions or
to meet liquidity requirements. Debt securities are carried at amortized cost and equity securities are carried at cost. Straight-line method
is used for the amortization of premiums and discounts on debt securities. Interest income is recorded on an accrual basis.
Trading account securities, purchased for resale in the near term, are reported at estimated fair value. No trading account securities were
held at the balance sheet date. The maturity profile of investment account securities is here as under:
Under 1 year 1 to 5 years Over 5 years Total Securities
Government guaranteed 31,758 31,758
Commercial paper 28,923 28,923
Total securities 28,923 31,758 60,681
2. Loans
Loans are stated net of an allowance for credit losses. Interest income is accounted for on an accrual basis and included in other assets.
Loans are classified as impaired when there is no longer reasonable assurance of the timely collection of the full amount of principal or
interest. An allowance for credit losses is maintained at a level that management considers adequate to absorb identified credit related
losses as well as losses that have been incurred but not yet identifiable. This allowance relates primarily to loans, but also to other credit
instruments such as letters of credit, and is either specific or general. The following loans were impaired at the balance sheet date and
specific provisions were created against these loans. Also there is no further interest accrued on these loans.
Gross loans Outstanding balances Specific provisions
Personal loans 15 15 (15)
Lines of credit 54 54 (54)
Total loans 69 69 (69)
The general allowance is provided for losses which management estimates are in the portfolio, not relating to loans specifically identified
as impaired and not yet captured by a specific allowance.
Estimated Gross amount Allowance for Net amount
loss factor credit losses
Commercial loans 0.40% 41,917 (168) 41,749
Residential mortgages 0.25% 3,903 (10) 3,893
Personal loans 0.25% 1,231 (4) 1,227
Total loans 47,051 (182) 46,869
Commercial (off-balance sheet) 1.00% 3,634 (37) 3,597
Personal (off-balance sheet) 0.25% 431 (1) 430
Total contingent liabilities 4,065 (38) 4,027
3. Fixed assets
Fixed assets are carried at cost less accumulated depreciation, which is calculated by using the straight-line method over the estimated
useful life of the asset.
Useful life Cost Accumulated Net book
depreciation value
Computer hardware and software 3 years 1,580 (376) 1,204
Furniture, fixtures and equipment 5 years 634 (84) 550
Leasehold improvements Lease term 546 (86) 460
Total fixed assets 2,760 (546) 2,214
4. Other assets
Other assets are comprised of future income tax asset of $2,334 (note 10), unamortized prepaid expenses and deposits of $320, accrued
interest on loans and investment income of $629 and miscellaneous assets of $636.
5. Deposits
Payable on demand
Interest bearing Non-interest bearing Payable after notice Payable on fixed date Total deposits
Personal 1,544 29,412 7,042 37,998
Commercial 2,582 436 2,214 5,232
Parent (note 8) 342 342
Total deposits 4,126 342 29,848 9,256 43,572
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March 2005
6. Share capital
The Bank is authorized to issue an unlimited number of common shares without par value and an unlimited number of non-voting preferred
shares without par value.
The Bank issued 15 million common shares and 10 million series A preferred shares to its Parent, and these shares have been fully
subscribed. These preferred shares are not redeemable at the option of the Bank, prior to 10 years since their issuance, and bear a fixed non-
cumulative cash dividend.
The Parent held a non-interest bearing deposit of $342 (note 6) with the Bank.
8. Non interest income
Non-interest income includes loan fees, personal and commercial service charges, safety deposit rentals, trade finance fees, gains on
foreign exchange transactions, and capital gain on sale of securities. Income is accounted for on accrual basis.
Loan fees and service charges 60
Trade finance fees 105
Foreign exchange gains 152
Capital gains on sale of securities 155
Total non-interest income 472
9. Income taxes
The Bank uses the asset and liability method of accounting for income taxes whereby income taxes reflect the expected future tax
consequences of temporary differences between the carrying amounts of assets and liabilities for book purposes compared with their
carrying amounts for tax purposes. Accordingly, a future income tax asset or liability is determined for each temporary difference based on
the tax rates that are expected to be in effect when the underlying items of income or expense are expected to be realized. Net future income
taxes accumulated as a result of these temporary differences are included in other assets or other liabilities.
A valuation allowance is established to reduce future income tax assets to an amount that is more likely than not to be realized. A future
income tax asset of $2,334 has been recorded, net of a valuation allowance of $400, using the enacted tax rate of 36.12%.
10. Translation of foreign currencies
Assets and liabilities denominated in foreign currencies are translated into Canadian dollars using the Bank of Canada exchange rates at the
balance sheet date. Revenue and expense amounts denominated in foreign currencies are translated using an average monthly exchange
rate. Realized and unrealized gains and losses resulting from translation are included in the statement of income.
11. Guarantee facility
The Parent has provided a guarantee of $10,000 to Royal Bank of Canada, securing the credit facilities that it may extend to the Bank.
12. Estimated fair value of financial instruments
The estimated fair values of assets and liabilities approximate their book values except securities investments where fair market value is
tabled below:
Book value Market value Positive Variance
Government guaranteed 31,758 32,150 392
Commercial paper 28,923 28,979 56
Total securities 60,681 61,129 448
13. Derivative financial instruments
In the ordinary course of business, the Bank uses derivative financial instruments, primarily over-the counter forward contracts and cross
currency swaps to manage its exposure to currency fluctuations, as part of the Bank’s asset liability management program. The Bank’s policy
is not to utilize derivative financial instruments for trading or speculative purposes.
The Bank hedges exposures on foreign currency denominated assets and liabilities by entering into offsetting foreign currency forward or
swaps contracts, if deemed appropriate. Income and expense arising from off-balance sheet forward contracts and currency swaps entered
into for hedging purposes is recognized on an accrual basis. Any costs relating to hedges are amortized over the life of the contract or the
term of the hedge, as appropriate. At the balance sheet date, other assets and other liabilities of $636 and $249, respectively, arising on
account of conversion of foreign currency swaps and forward contracts, were recognized. These amounts will eventually reverse at the
maturity of the forward and swap contracts.
Derivatives that do not qualify for hedge accounting are carried at fair value on a gross basis as derivative-related amounts in assets and
liabilities, with changes in fair value being recorded in non-interest income. These derivatives are still eligible for designation in future as
hedges. Upon such designation, any previously recorded fair value on the consolidated balance sheet is amortized to non-interest income.
Notional amounts of forward and swap contracts, which are off-balance sheet, serve as reference for calculating payments and are a common
measure of business volume. The following is a summary of the notional amounts, by remaining term to maturity, of the Bank’s derivative
portfolio at the balance sheet date:
Under 1 year 1 to 5 years Over 5 years Total
Forward contracts 7,884 7,884
Cross currency swaps 57,825 57,825
Total notional amounts 65,709 65,709
The following is a summary of the fair value of the Bank’s derivative portfolio at the balance sheet date, classified by positive and negative
fair value:
Positive fair value Negative fair value Net fair value
Forward contracts 328 33 295
Cross currency swaps 1,427 16 1,411
Total fair value 1,755 49 1,706
Current replacement cost is the positive fair value of outstanding derivative financial instruments, which represents the Bank’s derivative
credit exposure.
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March 2005
Credit equivalent amount is the current replacement cost for favorable contracts plus an amount for future credit exposure associated with
the potential for future changes in currency rates for the contracts. Future credit exposure is calculated using a formula prescribed by OSFI.
Risk weighted amount represents the credit equivalent amounts weighted according to the credit worthiness of the counterparty, using
factors prescribed by OSFI.
The following is a summary of the Bank’s derivative portfolio and related credit exposures at the balance sheet date:
Current replacement Credit equivalent Risk weighted
cost amount amount
Forward contracts 328 407 203
Cross currency swaps 1,427 2,005 1,003
Net amounts 1,755 2,412 1,206
14. Contractual reprising and maturity schedule
The table below details our exposure to interest rate risk as defined and prescribed by the Canadian Institute of Chartered Accountants
Section 3860, financial instruments - Disclosure and Presentation. On-balance sheet financial assets and liabilities are reported based on
the earlier of their contractual reprising date or maturity date. Effective interest rates have been disclosed where applicable. The effective
rates shown represent historical rates for fixed-rate instrument and current market rates for floating-rate instrument.
Carrying amount (earlier of contractual repricing or maturity date)
Rate Under 3 to Over 6 to Over 1 to Over Non-interest Total

sensitive 3 months 6 months 12 months 5 years 5 years sensitive
Assets
Cash resources 7,925 3,518 11,443
Interest rate 2.38%
Securities -
Investments 28,922 31,757 60,679
Interest rate 2.59% 4.07%
Loans 3,122 4,413 1,638 3,594 16,021 18,082 46,870
Interest rate 5.52% 4.50% 4.50% 4.50% 5.01% 5.16%
Net fixed assets 2,214 2,214
Interest rate
Other assets 3,920 3,920
Interest rate
Total assets 3,122 41,260 1,638 3,594 47,778 18,082 9,652 125,126
Liabilities and
shareholder’s equity
Deposits 33,974 570 753 4,219 3,564 150 342 43,572
Interest rate 2.75% 2.91% 3.36% 3.15% 3.07% 2.99%
Borrowings 42,070 18,030 60,100
Interest rate 2.68% 3.04%
Other liabilities 2,136 2,136
Interest rate
Shareholder’s equity 19,318 19,318
Interest rate
Total liabilities 33,974 570 42,823 22,249 3,564 150 21,796 125,126
Total gap (30,852) 40,690 (41,185) (18,655) 44,214 17,932 (12,144) (0)
178
March 2005
Annexure J - Statement of Accounts of ICICI PRUDENTIAL LIFE INSURANCE CO. LTD.

Part I - STATEMENT OF PROFITS - SHAREHOLDERS
(Rs. in Thousands)
For the Year ended March 31 Nine months
ended December
31, 2004
2001 2002 2003 2004 (unaudited)
AMOUNT TRANSFERRED TO:
Policyholders’ Account (Technical) Participating - 927,171 706,428 464,766 146,310
Policyholders’ Account (Technical) Non-Participating - 124,697 30,027 93,396 -
Policyholders’ Account (Technical) Annuities Participating - 175,169 221,272 92,378 -
Policyholders’ Account (Technical) Linked - 14,769 362,573 1,292,142 1,577,598
Policyholders’ Account (Technical) Linked Pension - - 263,484 425,064 229,865
(A) - 1,241,806 1,583,784 2,367,746 1,953,773
INCOME FROM INVESTMENTS
(a) Interest/Dividend [Gross] 61,330 107,292 62,019 97,455 67,059
(b) Profit on sale of Investments (net) 4,622 112,347 57,172 45,941 3,552
Fees for Professional Services 1,000 1,011 1,397 89 117
Other Income - 58 19 1,098 146
(B) 66,952 220,708 120,607 144,583 70,874
Operating Expenses
Employees’ remunerations and welfare benefits 7,662 2,974 1,648 2,334 636
Travel, conveyance and vehicle running expenses 2,876 341 49 70 35
Sales Promotion 14,625 692 4,543 10,151 -
Rents, Rates and Taxes 5,983 5 - -
Legal and Professional charges 1,504 6,057 22 560 365
Sale/Write off of Fixed Assets - - 802 829 30
Others 1,506 861 1,527 1,851 3,300
Depreciation 717 142 47 61 22
Preliminary expenses written off 29,820 - - - -
(C) 64,693 11,072 8,638 15,856 4,388
Profit/(Loss) before Tax (B-A-C) 2,259 (1,032,170) (1,471,815) (2,239,019) (1,887,287)
Less : Provision for taxation
(a) Current tax expense - - - - -
(b) Deferred tax income - (18,811) - 23,336 -
- (18,811) - 23,336 -
Profit/ (Loss) after Tax 2,259 (1,050,981) (1,471,815) (2,215,683) (1,887,287)
Company thereafter, in the Capital of the Subsidiary 1,672 (777,726) (1,089,143) (1,639,605) (1,396,592)
Notes:
1. The Company was incorporated on July 20, 2000.
on timing differences has been recognized during the year ended March 31, 2002. The Deferred Tax adjustments for the year ended March
31, 2001 has not been determined and consequently no adjustments have been carried out in the ‘Statement of Profits’ shown above.
3. Till the year ended March 31, 2002 the Company capitalized all improvements to software applications. However in view of the rapid
advancement in technology and faster obsolescence the Company has changed the policy, in year ended March 31, 2003, of capitalization
and only significant improvements to software are capitalized with the insignificant improvements being charged off as software expenses.
Had the company followed previous year’s accounting policy the net deficit for the year ended March 31, 2003 would have been lower by
Rs. 1.45 million and the net block of fixed assets as at March 31, 2003 would have been higher by Rs. 1.45 million. The effect of the same
for each of the year ended March 31, 2001 and 2002 has not been determined and consequently, no adjustments have been carried out in
the Statement of Profits shown above.
4. During year ended March 31, 2003 the Company has changed its accounting policy for provision of leave encashment from arithmetical
basis to actuarial basis. The impact on account of change in accounting policy is an additional liability of Rs. 0.48 million. The effect of the
same for each of the year ended March 31, 2001 and 2002 has not been determined and consequently, no adjustments have been carried
out in the Statement of Profits shown above.
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March 2005

(Rs. in Thousands)
(unaudited)
ASSETS:
Investments 8,978,914
Asset held for Linked business 17,561,093
Fixed Assets (including Capital WIP) 584,840
Loans 24,846
Cash & Bank Balances 693,212
Advances & Other Assets 563,520
28,406,425
Less: Current Liabilities & Provisions 1,638,860
Policyholders’ Funds:
Policy Liabilities
- Participating Business 4,401,524
- Non-Participating Business 1,143,038
- Annuities Participating 1,560,205
- Linked 247,986
- Linked Pension 67,635
- Linked Group Gratuity 1,669
Insurance Reserves :
- Provision for linked liabilities 17,561,094
26,622,011
Net Worth 1,784,414
REPRESENTED BY:
(A) SHARE CAPITAL:
825,000,000 Equity Shares of Rs. 10/- each fully paid-up 8,250,000
Of the above 610,499,993 Equity Shares of Rs.10/- each are held by ICICI Bank Ltd.
(The Holding Company) and 7 shares through its nominees Credit/(Debit) Fair
value Change Account- net 133,791
(B) Reserves and Surplus :
Profit and Loss account (6,628,025)
Fund for future appropriation 28,648
1,784,414
the Holding Company and its nominees 74% 1,320,467
1. Contingent Liabilities
Contingent Liabilities at March 31, 2004 Rs. Nil (March 2003 : Rs. Nil)
2. Actuarial method and assumptions
The actuarial valuation liability on both participating and non-participating policies is calculated using the gross premium method. The gross
premium reserves are calculated using assumptions for interest, mortality, expense, and inflation and in the case of participating policies,
the future bonuses together with allowance for taxation and allocation of profits to shareholders. These assumptions are determined as
prudent estimates at the date of valuation with allowances for adverse deviations.
For the participating policies and non participating term insurance policies, the interest rates used for valuation are in the range of 4% to
6% per annum (Previous year - 4 to 7.75% per annum). For non participating single premium investment policies which are maintained as
a hedged portfolio, the interest rates used for valuation range from 4.7% to 10% per annum (Previous year – 4.7% to 10% per annum).
The valuation has been carried out without assuming lapses or policies becoming paid up. Mortality rates used are based on the published
L.I.C. (1994 – 96) Ultimate Mortality Table, adjusted to reflect expected experience and allowances for adverse deviation. The method of
unearned premium for the unexpired portion of the risk has been adopted for the general fund liabilities of linked business and riders
thereunder, and one year renewable group term insurance.
The charges under unit linked policies to meet future expenses are considered adequate. The unit liability in respect of linked business has
been valued on the basis of the net asset value of the units, to the credit of policyholders, as on the valuation date.
3. Encumbrances on assets
The assets of the Company are free from all encumbrances as at March 31, 2004, as in the previous year.
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March 2005
4. Capital Commitments
Commitments made and outstanding for loans and investment as at March 31, 2004 is Rs. Nil. (Previous year Rs. Nil)
Estimated amount of contracts remaining to be executed on fixed assets to the extent not provided for (net of advance) as at March 31, 2004
is Rs. 25,145 thousand (Previous year Rs. 24,400 thousand).
5. Claims
Claims settled and remaining unpaid for a period of more than six months as at March 31, 2004 amount to Rs. Nil. (Previous Year: Rs. Nil).
6. Taxation
Accounting Standard 22 ‘Accounting for Taxes on Income’ issued by the ICAI states that “‘where an enterprise has unabsorbed depreciation
or carry forward of losses under tax laws, deferred tax assets should be recognized only to the extent that there is virtual certainty supported
by convincing evidence that sufficient future taxable income will be available, against which such deferred tax assets can be realized”.
According to the Accounting Standard Interpretation (ASI) 9 issued by the ICAI on AS 22, “Virtual certainty” refers to “the extent of certainty,
which, for all practical purposes, can be considered certain”.
Accordingly, the net deferred tax asset of Rs. 102,346 thousand has been reversed in the year ended March 31, 2004.
The net deferred tax asset of Rs. 102,346 thousand in previous year was on account of carried forward losses.

1. Background
ICICI Prudential Life Insurance Company Limited (‘the Company’) was incorporated on 20 July, 2000 as a company under the Companies
Act, 1956. The Company is registered with the Insurance Regulatory and Development Authority (‘IRDA’) and is in the business of
underwriting life insurance policies.
The Company’s life insurance business comprises of individual life & group business, including participating, non-participating, annuities,
pension products and linked policies. Some of these policies have riders attached to them such as Accident and Disability Benefit, Level
Term, Critical Illness and Major Surgical Assistance.
2. Summary of significant accounting policies
2.1 Basis of preparation
The accompanying financial statements have been prepared under the historical cost convention, on the accrual basis of accounting,
in compliance with the accounting standards issued by the Institute of Chartered Accountants of India (‘ICAI’), to the extent applicable,
and in accordance with the provisions of the Insurance Act, 1938, Insurance Regulatory and Development Authority Act, 1999, the
Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies)
Regulations, 2002 (‘the Regulations’), and the Companies Act, 1956 to the extent applicable.
2.2 Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent
liabilities as on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are
based upon management’s evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results
could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
2.3 Revenue recognition
2.3.1 Premium income
Premium is recognised as income when due. Uncollected premium on lapsed policies is recognised as income when such
policies are reinstated.
For linked business, premium income is recognized when the associated units are allotted. Fees on linked policies is
recognized when due.
2.3.2 Income earned on investments
Interest income on investments is recognised on an accrual basis. Accretion of discount and amortisation of premium relating
to debt securities is recognised over the holding/maturity period on a straight line basis.
Dividend income is recognised when the right to receive dividend is established.
Realised gain / loss on debt securities for other than linked business is the difference between the sale consideration and the
amortised cost, which is computed on a weighted average basis, as on the date of sale.
In case of listed equity shares / mutual funds units, the profit or loss on actual sale of investment includes the accumulated
changes in the fair value previously recognised under “Fair Value Change Account”.
Realised gain / loss on debt securities for linked business is the difference between the sale consideration and the book cost,
which is computed on weighted average basis, as on the date of sale.
2.3.3 Income earned on loans
Interest income on loans is recognized on an accrual basis.
2.4 Reinsurance premium
Reinsurance premium ceded is accounted in accordance with the treaty or in-principle arrangement with the reinsurer.
2.5 Benefits Paid (Including Claims)
Death and surrender claims are accounted for on receipt of intimation. Maturity claims are accounted when due for payment.
Reinsurance on such claims is accounted for, in the same period as the related claims.
2.6 Acquisition Costs
Acquisition costs are costs that vary, with and are primarily related to the acquisition of new and renewal insurance contracts. Such
costs are expensed in the year in which they are incurred.
2.7 Liability for life policies in force
Liability for life policies in force and also policies in respect of which premium has been discontinued but a liability exists, is
determined by the Appointed Actuary on the basis of an annual review of the life insurance business, as per the gross premium
method in accordance with accepted actuarial practice, requirements of the IRDA and the Actuarial Society of India. The linked policies
sold by the Company carry two types of liabilities – unit liability representing the fund value of policies and non-unit liability for future
expenses, meeting death claims, income taxes and cost of any guarantees. Actuarial policies and assumptions are given in note 3.2
below.
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March 2005
2.8 Investments
Investments are recorded at cost on the date of purchase, which includes brokerage, if any and excludes interest paid on purchases.
2.8.1 Classification
Investments maturing within twelve months from the balance sheet date and investments made with the specific intention to
dispose off within twelve months from the balance sheet date are classified as short-term.
Investments other than short term are classified as long-term investments.
2.8.2 Valuation – shareholders’ investments and non-linked policyholders’ investments
All debt securities are considered as ‘held to maturity’ and accordingly stated at historical cost, subject to amortisation of
premium or accretion of discount in the revenue account or the profit and loss account over the period of maturity/holding on
a straight line basis.
Listed equity shares as at the balance sheet date are stated at fair value being the last quoted closing price on the National Stock
Exchange (‘NSE’). Mutual fund units as at the balance sheet date are valued at the previous day’s net asset values. Equity shares
awaiting listing are stated at historical cost subject to provision for diminution, if any, in the value of such investment determined
separately for each individual investment.
Unrealised gains/ losses arising due to changes in the fair value of listed equity shares and mutual fund units are taken to “Fair
Value Change Account” and carried forward in the balance sheet.
Investment in real estate is valued at historical cost, subject to provision for impairment, if any. Revaluation of investment in real
estate is done at least once in every three years.
2.8.3 Valuation-linked business
Government securites are valued at prices obtained from Credit Rating Information Services of India Ltd. (‘CRISIL’). Debt
securities, other than Government securites, are valued on the basis of CRISIL Bond Valuer.
Listed equity shares are valued at fair value, being the last quoted closing price on the NSE. Mutual fund units are valued at the
previous day’s net asset values.
Unrealized gains and losses are recognized in the scheme’s revenue account.
2.8.4 Transfer of investments
In order to meet the deficit in the Policyholders’ account the Company transfers investments from Shareholders’ fund to
Policyholders’ fund.
Prior to the receipt of circular dated 29 October, 2003 on “Transfer of funds by the life insurance companies” issued by IRDA,
such transfers were carried out at market value. However, effective the date of receipt of the circular i.e. 6 November, 2003, the
Company effects such transfers at lower of cost or market value.
The circular permits transfer of only approved investments from shareholders’ assets at market price where the policyholders’
fund size does not exceed Rs. 50 crores. This change in accounting policy does not have a material impact on the financial
statement.
2.9 Loans
Loans are stated at historical cost, subject to provision for impairment.
2.10 Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation. Cost includes the purchase price and any cost directly attributable to
bringing the asset to its working condition for its intended use. Assets costing upto Rs. 20,000 (Rupees twenty thousand) are fully
depreciated in the year of acquisition. Significant improvements to software are capitalized with the insignificant improvements being
charged off as software expenses. Depreciation is provided on Straight-Line Method (‘SLM’) prorated from the date of acquisition / upto
the date of sale, with reference to the management’s assessment of the estimated useful life for each class of asset, as stated below:
Asset Estimated useful life
Leasehold improvements Renewable period of respective leases, subject to a maximum of 9
years.
Communication networks and servers 4 years
Computers and peripheral equipments 3 years
Software 3 years
Office Equipment 4 years
Furniture & Fixtures 4 years
2.11 Accounting for leases
Operating leases
Leases where the lessor, effectively retains substantially all the risks and benefits of ownership over the leased term, are classified as
operating leases. Operating lease rentals are recognized as an income/expense, as applicable, over the lease period.
2.12 Staff benefits
The Company has incorporated a Provident Fund trust. The contribution to which is under defined contribution plan. Company’s
liability towards the same is at the rate specified in the trust deed and is charged to the revenue account and profit & loss account.
The Company has incorporated a gratuity trust. The trust has taken a group policy from the Company to cover the liability towards
gratuity. The Company’s liability towards gratuity - a defined benefit plan, is accounted for on the basis of an independent actuarial
valuation done at the year end and is charged to the revenue account and the profit & loss account.
The Company’s liability towards leave encashment benefits is accounted for on the basis of an independent actuarial valuation done
at the year end and is charged to the revenue account and the profit & loss account.
2.13 Foreign exchange transactions
Transactions in foreign currencies are recorded at the exchange rates prevailing at the date of the transaction. Exchange differences
arising on foreign currency transactions settled during the year are recognised in the revenue account or the profit and loss account.
Current assets and liabilities in foreign currency, if any, are translated at the year-end closing rates. The resulting exchange gain or
loss, if any, is reflected in the revenue account or the profit and loss account.
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2.14 Taxation
Income tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and
deferred tax charge or credit (reflecting the tax effects of timing differences between the accounting income and taxable income for the
period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that
have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. However,
where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there
is virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or
written up to reflect the amount that is reasonably or virtually certain to be realized.
2.15 Contingencies
Contingent losses arising from claims other than insurance claims, litigation, assessment, fines, penalties, etc. are recorded when it
is probable that a liability has been incurred and the amount can be reasonably estimated.
3.1 Investments
The investments are effected from the respective funds of the policyholders and shareholders and income thereon has been accounted
accordingly.
3.2 Allocation of expenses
Operating expenses relating to insurance business are allocated to specific business segments – participating, non-participating, annuities
and linked on the following consistently applied bases:
- Expenses that are directly identifiable to the business class are allocated on actual basis.
- Other expenses, that are not directly identifiable, are allocated on either of the following basis:
- Number of policies;
- Weighted annualized first year premium income;
- Sum assured;
- Total premium income; and
- Medical cases
Custody charges and other investment management expenses are allocated to policyholders and shareholders on the basis of funds under
management.
The method of allocation has been decided based on the nature of the expense and its logical co-relation with various business segments.
3.3 Risks retained and reinsured
Extent of risk retained and reinsured is as follows:
31st March, 2004 31st March, 2003
Individual
Risk retained 94% 95%
Risk reinsured 6% 5%
Group
Risk retained 54% 42%
Risk reinsured 46% 58%
3.4 Investments
- All investments are performing investments.
- Investments under Section 7 of the Insurance Act, 1938 are as follows:
(Rs. in thousands)
March 31, 2004 March 31, 2003
Balance with Reserve Bank of India 1,000 1,000
7.40% Govt. of India Securities * 45,204 12,342
* This investment is in the custody of Deutsche Bank AG, Indian branch in Constituent Subsidiary General Ledger Account under
intimation to IRDA.
3.5 Value of unsettled contracts relating to investments as at March 31, 2004 are as follows:
(Rs. in thousands)
Particulars March 31, 2004 March 31, 2003
Linked Business Non-linked Business Linked Business Non-linked Business
Purchases where deliveries are pending 134,766 80,435 14,410 41,790
Sales where receipts are overdue Nil Nil Nil Nil
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March 2005
Annexure K - Statement of Accounts of ICICI LOMBARD GENERAL INSURANCE CO. LTD.

(Rs. in Thousands)
ended December
31, 2004
2001 2002 2003 2004 (unaudited)
OPERATING PROFIT/(LOSS)
Fire Insurance - (571) (47,099) 383,131 345,496
Marine Insurance - (3) (14,395) (70,243) (66,566)
Miscellaneous Insurance - (130,120) (8,921) (43,009) (105,062)
Income from investments
Interest & Dividend [Gross] - 51,996 88,825 119,904 94,226
Profit /(Loss) on sale of Investments (Net) - 643 27,239 46,251 94,603
Interest other - 14 - -
Other Income - - 479 408 644
- (78,041) 46,128 436,442 363,341
LESS : OTHER EXPENSES
Expenses other than those related to insurance business
Employees’ remunerations and welfare benefits 4,503 12,595 2,654 2,193 1,696
Travel, conveyance and vehicle running expenses 1,297 3,065 - - -
Training expenses 1,204 1,574 - - -
Rents, Rates and Taxes 2,089 9,704 - - -
Legal and Professional charges 1,093 2,196 - - -
Others 1,822 2,538 63 90 240
Preliminary expenses written off 653 1,558 1,558 4,020 -
Share issue expenses - - - 7,700 -
12,661 33,230 4,275 14,003 1,936
Profit / (Loss) before Tax (12,661) (111,271) 41,853 422,439 361,405
(a) Current tax expense - (2,750) 3,600 111,000 61,500
(b) Deferred tax income - 29,200 5,273 (6,400) (3,200)
- 26,450 8,873 104,600 58,300
Profit/ (Loss) after Tax (12,661) (84,821) 32,980 317,839 303,105
ICICI Ltd., upto March 29, 2002 and ICICI Bank thereafter,
Amount of profit so far as it concerns the members of
erstwhile ICICI Ltd. upto March 29, 2002 and ICICI Bank,
the Holding Company thereafter, in the Capital of the
Subsidiary (12,661) (62,768) 24,405 235,201 224,298
Notes:
1. The Company was incorporated on October 30, 2000.
2. During the year ended March 31, 2003, the Company had changed its accounting policy relating to recognition of reinsurance commission
income. In the earlier year, the Company used to recognise commission income upfront on cession of reinsurance business. Consequent
to the change in accounting policy, the commission income, transfer to shareholders account are lower by Rs. 182,500 thousands, operating
loss is higher by Rs. 182,500 thousands, profit before taxes is lower by Rs. 182,500 thousands. The effect of the same for each of the year
ended March 31, 2001 and 2002 has not been determined and consequently, no adjustments have been carried out in the Statement of
Profits shown above.
3. During the year ended March 31, 2004, the Company has changed its accounting policy for preliminary expenses. Preliminary expenses to
the extent not written off have been fully written off as compared to the earlier policy of being amortized over a period of five years, resulting
in preliminary expenses to the extent not written off and profit for the year before tax being lower by Rs. 2,462 thousand. The effect of the
same for each of the year ended March 31, 2001, 2002 and 2003 has not been determined and consequently, no adjustments have been
carried out in the Statement of Profits shown above.
4. During the year ended March 31, 2004, the Company has changed its accounting policy relating to reinsurance commission income. In the
previous year, the Company recognized commission on reinsurance ceded over the contract period. Had the Company continued to follow
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March 2005
the accounting policy followed in the previous year, the commission income, transfer to shareholders’ account, operating profit, profit
before tax would have been lower by Rs. 335,936 thousand and unearned commission would have been higher by Rs. 335,936 thousand.
The effect of the same for each of the year ended March 31, 2001, 2002 and 2003 has not been determined and consequently, no
adjustments have been carried out in the Statement of Profits shown above.
5. During the year ended March 31, 2004, the Company has changed its accounting policy for leave encashment. Leave encashment liability
has been provided for on the basis of actual leave balance as at the year end as against the earlier policy of being provided for on the basis
of actuarial valuation. The impact of the change is presently not quantifiable, but in the opinion of the management, it is not expected to be
material. The effect of the same for each of the year ended March 31, 2001, 2002 and 2003 has not been determined and consequently, no
adjustments have been carried out in the Statement of Profits shown above.
6. During the nine months ended December 31, 2004, the Company has changed its accounting policy relating to depreciation on computer
software acquired on or after April 1, 2004. In the previous period, depreciation on computer software was provided @ 20 percent except
for expenditure less than Rs. 500,000 which were fully depreciated in the year in which incurred. Had the company continued to follow the
accounting policy followed in previous period, the amount transferred to shareholder’s account, operating profit, profit before tax would
have been lower by Rs. 13,896 thousand and accumulated depreciation would have been higher by Rs. 13,896 thousand. The effect of the
same for each of the year ended March 31, 2001, 2002 and 2003 has not been determined and consequently, no adjustments have been
carried out in the Statement of Profits shown above.
(Rs. in Thousands)

(unaudited)
ASSETS:
Investments 4,963,848
Fixed Assets 327,322
Deferred Tax asset 38,200
Cash and bank balances 31,056
Advances and other assets 1,945,289
7,305,715
Less: Current Liabilities & Provisions 4,695,287
2,610,428
REPRESENTED BY :
(A) SHARE CAPITAL :
220,000,000 Equity Shares of Rs. 10/- each fully paid-up 2,200,000
Of the above 162,799,300 Equity Shares of Rs.10/- each are held by ICICI Bank Ltd.
(the Holding Company) and 700 shares through its nominees
Profit and Loss account 238,053
Fair value change account 172,375
2,610,428
Net Assets so far as it concerns the members of ICICI Bank Ltd., the Holding Company
and its nominees 74.00% 1,931,717
Notes:
1. Contingent liabilities at December 31, 2004 is Rs. Nil (March 31, 2004 Rs. Nil).
2. The assets of the Company are free from all encumbrances.
3. Estimated amount of contracts remaining to be executed on fixed assets and not provided for (net of advances) is Rs. 12,144 thousand (March
31, 2004 Rs. 5,332 thousands).
4. Claims
Claims, less reinsurance, paid to claimants in / outside India are as under:
(Rs. in thousands)
For the Nine Months ended For the year ended
December 31, 2004 March 31, 2004
In India 860,545 493,074
Outside India Nil Nil
The Company does not have any liability relating to claims, where the claim payment period exceed four years.
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March 2005
Ageing of claims
Ageing of claims is as set out below:
(Rs. in thousands)
For the Nine Months ended For the year ended
More than six months 556,050 .433,941
Others 1,170,453 572,694
Claims settled and remaining unpaid for more than six months is Rs. Nil (March 31, 2004 Rs. Nil).

1. Background
ICICI Lombard General Insurance Company Limited (‘the Company’) was incorporated on October 30, 2000. The Company obtained
regulatory approval to undertake General Insurance business on August 3, 2001 from the Insurance Regulatory and Development Authority
(‘IRDA’).
2. Basis of preparation of financial statements
The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting, and
comply with the applicable accounting standards issued by the Institute of Chartered Accountants of India (‘ICAI’), and in accordance with
the provisions of the Insurance Act, 1938, Insurance Regulatory and Development Authority Act, 1999, the Insurance Regulatory and
Development Authority (Preparation of Financial Statements and Auditor’s Report of Insurance Companies Regulations), 2002 (‘the Regulations’)
and orders / directions issued by the IRDA in this behalf, the Companies Act, 1956 to the extent applicable and in the manner so required.
3. Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent
liabilities on the date of the financial statements. Actual results may differ from those estimates. Any revision to accounting estimates is
recognised prospectively in current and future periods.
Premium income
Premium earned is recognised as income over the period of risk or the contract period based on 1/365 method, whichever is appropriate
on a gross basis. Any subsequent revision to premium is recognised over the remaining period of risk or contract period.
Adjustments to premium income arising on cancellation of policies is recognized in the year in which it is cancelled.
Income from reinsurance business
Commission on reinsurance business is recognized at the inception of the contract as income in the year of ceding the risk.
Profit commission under re-insurance treaties is recognized as income in the year of determination of profits.
Income earned on investments
Interest income on investments is recognized on an accrual basis. Accretion of discount and amortisation of premium relating to debt
securities is recognised over the holding/maturity period on a straight-line basis.
Dividend income is recognised when the right to receive dividend is established.
Realized gain / loss on securities, which is the difference between the sale consideration and the carrying value in the books of the Company
is recognised on the date of sale. In determining the realized gain / loss, cost of securities is arrived at on ‘Weighted average cost’ basis.
However in case of listed equity shares, the profit or loss also includes the accumulated changes in the fair value previously recognised
under the heading Fair Value Change Account in respect of the particular security, which is transferred to the profit and loss account on the
date of sale.
5. Premium received in Advance
This represents premium received during the year, where the risk commences subsequent to the Balance Sheet date.
6. Reinsurance premium
Insurance premium on ceding of the risk is recognised in the year in which the risk commences, over the period of contract or period of risk,
whichever is appropriate. Any subsequent revision to premium ceded is recognised over the remaining period of risk or contract period.
Adjustment to reinsurance premium arising on cancellation of policies is recognised in the year in which it is cancelled.
7. Reserve for unexpired risk
Reserve for unexpired risk is recognised net of reinsurance ceded and represents premium written that is attributable and to be allocated
to succeeding accounting periods for risks to be borne by the Company under contractual obligations. It is calculated on a daily pro-rata basis
subject to a minimum of 50% of the premium, written during the twelve months preceding the balance sheet date for fire, marine cargo and
miscellaneous business and 100% for marine hull business, in accordance with section 64 V (1) (ii) (b) of the Insurance Act, 1938.
8. Claims
Claims comprise the claims made for losses incurred and those estimated or anticipated under the policies following a loss occurrence and
specific claim settlement costs such as survey / legal fees and other directly attributable costs.
Estimated liability for claims after adjusting claims recoverable from / payable to reinsurers / co-insurers are accounted for as and when
intimated/reported, upto the end of the financial year.
Provisions for claims are based on individual case estimates received. The estimates are regularly reviewed and updated as additional
information on the estimated claims becomes known.
Estimated liability for claims Incurred But Not Reported (‘IBNR’) and claims Incurred But Not Enough Reported (‘IBNER’) is based on actuarial
estimate duly certified by the appointed Actuary. Assumptions used by the Actuary are disclosed in note 18 below.
9. Acquisition Costs
Acquisition costs are those costs that vary with, and are primarily costs related to the acquisition of new and renewal insurance contracts viz.
commission, policy issue expenses, etc. These costs are expensed in the year in which they are incurred.
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March 2005
10. Premium deficiency

Premium deficiency is recognised when the sum of expected claim costs, related expenses and maintenance costs exceed the reserve for
unexpired risks and is computed business segment wise.
11. Investments
Investments are recorded at cost on trade date and include brokerage, transfer charges, stamps etc, if any, and excludes interest accrued up
to the date of purchase.
Classification
Investments maturing within twelve months from balance sheet date and investments made with the specific intention to dispose off within
twelve months are classified as ‘short term investments’.
All other investments are classified as ‘long term investments’.
Valuation
All debt securities including government securities are considered as ‘held to maturity’ and accordingly stated at historical cost subject to
amortisation of premium or accretion of discount on a straight line basis over the holding/maturity period.
Listed equity shares as at the balance sheet date are stated at fair value, being the lowest of last quoted closing price on the National Stock
Exchange or The Stock Exchange, Mumbai.
Mutual fund investments are stated at fair value, being the closing net asset value as at balance sheet date.
Unrealized gain / loss arising due to changes in fair value of listed equity shares is not taken to profit and loss account but is taken to the Fair
value change account. This balance in the fair value change account is not available for distribution, pending realisation.
12. Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation. Cost includes the purchase price and any cost directly attributable to bringing
the asset to its working condition for its intended use.
Depreciation on assets added/disposed off during the year is provided on pro rata basis with reference to the month of additions /
deductions.
Depreciation is provided on a straight-line basis, pro-rata for the period of use at the rates prescribed in Schedule XIV to the Companies Act,
1956 except in the cases set out below where depreciation is provided at a rate higher than those prescribed under Schedule XIV to the
Companies Act, 1956.
Depreciation on information technology equipment is provided @ 25 percent.
Depreciation on computer software is provided @ 20 percent.
The Company has changed its accounting policy relating to depreciation on computer software acquired on or after April 1, 2004. In the
previous period, depreciation on computer software was provided @ 20 percent except for expenditure less than Rs. 500,000 which were
fully depreciated in the year in which incurred. Had the company continued to follow the accounting policy followed in previous period, the
amount transferred to shareholder’s account, operating profit, profit before tax would have been lower by Rs. 13,896 thousand and
accumulated depreciation would have been higher by Rs. 13,896 thousand.
All assets individually costing less than Rs. 5,000 are fully depreciated in the year in which incurred.
13. Retirement benefits
Provident fund
This is a defined contribution scheme and contributions payable to the Regional Provident Fund Authority is provided on the basis of
specified percentage of salary and is charged to Profit and Loss account and Revenue account(s).
Gratuity
Gratuity, which is a defined benefit scheme is made on the basis of by actuarial valuation and is charged to Profit and Loss account and
Revenue account(s).
Basis of allocation
Retirement benefit expense are allocated to profit and loss account and revenue account on the basis as explained in paragraph 17.
14. Foreign currency transactions
Transactions denominated in foreign currencies are recorded at the rates prevailing on the date of the transaction. Foreign exchange
denominated current assets and liabilities, are translated at the rates prevalent at the date of the Balance Sheet. The resultant gains/ losses
are recognized in the Profit and Loss Account and Revenue Account(s).
15. Taxation
Current tax
The Company provides for income tax on the basis of estimated taxable income for the current accounting period in accordance with the
provisions of the Income Tax Act, 1961.
Deferred tax
Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences between the accounting
income as per the Company’s financial statements and the taxable income for the year.
Deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future, however, where
there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual
certainty of realisation of such assets.
Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/
virtually certain to be realised.
16. Contingencies
Loss contingencies arising from claims, litigation, assessment, fines, penalties etc. are recorded when it is probable that a liability has been
incurred and the amount can be reasonably estimated.
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17. Premium
Premium, less reinsurance, written from business in/outside India is given below:
(Rs. in thousands)
Particulars For the Nine Months ended For the year ended
December31, 2004 March 31, 2004
In India 2,224,150 1,298,166
Outside India Nil Nil
18. Investments
Value of contracts in relation to investments for:
Purchases where deliveries are pending Rs. Nil (Previous year Rs. Nil);
Sales where payments are overdue Rs. Nil (Previous year Rs. Nil).
Historical cost of investments that are valued on fair value basis is Rs. 1,010,904 thousand (Previous year Rs. 527,014 thousand).
All investments are made in accordance with the Insurance Act, 1938 and Insurance Regulatory and Development Authority (Investment)
Regulations, 2000 and are performing investments.
The Company does not have any investment property as at December 31, 2004 (previous year: Rs. Nil).
19. Allocation of income and expenses
Allocation of investment income
Investment income has been allocated between revenue accounts and profit and loss account on the basis of the ratio of average
policyholders funds to average shareholders funds respectively, average being the balance at the beginning of the year and that at the end
of the year.
Allocation of expenses
Operating expenses relating to insurance business are allocated to specific classes of business on the following basis:
- Expenses that are directly identifiable to a business class are allocated on actuals.
- Other expenses, that are not directly identifiable, are broadly allocated on the basis of gross written premium earned in each business
class.
20. As on December 31, 2004 an amount of Rs. 14,543 thousand (March 31, 2004 Rs. 8,674 thousand) collected towards Environment Relief
fund under Public Liability policies has been disclosed under current liabilities and the same is invested in Government Securities.
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Annexure L - Statement of Accounts of ICICI VENTURE FUND MANAGEMENT COMPANY LIMITED

(Rs. in crores)
For the Year ended March 31, Period
ended December
31, 2004
2000 2001 2002 2003 2004 (Unaudited)
INCOME:
Income from Operations 364.09 34.42 18.84 33.82 104.13 45.47
Profit on Sale of Investments 4.93 - 1.24 1.45 1.96 1.81
Provision for doubtful debts, advances

& expenses written back 0.40 1.63 0.15 0.07 0.11 -
Profit on Sale of asset (net) - - - 0.02 - -
Other Income 0.05 0.31 0.08 0.30 0.51 1.41
369.47 36.36 20.31 35.66 106.71 48.69
LESS: EXPENDITURE:
Cost of Sales of Securities held as Stock-in-Trade 305.36 4.93 - - 59.20 1.33
Staff Expenses 3.38 3.10 4.55 6.22 6.54 5.96
Establishment Expenses 0.71 1.03 1.88 2.09 2.83 2.09
Other Expenses 6.41 6.47 3.59 7.55 5.54 6.58
Provision for Contingencies - 1.00 - - - -
Depreciation 1.01 1.36 1.34 1.23 1.21 1.07
316.87 17.89 11.36 17.09 75.32 17.03
Profit Before Taxation 52.60 18.47 8.95 18.57 31.39 31.66
Deferred Tax - - 0.37 (0.45) 0.17 (0.62)
Profit After Taxation 38.35 10.45 5.58 12.50 25.97 19.98

erstwhile ICICI Ltd. upto March 29, 2002 and
in the Capital of the Subsidiary 100% 99.99% 99.99% 99.99% 99.99% 99.99%

ICICI Bank, the Holding Company thereafter, in the
Capital of the Subsidiary 38.35 10.45 5.58 12.50 25.97 19.98
Note:
1. Consequent upon Accounting Standard 22 ‘Accounting for Taxes on Income becoming mandatory effective April 1, 2001, the Deferred Tax
shown above.
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March 2005
(Rs. in crores)
(unaudited)
ASSETS :
Fixed Assets (net of depreciation) 13.13
Investments 27.10
Current Assets & Advances 4.26
LESS: LIABILITIES
Loan Funds 0.88
Current Liabilities and Provisions 11.45
Deferred Tax Liability 1.28
Net worth 30.88
REPRESENTED BY :
SHARE CAPITAL :
31,25,000 Equity Shares of Rs.10/- each fully paid-up
(Of the above 3,124,890 shares have been subscribed by ICICI Bank Ltd. 2.34
the Holding Company)
(Of the above 125,000 shares have been issued as fully paid,
pursuant to a contract without payment being received in cash)
RESERVES & SURPLUS:
Capital Redemption Reserve 0.78
General Reserve 23.78
Amalgamation Reserve -
Surplus in Profit & Loss Account 3.98
30.88
the Holding Company 99.99% 30.87
Note:
1. Estimated amount of Contracts remaining to be executed on capital account not provided for (net of advances, if any) – Rs. 0.34 crore. (Period
ended March 31, 2004 – Rs. 3.78 crores).
2. (a) Pursuant to resolution for reduction of capital passed at the extraordinary general meeting of the company held on 11 November, 2003,
the company has filed a petition under Section 100 of the Companies Act, 1956, in the High Court, Karnataka. The company proposed
to reduce the paid up capital by canceling 2,125,000 equity shares of Rs. 10 each and cancel the General Reserve of Rs. 6.08 crores,
Amalgamation Reserve of Rs. 4.79 crores and surplus in Profit & Loss account of Rs. 2.20 crores. The aforesaid petition is pending
confirmation by the High Court. The said resolution was modified at the extraordinary general meeting of the company held on
1 September, 2004 and further modified at the extraordinary general meeting of the company held on 5 November, 2004 to reduce the
paid up capital by cancelling 1,343,827 equity shares of Rs. 10 each and cancel the General Reserve of Rs. 20.05 crores.
(b) In accordance with section 77A of the Companies Act, 1956, at the extraordinary general meeting of the company held on 5 November
2004, the members approved a buy-back of upto 781,200 shares at a price of Rs. 136.80 per share. Accordingly, 781,173 shares were
bought back, resulting in cancellation of share capital of Rs. 7,811,730 & Free Reserves of Rs. 99,052,736. Consequently, share capital
of the Company stand reduced to 2,343,827 shares of Rs. 10 each, aggregating to Rs. 2.34 crores and General Reserve stand reduced
to Rs. 23.78 crores.
Further, in accordance with provisions of section 77AA, a sum equal to nominal value of shares bought back, amounting to Rs. 0.78 crores
has been transferred to Capital Redemption Reserve, by appropriating from General Reserve.
3. Provision for tax of Rs. 11.68 crores (Period ended March 31, 2004– Rs.5.42 crores) includes provision for deferred tax amounting to Rs.
(0.62) crore. (Period ended March 31, 2004 – Rs.0.17 crores).
4. Pursuant to resolution passed at the meeting of the Board of Directors of the Company, held on 21 July 2004, the company has decided not
to carry on activities of Non Banking Financial Companies under section 45-IA (6) (i) and applied to Reserve Bank of India for cancellation of
certificate of registration as an Non Banking Financial Company. The Reserve Bank of India vide its order dated September 27, 2004 has,
cancelled as surrendered, the certificate of registration granted to the Company. Consequently the Statutory Reserve, created in pursuance
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March 2005
of section 45-IC of the Reserve Bank of India (Amendment) Act, 1997, amounting to Rs 20.99 crores has been treated as free reserve and
transferred to General Reserve.
5. During the year 1999-00, the Company had given on lease certain Plant & Machinery. However, due to down turn in industry, the lessee
defaulted in payment of Lease rentals. Consequently, the lease was restructured during the year 2001-02 and terms of lease were revised.
The company, as a matter of prudence had provided for Rs 1 crore towards the probable loss arising from non-payment of future minimum
lease payments and the same is being carried as provision for contingencies.
6. Pursuant to resolution passed at the meeting of the Board of Directors of the Company, held on 21 July 2004, the Company has decided not
to carry on activities of Non-Banking Financial Companies under section 45IA (6) (i) and accordingly surrendered the certificate of registration
granted by the Reserve Bank of India. This cessation of business amounts to terminating through abandonment separate major line of
business, as defined under Accounting Standard 24 “Discontinuing Operations”.
The disclosure required by the Accounting Standard 24, “Discontinuing Operations” in respect of initial disclosure event is given below
(Rupees in crores)
For the period

ended Dec 31,2004
Revenue from discontinuing operations 2.06
Expenses from discontinuing operations 1.57
Pre tax profit/(loss) from ordinary activities attributable to discontinuing operations 0.49
Carrying amounts as at Balance Sheet of total assets 4.47
Carrying amounts as at Balance Sheet of total liabilities 1.00
Net Cash flows attributable to discontinuing operations 1.88
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March 2005
OPERATIONS & SIGNIFICANT ACCOUNTING POLICIES

The following paragraphs describe the nature of operations, the basis of presentation and the main accounting policies adopted by the company.
1. Nature of Operations
The Company is a public financial institution and provides venture capital assistance to a wide spectrum of industrial sectors. The assistance
is extended through the Venture Funds and the Private Equity Funds managed/advised by the Company. The accounts of these Funds are
maintained separately and do not form part of the Company’s financial statements.
2. Basis of Presentation
ICICI Venture Funds Management Company Limited maintains the Books of Account in accordance with Section 209 of the Companies Act,
1956. The accounting and reporting policies of the company are in conformity with the provisions of the Companies Act, 1956 and the
Accounting Standards issued by the Institute of Chartered Accountants of India. The Company’s assets and liabilities are principally
recorded on the historical cost basis and the accrual method of accounting is followed, except where otherwise noted. The principal
accounting policies followed are consistent with those followed in the previous year.
3. Income Recognition
i. As Fund Manager, the Company is entitled to an annual management fee and a performance fee, which is contingent on the payouts
to the Fund investors. In respect of the Private Equity Funds advised by the Company, the Company is entitled to an advisory fee. The
annual management fee, performance fee and the advisory fee are recognized as revenue when they contractually accrue except
where the management believes that the collectability is in doubt.
ii. Dividend income from investment in units of Mutual Fund is recognized on cash basis. Dividend from shares of corporate bodies is
accrued when such dividend has been declared by the corporate body in its Annual General Meeting and the Company’s right to
receive the dividend payment is established.
iii. Income on securities classified as stock-in-trade is recognised on trade date.
iv. Interest is recognised, except where collectability is in doubt, on time proportionate basis taking into account the amount outstanding
and the interest rates implicit in the transaction. Revenue recognition on loans placed in non-accrual status is resumed and the
suspended income is recognised when the investment becomes contractually current and incomes are actually realised.
v. No credit is taken for interest and other dues in respect of (a) decreed debts, (b) where suits have been filed, (c) where loans have
been recalled and (d) where accounts are considered bad or doubtful.
4. Foreign Exchange Transactions
Transactions in foreign currency, to the extent not covered by forward contracts, are recorded at the exchange rate prevailing on the date
of the transaction. Exchange differences arising on foreign currency transactions are recognised as income or expense in the period in
which they arise.
Monetary items (other than those relating to fixed assets) are restated at the rates prevailing at the year end. The difference between the
year end rate and the exchange rate at the date of the transaction is recognised as income or expense in the profit and loss account.
5. Investments
Long-term Investments are carried at cost. Provision for diminution, if any, in the value of long-term investments is made to recognise a
decline, which is not temporary. The said diminution is determined for each investment individually. Current Investments are stated at
lower of cost or fair value.
6. Stock-in-trade
Units and Securities held for trading purposes are classified as Stock-in-trade. Stock-in-trade is stated at lower of cost or market value.
7. Leasing Business
Lease income is recognized on accrual basis, except where collectability is in doubt. In respect of assets leased, all of which were leased
prior to Accounting Standard 19 – Leases, issued by the Institute of Chartered Accountants of India becoming mandatory, the company has
followed the recommendations contained in the guidance note on Accounting for Leases issued by the Institute of Chartered Accountants
of India. The corresponding assets are depreciated at the rates and in the manner prescribed under Schedule XIV to the Companies Act,
1956.
Fixed Assets are stated at cost less accumulated depreciation. Additions, major renewals and improvements are capitalized, while
maintenance and repairs are expensed. Upon disposition, the net book value of assets is relieved and resultant gains and losses are
reflected in the Profit and Loss Statement. The basis of depreciation is as follows:
a) In respect of leased assets (other than vehicles leased to third parties), depreciation is provided on straight-line method at the rates
and in the manner prescribed under Schedule XIV to the Companies Act, 1956.
b) In respect of all other assets, depreciation is provided on written-down value method at the rates and in the manner prescribed under
Schedule XIV to the Companies Act, 1956.
9. Employee Benefits
The Company has a Superannuation fund and a gratuity fund maintained and administered by Life Insurance Corporation of India to which
transfers are made annually based on advises received from the Life Insurance Corporation of India. Additionally, the Company also makes
monthly contributions to the Employees Provident Fund Scheme managed by a trust constituted for the purpose and to the Family Pension
Scheme administered by the Central Government. Contributions to retirement benefit schemes are booked under staff expenses.
Provision for unutilised leave benefits has been made on the basis of management estimates.
10. Income Tax
Income tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year.
Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying values of
the assets and liabilities and their respective tax bases. Deferred tax assets are recognized subject to the management’s judgment that
realization is virtually certain.
Deferred tax assets and liabilities are measured using enacted tax rates applicable on the Balance Sheet date. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the income statement in the period of enactment of the change.
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March 2005
Annexure M - Statement of Accounts of ICICI Bank UK Limited

(US Dollars in thousands)
Period from Period from April 1,
February 11, 2003 2004 to Dec 31, 2004
to March 31, 2004 (unaudited)
INCOME
Operating Income 1,552 12,076
LESS: EXPENDITURE:
Interest expended 187 4,670
Salaries and employee benefits 1,636 2,808
Other administrative expenses 1,976 4,336
(2,247) 262
Extent of interest so far as it concerns members of ICICI Bank the
Holding Company, in the Capital of the Subsidiary 100% 100%
the Holding Company in the Capital of the Subsidiary (2,247) 262
PART II - STATEMENT OF ASSETS AND LIABILITIES
(US Dollars in thousands)

(unaudited)
ASSETS :
Cash and cash equivalents 198,830
Fixed assets 1,921
Loans 282,856
Other assets 140,738
624,345
LESS: LIABILITIES :
Deposits 236,292
Current liabilities and provisions 290,038
526,330
Net Worth 98,015
REPRESENTED BY :
(A) SHARE CAPITAL
50,000,000 Equity Shares of US Dollar 1 each fully paid-up 50,000
50,000,000 Preference Shares 50,000
All the above equity shares are held by ICICI Bank Limited, the holding
Company and its nominees
Profit & Loss Account (1,985)
98,015
Note :
1. ICICI Bank UK Limited (ICICI Bank UK) was incorporated on February 11, 2003 as a 100% subsidiary of ICICI Bank Limited for banking
operations in the United Kingdom. The Company was incorporated as a private company with the Registrar of Companies for England and
Wales.
2. As at December 31, 2004, USD 1,132,749 of fees and commissions receivable consists of non-refundable arrangement and other fees
earned by the Company on credit facilities granted during the period. In accordance with the accounting policy, these fees have been
recognised up-front.
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March 2005
3. As at December 31, 2004, there were deferred tax assets of USD 694,000 in respect of tax losses carried forward and USD 355,248 in
respect of a timing difference on the creation of a general provision for bad and doubtful debts. The Directors have considered it prudent
not to recognise these assets based on current profitability levels. The Directors of the Company are not aware of any factors which will have
a material effect upon future tax charges other than the tax losses carried forward as noted above.
4 Commitments
(a) Other commitments
USD in thousands USD in thousands
Loan commitments (undrawn credit lines) – one year or less 46,588 36,124
(b) Significant concentrations of contingent liabilities and commitments
Approximately 39% of total contingent liabilities and commitments relate to counterparties in India.
(c) Foreign exchange contracts
In addition to the commitments disclosed above, there are outstanding foreign exchange contracts for purchases of USD 27,428 and
sales of USD 42,920
5. Risk management
Through its banking services the Company is exposed to a range of risks. To manage these risks the Company has established the following
committees and functions to assist the Board of Directors: Governance Committee; Audit Committee; Credit Committee; Asset and Liability
Committee; and Internal Audit.
Major risks
Credit risk
Credit risk arises principally on the lending activities of the bank. Credit risk policies are applied by the Credit Committee which operates
within the authority granted to it by the Board. Country and counterparty limits are established and monitored on a daily basis, with a detailed
review at least once a year. Management receives regular reports on the utilisation of these limits.
Interest rate risk
Interest rate risk primarily arises on the mis-matching of the banks assets with its funding. This is monitored daily and is managed by the
Asset and Liability Committee. Principal limits have been established for the Company’s assets and liabilities when allocated to time bands
by reference to the next contractual repricing date.
Liquidity risk
Liquidity risk arises on the mis-matching of the residual maturity of the Company’s assets and funding. This is also monitored daily, and is
managed by the Asset and Liability Committee. Limits have been established for each time band and incorporate FSA agreed limits.
Foreign exchange risk
Foreign exchange risk is managed within the treasury function. Policies and procedures are detailed in an operational procedures manual.
This incorporates FSA agreed limits, and other regulatory bodies requirements and best practices. It is subject to periodic review by Internal
Audit, and is approved by the Board. Senior management also regularly monitors the positions taken on a daily basis.
Operational risk
Operational risk is the risk of loss resulting from inadequate or failed internal process, people and systems or from external events. The
Company’s operational risk framework is subject to procedural policies and best practice standards, with senior management being
responsible for their implementation and maintenance. Adherence to these policies is also subject to periodic review by Internal Audit.
6. Derivative and exchange rate contracts
The Company enters into various financial instruments as principal to manage balance sheet interest rate and foreign exchange rate risk. At
the period end, the principal amounts and fair values of the instruments were:
December 31, 2004 USD in thousands
Principal amount Positive Fair Values Negative Fair Values
Exchange rate related contracts 70,169 126 0
Exchange rate related contracts are predominantly spot transactions but will also include currency swaps and forwards. The Company’s
currency swap transactions generally involve an exchange of currencies and an agreement to re-exchange the currency at a future date
where the swaps relate to assets and liabilities denominated in different currencies.
The contract or notional principal amounts of these instruments are not indicative of the amounts at risk which are smaller amounts payable
under the terms of these instruments and upon the basis of the contract or notional principal amount. Derivatives contracts are used for
hedging purposes only and are executed with bank counterparties for whom volume and settlement limits have been approved. Group
limits are approved for connected exposures.
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March 2005

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
Company’s financial statements:
1. Accounting convention
The financial statements have been prepared under the historical cost convention and in accordance with the special provisions of Part VII,
Chapter II of the Companies Act, 1985 relating to banking companies, applicable accounting standards and the British Bankers’ Association
Statements of Recommended Accounting Practice.
2. Cash flow statement
As a wholly owned subsidiary whose parent produces publicly available accounts (see note 23), the Company has taken advantage of the
exemption available within FRS 1 (revised), “Cash Flow Statements”, and does not produce a cash flow statement.
3. Loans and advances
Loans and advances are stated at cost after deduction of amounts which in the opinion of the directors are required as specific or general
provisions. Where loans have been acquired at a premium or discount, these premiums and discounts are amortised through the profit and
loss account from the date of acquisition to the date of maturity on a straight line basis.
Loans are designated as non-performing as soon as management has doubts as to the ultimate collectibility of the principal or interest. Loans
are also considered to be non-performing if principal or interest is 90 days overdue. When a loan is designated as non-performing, interest
will be suspended and a specific provision raised if required.
Specific provisions
Specific provisions represent the quantification of the actual or expected losses from identified accounts and are deducted from loans and
advances on the balance sheet. The amount of the specific provision raised is assessed on a case by case basis. The amount of specific
provision raised is the Company’s conservative estimate of the amount needed to reduce the carrying value of the asset to its expected net
realisable value.
General provisions
General provisions augment specific provisions and provide cover for loans which are impaired at the balance sheet date but which will not
be identified as such until some time in the future. The general provision is determined by taking into account the structure and risk of the
Company’s loan portfolio. General provisions are deducted from loans and advances in the balance sheet.
4. Foreign currencies
The financial statements are prepared in US Dollars, which represents the currency of the primary economic environment in which the
Company operates since a significant proportion of the banking assets and liabilities, revenues and expenses are transacted in US Dollars.
Monetary assets and liabilities denominated in foreign currencies are translated into US Dollars at the exchange rates ruling at the balance
sheet date and the gains or losses on translation are included in the profit and loss account. Income and expenses denominated in foreign
currencies are converted into US Dollars at the rate of exchange ruling at the date of the transaction. Forward foreign exchange contracts
are valued at the market rates applicable to their respective maturities at the balance sheet date, and the resulting profits or losses included
in the profit and loss account for the year.
5. Depreciation
Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets on a straight-line basis over their
estimated useful economic lives as follows:
Leasehold improvements Over the lease period
Office equipment 6 – 7 years
Furniture, fixtures and fittings 6 – 7 years
Computer hardware and software 3 – 4 years
6. Interest income and expense
Interest receivable and payable is accrued over the period of the related loans and deposits.
7. Fees and commissions receivable
Fees and commissions are taken to income once the related service has been provided and the right to receive the associated fees has been
established.
8. Fees and commissions payable
Fees and commissions payable on borrowings are expensed to the profit and loss account over the life of the borrowing.
9. Taxation
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and
for accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19 “Deferred
Tax”. Deferred tax assets are recognised to the extent that, on the basis of all available evidence, it can be regarded as more likely than not
that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
10. Pension costs
The Company operates a stakeholder pension scheme. Contributions to the scheme are charged to the profit and loss account when paid.
USD 42,214 in contributions were made during the period.
11. Leases
Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease.
12. Off-balance sheet financial derivatives
Off-balance sheet financial derivatives are entered into by the Company for hedging purposes to reduce the risks arising on transactions
entered into in the normal course of business. The income and expense arising from off-balance sheet financial derivatives entered into
for hedging purposes is recognised in the accounts in accordance with the accounting treatment of the underlying transactions or
transactions being hedged. All off-balance sheet financial derivatives are held for the period in which the underlying hedge matures. To
qualify as a hedge, a derivative must effectively reduce the price or interest rate risk of the asset, liability or anticipated transaction to which
it is linked and be designated as a hedge at inception of the derivative contract. Accordingly, changes in the market value of the derivative
must be highly correlated with changes in the market value of the underlying hedged item at inception of the hedge and over the life of the
hedge contract.
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March 2005
Annexure N - Statement of Accounts of ICICI DISTRIBUTION FINANCE PRIVATE LIMITED

(Rupees in crores)
For the year ended April 04
March 31, 2004 to Dec 31, 2004
(unaudited)
REVENUE:
Hire Purchase Income 2.99 0.49
Interest income 1.64 0.21
Discounting Charges 0.43 -
Distribution Finance Income 8.89 -
Other Income 3.75 2.27
17.70 2.97
EXPENDITURE:
Employee Expenses 1.79 -
Hire Purchase /Consumer Finance Expenses 0.13 0.02
Administrative Expenses 2.64 0.32
Interest and Bank Charges 4.03 0.13
Bad Debts 2.46 1.65
Provision for Doubtful Debts 0.49 -
Excess provision for losses written back (0.06) -
Depreciation 0.21 -
Total Expenses 11.69 2.12
Profit /Loss Before Tax from Operations 6.01 0.85
Current tax expense 2.65 0.31
Profit/ (Loss) after Tax 3.36 0.54
Extent of interest so far as it concerns members of ICICI Bank,
the Holding Company, in the Capital of the Subsidiary 100.00% 100.00%
the Holding Company in the Capital of the Subsidiary 3.36 0.54
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March 2005

(Rupees in crores)
As at December 31, 2004
(unaudited)
ASSETS:
Investments -
Loans and Advances 14.01
Stock on hire 0.22
Cash and bank balances 51.49
Other Assets 1.22
66.94
LIABILITIES:
Current Liabilities & Provisions 14.16
Unsecured Loans -
Net Worth 52.78
REPRESENTED BY :
(A) SHARE CAPITAL :
8,750,000 Equity Shares of Rs. 10/- each fully paid-up
All the above equity shares are held by ICICI Bank Limited,
the holding Company and its nominees. 8.75
Profit and Loss account 0.55
Share Premium Account 34.46
Reserve Fund as per RBI Act 3.63
General Reserve 2.50
Capital Redemption Reserve 2.89
52.78
Net Worth 52.78
the Holding Company and its nominees 100% 52.78
Notes:
1 On January 3, 2003 the then shareholders of the Company had signed a Share Purchase Agreement to transfer their entire shareholding
in the Company to ICICI Bank Limited (the Bank) and accordingly on May 7, 2003, the transfer of shares was completed. Consequent to the
transfer of shares, the Company has become a wholly owned subsidiary of the Bank. As per the approval of the Reserve Bank of India (RBI)
dated March 31, 2003 received by the Bank for the acquisition of these shares, the Bank is required to initiate proceedings for the voluntary
winding up of the Company after the business is transferred to the Bank’s balance sheet. Hence the financial statements are not prepared
on the going concern assumption.
Adjustments relating to the recoverability and the classification of recorded asset amount or to amounts and classification of liabilities that
may be necessary on winding up of the Company have been made based on management’s assessment of the same.
All assets and liabilities have been stated at net realisable value.
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March 2005
2. SIGNIFICANT ACCOUNTING POLICIES

a) System of Accounting
The financial statements are prepared under the historical cost convention, on accrual basis and in accordance with the provisions of the
Companies Act, 1956 and accounting principles generally accepted in India. As stated in para1 (a), the financial statements have not been
prepared on a going concern basis.
b) Fixed assets
Fixed assets are stated at lower of net realisable value and written down value.
c) Investments
Long term investments are carried at cost of acquisition less provision for diminution in value, if any, other than of temporary nature.
d) Stock on hire
Stock on hire under hire purchase agreements is valued at the aggregate of future installment receivable and is net of unmatured finance
charges and installments received in advance.
e) Income recognition
i. Income is accounted for on accrual basis except income relating to assets for which installments/ interest has remained overdue for
more than six months. In such cases income is recognized only when it is received.
ii. Hire Purchase and Consumer Finance income is accounted for using the Internal Rate of Return (IRR) implicit in the contracts, so as to
provide a constant periodic rate of return on the balance principal amount outstanding on those contracts.
iii. Front-ended service charges are treated as income of the period in which they accrue.
iv. Delayed payment charges, in case of Consumer Finance/Hire Purchase are accounted for on receipt basis.
v. Interest income is accounted for on time accrual basis.
f) Depreciation
Depreciation on fixed assets is provided on the Straight Line Method over the estimated useful life. Depreciation on assets acquired /
disposed off during the year is provided pro-rata from / up to the month of acquisition/ disposal. The useful life of the assets is estimated
as under:
Asset Estimated Useful life Rate of Depreciation (%)
Computers 3 yrs 33.33
Office Equipment 5 yrs 20.00
Furniture & Fixtures 5 yrs 20.00
Vehicles 5 yrs 20.00
Assets costing less than Rs. 5,000/- are depreciated at the rate of 100% during the year.
g) Taxation
Income-tax expense is accrued in accordance with Accounting Standard 22 “Accounting for taxes on income” issued by Institute of Chartered
Accountants of India, which includes current and deferred taxes. Deferred income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal of timing differences of earlier years. In view of the transfer of the
Company’s shares to ICICI Bank Limited and impending winding up of the Company as required by the Reserve Bank of India (refer Note 1
above), no deferred tax asset has been recognized.
h) Earnings per equity share (EPS)
Basic and diluted EPS is reported in accordance with Accounting Standard 20 “ Earnings Per Share” issued by the Institute of Chartered
Accountants of India. Basis of EPS has been computed by dividing net profit after tax by weighted average number of equity shares
outstanding for the period. Diluted EPS has been computed using the weighted average number of equity shares and dilutive potential
equity shares outstanding during the year.
3. Contingent Liability (not provided for) – Disputed Sales Tax Demand Rs. 6,81,69,226/-
198
March 2005
Annexure O - Statement of Accounts of ICICI INVESTMENT MANAGEMENT CO. LTD.

(Rs. in Thousands)
ended December
31, 2004
2001 2002 2003 2004 (unaudited)
INCOME:
Interest Income 10,944 11,179 10,340 7,193 5,425
Dividend Income - 73 591 315 1
Other Income - - 11 - -
Profit on sale of Investment - - - 9 -
10,944 11,252 10,942 7,517 5,426
LESS: EXPENDITURE
Professional Fees - 8,779 - - -
Establishment and other expenses - - 2,217 2,727 1,765
Annual Fees – SEBI - - 250 250 750
Other Expenses 6 15 13 12 11
Auditor’s Remuneration 6 53 37 38 25
Misc. Expenditure W/off 257 257 257 257 192
Interest on Income Tax - - 30 50 -
269 9,104 2,803 3,334 2,743
Profit Before Tax 10,675 2,148 8,139 4,183 2,683
Less : Provision for Current Taxation [net] 4,450 750 2,897 1,182 1,051
Profit After Tax 6,225 1,398 5,242 3,001 1,632
Amount of profit so far as it concerns the members of
erstwhile ICICI Ltd. upto March 29, 2002 and ICICI Bank,
the Holding Company thereafter, in the Capital of the Subsidiary 6,225 1,398 5,242 3,001 1,632
Note:
The Company was incorporated on March 9, 2000.

(Rupees in Thousands)
(unaudited)
ASSETS :
Investments 14,375
Current Assets
Interest accrued on Fixed Deposits 9,743
Bank Balance & Deposits 92,817
Other Current Assets 6,373
LESS: LIABILITIES:
Current Liabilities and Provisions 5,866
Net Worth 117,442
199
March 2005
(Rupees in Thousands)
(unaudited)
REPRESENTED BY :
SHARE CAPITAL :
10,000,700 Equity Shares of Rs.10/- each fully paid-up
All the above equity shares are held by ICICI Bank Limited,
the holding Company and its nominees. 100,007

Profit & Loss Account 17,499
Less: Miscellaneous Expenditure 64
(To the extent not written off or adjusted) 117,442
Net Assets so far as it concerns the members of ICICI Bank Ltd,

Note:
1. There is no deferred tax liability in case of the Company.
SIGNIFICANT ACCOUNTING POLICIES :

1. Method of Accounting :
The accounts are prepared in accordance with accounting principles generally accepted in India. The Company follows the accrual method
of accounting.
2. Preliminary Expenses :
Preliminary Expenses towards the incorporation of the Company are treated as Miscellaneous Expenditure and are written off to the Profit
and Loss Account over a period of 5 years. Accordingly, the fifth and final preliminary expense will be written off during the current financial
year ending March 2005.
3. Revenue Recognition :
Interest income and other dues are accounted on accrual basis. Dividend is recognised when declared.
4. Investments:
Long term investments are carried at cost less diminution, other than temporary.
200
March 2005
ICICI BANK LIMITED

(Rs. in crore)
CONSOLIDATED STATEMENT OF PROFITS Year ended Period ended
Interest Earned
Interest / discount on advances / bills 6,198.91 5,011.28
Income on investments 2,645.39 1,766.96
Interest on balances with Reserve Bank of India and other inter-bank funds 219.39 176.87
Others 180.63 138.93
Total (A) 9,244.32 7,094.04

Other Income
Commission, exchange and brokerage 1,203.72 1,498.54
Profit / (Loss) on sale of investments (net) 1,417.54 458.90
Profit / (Loss) on revaluation of investments (net) 1.05 1.93
Profit / (Loss) on foreign exchange transactions (net)
(including premium amortisation) 208.61 205.92
Profit/(Loss) on sale of land, buildings and other assets (net) (3.28) (9.97)
Miscellaneous Income [including lease income] 1,725.38 2,136.02
Total (B) 4,553.02 4,291.34

TOTAL INCOME (C) = (A) + (B) 13,797.34 11,385.38
Interest Expended
Interest on deposits 3,019.43 2,276.53

Interest on Reserve Bank of India / inter-bank borrowings 323.10 299.20
Others 3,825.13 2,339.99
Total (D) 7,167.66 4,915.72

Operating Expenses
Payments to and provisions for employees 710.66 774.65
Depreciation on fixed assets [including leased assets] 560.89 465.55
Other operating expenses 2,921.88 3,286.54
Total (E) 4,193.43 4,526.74
TOTAL EXPENSES (F) = (D) + (E) 11,361.09 9,442.46

Net Income before provisions (C) - (F) 2,436.25 1,942.92
Less : Provision for taxes (net of deferred tax for Q Sep 2004
Rs. 84.82 crore FY 2004 Rs. 9.16 crore) 339.84 366.31
Provision for advances [net] 487.31 93.71
Provision for investments (including credit substitutes) (net) 8.68 263.19
Other provisions [including additional depreciation /
(write-back of depreciation) on investments] 20.79 12.43
Total Provisions 856.62 735.64

NET PROFIT AFTER TAX AND BEFORE MINORITY INTEREST 1,579.63 1,207.28
Less : Minority Interest (0.75) (40.17)
NET PROFIT 1,580.38 1,247.45
201
March 2005
(Rs. in crore)
CONSOLIDATED BALANCE SHEET As on As on
ASSETS
Cash in Hand 484.92 476.89
Balance with RBI 4,961.37 6,980.91
Balance with Banks
I. In India
i) Balances with banks
a) in Current Accounts 389.66 453.15
b) in Other Deposit Accounts 1,187.66 851.16
ii) Money at call & short notice
a) with banks - 1,153.00
b) with other institutions - 6.00
Total (I) 1,577.32 2,463.31
II. Outside India
i) in Current Accounts 301.33 365.39
ii in Other Deposit Accounts 1,248.40 2,280.93
iii) Money at call & short notice 415.07 278.15
Total (II) 1,964.80 2,924.47
Balance with Banks Total 3,542.12 5,387.78
Investments
I. Investments in India
i) Government securities 31,841.87 31,315.96
ii) Other approved securities 30.12 31.88
iii) Shares * 2,949.17 2,928.49
iv) Debentures and Bonds 6,491.61 4,860.67
v) Subsidiaries and/or joint ventures 1.33 1.32
vi) Others (CPs, Mutual Fund Units, etc.) 4,219.61 5,267.17
Total (I) 45,533.71 44,405.49
II. Investments outside India 41.08 1,558.64

Investments Total 45,574.79 45,964.13
Advances
I. In India 63,243.62 75,642.64
II. Outside India 1,152.20 4,303.04
Advances Total 64,395.82 79,945.68
Fixed Assets 4,147.07 3,987.05
Others Assets 7,641.52 11,157.24
TOTAL ASSETS 130,747.61 153,899.68
202
March 2005
CONSOLIDATED BALANCE SHEET As on As on

LIABILITIES
Deposits
Demand Deposits
- From Banks 135.32 185.44
- From Others 7,109.79 8,999.12
Saving Deposits 8,372.22 10,831.18
Term Deposits -
- From Banks 5,041.88 2,757.83
- From Others 47,419.52 59,823.38
Deposits Total 68,078.73 82,596.95
Borrowings
I. In India
i) Reserve Bank of India -
ii) Other banks 3,683.11 5,147.10
iii) Other institutions and agencies
a) From Government of India 441.15 380.65
b) From Financial Institutions 5,845.95 5,668.10
Borrowings in the form of
a) Deposits taken over from erstwhile ICICI Limited 465.97 332.66
b) Commercial Paper 74.28 97.79
c) Bonds & Debentures (excluding subordinated debt)
1) Debentures & Bonds guaranteed by the Government of India 1,481.50 1,481.50
2) Tax free Bonds -
3) Non convertible portion of partly convertible notes -
4) Borrowings under private placement of bonds carrying
maturity of one to thirty years from the date of placement 4,815.06 4,009.20
5) Bonds Issued under multiple option/safety bonds series 10,208.58 8,013.91
6) Application Money pending allotment -
Total (I) 27,015.60 25,130.91
II. Outside India 7,942.47 11,462.47
Borrowings Total 34,958.07 36,593.38
Other Liabilities & Provisions 9,426.84 11,136.47
Unsecured Redeemable Debenture/Bonds (Subordinated for Tier II capital) 9,105.86 8,374.51
Minority Interest 11.12 124.36
Liabilities on Life Policies in force 1,061.06 2,498.32
Total Liabilities
(excluding Share Capital and Reserves and Surplus) 122,641.68
A) SHARE CAPITAL :
i) Issued, Subscribed and Paid-up equity share capital
[refer note (1)] 616.40 735.89
ii) Preference Share Capital [refer note (2) and (3)] 350.00 350.00
Share Capital Total 966.40 1,085.89
i) Statutory Reserve 977.20 961.40
ii) Debenture Redemtion Reserve - -
iii) Special Reserve 1,192.49 1,195.81
iv) Capital Reserve 481.32 482.10
v) Share Premium 884.30 3,987.24
vi) Investment Fluctuation Reserve 780.33 790.57
vii) Revenue & Other Reserves 2,823.88 2,878.16
viii) Balance in Profit & Loss Account - 1,194.52
Reserves and Surplus Total 7,139.52 11,489.80
Total Share capital and Reserves and Surplus 8,105.92 12,575.69
TOTAL LIABILITIES 130,747.61 153,899.68
203
March 2005
NOTES :
1. Includes :-
a) 31,818,180 underlying equity shares consequent to the ADS issue.
b) 23,539,800 equity shares issued to the equity shareholders of Bank of Madura Limited amalgamation.
c) 264,465,582 equity shares issued to the equity shareholders [excluding ADS holders] of erstwhile ICICI Limited on amalgamation.
d) 128,207,142 underlying equity shares issued to the ADS holders of erstwhile ICICI Limited on amalgamation.
2. Includes:-
a) 108,928,571 equity shares issued consequent to public issue vide prospectus dated April 12, 2004
b) 6,992,187 equity shares on exercise of the green shoe option
c) 3,615,486 equity shares on exercise of employee stock option (March 31, 2004: 3,370,604 equity shares; December 31, 2003 :
2,193,213 equity shares)
3. The notification from Ministry of Finance has currently exempted the Bank from the restriction of section 12 (1) of the Banking Regulation Act,
1949, which prohibits issue of preference shares by banks.
CONTINGENT LIABILITIES As on March 31, 2004 As on Decemeber 31, 2004
i) Claim against Bank not acknowledged as debts 2,514.67 2,252.19

ii) Liability for partly paid investments 124.14 16.84
iii) Liability on account of outstanding forward exchange contracts 55,735.26 62,806.16
iv) Guarantees given on behalf of constituents 12,029.00 14,655.88
v) Acceptances, endorsements & other obligations 6,523.99 9,573.49
vi) Currency Swaps 4,430.26 7,303.73
vii) Interest rate Swaps 126,603.08 183,627.35
viii) Other items for which Bank is contingently liable 4,059.93 8,269.35
TOTAL CONTINGENT LIABILITIES 212,020.33 288,504.99
Bills for collection 1,510.94 2,052.22
204
March 2005
SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
OVERVIEW
ICICI Bank Limited together with its subsidiaries, joint ventures and associates (collectively, the Group) is a diversified financial services group
providing a variety of banking and financial services including project finance, working capital finance, venture capital finance, investment
banking, treasury products and services, retail banking and broking.
ICICI Bank Limited (”ICICI Bank” or ”the Bank”), incorporated in Vadodara, India is a publicly held bank engaged in providing a wide range of
banking and financial services including commercial banking and treasury operations. ICICI Bank is a banking company governed by the Banking
Regulation Act, 1949.
Principles of consolidation
The consolidated financial statements include the accounts of ICICI Bank Limited, its subsidiaries, associates and joint ventures.
The Bank consolidates all subsidiaries as defined in Accounting Standard (”AS”) 21 “Consolidated Financial Statements” issued by the Institute
of Chartered Accountants of India (”ICAI”) on line by line basis by adding together like items of assets, liabilities, income and expenses. Further,
the Bank accounts for investments in associates as defined by AS 23 “Accounting for Investments in Associates in Consolidated Financial
Statements” by the equity method of accounting. The Bank has investments in certain joint ventures, which have been consolidated by the
proportionate consolidation method as required by AS 27 on “Financial Reporting of Interests in Joint Ventures.” The financial statements of two
companies which are in the nature of jointly controlled entities, have been consolidated as per AS 21 “Consolidated Financial Statements” issued
by the ICAI, consequent to the limited revision to AS 27 “Financial Reporting of Interests in Joint Ventures” issued by the ICAI.
Basis of preparation
The accounting and reporting policies of the Group used in the preparation of these financial statements conform with the Accounting Standards
issued by ICAI, the guidelines issued by the Reserve Bank of India (”RBI”), Insurance Regulatory and Development Association (”IRDA”) and
National Housing Bank (”NHB”) from time to time as applicable to relevant companies and generally accepted accounting principles prevailing in
India.
The Group follows the accrual method of accounting except where otherwise stated and historical cost convention. In case the accounting
policies followed by a subsidiary, joint venture or associate are different from those followed by ICICI Bank Limited, the same are disclosed
separately.
The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the
reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future
results could differ from these estimates.
These financial statements have been prepared in accordance with AS 25 on “Interim Financial Reporting” issued by the ICAI. Certain expenditure,
including retirement benefits, are determined for the whole accounting year and for the interim period accounts, the same are considered on a
pro-rata basis.
The consolidated financial statements include the results of the following entities:
Sr. No Name of the compan Country/ residence Relation Ownersinterest
1 ICICI Securities Limited India Subsidiary 99.92%
2 ICICI Brokerage Services Limited India Subsidiary 99.92%
3 ICICI Securities Inc. USA Subsidiary 99.92%
4 ICICI Securities Holding Inc. USA Subsidiary 99.92%
5 ICICI Venture Funds Management Company Limited India Subsidiary 99.99%
6 ICICI Home Finance Company Limited India Subsidiary 100.00%
7 ICICI Trusteeship Services Limited India Subsidiary 100.00%
8 ICICI Investment Management Company Limited India Subsidiary 100.00%
9 ICICI International Limited Mauritius Subsidiary 100.00%
10 ICICI Bank UK Limited United Kingdom Subsidiary 100.00%
11 ICICI Distribution Finance Private Limited India Subsidiary 100.00%
12 ICICI Bank Canada Canada Subsidiary 100.00%
13 ICICI Property Trust India Direct holding 100.00%
14 ICICI Eco-net Internet & Technology Fund India Direct holding 92.12%
15 ICICI Equity Fund India Direct holding 100.00%
16 ICICI Emerging Sectors Fund India Direct holding 98.88%
17 ICICI Strategic Investments Fund India Direct holding 100.00%
205
March 2005
The financial statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the Bank, i.e. period
ended December 31, 2004.
As per the approASSal oAS As per the approvel of the Reserve Bank of India (RBI) dated March 31, 2003 received by the Bank for the acquisition
of ICICI DistributionFinance Private Limited (IDFPL), the Bank is required to initiate proceedings forvoluntarywiupofIDFafterthebusinesistransferrthe
Bank’s balance sheet. Hence, the financials of IDFPL are not prepared on a going concern basis.
Adjustments relating to the recoverability and the classification of recorded asset amount or to amounts and classification of liabilities that may
be necessary on winding up of IDFPL have been made based on management’s assessment of the s.All assets and liabilrealvalue. The investment
in TCW/ICICI Investment Partners LLC. (holding of the Bank is 50%) is accounted under equity method as per AS 23. TCW/ICICI Investment
Partners LLC. is an asset and fund management company, which undertakes financial, trust, agency, investment other operations that may arise
in connection therewith.
The Bank has adopted AS 27 and the investments in the following compaccounted in accordance with the provisions of AS 27 :-
Sr. No. Name of the company Country/ residence Percentage holding
1 Prudential ICICI Asset Management Company Limited India **44.99%
2 Prudential ICICI Trust Limited India **44.80%
** Indicates holding by ICICI Bank Limited along with its subsidiaries.
The financial statements of the following companies which are in the nature of jointly controlled entities, have been consolidated as per AS 21
“Consolidated Financial Statements” issued by the ICAI, consequent to the limited revision to AS 27 “Financial Reporting of Interests in Joint
Ventures” issued by the ICAI. The said companies, for the previous year were consolidated as per AS 27 “Financial Reporting of Interests in Joint
Ventures” issued by the ICAI. The figures for the previous year have not been re-grouped in respect of these jointly controlled companies.
Accordingly, the figures for the previous year are not comparable to that extent.
Sr. No. Name of the company Country/ residence Percentage holding
1 ICICI Prudential Life Insurance Company Limited India 74.00%
2 ICICI Lombard General Insurance Company Limited India 74.00%
The companies in which ICICI Bank’s holding is temporary in nature are excluded from consolidation.
Equity issue of ICICI Bank Limited
During April 2004, the Bank made an issue of 115,920,758 equity shares (including 6,992,187 equity shares issued by exercise of green shoe
option) of Rs.10 each at a premium of Rs. 270 per share aggregating Rs. 3,245.8 crore under the Prospectus dated April 12, 2004. The expenses
of the issue have been charged to the Share Premium Account, in accordance with the objects of the Issue stated in Prospectus.
A. SIGNIFICANT ACCOUNTING POLICIES
ICICI Bank Limited
a) Interest income is recognised in the profit and loss account as it accrues except in the case of non-performing assets where it is recognised,
upon realisation, as per the prudential norms of RBI. Accrual of income is also suspended considering economic conditions and other risk
factors, on certain other loans, including certain projects under implementation, where the implementation has been significantly delayed
or in the opinion of the management significant uncertainties exist as to the final financial closure and/ or date of completion of the project.
b) Effective April 1, 2004 the commissions paid to direct marketing agents (DMAs) for auto loans, is recorded upfront in the profit and loss
account net of subvention income received from them. For disbursements made till March 31, 2004, the gross commissions paid to direct
marketing agents (DMAs) for auto loans were recorded upfront in the profit and loss account and subvention income received from them
were being amortised over the life of the loan.
c) Income from hire purchase operations is accrued by applying the interest rate implicit on outstanding balances.
d) Income from leases is calculated by applying the interest rate implicit in the lease to the net investment outstanding on the lease over the
primary lease period. Leases effected from April 1, 2001 have been accounted as per Accounting Standard 19 on “Accounting for Leases”
issued by ICAI Accordingly, leases effected from April 1, 2001 are accounted as advances at an amount equal to the net investment in the
lease. The lease rentals are apportioned between principal and finance income based on a pattern reflecting a constant periodic return on
the net investment of outstanding in respect of finance lease. The principal amount is recognised as repayment of advances and the finance
income is reported as interest income.
e) Income on discounted instruments is recognised over the tenure of the instrument on a constant yield basis.
f) Dividend is accounted on an accrual basis when the right to receive the dividend is established.
g) Fees received as a compensation of future interest sacrifice is amortised over the remaining period of the facility.
h) Arranger’s fee is accrued proportionately where more than 75% of the total amount of finance has been arranged.
i) All other fees are recognised upfront on their becoming due.
j) Income arising from sell down/securitisation of loan assets is recognised upfront, net of future servicing cost for assets sold, expected
prepayment and projected delinquencies and included in interest income.
k) Guarantee commission is recognised over the period of the guarantee.
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March 2005
Other entities
l) Fees earned on non-fund based activities such as issue management, loan syndication, financial advisory services etc., are recognised
m) Income from brokerage activities is recognised as income on the trade date of the transaction.Related expenditure incurred for procuring
business are accounted for as procurement expenses.
n) The fund management company is entitled to annual management fee and a performance fee, which is contingent on the payouts to the fund
investors. The annual management fee, performance fee and the advisory fee are recognized as revenue when they contractually accrue
except where the management believes that the collectability is in doubt.
o) In case of life insurance business, insurance premium is recognised as income when due. Uncollected premium on lapsed policies is
recognised as income when such policies are reinstated. For linked business, premium is recognised when the associated units are
allotted. Fees on linked policies is recognised when due.
In case of general insurance business, insurance premium is recognised as income over the contract period based on 1/365 method or over
the period of risk whichever is appropriate on a gross basis. Any subsequent revision to premium is recognised over the remaining period
of risk or contract period. Adjustments to premium income arising on cancellation of policies is recognised in the year in which it is
cancelled. Premium deficiency is recognised if the sum of expected claim costs, related expenses and maintenance costs exceeds related
reserves for unexpired risks. Commission on reinsurance business is recognised at the inception of the contract as income in the year of
ceding the risk.
p) In case of the venture funds, realised gains and losses on investments and units in mutual fund and unrealized gains or losses on
restatement of units in mutual fund are dealt with in the revenue account. The cost of investments sold is determined on weighted average
basis and the cost of units in mutual fund sold is determined on first-in, first-out basis for the purpose of calculating gains or losses on sale.
2. Investments
ICICI Bank Limited
Investments are valued in accordance with the extant RBI guidelines on investment classification and valuation as under:
a) All investments are categorised into ‘Held to Maturity‘, ’Available for Sale’ and ‘Trading‘. Reclassifications, if any, in any category are
accounted for as per the RBI guidelines. Under each category, the investments are further classified under (a) Government securities (b)
other approved securities (c) shares (d) bonds and debentures (e) subsidiaries and joint ventures and (f) others.
b) ‘Held to Maturity’ securities are carried at their acquisition cost or at amortised cost, if acquired at a premium over the face value. A provision
is made for other than temporary diminution.
c) ‘Available for Sale’ and ‘Trading’ securities are valued periodically as per RBI guidelines. The market/fair value for the purpose of periodical
valuation of quoted investments included in the “Available for Sale” and “Trading” categories is the market price of the scrip as available from
the trades/quotes on the stock exchanges, SGL account transactions, price list of RBI or prices declared by Primary Dealers Association of
India jointly with Fixed Income Money Market and Derivatives Association (“FIMMDA”) periodically.
The market/fair value of unquoted SLR securities included in the ‘Available for Sale’ and ‘Trading’ categories is as per the rates published
by FIMMDA.
The valuation of non-SLR securities, other than those quoted on the stock exchanges, wherever linked to the Yield-to-Maturity (“YTM”) rates,
is with a mark-up (reflecting associated credit risk) over the YTM rates for government securities published by FIMMDA.
Unquoted equity shares are valued at the book value, if the latest balance sheet is available or at Re. 1.
Securities are valued scrip-wise and depreciation/appreciation aggregated for each category. Net appreciation in each basket if any, being
unrealised, is ignored, while net depreciation is provided for.
d) Costs such as brokerage, commission etc., pertaining to investments, paid at the time of acquisition, are charged to revenue.
e) Broken period interest on debt instruments is treated as a revenue item.
f) Investments in subsidiaries/joint ventures are categorised as Held to Maturity in accordance with RBI guidelines.
g) Profit on sale of investments in the ‘Held to Maturity’ category is credited to the revenue account and is thereafter appropriated (net of
applicable taxes and statutory reserve requirements) to Capital Reserve. Such appropriation is made at the year-end.
h) At the end of each reporting period, security receipts issued by the asset reconstruction company are valued in accordance with the
guidelines applicable to non-SLR instruments prescribed by RBI from time to time. Accordingly, in case where the security receipts issued
by the asset reconstruction company are limited to the actual realisation of the financial assets assigned to the instruments in the concerned
scheme, the Bank reckons the Net Asset Value (“NAV”), obtained from the asset reconstruction company from time to time, for valuation of
such investments at each reporting period end.
Other entities
In case of investments by ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund, ICICI Emerging Sectors Fund and ICICI Strategic
Investments Fund, brokerage, commission and stamp duty are included in the cost of acquisition while front-end fees earned are netted off from
cost of investments. Front-end fee, if any received on loan investments is recorded through the Revenue Account. Bonus shares and right
entitlements are recorded when such benefits are known.
ICICI Equity Fund, ICICI Eco-net Internet and Technology Fund, ICICI Emerging Sectors Fund and Strategic Investment Fund (schemes of ICICI
Venture Capital Fund) value their investments as per Securities and Exchange Board of India (‘SEBI’) guidelines issued from time to time.
Unrealised gains and temporary losses on investments are recognised as components of investors’ equity and are dealt with under Unrealised
Investment Reserve
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March 2005
ICICI International Limited values its investments in accordance with International Accounting Standard (IAS) 39 (Financial Instruments:
Recognition and Measurement
ICICI Securities Limited, ICICI Brokerage Services Limited, ICICI Securities Inc., and ICICI Securities Holding Inc., value the securities held as
stock in trade at cost or market value whichever is lower and the securities held as long term investments are valued at cost which includes
brokerage and stamp duty payable if any. However, in respect of securities held as stock-in-trade, brokerage and stamp duty are written off as
revenue expenditure. Commission earned in respect of securities held as stock-in-trade and investments acquired from the primary market and
on devolvement are adjusted from the cost of acquisition.
ICICI Bank UK Limited classifies investments into trading investments and long term investments. Trading investments are recorded at fair value
with realized and unrealised gains and losses included in non interest income. The fair value of trading assets are based upon quoted market
prices or, if quoted market prices are not available, estimates using similar investments or pricing models. Long term investments are recorded
at amortised costs less any provisions made for permanent diminution in value.
ICICI Bank Canada classifies investments into investment account securities or trading account securities. Investment account securities
comprise debt and equity securities, originally purchased with the intention of holding to maturity or for a pre-determined period of time, which
may be sold in response to changes in investment objectives arising from changing market conditions or to meet liquidity requirements. Debt
securities are carried at amortized cost and equity securities are carried at cost. Straight-line method is used for the amortization of premiums
and discounts on debt securities.
Other entities value their investments as per AS 13 “Accounting for Investments“ issued by ICAI.
Insurance joint ventures
ICICI Prudential Life Insurance Company Limited and ICICI Lombard General Insurance Company Limited record their investments at cost on the
date of purchase, which includes brokerage, if any and excludes interest paid on purchases. Investments maturing within twelve months from
the balance sheet date and investments made with the specific intention to dispose off within twelve months from the balance sheet date are
classified as short-term. Investments other than short term are classified as long-term investments.
The insurance joint ventures are governed by Insurance Act 1938 which value their investments in accordance with the provisions of Insurance
Regulatory and Development Authority Regulation, 2002. All debt securities are considered as ‘held to maturity’ and accordingly stated at
historical cost, subject to amortisation of premium or accretion of discount in the revenue account or the profit and loss account over the period
of maturity/holding on a straight line basis.
Listed equity shares as at the balance sheet date are stated at fair value being the last quoted closing price on the National Stock Exchange or The
Stock Exchange, Mumbai. Mutual fund units as at the balance sheet date are valued at the net asset values. Equity shares awaiting listing are
stated at historical cost subject to provision for diminution, if any, in the value of such investment determined separately for each individual
investment. The unrealised gain / loss arising on account of such valuation is taken to equity under the head “Fair Value change account”.
Investment in real estate is valued at historical cost, subject to provision for impairment, if any. Revaluation of investment in real estate is done
at least once in every three years.
3. Provisions/Write-offs on loans and other credit facilities
ICICI Bank Limited
a) All credit exposures are classified as per RBI guidelines, into performing and non-performing assets. Further, non-performing assets are
classified into sub-standard, doubtful and loss assets based on the criteria stipulated by RBI. Provisions are made on substandard and
doubtful assets at rates equal to or higher than those prescribed by the RBI. Loss assets and unsecured portion of sub-standard and doubtful
assets are provided/written off as per the extant RBI guidelines. Additional provisions are made against specific non- performing assets over
and above what is stated above, if in the opinion of the management, increased provisions are necessary.
would require a bank to make 100% provision on the secured portion of the doubtful assets outstanding for more than three years in
doubtful category instead of the earlier requirement of 50% provision. However, RBI has allowed banks to make 100% provision on the
assets classified as doubtful for over three years at March 31, 2004 in a graded manner over three years (i.e. 60% by March 31, 2005, 75%
by March 31, 2006 and 100% by March 31, 2007). Accordingly the Bank has adopted the revised RBI guidelines.
b) For restructured/rescheduled assets, provision is made in accordance with the guidelines issued by RBI, which requires the present value
of the interest sacrifice be provided at the time of restructuring.
c) In the case of other than restructured loan accounts classified as NPAs, the account is reclassified as “standard” account if arrears of interest
and principal are fully paid by the borrower.
In respect of non-performing loan accounts subjected to restructuring, asset category is upgraded to standard if the borrower demonstrates,
over a minimum period of one year, the ability to repay the loan in accordance with the contractual terms.
d) The Bank has incorporated the assets taken over from erstwhile ICICI Limited (“ICICI”) in its books at carrying values as appearing in the
books of ICICI with a provision made based on a fair valuation exercise carried out by an independent firm. To the extent provisions are
required in respect of the assets taken over from ICICI, the provision created on fair valuation of the assets at the time of the amalgamation
is used.
e) Amounts recovered against other debts written off in earlier years and provisions no longer considered necessary in the context of the
current status of the borrower are recognised in the profit and loss account.
f) In addition to the general provision of 0.25% made on standard assets in accordance with RBI guidelines, the Bank maintains general
provisions to cover potential credit losses, which are inherent in any loan portfolio but not identified. For standard assets, additional general
provisions are determined having regard to overall portfolio quality, asset growth, economic conditions and other risk factors.
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March 2005
g) In addition to the provisions required to be held according to the asset classification status, provisions are held for individual country
exposure (other than for home country). The countries are categorised into seven risk categories namely insignificant, low, moderate, high,
very high, restricted and off-credit and provisioning made on exposures exceeding 90 days on a graded scale ranging from 0.25% to 100%.
For exposures with contractual maturity of less than 90 days, 25% of the normal provision requirement is held. If the country exposure (net)
of the Bank in respect of each country does not exceed 1% of the total funded assets, no provision will be maintained on such country
exposure.
Other entities
The policy of provisioning against non-performing loans and advances has been decided by the management considering prudential norms
issued by the respective governing regulatory authority.
4 Fixed assets and depreciation
ICICI Bank Limited

a) Premises and other fixed assets are carried at cost less accumulated depreciation. Depreciation is charged over the estimated useful life of
a fixed asset on a “straight line” basis. The rates of depreciation for fixed assets, which are not lower than the rates prescribed in schedule
XIV of the Companies Act, 1956, are as follows
Asset Depreciation rate
Premises owned by the Bank 1.63%
Improvements to leasehold premises 1.63% or over the le
whichever is higher
ATMs 12.50%
conditioners, xerox machines, etc. 10%
Furniture and fixtures 15%
Motor vehicles 20%
Computers 33.33%
EDC Terminals 16.67% .
Others (including software and system development expenses) 25%
b) Depreciation on leased assets is made on a straight-line basis at the higher of the rates determined with reference to the primary period of
lease and the rates specified in Schedule XIV to the Companies Act, 1956.
c) Assets purchased/sold during the year are depreciated on the basis of actual number of days the asset has been put to use.
d) Items costing less than Rs. 5,000 are depreciated fully over a period of 12 months from the date of purchase.Other entities
e) In case of ICICI Venture Funds Management Company Limited, depreciation on assets, other than leased assets, is charged on written down
value method in accordance with the provisions of Schedule XIV of the Companies Act, 1956.
f) In case of ICICI Securities Limited, ICICI Brokerage Services Limited, ICICI Securities Inc., and ICICI Securities Holding Inc., depreciation
on assets, other than leased assets and improvements to leased property, is charged on written down value method in accordance with the
provisions of Schedule XIV of the Companies Act, 1956.
g) In case of Prudential ICICI Asset Management Company Limited, fixed assets other than leasehold improvements are depreciated at written
down value method based on economic lives of the assets as estimated by the management.
h) In case of ICICI Bank Canada, fixed assets other than leasehold improvements are depreciated using straight-line method over the estimated
useful lives of the assets as estimated by the management.
i) In case of ICICI Bank UK, fixed assets other than leasehold improvements are depreciated using straight-line method over the estimated
useful economic lives of the assets as estimated by the management.
5 Foreign currency transactions
ICICI Bank Limited
a) Income and expenditure items are translated at the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities
are translated at closing exchange rates notified by the Foreign Exchange Dealers’ Association of India (“FEDAI”) at the balance sheet date
and the resulting profits/losses are included in the profit and loss account.
b) Outstanding forward exchange contracts are stated at contracted rates and are revalued at the exchange rates notified by FEDAI for specified
maturities and at interpolated rates for contracts of in-between maturities. The resultant gains or losses are recognised in the profit and loss
account.
c) Contingent liabilities on account of guarantees, endorsements and other obligations are stated at the exchange rates notified by FEDAI at
the balance sheet date.
Other entities
Financial statements of foreign subsidiaries/associates – ICICI Securities Holding Inc., ICICI Securities Inc., ICICI Bank UK Limited, ICICI Bank
Canada, ICICI International Limited and TCW/ICICI Investment Partners LLC have been converted in accordance with Accounting Standard 11 on
“The effects of changes in foreign exchange rates”.
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March 2005
6 Accounting for derivative contracts
ICICI Bank Limited

The Bank enters into derivative contracts such as foreign currency options, interest rate and currency swaps and cross currency interest rate
swaps to hedge on-balance sheet/off-balance sheet assets and liabilities or for trading purposes.
The swap contracts entered to hedge on-balance sheet assets and liabilities are structured in such a way that they bear an opposite and offsetting
impact with the underlying on-balance sheet items. The impact of such derivative instruments are correlated with the movement of underlying
assets and accounted pursuant to the principles of hedge accounting.
Foreign currency and rupee derivatives, which are entered for trading purposes, are marked to market and the resulting gain/loss, (net of
provisions, if any) is recorded in the profit and loss account.
Other entities
In case of ICICI Securities Limited for equity derivatives,
a) The gains are recognised only on settlement / expiry of the derivative instruments.
b) All open positions are marked to market and the unrealised gains / losses are netted off on a scrip-wise basis. Mark-to-market gains, if any,
are not recognised.
c) Debit / credit balances on open positions are shown as current assets / liabilities, as the case may be.
7.Employee stock option scheme (”ESOS”)

The Bank has formulated an employees stock option scheme. The Scheme provides that employees are granted an option to acquire equity
shares of the Bank that vests in graded manner. The options may be exercised within a specified period. The Bank follows the intrinsic value
method for computing the compensation cost, if any, for all options granted.
8 Staff retirement benefits

For employees covered under group gratuity scheme of Life Insurance Corporation of India (“LIC”)/ICICI Prudential Life Insurance Company
Limited (“ICICI Prulife”), gratuity charge to profit and loss account is on the basis of premium charged. For employees covered under group
superannuation scheme of LIC, the superannuation charged to profit and loss account is on the basis of premium charged by LIC. Provision for
gratuity for other employees and leave encashment liability are determined as per actuarial valuation. Defined contributions for provident fund
are charged to the profit and loss account based on contributions made in terms of the scheme.
The Bank provides for pension, a deferred retirement plan, covering certain employees. The plan provides for a pension payment on a monthly
basis to these employees on their retirement based on the respective employee’s salary and years of employment with the Bank. Employees
covered by the pension plan are not eligible for benefits under the provident fund plan, a defined contribution plan. The pension plan is funded
through periodic contributions to a fund set-up by the Bank and administered by a Board of Trustees. Such contributions are actuarially
determined.
Certain expenditures, including retirement benefits, are determined for the whole accounting year and for the interim period accounts, the same
are considered on a pro-rata basis.
9. Income taxes
Income tax expense is the aggregate amount of current tax and deferred tax charge. Current year taxes are determined in accordance with the
Income Tax Act, 1961. Deferred tax adjustments comprise of changes in the deferred tax assets or liabilities during the period.
Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences arising between the carrying values of
assets and liabilities and their respective tax basis and operating carry forward losses. Deferred tax assets are recognised only after giving due
consideration to prudence. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially
enacted by the balance sheet date. The impact on account of changes in the deferred tax assets and liabilities is also recognised in the income
statement.
Deferred tax assets are recognised and reassessed at each reporting date, based upon management’s judgement as to whether realisation is
considered reasonably certain. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is
virtual certainty that such deferred tax asset can be realised against future profits.
10.Translation of the financial statements of foreign offices

In accordance with the guidelines issued by RBI, all assets, liabilities, income and expenditure of the foreign representative offices and branches
of the Bank have been converted at the closing rate prevailing on the balance sheet date. The resultant gains or losses are recognised in the profit
and loss account.
11.Others
a. Reinsurance premium of insurance business
Insurance premium on ceding of the risk is recognised in the year in which the risk commences, over the period of contract or period of
risk, whichever is appropriate. Any subsequent revision to premium ceded is recognised over the remaining period of risk or contract
period. Adjustment to reinsurance premium arising on cancellation of policies is recognised in the year in which it icancelled.
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March 2005
b. Claims and benefits paid

In case of general insurance business, claims comprise the claims made for losses incurred and those estimated or anticipated under the
policies following a loss occurrence and specific claim settlement costs such as survey / legal fees and other directly attributacosts.
Estimated liability for claims after adjusting claims recoverable from / payable to reinsurers / co-insurers are accounted for as and when
intimated/reported, upto the end of the financial year.
Provisions for claims are based on individual case estimates received. The estimates are regularly reviewed and updated as additional
information on the estimated claims becomes known.
Estimated liability for claims Incurred But Not Reported (‘IBNR’) and claims Incurred But Not Enough Reported (‘IBNER’) is based on internal
estimates by the management.
In case of life insurance business, death and surrender claims are accounted for on receipt of intimation. Maturity claims are accounted
when due for payment. Reinsurance on such claims is accounted for, in the same period as the related claims.
c. Reserve for unexpired risk
Reserve for unexpired risk is recognised net of reinsurance ceded and represents premium written that is attributable and to be allocated
to succeeding accounting periods for risks to be borne by the Company under contractual obligations. It is calculated on a daily pro-rata basis
subject to a minimum of 50% of the premium, written during the twelve months preceding the balance sheet date for fire, marine cargo and
miscellaneous business and 100% for marine hull business, in accordance with section 64 V (1) (ii) (b) of the Insurance Act, 1938.
d. Acquisition costs
Acquisition costs are those costs that vary with, and are primarily costs related to the acquisition of new and renewal insurance contracts viz.
commission, policy issue expenses, etc. These costs are expensed in the year in which they are incurred.
e. Liability for life policies in force
In respect of life insurance business, liability for life policies in force and also policies in respect of which premium has been discontinued
but a liability exists, is determined by the Appointed Actuary on the basis of an annual review of the life insurance business, as per the gross
premium method in accordance with accepted actuarial practice, requirements of the IRDA and the Actuarial Society of India. The linked
policies sold by the Company carry two types of liabilities – unit liability representing the fund value of policies and non-unit liability for
future expenses, meeting death claims, income taxes and cost of any guarantees.
B. NOTES FORMING PART OF THE ACCOUNTS

1. Preference shares
Certain Government Securities amounting to Rs. 190.0 crore (March 31, 2004: Rs. 145.5 crore, December 31, 2003: Rs. 146.0 crore) have
been earmarked against redemption of preference share capital, which falls due for redemption on April 20, 2018 as peroriginal issue
terms.
2. Subordinated debt
Subordinated debt includes index bonds amounting to Rs. 12.1 crore (March 31, 2004: Rs. 11.0 crore, December 31, 2003: Rs. 10.7 crore)
which carry a detachable warrant entitling bondholders to a right to receive an amount linked to the BSE Sensitive index (“Sensex”) per
terms of the issue. The Bank has not issued any subordinated debt during the period.
In terms of the ESOS, as amended, the maximum number of options granted to any eligible employee in a financial year shall not exceed
0.05% of the issued equity shares of the Bank at the time of grant of the options and aggregate of all such options granted to the eligible
employees shall not exceed 5% of the aggregate number of the issued equity shares of the Bank on the date (s) of the grant options.
In terms of the Scheme, 19,107,645 options (March 31, 2004: 15,964,982 options, December 31, 2003: 17,234,594 options) granted to
eligible employees were outstanding at December 31, 2004.
A summary of the status of the Bank’s option plan is given below:
Period ended Year ended March Period ended

December 31,2004 31,2004 December 2004
Option share Option shares Option shares
outstanding outstanding outstanding
Outstanding at the beginning of the period / year 15,964,982 12,610,275 12,610,275
Add: Granted during the period / year 7,554,500 7,491,800 7,491,800
Less: Forfeited/lapsed during the period / year 733,601 766,489 600,443
Exercised during the period / year * 3,678,236 3,370,604 2,267,038P.
Outstanding at the end of the period / year 19,107,645 15,964,982 17,234,594
* Includes options exercised but not allotted
4. Early retirement option (”ERO”)
The Bank had implemented an Early Retirement Option scheme 2003 for its employees in July 2003. All employees who had completed 40
years of age and seven years of service with the Bank (including period of service with entities amalgamated with the Bank) were eligible
for the ERO.
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March 2005
The ex-gratia payments under ERO and termination benefits and leave encashment in excess of the provision made (net of tax benefits),
aggregating to Rs. 191.0 crore (March 31, 2004: Rs. 191.0 crore, December 31, 2003: Rs. 191.0 crore) are being amortised over a period
of five years commencing August 1, 2003 (the date of retirement of employees exercising the Option being July 312003).
On account of the above ERO scheme, an amount of Rs. 28.8 crore (March 31, 2004: Rs. 25.6 crore, December 31 2003: Rs. 16.0 crore) has
been charged to revenue being the proportionate amount amortised for the nine month period ended December 31, 2004.
5. Deferred tax
On December 31, 2004, the Group has recorded net deferred tax asset of Rs. 358.4 crore, (March 31, 2004: Rs. 462.8 crore, December 31,
2003: Rs. 500.7 crore) which has been included in Other Assets.
The analysis of deferred tax assets and liabilities into major items is given below:
Rupees in crore
Particulars December 31, 2004 March 31, 2004 December 31, 2003
Deferred tax asset
Provision for bad and doubtful debts 1,188.6 1,366.5 1,365.3
Others 48.3 25.4 65.0
1,236.9 1,391.9 1,430.3
Less: Deferred tax liability
Depreciation on fixed assets 849.1 900.2 903.7
Others 29.4 28.9 25.9
878.5 929.1 929.6
Net Deferred Tax Asset/ (Liability) 358.4 462.8 500.7
The Group has transactions with its related parties comprising of joint ventures, associates and key management personnel. The following
represent the significant transactions between the Group and such related parties:
Lease of premises and facilities
During the period ended December 31, 2004, the Bank charged for lease of premises, facilities and other administrative costs to affiliates
amounting to Rs. 1.1 crore (March 31, 2004: Rs. 18.6 crore, December 31, 2003: Rs. 13.7 crore).
Interest received
During the period ended December 31, 2004 the Bank received interest from its Key management personnel@ amounting to Rs. 0.02 crore
Remuneration to whole-time directors
Remuneration paid to the whole-time directors of the Bank during the period ended December 31, 2004 was Rs. 5.0 crore (March 31, 2004:
The following balances payable to/receivable from the related parties are included in the balance sheet as on December 31, 2004:
Rupees in crore
Items/Related Party Joint Ventures Key Management Total
and Associates Personnel @
Deposits with ICICI Bank .. 3.4 3.4
Advances .. 1.1 1.1
Investments of related parties in ICICI Bank .. 0.2 0.2
Receivables 0.02 .. 0.02
Payables .. .. ..
@
whole time directors of the Board and their relatives
The following balances payable to/receivable from the related parties are included in the balance sheet as on March 31, 2004.
Rupees in crore
Deposits with ICICI Bank 96.5 2.3 98.8
Advances .. 1.0 1.0
Receivables 25.2 .. 25.2
Payables 1.1 .. 1.1
@
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March 2005
The following balances payable to/receivable from the related parties are included in the balance sheet as on December 31, 2003.
Rupees in crore
Deposits with ICICI Bank 46.6 2.1 48.7
Advances .. 1.5 1.5
Receivables .. .. ..
Payables .. .. ..
@
Joint ventures and associates
Prudential ICICI Asset Management Company Limited, Prudential ICICI Trust Limited, TCW/ICICI Investment Partners L.L.C.
For the period ended December 31, 2004, ICICI Prudential Life Insurance Company Limited and ICICI Lombard General Insurance Company
Limited have not been classified under joint ventures and associates as they have been accounted as subsidiaries as required by AS 21.
7. Earnings per share (”EPS”)
The group reports basic and diluted earnings per equity share in accordance with AS 20, “Earnings per Share”. Basic earnings per share
is computed by dividing net profit after tax by the weighted average number of equity shares outstanding during the period/year. Diluted
earnings per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during
the period/year.
The computation of earnings per share is given below:
Rupees in crore except per share data
Basic (not annualised)
Net profit 1,247.5 1,580.4 1,138.8
Basic earnings per share (Rs.) 17.21 25.73 18.56
Diluted (not annualised)
Weighted average no. of equity shares 730,777,680 619,201,380 618,649,649
Net profit 1,247.5 1,580.4 1,138.8
Diluted earnings per share (Rs.) 17.07 25.52 18.41
Nominal value per share (Rs.) 10.0 10.0 10.0
The dilutive impact is mainly due to options granted to employees by the Bank
8. Assets given under lease
8.1 Assets given under operating lease
The future lease rentals are given in the table below
Rupees in crore
Later than one year and not later than five years 99.5 98.2 97.2
Total 161.2 178.7 183.6
8.2 Assets given under finance lease
The future lease rentals are given below
Rupees in crore
Total of future minimum lease payments 147.3 179.3 190.2
Present value of lease payments 119.5 141.8 149.1
Unmatured finance charges 27.8 37.5 41.1
Maturity profile of total of future minimum
lease payments
Later than one year and not later than five years 105.0 1,25.6 133.0
Total 147.3 179.3 190.2
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March 2005
Maturity profile of present value of lease payments December 31, 2004 March 31, December 31,
2004 2003
Total 119.5 141.8 149.1
9. Other
a. Exchange fluctuation
Exchange fluctuation aggregating Rs. 39.9 crore (March 31, 2004 : Rs. 57.8 crore, December 31, 2003: Rs. 75.5 crore), which arises
on account of rupee-tying agreements with the Government of India, is held in “Exchange Fluctuation Suspense with Government
Account” pending adjustment at maturity on receipt of payments from the Government for repayments to foreign lenders.
b. Swap suspense (net)
Swap suspense (net) aggregating Rs. 113.9 crore (debit) (March 31, 2004: Rs. 67.7 crore (debit), December 31, 2003: Rs. 69.3 crore
(debit)), which arises out of conversion of foreign currency swaps, is held in “Swap suspense account” and will be reversed at
conclusion of swap transactions with swap counter parties.
10. Provision for non-performing assets
would require a bank to make 100% provision on the secured portion of the doubtful assets outstanding for more than three years in
doubtful category instead of the earlier requirement of 50% provision. However, RBI has allowed banks to make 100% provision on the
existing assets which are in doubtful category for more than three years as on March 31, 2004 till March 31, 2007 in a graded manner (i.e.
60% as on March 31, 2005, 75% as on March 31, 2006 and 100% as on March 31, 2007). Accordingly the Bank has adopted the revised RBI
guidelines.
The impact of the adoption of the revised guidelines on the profit and loss account is not significant.
11. Rupee derivatives
Effective April 1, 2004, the bank has accounted for the unrealised gain on rupee derivatives (net of provisions) as compared to its earlier
policy of ignoring the unrealised gains. As a result the profit after tax for the current period is higher by Rs 40.7 crore.
12. Subvention income
Effective April 1, 2004 the commissions paid to direct marketing agents (DMAs) of auto loans, net of subvention income received from them,
13. Transfer of investments from AFS to HTM Category
During the period ended December 31, 2004, the Bank has transferred investments amounting to Rs. 21,348.9 crore from Available for Sale
category to Held to Maturity category in accordance with RBI circular: DBOD.No.BP.BC.37/ 21.04.141/2004-05 dated September 2, 2004. The
difference between the book value of each investment and the lower of its acquisition cost and market value on the date of transfer,
amounting to Rs. 182.8 crore has been provided for in the profit and loss account.
14. Appropriation of Net Profit
The Bank intends to make appropriation of net profit at year-end. Accordingly, the financial statements do not include appropriations to
Statutory Reserve (Rs. 348.0 crore), Capital Reserve (Rs. 19.3 crore) and Investment Fluctuation Reserve (amount not ascertainable) out of
the current period profit.
15. Pursuant to the resolution passed at the meeting of the Board of Directors of ICICI Venture Funds Management Company Limited (IVFMCL),
held on July 21, 2004, IVFMCL has decided not to carry on activities of Non Banking Financial Companies, under section 45-1A(6)(i) and
applied to Reserve Bank of India for cancellation of certificate as a Non Banking Financial Company. The Reserve Bank of India vide its order
dated September 27, 2004 has cancelled as surrendered, the certificate of registration granted to the company. Consequently the Statutory
Reserve, created in pursuance of section 45-IC of the Reserve Bank of India (Amendment) Act, 1997, amounting to Rs. 21 crore has been
treated as free reserve and transferred to General Reserve.
16. Information about business and geographical segments
The Group reports its operations into the following segments:
z Consumer and commercial banking comprising the retail and corporate banking operations of the Bank, ICICI Home Finance Company
Limited, ICICI Bank UK Limited, ICICI Bank Canada and ICICI Distribution Finance Private Limited.
z Investment banking comprising the treasury of the Bank, the investment banking business of ICICI Securities Limited, ICICI Brokerage
Services Limited, ICICI Securities Inc., and ICICI Securities Holding Inc., ICICI Venture Funds Management Company Limited, ICICI
Eco-net Internet & Technology Fund, ICICI Equity Fund, ICICI Strategic Investment Fund, ICICI Emerging Sector Fund and ICICI
International Limited
z Others comprising ICICI Lombard General Insurance Company Limited, ICICI Prudential Life Insurance company Limited, Prudential
ICICI AMC Ltd, Prudential ICICI Trust Limited, ICICI Property Trust, ICICI Investment Management Company Limited, ICICI Trusteeship
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March 2005
Services Limited and TCW/ICICI Investment Partner LLC. whose individual business is presently not material in relation to the
consolidated financials.
Inter segment transactions are generally based on transfer pricing measures as determined by management. Income, expenses,
assets and liabilities are either specifically identifiable with individual segments or have been allocated to segments on a systematic
basis.
Based on such allocations, segmental balance sheet as on December 31, 2004 and segmental profit & loss account for the period
ended December 31, 2004 have been prepared.
(Rupees in Crore)
Consumer and Investment banking Others Total
commercial banking
Particulars For the For the For the For the For the For the For the For the For the For the For the For the
period year period period year period period year period period year period
ended ended ended ended ended ended ended ended ended ended ended ended
30.12.04 31.03.04 31.12.03 30.12.04 31.03.04 31.12.03 30.12.04 31.03.04 31.12.03 30.12.04 31.03.04 31.12.03
1. Revenue (before
extraordinary
profit) 7,813.9 9,705.2 7,241.2 2,248.4 3,914.0 3,012.0 1,960.6 1,391.3 797.1 12,022.9 15,010.5 11,050.3
2. Less: Inter
segment revenue .. .. .. .. .. .. .. .. .. (637.5) (1,104.9) (874.0)
3. Total revenue
(1) -(2) .. .. .. .. .. .. .. .. .. 11,385.4 13,905.6 10,176.3
4. Operating profit
(i.e. Profit before
unallocated
expenses, extra-
ordinary profit,
provision, and tax) 1,381.6 1,314.9 970.7 703.4 1,362.5 1,065.1 (113.3) (107.2) (87.8) 1,971.7 2,570.2 1,948.0
5. Unallocated
expenses .. .. .. .. .. .. .. .. .. 28.8 25.6 16.0
6. Provisions 146.2 580.3 542.2 223.2 44.0 17.4 (40.2) .. .. 329.2 624.3 559.6
7. Profit before tax
(4)-(5)-(6) 1,235.4 7,345.7 4,284.8 480.2 13,184.3 10,477.2 (73.1) (1,071.8) (878.3) 1,613.7 1,920.3 1,372.4
8. Income tax
expenses (net) /
(net deferred
tax credit) .. .. .. .. .. .. .. .. .. 366.3 339.8 233.6
9. Net Profit (7)-(8) .. .. .. .. .. .. .. .. .. 1,247.4 1,580.5 1,138.8
A. Other Information
10. Segment assets 97,317.9 79,963.9 74,719.9 50,117.5 46,323.3 41,051.6 3,711.9 1,830.1 1,428.6 151,147.3 128,117.3 117,200.1
11. Unallocated assets .. .. .. .. .. .. .. .. .. 2,752.3 2,630.3 2,275.8
12. Total assets

(10)+(11) .. .. .. .. .. .. .. .. .. 153,899.6 130,747.6 119,475.9
13. Segment liabilities 116,683.9 100,309.0 92,459.8 34,323.0 29,291.3 26,222.2 2,892.7 1,147.3 793.9 153,899.6 130,747.6 119,475.9
14. Unallocated l
iabilities .. .. .. .. .. .. .. .. .. .. .. ..
15. Total liabilities

(13)+(14) .. .. .. .. .. .. .. .. .. 153,899.6 130,747.6 119,475.9
The business operations of the Group are largely concentrated in India. The assets and income from foreign operations are not significant to the
overall operations of the Bank and have accordingly not been disclosed.
17. Cash and cash equivalents
Cash and cash equivalents include cash in hand, balances with RBI, balances with other banks and money at call and short notice.
18. Contingent liability
The Income-tax authorities have disallowed deduction in respect of specific provisions for bad debts made by erstwhile ICICI Limited in
prior years on account of retrospective amendment to section 36(1)(vii) of the Income Tax Act, 1961 (the “Act”). The total potential tax impact
of such disallowances is Rs. 276.6 crore, which is included in the contingent liability and is disputed by the Bank in appeals. Based on a legal
opinion, the Bank is of the view that the disputed amount would alternatively be deductible under the provisions of the Act as business loss.
Further, as the provision is tax deductible in the year of write off, the Bank is eligible to create a deferred tax asset and accordingly, there
is no revenue impact.
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March 2005
19. Additional disclosures

Additional statutory information disclosed in separate financial statements of the parent and the subsidiaries having no bearing on the true
and fair view of the consolidated financial statements and also the information pertaining to the items which are not material have not been
disclosed in the consolidated financial statement in view of the general clarification issued by ICAI.
20. Comparative figures
Figures of the previous period have been regrouped to conform to the current period’s presentation.
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March 2005
C. STATUTORY AND OTHER INFORMATION Saving Bond, Regular Income Bond and Children Growth Bond) -
0.70 per cent:-
MINIMUM SUBSCRIPTION
For every valid application procured under any other Category
In accordance with the SEBI Guidelines, we would be free to retain
(i) Tax Saving Bond - Nil
whatever amount is received by us in the Issue.
(ii) Regular Income Bond and Children Growth Bond - 0.20 per
EXPENSES OF THE ISSUE
cent of the amount allotted
The total expenses payable by us for the Issue would not exceed In case of multiple applications, we at our sole and absolute
1.75% of the amount raised and retained or Rs. 6.25 crore, which is discretion, may decide to treat all such multiple applications by
higher, which would include the following: each applicant as one single consolidated application for the purpose
MANAGEMENT FEES of computation and payment of brokerage and commission. Such
The fees payable to the Lead Manager and Co-Managers shall be brokerage and commission would be payable, on the total amount
mutually agreed upon by the parties. Such management fee would be allotted, in accordance with aforesaid clauses.
up to a maximum of 0.50% of the amount mobilised and retained by us. In addition to the above, we may, at our sole discretion, offer
BROKERAGE AND COMMISSION additional brokerage and/or commission in cash or kind, not
exceeding 0.50% of the issue size (including Over Subscription
We will pay brokerage to all the brokers and Bankers to the Issue Option), to brokers/sub-brokers and/or agents/sub-agents whose
(hereinafter referred to in this paragraph as “Brokers”) on applications code appears in the brokers/sub-brokers and/or agents/sub-agents
bearing their stamp in the Broker column. column on the Application Form. This brokerage and commission
We will pay commission to all agents appointed by us for marketing would be payable on allotment of select options/Bonds to select
of the Issue, on applications bearing their stamp in the Broker/Agent categories, or on the basis of such criteria as may be decided by us,
column. at our discretion.
Brokerage would be payable in the following manner :- FEES PAYABLE TO THE REGISTRARS
For every valid application procured under the category The fees payable to the Registrars to the Issue, MCS Limited, will be
“Individuals” (for this purpose, “Individual” includes individuals, mutually agreed on by the parties.
Karta of Hindu Undivided Family and Minors) for all Bonds (Tax
TRUSTEE FOR THE BONDHOLDERS
Saving Bond, Regular Income Bond and Children Growth Bond) -
0.80 per cent The fees payable to The Western India Trustee and Executor
For every valid application procured under any other category Company Limited, as Trustees to the Bondholders is Rs. 25,000/- as
an acceptance fee. In addition, they would be paid an annual service
(i) Tax Saving Bond - NIL
charge of Rs. 80,000/- on a pro rata basis on the outstanding principal
(ii) Regular Income Bond and Children Growth Bond - 0.20 per amount.
cent of the amount allotted
Commission would be payable in the following manner OTHER EXPENSES
For every valid application procured under the category The other expenses include fees and reimbursement of expenses
“Individuals” (for this purpose, “Individual” includes individuals, towards printing and distribution, issue advertisement, listing fees,
Karta of Hindu Undivided Family and Minors) for all Bonds (Tax credit rating fees, fees payable to the Auditors and other expenses.
The above expenses will be met out of the proceeds of the Issue.
COMMISSION AND BROKERAGE PAID ON PREVIOUS ISSUES BY ICICI AND US

(Rs. in crore)
Sr. Issue Month and Year and Commission
No. Brokerage
1. Public Issue of Bonds in the nature of Debentures December, 1997 4.58
2. Public Issue of Bonds in the nature of Debentures March, 1998 8.27
3. Public Issue of Bonds in the nature of Debentures April, 1998 3.67
4. Public Issue of Bonds in the nature of Debentures July, 1998 5.85
5. Public Issue of Bonds in the nature of Debentures August, 1998 5.72
6. Public Issue of Bonds in the nature of Debentures October, 1998 4.45
8. Public Issue of Bonds in the nature of Debentures January, 1999 6.90
10. Public Issue of Bonds in the nature of Debentures May, 1999 2.39
13. Public Issue of Equity Shares September, 1999 5.54
15. Public Issue of Bonds in the nature of Debentures November, 1999 2.15
16. Public Issue of Bonds in the nature of Debentures February, 2000 6.02
217
March 2005
Sr. Issue Month and Year and Commission

No. Brokerage
25. Public Issue of Bonds in the nature of Debentures June, 2001 1.19
28. Public Issue of Bonds in the nature of Debentures September, 2001 2.63
40 Public Issue of Equity Shares April, 2004 4.65
41 Public Issue of Bonds in the nature of Debentures January, 2005 @
42. Public Issue of Bonds in the nature of Debentures February, 2005 @
@ Post Issue formalities are being completed. ICICI had incurred commission and brokerage (including selling,
(1) For all Issues till March 1997, the Trustee was Central Bank of management and underwriting fees) of US$ 12.6 million in respect
India, Jehangir Wadia Bldg., 53 M. G. Road, Fort, Mumbai 400 of its September 1999 ADS Issue. We incurred commission and
023 and for all issues from December 1997 till December 2000, brokerage (including selling, management and underwriting fees)
the Trustee has been Bank of Maharashtra, “Lokmangal” 1501, of US$ 6.14 million in respect of our March 2000 ADS Issue.
Shivaji Nagar, Pune 411 005. For all issues from February 2001, Issues otherwise than for Cash
the Trustee has been The Western India Trustee and Executor
Company Limited. Except as stated in the section entitled “Capital Structure” on page 6
of this Prospectus, we have not issued any Equity Shares for
G All Trust Deeds have been executed within six months from
consideration otherwise than for cash.
the close of the Issue.
G The Notional Debt Service Coverage Ratio (NDSCR) of ICICI Previous Rights and Public Issues
for the year ended March 31, 1998, 1999, 2000, 2001 and for Details of Rights and Public Issues made by us in the last five years
the period ended March 29, 2002 (prior to the merger with us) are given below:
was 1.3, 1.4, 1.6, 1.4 and 1.6 respectively.
American Depositary Receipts Issue (2000)
Net Profits after tax + interest on loans + non
cash charges + collection from borrowers + 15,909,090 American Depositary Receipts (ADRs), each representing
cost of sales of Investment/ Leased assets two Equity Shares issued at US$11 per ADR aggregating US$175
NDSCR = million.
Financial Expenses + Repayment of loans +
Approtioned principal instalment during the Closing Date : March 27, 2000
year on debentures Date of Allotment : March 31, 2000
Commission and brokerage paid on foreign currency bond issues Date of Refunds : N.A.
made by ICICI
Date of Listing on : The New York Stock Exchange (NYSE)
Sr. Issue Month Commission & on March 28, 2000
No. and Year No. brokerage Depository : Deutsche Bank Trust Company Americas
(including selling,
management and The premium collected from above mentioned issue has been utilised
underwriting fees) for our business. We have complied with the continuous listing
(US$ in million) requirements in respect of our ADRs.
1. Floating Rate Notes March, 1997 0.60 Public Issue of Equity Shares (2004)
2. 7.55% Yankee Bonds August, 1997 0.98 Public Issue of 108,928,571 Equity shares of Rs.10/- each at a price
3. 4.75% Fixed Rare Notes October 2003 0.75 of Rs.280/- for cash aggregating Rs.3,050 crore (the “Issue”) with a
green shoe option of 16,071,429 equity shares of Rs.10/- each at a
4. 5.00% Fixed Rate Notes August 2004 0.45
For all the above foreign currency Bond issues, the Trustee is Deutsche
Bank.
218
March 2005
price of Rs.280/- for cash aggregating Rs.450 crore Depository : Deutsche Bank
Closing Date : April 7, 2004 The premium collected from above mentioned issue was utilised
Date of Allotment : April 21, 2004 for ICICI’s business. ICICI had complied with the continuous listing
requirements in respect of its ADRs.
Date of Refunds : April 22, 2004
Date of Listing on : BSE on April 21, 2004 Public Issue of Equity Shares (1999)
Stock Exchanges NSE on April 22, 2004 Public Issue of 41,470,000 Equity Shares of Rs. 10 each for cash at a
premium of Rs.63 per share aggregating Rs.303 crore
Exercise of Green Shoe Option
Closing Date : September 14, 1999
Closing Date : N.A.
Date of Allotment : October 1, 1999
Date of Allotment : May 24, 2004
Date of Refunds : October 14, 1999
Date of Refunds : N.A.
Date of Listing on : BSE on November 2, 1999
Date of Listing on : BSE on May 25, 2004 Stock Exchanges NSE on November 5, 1999
Stock Exchanges NSE on May 26, 2004
Calcutta Stock Exchange Association
Details of Rights and Public Issues made by ICICI in the last five Limited on November 5, 1999
years are given below The Delhi Stock Exchange Association
American Depositary Receipts Issue (1999) Limited on November 5, 1999
32,142,857 American Depository Receipts (ADRs), each representing Vadodara Stock Exchange Ltd. on
five Equity Shares issued at US$9.80 per ADR aggregating US$315 November 5, 1999
million. Bangalore Stock Exchange Ltd. on
Closing Date : September 22, 1999 November 5, 1999
Date of Allotment : September 22, 1999 Mangalore Stock Exchange Ltd. on
November 3, 1999
Date of Refunds : N.A.
Date of Listing on : The New York Stock Exchange (NYSE) Madras Stock Exchange Ltd. on
Stock Exchange on September 22, 1999 November 3, 1999
Previous Bond Issues
1. ICICI Bank
We have has not made any public issue of debentures, bonds or promissory notes either in India or abroad in the five years preceding the
date of this Prospectus, other than the following:
Issue Name- Deemed Date of Description- Amount Date of Redemption Rating at the time
Date of Date of completion Allotted of Issue
closure of Allotment of despatch (in crore
Issue of unless
debenture Otherwise
certificates specified)
January 2003 February April 1, 2003 Public Issue of Rs. 1,122 Tax Saving Bond ICRA “LAAA”
January 27, 26, 2003 Unsecured Option I February 26, 2006 CARE “CARE AAA”
2003 Redeemable Bonds Option II June 26,2006
in the nature of Option III February 26, 2008
Debentures Option IV June 26, 2008
aggregating Rs.
400 crore with a
right to retain
oversubscription
upto Rs. 400 crore
February April 3, May 5, 2003 Public Issue of 740 Tax Saving Bond ICRA “LAAA”
2003-March 2003 Unsecured Option I April 3, 2006 CARE “CARE AAA”
4, 2003 Redeemable Bonds Option II August 3, 2006
in the nature of Option III April 3, 2008
Debentures Option IV August 3, 2008
aggregating Rs. Regular Income Bond
400 crore with a April 3, 2010
right to retain
oversubscription
upto Rs. 400 crore
219
March 2005
March 2003- April 30, May 22, Public Issue of 481 Tax Saving Bond ICRA “LAAA”
March 31, 2003 2003 Unsecured Option 1 April 30, 2006 CARE “CARE AAA”
2003 Redeemable Bonds Option II August 30, 2006
in the nature of Option III April 30, 2008
Debentures Option IV August 30, 2008
aggregating Rs. 400 Regular Income Bond
crore with a April 30, 2010
right to retain
oversubscription
upto Rs. 400 crore
August 2003 October 9, November Public Issue of 343 Tax Saving Bond ICRA “LAAA”
September 2003 3, 2003 Unsecured Option 1 October 9,2006 CARE “CAREAAA”
9, 2003 Redeemable Bonds Option II February 9, 2007
in the nature of Option III October 9, 2008
D e b e n t u r e s Option IV February 9,2009
aggregating Rs. Regular Income Bond
300 crore with a October 9, 2010
right to retain
oversubscription
uptoRs. 300 crore
O c t o b e r, October N.A. 4.75% Fixed Rate US$ October 22, 2008 Moody’s: Baa3
2003 22, 2003 Notes 300mn S&P: BB
October 2003 December January 14, Public Issue of 486 Tax Saving Bond ICRA “LAAA”
-November 15, 2003 2004 Unsecured Option I December 15,2006 CARE “CARE AAA”
15, 2003 Redeemable Bonds Option II June 15,2007
in the nature of Option III December 15, 2008
Debentures Option IV June 15, 2009
aggregating Rs. 400 Regular Income Bond
crore with a December 15,2010
right to retain
oversubscription
upto Rs. 400 crore
December February 5, March 13, Public 523 Tax Saving Bond ICRA “LAAA”
2003- 2004 2004 Issue of Unsecured Option I February 5, 2007 CARE “CARE AAA”
January 6, Redeemable Option II August 5, 2007
2004 Bonds in the nature Option III February 5, 2009
of Debentures
Option IV August 5, 2009
aggregating Rs.
100 crore with a
right to retain
oversubscription
upto Rs. 100 crore
January , March 11, @ Public 775 Tax Saving Bond ICRA “LAAA”
2005 - 2005 Issue of Unsecured Option I March 11, 2010 CARE “CARE
February 9, Redeemable Option II March 11, 2010 AAA”
2005 Bonds in the nature Regular Income Bond
of Debentures Option I March 11, 2010
aggregating Rs. Option II March 11, 2012
600 crore with a Option III March 11, 2015
right to retain
Children Growth Bond
oversubscription
Option I March 11, 2012
upto Rs. 600 crore
Option II March 11, 2015
220
March 2005
Fe b r u a r y, @ @ Public @ @ ICRA “LAAA”

2005 - Issue of Unsecured CARE “CARE
AAA”
March 9, Redeemable
2005 Bonds in the nature
of Debentures
aggregating Rs.
400 crore with a
right to retain
oversubscription
upto Rs. 400 crore
@ Post Issue formalities are being completed.
2. ICICI
ICICI had made debenture issues, issues of bonds in the nature of Promissory Notes, Rights issues of Convertible Debentures and several
issues of foreign currency denominated bonds and notes. The details for such issues made in the five years preceding the date of this
Prospectus are given below:
Issue Name- D e e m e d Date of Description- Amount Date of Redemption Rating at the time
Date of closure Date of completion Allotted (in of Issue
of Issue Allotment of despatch c r o r e
o f u n l e s s
debenture Otherwise
certificates specified)
August 1999- September October 27, Public Issue of 283 Encash Bond September 23, ICRA “LAAA”
August 27, 23, 1999 1999 Unsecured 2002 CARE “CARE AAA”
1999 Redeemable Bonds Tax Saving Bond
Option I, III, IV September 23,
in the nature of
2002
Debentures Option II and V December 23,
aggregating Rs. 2002
200 crore with a Regular Income Bond
Option I,II, III September 23,
right to retain
2002
oversubscription Money Multiplier Bond
upto Rs. 200 crore Option I September 23, 2002
Option II August 23, 2018
October 1999- November December Public Issue of 352 Encash Bond ICRA “LAAA”
November 2, 30, 1999 30, 1999 Unsecured November 30, 2002 CARE “CARE AAA”
1999 Redeemable Bonds Tax Saving Bond
Option I, III, IV November 30,
in the nature of
2002
Debentures
Option II and V February 28,
aggregating Rs. 300
Regular Income Bond
crore with
Option I, II and III November
a right to retain
30,2002
oversubscription Money Multiplier Bond
upto Rs. 300 crore Option I November 30, 2002
Option II October 31, 2018
November December February 1, Public Issue of 242 Gilt Rate December 24, 2004 ICRA “LAAA”
1999- 24, 1999 2000 Unsecured Plus Bond Encash Bond CARE “CARE AAA”
December 24, 2002
December 2, Redeemable Bonds
Tax Saving Bond
1999 in the nature of Option I, II, IV December 24,
Debentures 2002
aggregating Rs. Option II and V March 24, 2003
300 crore with a Regular Income Bond
Option I, II and III
right to retain
December 24,
oversubscription 2002
upto Rs. 300 crore Money Multiplier Bond
Option I December 24, 2002
Option II September 24, 2022
221
March 2005
February March 24, April 28, Public Issue of 605 Tax Saving Bond Option I, III ICRA “LAAA”
2000- 2000 2000 Unsecured and IV March 24, 2003 CARE “CARE AAA”
February 24, Redeemable Bonds Option II and V June 24, 2003
2000 in the nature of
Debentures
aggregating Rs.
300 crore with a
right to retain
oversubscription
upto Rs. 300 crore
March 2000- April 25, May 30, Public Issue of 350 Gilt Rate April 25, 2005 ICRA “LAAA”
March 31, 2000 2000 Unsecured Plus Bond CARE “CARE AAA”
2000 Redeemable Bonds Encash Bond April 25, 2003
in the nature of Regular Income Bond Option I, II
Debentures and III April 25, 2003
aggregating Rs. Money Multiplier Bond Option I
August 25, 2003
300 crore with a
Option II February 25, 2019
right to retain
Tax Saving Bond
oversubscription
Option I, III and IV April 25,
upto Rs. 400 crore
billion 2003
Option II and V October 25,
2003
July 2000- August 29, September Public Issue of 89 Regular Income Bond ICRA “LAAA”
August 3, 2000 27, 2000 Unsecured Option I, II and III August 29, CARE “CARE AAA”
2000 Redeemable Bonds 2005
in the nature of Money Multiplier Bond
Debentures February 28, 2011
aggregating Rs. Tax Saving Bond
300 crore with a Option l and II August 29, 2003
right to retain Option III November 29, 2003
oversubscription
upto Rs. 200 crore
August 2000- October 5, N o v e m b e r Public Issue of 416 Regular Income Bond ICRA “LAAA”
September 2000 13, 2000 Unsecured Option I,II and III October 5, CARE “CARE AAA”
12,2000 Redeemable Bonds 2004
Debentures Option I April 5, 2007
aggregating Option II January 5, 2011
Rs. 250 crore with Option III October 5, 2015
a right to retain Option IV January 5, 2022
oversubscription Tax Saving Bond
upto Rs. 250 crore Option l and III October 5, 2003
Option II and IV February 5,
2004
222
March 2005
October 2000- November December Public Issue of 252 Regular Income Bond ICRA “LAAA”
October 17, 14, 2000 20, 2000 Unsecured Option I II, III November 14, CARE “CARE AAA”
Debentures Option I September 14, 2004
aggregating Option II April 14, 2007
Rs. 250 crore with Option III November 14, 2010
a right to retain Option IV July 14,2015
oversubscription Option V October 14, 2021
upto Rs. 250 crore Tax Saving Bond
Option I November 14, 2003
November December January 17, Public Issue of 271 Regular Income Bond ICRA “LAAA”
2000- 13, 2000 2001 Unsecured Option I, II and III December 13, CARE “CARE AAA”
November Redeemable Bonds 2005
17,2000 in the nature of Money Multiplier Bond
Debentures Option I October 13,2004
aggregating Option II June 13,2007
Rs. 200 crore with Option III March 13, 2011
a right to retain Option IV December 13, 2015
oversubscription Option V March 13, 2022
upto Rs. 200 crore Tax Saving Bond
Option I December 13,2003
Option II April 13, 2004
December January February 20, Public Issue of 378 Regular Income Bond ICRA “LAAA”
2000- 19, 2001 2001 Unsecured Option I, II and III January 19, CARE “CARE AAA”
December Redeemable Bonds 2006
23,2000 in the nature of Money Multiplier Bond
Debentures Option I November 19, 2004
aggregating Option II July 19,2007
Rs. 250 crore with Option III April 19, 2011
a right to retain Option IV June 19,2022
oversubscription Tax Saving Bond
upto Rs. 250 crore Option I January 19, 2004
Option II May 19, 2004
Pension Bond
Option I January 19, 2017
Option II January 19, 2019
Option III January 19, 2023
223
March 2005
February March 22, May 3, Public Issue of 999 Regular Income Bond ICRA “LAAA”
2001- 2001 2001 Unsecured Option I, II CARE “CARE AAA”
February 28, Redeemable Bonds and III March 22,
2001 in the nature of 2006
Debentures Money Multiplier Bond
aggregating Option I January 22, 2005
Rs. 500 crore with a
Option II September 22, 2007
right to retain
oversubscription
upto Rs. 500 crore
Tax Saving Bond
Option II July 22, 2004
Pension Bond
Option I March 22,2012
Option III March 22, 2019
March 2001 April 26, May 29, Public Issue of 573 Regular Income Bond ICRA “LAAA”
March 31, 2001 2001 Unsecured Option I, II and III April 26, CARE “CARE AAA”
in the nature of
Money Multiplier Bond
Debentures
aggregating Option I August 26, 2005
Rs. 400 crore with a Option II July 26, 2008
right to retain Children Growth Bond
oversubscription Option I January 26, 2018
upto Rs. 400 crore
Tax Saving Bond
Option I April 26, 2004
Pension Bond
Option III April 26, 2019
June 2001- July 24, August 25, Public Issue of 200 Regular Income Bond ICRA “LAAA”
June 29,2001 2001 2001 Unsecured Option I, II and III July 24, 2006 CARE “CARE AAA”
Redeemable Bonds Money Multiplier Bond
in the nature of Option I November 24, 2005
Debentures Option II September 24, 2008
aggregating Children Growth Bond
Option I October 24, 2017
right to retain
oversubscription
Encash Bond July 24, 2006
upto Rs. 400 crore
Pension Bond
Option I July 24, 2012
Option III July 24, 2019
224
March 2005
July 2001 August September Public Issue of 277 Regular Income Bond ICRA “LAAA”
August 4, 28, 2001 26, 2001 Unsecured Option I, II and III August 28, CARE “CARE AAA”
Debentures Option I January 28, 2006
aggregating Rs. 400 Option II October 28, 2008
crore with a right
to retain
oversubscription
upto Rs. 400 crore
Encash Bond August 28, 2006
Tax Saving Bond
Option I August 28, 2004
Option II December 28, 2004
August 2001- September October 17, Public Issue of 224 Regular Income Bond ICRA “LAAA”
September 5, 27, 2001 2001 Unsecured Option I, II and III September CARE “CARE AAA”
2001 Redeemable Bonds 27,2006
Debentures Option I February 27, 2006
aggregating Rs. 400
Option II December 27, 2008
crore with a right
to retain
Option I February 27,2018
oversubscription
upto Rs. 400 crore Option II September 27, 2022
Encash Bond September 27,
2006
Tax Saving Bond
Option I September 27, 2004
Option III March 27, 2008
September November December Public Issue of 288 Regular Income Bond ICRA “LAAA”
2001- 12, 2001 3, 2001 Unsecured Option I, I and III November 12, CARE “CARE AAA”
October 16, Redeemable Bonds 2006
2001
in the nature of Option IV November 12, 2004
Debentures Money Multiplier Bond Option I
aggregating Rs. 400 April 12, 2006
crore with a right Option II February 12, 2009
to retain Children Growth Bond
oversubscription Option I April 12, 2018
upto Rs. 400 crore Option II November 12, 2022
Encash Bond November 12,
2006
Tax Saving Bond Option I
November 12, 2004
Option III May 12, 2008
225
March 2005
November December January 16, Public Issue of 406 Regular Income Bond ICRA “LAAA”
2001 24, 2001 2002 Unsecured Option I II and III December CARE “CARE AAA”
December 3, Redeemable Bonds 24,2008
2001 in the nature of Money Multiplier Bond
Debentures
Option I July 24, 2006
aggregating Rs. 400
crore with a right
oversubscription Option I May 24, 2018 Option II
upto Rs. 400 crore December 24, 2022
Encash Bond December 24,
2006
Tax Saving Bond
Option III June 24, 2008
Floating Rate Bond December
24, 2007
December January February Public Issue of 426 Regular Income Bond ICRA “LAAA”
2001 23, 2002 13, 2002 Unsecured Option I, II and III January 23, CARE “CARE AAA”
December Redeemable Bonds 2009
29, 2001 in the nature of
Money Multiplier Bond
Debentures
aggregating Rs. 400 Option I August 23, 2006
crore with a right Option II May 23, 2009
oversubscription Option I June 23, 2018
upto Rs. 400 crore
Encash Bond January 23, 2007
Tax Saving Bond
Option II May 23,2005
Option IIII July 23, 2008
Floating Rate Bond January 23,
2008
J a n u a r y February March 11, Public Issue of 623 Regular Income Bond ICRA “LAAA”
2002- 19, 2002 2002 Unsecured Option I, II and III February 19, CARE “CARE AAA”
January 24, Redeemable Bonds 2009
2002 in the nature of Option IV February 19, 2007
Debentures Money Multiplier Bond
aggregating Rs. 600
Option I August 19, 2006
crore with a right
Option II May 19, 2009
to retain
Children Growth Bond Option I July
oversubscription
19, 2018
upto Rs. 600 crore
Option II February 19, 2023
Encash Bond February 19, 2007
Tax Saving Bond
Option I February 19, 2005
Option II June 19,2005
Option III August 19, 2008
226
March 2005
February March 27, April 22, Public Issue of 1,037 Monthly Income Bond ICRA “LAAA”
2002- 2002 2002 Unsecured March 27, 2009 CARE “CARE AAA”
March Redeemable Bonds Regular Income Bond
4,2002 in the nature of Option l and II March 27, 2009
Debentures Option III March 27, 2007
aggregating Money Multiplier Bond
September 27, 2009
right to retain
oversubscription
Option I October 27, 2018
upto Rs. 600 crore
Encash Bond March 27, 2007
Tax Saving Bond
Option III July 27, 2005
Option IV September 27, 2008
March 2002- April 23, May 16, Public Issue of 537 Monthly Income Bond ICRA “LAAA”
2002 2002 Unsecured April 23, 2009 CARE “CARE AAA”
March 28,
2002 Redeemable Bonds Regular Income Bond Option l and
in the nature of II April 23, 2009 Option III April 23,
Debentures 2007
aggregating Money Multiplier Bond
Rs. 600 crore with a December 23,2009
right to retain Children Growth Bond
oversubscription Option I February 23, 2019
upto Rs. 600 crore Option II July 23, 2023
Encash Bond April23, 2007
Tax Saving Bond
Option III August 23, 2005
Option IV October 23, 2008
The total amount of liabilities, as on March 7, 2005, on account of redemption of the bonds (domestic public issuances only) over the next
10 years will be as follows:
Years Redemption Amount
(Rs. crore)
2004-05 683.05
2005-06 2,799.83
2006-07 3,175.81
2007-08 474.08
2008-09 612.66
2009-10 358.28
2010-11 172.84
2011-12 13.64
2012-13 -
2013-14 -
227
March 2005
CAPITALISATION OF RESERVES OR PROFITS MAIN PROVISIONS OF OUR ARTICLES OF ASSOCIATION AND

RELATED MATTERS
We have not capitalised our reserves or profits at any time.
Capitalised terms used in this section have the meaning that has
PREVIOUS ISSUES OF PREFERENCE SHARES been given to such terms in the Articles of Association of ICICI Bank.
As per Sec 12(1) of the Banking Regulation Act, a bank is not allowed The regulations contained in Table ‘A’ of Schedule I to the Companies
to issue preference shares. However consequent to the merger of Act (Act I of 1956) shall apply only in so far as the same are not
the erstwhile ICICI Limited with us, we have issued 350 nos. of 0.001% provided for or are not inconsistent with these Articles and the
Preference shares of the face value of Rs. 1 crore each aggregating regulations for the management of ICICI Bank and for observance of
Rs. 350 crore to the preference shareholders of erstwhile ICICI Limited. the Members thereof and their representatives shall, subject to any
The Ministry of Finance has issued a notification no. F. No. 13/3/2002 exercise of the statutory powers of ICICI Bank with reference to
- BOA dated April 17, 2002 to the effect that the restriction of section repeal or alteration of or addition to, its regulations by Special
12 (1) of the Banking Regulation Act, 1949, prohibiting banks Resolution, as prescribed by the Companies Act, be such as are
established after 1944 from issuing or having outstanding preference contained in these Articles.
shares, is not applicable to us for a period of 5 years. The main provisions of the Articles of Association of ICICI Bank inter
alia are detailed below:
OPTION TO SUBSCRIBE
Rights of Members
Save as otherwise stated in the Prospectus, there are no outstanding
options to subscribe for any Shares/Bonds of our Company. As to Capital
We have made arrangements for issue and holding of the Bonds in
either physical or dematerialised form (Refer “Depository Article 73 provides that
Arrangement” on page 25) The Company may from time to time increase its share capital by
PURCHASE OF PROPERTY issuing new shares, subject to the provisions of the Banking Regulation
Act.
There is no property which we have purchased or acquired or
propose to purchase or acquire which is to be paid for wholly or Article 76 provides that
partly out of the proceeds of the present Issue or the purchase or In addition to and without derogating from the powers for the purpose
acquisition of which has not been completed on the date of issue of conferred on the Directors under Article 15, ICICI Bank in General
this Prospectus, other than property: Meeting may, in accordance with the provisions of Section 81 of the
(a) the contracts for the purchase or acquisition whereof were Act, determine that any shares (whether forming part of the original
entered into in the ordinary course of our business, the contracts capital or of any increased capital of ICICI Bank) shall be offered to
not being made in contemplation of the issue nor the issue in such persons (whether Members or holders of debentures of ICICI
consequence of the contract; or Bank or not) in such proportion and on such terms and conditions
(b) in respect of which the amount of the purchase money is not and either at a premium or at par, or at a discount, subject to
material. compliance with the provisions of Section 79 of the Act), as such
General Meeting shall determine.
REVALUATION OF ASSETS
Article 211 provides that
We have not revalued any of our assets during the five years preceding
the date of this Prospectus. If ICICI Bank shall be wound up and the assets available for distribution
among the Members as such shall be insufficient to repay the whole
CLASSES OF SHARES of the paid-up capital, such assets shall be distributed so that, as
nearly as may be, the losses shall be borne by the Members in
Our Authorised Share Capital is Rs. 1,900 crore divided into
proportion to the capital paid-up, or which ought to have been
1,55,00,00,000 Equity Shares of Rs. 10 each and 350 Preference
paid-up, at the commencement of the winding up, on the shares
Shares of Rs.1,00,00,000 each.
held by them, respectively. And, if in a winding up, the assets available
PAYMENT OR BENEFIT TO OUR PROMOTERS OR OFFICERS for distribution among the Members shall be more than sufficient to
repay the whole of the capital paid-up at the commencement of the
Save as otherwise stated in this Prospectus, no amount or benefit
winding up, the excess shall be distributed amongst the Members in
has been paid or given within the two preceding years or is intended proportion to the capital at the commencement of the winding up,
to be paid or given to any of our Promoters or Officers except the paid-up or which ought to have been paid-up on the shares held by
normal remuneration for services rendered as directors, officers or them, respectively. But this Article is to be without prejudice to the
employees of the Company. rights of the holders of shares issued upon special terms and
Ms. Lalita D. Gupte, Joint Managing Director has availed of housing conditions.
loans under the Staff Housing Loan Scheme in ICICI. Mr. K. V. Kamath,
As to Dividend
Managing Director & CEO, Ms. Kalpana Morparia, Deputy Managing
Director, Ms. Chanda D. Kochhar, Executive Director and Dr. Nachiket Article 35 provides that
Mor, Executive Director have availed of housing loans under theStaff
No Member shall be entitled to receive any dividend or to exercise
Housing Loan Scheme. The wholetime Directors are also eligible
any privilege as a Member until he shall have paid all calls for the
for the benefit of stock options under the Employee Stock Option time being due and payable on every share held by him whether
Scheme (ESOS) alone or jointly with any person, together with interest and expenses,
Dr. Nachiket Mor has also availed of certain other loans under staff if any.
loan schemes.
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Article 173 provides that Buy Back of shares

The profits of ICICI Bank, subject to the provisions of the Act, the Article 80A provides that
Memorandum and these presents, shall be divisible among the
members in proportion to the amount of capital paid-up on the The Company may purchase its own shares in the manner provided
shares held by them, respectively. for in Section 77A of the Act.
Modification of Class Rights
Subject to the provisions of the said Acts, no Member shall be Article 81 provides that
entitled to receive payment of any interest or dividend in respect of (a) If at any time, the share capital of ICICI Bank is divided into
his share or shares whilst any money may be due or owing from him different classes of shares, the rights and privileges attached to
to ICICI Bank in respect of such share or shares or otherwise the shares of any class may, subject to the provisions of the Act,
howsoever either alone or jointly with any other person or persons and whether or not ICICI Bank is being wound up, be varied,
and the Directors may deduct from the interest or dividend payable modified, commuted, affected or abrogated with the consent
to any Member all sums of money so due from him to ICICI Bank. in writing of the holders of not less than three-fourths of the
issued shares of that class or with the sanction of a Special
Voting Rights
Resolution passed at a separate meeting of the holders of the
Article 113 provides that issued shares of that class.
(a) On a show of hands, every Member present in person shall (b) This Article is not to derogate from any power ICICI Bank would
have had if this Article were omitted and the right of the
have one vote ; and
dissentient shareholders being holders of not less in the
(b) On a poll, the voting rights of Members shall be as provided in aggregate than 10 per cent of the issued shares of that class
Section 87 of the Act, but will be subject to the ceiling of ten per being persons who did not consent to or vote in favour of the
cent of the total voting rights or such other percentage as may Resolution for the variation, to apply to the Court to have the
be stipulated by Section 12(2) of the Banking Regulation Act. variations or modifications cancelled as provided in Section
107 of the Act.
A Body Corporate (whether a company within the meaning of the Forfeiture and Lien
Act or not) may, if it is a Member, by a resolution of its Board of Article 33 provides that
Directors or other governing body authorise such person as it thinks
fit to act as its representative at any meeting of ICICI Bank, in Neither a judgement nor a decree in favour of ICICI Bank for calls or
accordance with the provisions of Section 187 of the Act. The other moneys due in respect of any shares nor any part payment or
satisfaction thereunder nor the receipt by ICICI Bank of a portion of
production at the meeting of a copy of such resolution duly signed
any money which shall from time to time be due from any Member
by one Director of such Body Corporate or by a Member of its
in respect of any shares either by way of principal or interest nor any
governing body and certified by him as being a true copy of the
indulgence granted by ICICI Bank in respect of payment of any
resolution shall, on production at the meeting, be accepted by ICICI money shall preclude the forfeiture of such shares as herein provided.
Bank as sufficient evidence of the validity of his appointment.
If any Member fails to pay the whole or any part of any call or
Any person entitled under the Transmission Clause to transfer any instalment or any money due in respect of any share(s) either by way
shares may vote at General Meetings in respect thereof as if he was of principal or interest on or before the day appointed for the payment
the registered holder of such shares provided that at least 48 hours of the same, the Directors may at any time thereafter during such
before the time of holding the meeting or adjourned meeting as the time as the call or instalment or any part thereof or other moneys
case may be at which he proposes to vote he shall satisfy the Directors remain unpaid or a judgement or decree in respect thereof remains
of his right to transfer such shares unless the Directors shall have unsatisfied in whole or in part serve a notice on such Member or on
previously admitted his right to vote at such meeting in respect the person (if any) entitled to the share(s) by transmission requiring
thereof. him to pay such call or instalment or such part thereof or other
Article 117 provides that moneys as remain unpaid together with any interest that may have
accrued and all expenses (legal or otherwise) that may have been
(a) Any Member of ICICI Bank entitled to attend and vote at a incurred by ICICI Bank by reason of such non-payment.
meeting of ICICI Bank shall be entitled to appoint another person
(whether a Member or not) as his proxy to attend and vote Article 38 provides that
instead of himself; but a proxy so appointed shall not have any The notice shall name a day not being less than 14 days from the
right to speak at the meeting; date of the notice and the place or places on and at which such call
(b) In every notice calling a meeting of ICICI Bank, there shall appear, or instalment or such part or other moneys as aforesaid and such
with reasonable prominence, a statement that a Member entitled interest and expenses as aforesaid are to be paid. The notice shall
to attend and vote is entitled to appoint a proxy to attend and also state that in the event of non-payment at or before the time and
vote instead of himself and that a proxy need not be a Member. at the place appointed, the share(s) in respect of which the call was
made or instalment is payable, will be liable to be forfeited.
Votes may be given either personally or by attorney or by proxy or
in the case of a Body Corporate, also by a representative duly The Company shall have no lien on its fully-paid shares. In the case
authorised as aforesaid. of partly paid-up shares, ICICI Bank shall have a first and paramount
lien on every share for all moneys that remain unpaid together with
any interest that may have accrued and all expenses (legal or
otherwise) that may have been incurred by ICICI Bank by reason of
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March 2005
non-payment of calls. Any such lien shall extend to all dividends aggregate his/her/its holding to a level of 5 per cent or more of the
from time to time declared in respect of such shares. Unless otherwise total issued capital of the Bank (or such other percentage as may be
agreed, the registration of a transfer of shares shall operate as a prescribed by the RBI from time to time) should be effected by such
waiver of ICICI Bank’s lien, if any, on such shares. buyer(s) after obtaining prior approval of the RBI. The term ‘group’
will have the same meaning as contained in Section 2(e) of the
Restriction on Transfer of Shares
Monopolies and Restrictive Trade Practices Act, 1969.
Article 59 (a) provides that Article 60 provides that
Notwithstanding anything contained in Articles 54, 55 and 56, but If ICICI Bank refuses to register the transfer of any shares it shall within
subject to the provisions of Section 111 of the Act and subject to the two months from the date on which the instrument of transfer is
provisions of the Securities Contracts (Regulation) Act, 1956 and the delivered to ICICI Bank, send to the transferee and the transferor
Rules and Regulations made thereunder and other applicable laws notice of the refusal.
and the Banking Act, the Directors may, at their absolute and
uncontrolled discretion, decline to register or acknowledge any Article 61 provides that
transfer of shares and by giving reasons for such refusal and in Subject to the provisions of the Act, no transfer shall be made to a
particular may so decline in respect of the shares upon which ICICI
person who is of unsound mind. The Directors may, at their absolute
Bank has a lien or whilst any moneys in respect of the shares desired
discretion, approve a minor becoming a Member of ICICI Bank on
to be transferred or any of them remain unpaid and such refusal shall such terms as the Directors may stipulate.
not be affected by the fact that the proposed transferee is already a
Member. Provided that registration of any transfer shall not be refused Article 68 provides that
on the ground of the transferor being either alone or jointly with any
The Company shall incur no liability or responsibility whatever in
other person or persons indebted to ICICI Bank on any account
consequence of their registering or giving effect to any transfer of
whatsoever.
shares made or purporting to be made by the apparent legal owner
Article 59 (b) provides that thereof (as shown or appearing in the Register of Members) to the
prejudice of persons having or claiming any equitable right, title or
Without prejudice to the foregoing provisions and without limiting interest to or in the same shares notwithstanding that ICICI Bank may
in any manner the generality of the above provisions, the Directors have had notice of such equitable right, title or interest or notice
of ICICI Bank may, at their absolute and uncontrolled discretion,
prohibiting registration of such transfer, and may have entered such
refuse to register the transfer of any shares or other securities of ICICI
notice or referred thereto in any book of ICICI Bank and ICICI Bank
Bank, being shares or securities issued by ICICI Bank, in favour of shall not be bound or required to regard or attend or give effect to
any transferee whether individual, firm, group, constituent of a group, any notice which may be given to them of any equitable right, title or
Body Corporate or Bodies Corporate under the same management interest or be under any liability whatsoever for refusing or neglecting
or otherwise and whether in his or its own name or in the name of to do so though it may have been entered or referred to in some
any other person if the total nominal value of the shares or other
book of ICICI Bank but ICICI Bank shall nevertheless be at liberty to
securities intended to be so transferred, exceeds, or together with
regard and attend to any such notice and give effect thereto, if the
the total nominal value of any shares or other securities already held Directors shall so think fit.
in ICICI Bank by such individual, firm, group, constituent of a group,
Body Corporate or Bodies Corporate under the same management Indemnity and Responsibility
or otherwise will exceed one per cent of the paid-up equity share
capital of ICICI Bank or if the Directors are satisfied that as a result of Article 215 provides that
the proposed transfer of any shares or securities or block of shares (a) Subject to the provisions of Section 201 of the Act, every Director
or securities of ICICI Bank, a change in the composition of the Board of ICICI Bank or Officer (whether Managing Director, Manager,
of Directors or change in the controlling interest of ICICI Bank is Secretary or other Officer) or employee or any person employed
likely to take place and that such change would be prejudicial to the by ICICI Bank as Auditor shall be indemnified by ICICI Bank
interest of ICICI Bank or to the public interest. For the purpose of this against and it shall be the duty of the Directors out of the funds
Article, the Directors of ICICI Bank shall be entitled, inter alia, to rely of ICICI Bank to pay all costs, losses and expenses (including
upon this Article to form its own opinion as to whether such travelling expenses) which any such Director, Officer, other
registration of transfer of any of its shares or other securities exceeding employee or Auditor may incur or become liable to by reason
one per cent of the paid-up equity share capital of ICICI Bank should of any contract entered into or act or deed done by him as such
be refused or not. Director, Officer, other employee or Auditor or in any way in the
Article 59 (c) provides that discharge of his duties.
(b) Subject as aforesaid, every Director, Officer, other employee or
Notwithstanding anything to the contrary, the restrictive provisions
Auditor of ICICI Bank shall be indemnified against any liability
contained in the preceding sub-article (b) shall not apply to the
incurred by him in defending any proceedings, whether civil or
transfer of any shares or other securities made to and representing
criminal, in which judgement is given in his favour or in which
the own investment of any of the following:
he is acquitted or discharged in connection with any application
i. Public Financial Institutions within the meaning of Section 4A of under Section 633 of the Act in which relief is given to him by
the Act; court.
ii. Public Sector Banks;
Chairman
iii. Multilateral Agencies, Foreign Banks and Institutions; and
iv. Public Sector Mutual Funds being Mutual Funds sponsored, Article 159 (a) provides that
promoted or managed by a Public Financial Institution or a All meetings of the Directors shall be presided over by the Chairman,
Public Sector Bank. if present, but if at any meeting of Directors, the Chairman be not
present, at the time appointed for holding the same, then and in that
Article 56 (d) provides that
case the Managing Director shall be entitled to be the Chairman of
Acquisition of shares by a person/group which would take in the such meeting, failing which the Board shall choose one of the Non-
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rotational Directors then present to preside at the meeting. term on June 23, 2004, subject to the approval of RBI and the Members
of ICICI Bank. The Members at their Meeting held on March 12, 2004,
Directors’ Remuneration and Powers approved the said re-appointment. RBI vide its letter dated April 7,
2004 also approved the said re-appointment.
The Board also appointed Ms. Kalpana Morparia and Mr. S. Mukherji
The fees payable to a Director for attending a meeting of the Board
as Additional Directors and appointed them as Executive Directors
or Committee thereof shall be decided by the Board of Directors,
for the period from May 3, 2002 till the dates on which their respective
from time to time, within the limits as may be prescribed by the Act
terms as whole-time Directors of ICICI would have expired. Mr. S.
or the Central Government. No Director who is a Government servant
Mukherji has ceased to be a Director effective February 1, 2004
shall be entitled to receive any remuneration under this Article or
other provisions of these presents except as authorised by the consequent upon his appointment as Managing Director & CEO of
Government. ICICI Securities. Ms. Kalpana Morparia was re-designated as Deputy
Managing Director with effect from February 1, 2004 and the same
Article 132A provides that was intimated to the Reserve Bank of India vide letter dated February
Subject to the provisions of Article 132, in the case of a Government 4, 2004.
servant, the Directors may allow and pay to any Director who is not The Board of Directors, at its Meeting held on April 30, 2004 revised
a bonafide resident of the place where a meeting is held and who the salary range payable to the wholetime Directors, subject to the
shall come to such place for the purpose of attending a meeting, approval of the Members. The Members, approved the same at
such sum as the Directors may consider fair compensation for their Annual General Meeting held on September 20, 2004. The
travelling, hotel and other expenses in addition to his remuneration Board or any Committee thereof may fix within the range stated
as above specified and the Directors may, from time to time, fix the below, the salary payable to the wholetime Directors. The terms of
remuneration to be paid to any Member or Members of their body the appointment, tenure and remuneration of each of the above
constituting a committee appointed by the Directors in terms of mentioned wholetime Director are detailed below :
these presents and may pay the same.
Salary and Tenure
Article 132B provides that
The range of salary and the tenure are given below:
Subject to the provisions of Article 132, in the case of a Government
Name and Designation Salary per Tenure up to
servant if any Director, being willing, shall be called upon to perform
month (Rs.)
extra services or to make any special exertions in going out or
residing at a particular place or otherwise for any of the purposes of Mr. K. V. Kamath 600,000-1,050,000 April 30, 2006
ICICI Bank, ICICI Bank may remunerate such Director either by a Managing Director & CEO
fixed sum or otherwise as may be determined by the Directors and Ms. Lalita D. Gupte 400,000-900,000 October 31, 2006
such remuneration may be either in addition to or in substitution for Joint Managing Director
his remuneration above provided.
Ms. Kalpana Morparia 300,000-900,000 April 30, 2006
Article 134 provides that Deputy Managing Director
Subject to the provision of the said Acts, if any Director, being Ms. Chanda D. Kochhar 200,000-500,000 March 31, 2006
willing, shall be called upon to perform extra services or to make Executive Director
any special exertions in going out or residing at a particular place or Dr. Nachiket Mor 200,000-500,000 March 31, 2006
otherwise for any of the purposes of ICICI Bank, ICICI Bank may Executive Director
remunerate such Directors either by a fixed sum or otherwise as
may be determined by the Directors and such remuneration may be
Perquisites
either in addition to or in substitution for his remuneration above
provided. Perquisites (evaluated as per Income-Tax Rules, wherever applicable,
Remuneration and at actual cost to ICICI Bank in other cases) like the benefit of ICICI
Bank’s furnished accommodation, gas, electricity, water and
The Articles provide that each Director, except a Director who is a furnishings, club fees, personal insurance, use of car and telephone
Government servant, is entitled to receive out of the funds of ICICI at residence or reimbursement of expenses in lieu thereof, payment
Bank by way of remuneration for attending each meeting of the of income-tax on perquisites by ICICI Bank to the extent permissible
Board or Committee thereof such fees as may be decided by the under the Income-tax Act, 1961 and Rules framed thereunder;
Board from time to time, within maximum limit of such fees that may medical reimbursement, leave and leave travel concession,
be prescribed by the Act or Central Government. At present, the fees education benefits, provident fund, superannuation fund, gratuity
payable for attending each meeting of the Board and Committee and other retirement benefits, in accordance with the scheme(s) and
thereof is Rs. 20,000/-. The Directors are to be paid travelling, hotel rule(s) applicable to the members of the staff from time to time, for
and other expenses for attending meetings of the Board/Committee.
the aforesaid benefits.
If any Director is required to perform extra services or is called upon
to go out of station for any of the purposes of ICICI Bank, ICICI Bank In case bank-owned accommodation is not provided, each of the
may remunerate such Director either by way of a fixed sum or wholetime Directors shall be eligible for house rent allowance of
otherwise as may be determined by the Board of Directors and such Rs.50,000/- per month and maintenance of accommodation including
remuneration may be either in addition to or in substitution of his furniture, fixtures and furnishings, as may be provided by ICICI Bank.
remuneration mentioned above.
Bonus
The Board of Directors, at its Meeting held on April 26, 2002
appointed Mr. K.V. Kamath, as Managing Director & CEO and Ms. An amount up to the average percentage of performance bonus
Lalita D. Gupte as Joint Managing Director, for the period from May paid to the employees, as may be determined by the Board or any
3, 2002 till the dates on which their respective terms as wholetime Committee thereof, based on achievement of such performance
Directors of ICICI would have expired. The Board had approved the parameters as may be laid down by the Board or any Committee
re-appointment of Ms. Lalita D. Gupte on the expiry of her current thereof, subject to other approvals as may be necessary.
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March 2005
Others Provided, further, that ICICI Bank shall not create:

Mr. K. V. Kamath, Ms. Lalita D. Gupte, Ms. Kalpana Morparia, Ms. (a) charge upon any unpaid capital of the company; and
Chanda D. Kochhar and Dr. Nachiket Mor are not liable to retire by (b) a floating charge on the undertaking or any property of ICICI
rotation. However, in order to comply with the provisions of the Bank or any part thereof unless the creation of such floating
Companies Act, 1956, and the Articles of Association, Ms. Lalita D. charge is certified in writing by the RBI as provided in the
Gupte and Ms. Kalpana Morparia shall be liable to retire by rotation, Banking Act.
if at any time the number of non-rotational Directors exceeds one-
Pursuant to Section 293(1)(d) and other applicable provisions of the
third of the total number of Directors. If Ms. Lalita D. Gupte and Ms.
Act, the Members of ICICI Bank passed a resolution at their Annual
Kalpana Morparia are re-appointed as Directors immediately on
General Meeting held on June 15, 1998, giving their consent to the
retirement by rotation, they shall continue to hold their offices of
borrowing by the Directors of ICICI Bank from time to time subject to
Joint Managing Director and Deputy Managing Director,
any restrictions imposed by the terms of Agreements as may have
respectively, and the retirement by rotation and re-appointment shall
been entered into or may be entered into from time to time for grant
not be deemed to constitute a break in their appointment.
of assistance to ICICI Bank, of all deemed by them to be requisite or
The remuneration is within the limits prescribed by the applicable proper for the purpose of carrying on the business of ICICI Bank,
provisions of the Companies Act, 1956. however that the total amount of such borrowing outstanding at any
time shall not exceed Rs. 30.00 billion, notwithstanding that the
Powers of the Directors
moneys to be borrowed together with the moneys already borrowed
Article 166 provides that by ICICI Bank (apart from temporary loans, if any, obtained from
ICICI Bank’s bankers in the ordinary course of business) will exceed
Subject to the provisions of the said Acts, the Board of Directors the aggregate of the paid-up capital of ICICI Bank and its free reserves
shall be entitled to exercise all such powers and to do all such acts that is to say, reserves that are not set apart for any specific purpose.
and things, as ICICI Bank is authorised to exercise and do.
Pursuant to the Scheme of Amalgamation of ICICI, ICICI Capital
Provided that the Board shall not exercise any power to do any act Services Limited and ICICI Personal Financial Services Limited
or thing which is directed or required, by any act or by the (Transferor companies) with us, our borrowing powers in terms of
Memorandum or Articles of ICICI Bank or otherwise, to be exercised Section 293(1)(d) of the said Act, shall without further act, instrument
or done by ICICI Bank in General Meeting. or deed stand enhanced by an amount aggregating to Rs.-1,005.50
Provided further that in exercising any such power or doing any billion being the aggregate borrowing limits of the Transferor
such act or thing, the Board shall be subject to the provisions companies, such limits being incremental to the pre-merger existing
contained in that behalf in any Act or in the Memorandum or Articles limit of Rs. 30.00 billion of ICICI Bank.
of ICICI Bank or in any regulations not inconsistent therewith and With the addition of Rs. 1,005.50 billion to the existing limit of
duly made thereunder including regulations made by ICICI Bank in Rs. 30.00 billion, the post merger borrowing powers of the Board of
General Meeting. Directors of the Bank stand at Rs. 1,035.50 billion.
No regulation made by ICICI Bank in General Meeting shall invalidate
any prior act of the Board which would have been valid if that Article 84 provides that
regulation had not been made. Any bonds, debentures, debenture stock or other securities issued
or to be issued by ICICI Bank shall be under the control of the Directors
Borrowing Powers
who may issue them upon such terms and conditions and in such
Article 83 provides that manner and for such consideration as they shall consider to be for
the benefit of ICICI Bank.
Subject to the relevant provisions of the Act, the Board of Directors
may from time to time, by a resolution passed at a meeting of the Article 85 provides that
Board, borrow moneys and may generally raise and secure the Debentures, debenture stock, bonds or other securities may be made
payment of such sum or sums in such manner and upon such terms assignable free from any equities between ICICI Bank and the person
and conditions in all respects as they think fit and in particular by the to whom the same may be issued.
issue of bonds, perpetual or redeemable debentures or debenture
stock or any mortgage or charge or other security on the undertaking Article 86 provides that
or the whole or any part of the property of ICICI Bank both present Subject to the provision of the said Acts, any bonds, debentures,
and future including its uncalled capital for the time being. debenture stock or other securities may be issued at a discount,
Provided that the Directors shall not borrow moneys, where moneys premium or at par and with any special privileges as to redemption,
to be borrowed together with the moneys borrowed by ICICI Bank, surrender, drawing, allotment of shares, appointment of Directors
apart from temporary loans obtained in its ordinary course of business or otherwise.
and except as otherwise provided hereafter, shall exceed the
Delegation of Powers
aggregate of the paid-up capital of ICICI Bank and its free reserves,
that is to say, reserves not set apart for any specific purpose. Article 157 provides that
Provided, however, that: The Directors may subject to the provisions of the Act delegate any
(a) nothing contained hereinabove shall apply to any sums of of their powers to Committees consisting of Directors and/or such
moneys borrowed by ICICI Bank from any other banking other person or persons as they think fit, and they may from time to
companies or from the RBI, State Bank of India or any other time revoke and substitute such delegation. Any Committee so formed
bank established by or under any law for the time being in shall in the exercise of the powers so delegated, conform to any
regulations that may from time to time be imposed on it by the
force;
Directors. All acts done by any such Committee in conformity with
(b) acceptance by ICICI Bank in the ordinary course of business of such regulations and in fulfilment of the purposes of its appointment
deposits of moneys shall not be deemed to be borrowing of but not otherwise, shall have the force and the effect as if done by the
moneys by ICICI Bank for the purpose aforesaid. Board.”
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Interest of Directors and Promoters Directors or any one or more of them may suffer by reason
of becoming or being sureties or a surety for ICICI Bank;
(ii) any contract or arrangement entered into or to be entered
(a) Every Director of ICICI Bank who is in any way, whether directly into with a public company or a private company which is
or indirectly, concerned or interested in a contract or a subsidiary of a public company, in which the interest of
arrangement or proposed contract or arrangement entered the Director aforesaid consists solely :
into or to be entered into, by or on behalf of ICICI Bank, shall (1) in his being a Director of such company and the holder of not
disclose the nature of his concern or interest at a Meeting of the more than shares of such number or value therein as is requisite
Board of Directors. to qualify him for appointment as a Director thereof, he having
(b) (i) In the case of a proposed contract or arrangement, the been nominated as such Director by ICICI Bank, or
disclosure required to be made by a Director under sub- (2) in his being a member holding not more than two per cent of
article (a) above shall be made at the meeting of the Board the paid-up share capital of such other company.
at which the question of entering into contract or
arrangement is first taken into consideration or if the Director None of the Directors of ICICI Bank are interested in any property
was not, at the date of that meeting, concerned or interested acquired by ICICI Bank. No Director is interested or concerned in the
in the proposed contract or arrangement at the first meeting Issue except so far as he or she may be issued Equity Shares out of
of the Board held after he becomes so concerned or the Issue in case he or she decides to subscribe thereto or except in
interested; case of issue of Equity Shares to a company/body corporate/firm/
concern/bank in which the Director is concerned or his or her relative
(ii) in the case of any other contract or arrangement, the might be directly or indirectly interested to hold any office of profit
required disclosure shall be made at the first meeting of or receive any commission/brokerage or remuneration.
the Board held after the Director becomes concerned or
interested in the contract or arrangement. The Directors of ICICI Bank are deemed to be interested only directly
or indirectly, to the extent to which they are Directors in (a) bodies
(c) (i) For the purpose of sub-articles (a) and (b) above, a general corporate which have obtained financial assistance from ICICI Bank
notice given to the Board by a Director, to the effect that he in the normal course of business, (b) banks which are Bankers to the
is a Director or a Member of a specified Body Corporate Issue or (c) any other contract or arrangement with ICICI Bank in the
or is a partner of a specified firm and is to be regarded as ordinary course of business or in connection with the Issue.
concerned or interested in any contract or arrangement
which may, after the date of the notice, be entered into with All Directors of ICICI Bank are or may be deemed to be interested to
that Body Corporate or firm shall be deemed to be a the extent of remuneration, sitting fees for attending meetings of the
sufficient disclosure of concern or interest in relation to Board and reimbursement of expenses, if any, payable to them by
any contract or arrangement so made; ICICI Bank. Directors of ICICI Bank are or may be deemed to be
interested to the extent of remuneration, sitting fees for attending
(ii) any such general notice shall expire at the end of the meetings of the Board, commission and reimbursement of expenses,
financial year in which it is given, but may be renewed for if any, payable to them by the subsidiaries/associate companies of
further periods of one financial year at a time, by a fresh ICICI Bank. Subject to the above, no Director is interested in the
notice given in the last month of the financial year in which promotion of ICICI Bank, or in any property acquired by ICICI Bank
it would otherwise expire; within two years of the date of the Prospectus or proposed to be
(iii) no such general notice and no renewal thereof shall be of acquired by it.
effect unless it is either given at a meeting of the Board or
the Director concerned takes reasonable steps to secure Managing Director
that it is brought up and read at the first meeting of the Article 151(a) provides that
Board after it is given.
Subject to the provisions of the said Acts and these presents, the
(d) Nothing in this Article shall be taken to prejudice the operation
Board of Directors of ICICI Bank shall be entitled to appoint from
of any rule of law restricting a Director of ICICI Bank from having
time to time, one or more of the Non-Rotational Directors to act as
any concern or interest in any contracts or arrangements with
the Wholetime or Executive Chairman and Managing Director or
ICICI Bank.
Part-time Chairman or Wholetime Chairman (hereinafter referred to
(e) Nothing in this Article shall apply to any contract or arrangement as the “Executive Chairman”) or a Managing Director or Managing
entered into or to be entered into between ICICI Bank and any Director(s) and/or Wholetime Director or Wholetime Director(s) of
other company where any of the Directors of ICICI Bank or two ICICI Bank (hereinafter referred to as the “Managing Director”) for
or more of them together holds or hold not more than two per such term not exceeding five years at a time as the Board of Directors
cent of the paid-up share capital in the other company. may think fit to manage the affairs and business of ICICI Bank and
Article 140 provides that may from time to time (subject to provisions of any contract between
him and ICICI Bank) may remove or dismiss him or them from office
(a) No Director of ICICI Bank shall, as a Director, take part in the and appoint another in his place.
discussion of, or vote on, any contract or arrangement entered
into or to be entered into, by Board’s proceedings or on behalf Retirement of Directors
of ICICI Bank, if he is in any way, whether directly or indirectly,
concerned or interested in the contract or arrangement; nor
shall his presence count for the purpose of forming a quorum at At every Annual General Meeting of ICICI Bank, one third of such
the time of any such discussion or vote; and if he does vote, his Directors for the time being as are liable to retire by rotation or if
vote shall be void. their number is not three or a multiple of three, then the number
nearest to one third, shall retire from office. The Debenture Directors,
(b) Sub-article (a) above shall not apply to:
the Government Directors and the Non Rotational Directors, subject
(i) any contract of indemnity against any loss which the to Article 151, shall not be subject to retirement under this Article.
233
March 2005
Number of Directors Subject as aforesaid, the Government Director shall be entitled to

the same rights and privileges and be subject to the same obligations
Article 126 provides that as any other Director of ICICI Bank.
Until otherwise determined by a General Meeting, the number of Debenture Director
Directors shall not be less than three or more than twenty one
excluding the Government Director (referred to in Article 128A) and Article 129 provides that
the Debenture Director (referred to in Article 129), (if any).
Any trust deed covering the issue of debentures or bonds of ICICI
Alternate Director Bank may provide for the appointment of a Director (in these presents
referred to as the “Debenture Director”) for and on behalf of the
Article 130 provides that holders of debentures or bonds for such period as is therein provided
(a) The Board of Directors may appoint an Alternate Director to not exceeding the period for which the debentures/bonds or any of
act for a Director (hereinafter in this Article called “the Original them shall remain outstanding and for the removal from office of
Director”) at his suggestion or otherwise, during his absence such Debenture Director and on a vacancy being caused whether
for a period of not less than three months from the state in which by resignation, death, removal or otherwise for appointment of a
meetings of the Board are ordinarily held; Debenture Director in the vacant place. The Debenture Director
shall not be liable to retire by rotation or be removed from office
(b) An Alternate Director appointed under sub-article (a) above
except as provided as aforesaid.
shall not hold office as such for a period longer than permissible
to the Original Director in whose place he has been appointed Additional Directors and Casual Vacancy
and shall vacate the office if and when the Original Director
returns to the state in which meetings of the Board are ordinarily Articles 135 and 136 provide that
held; The Directors shall have the power at any time and from time to time
(c) If the term of office of the Original Director is determined before to appoint, subject to the provisions of these presents, any person as
he so returns to the state aforesaid any provision for the an Additional Director to the Board either to fill a casual vacancy or
automatic re-appointment of retiring Directors in default of as an addition to the Board but so that the total number shall not, at
another appointment shall apply to the Original, and not to the any time, exceed the maximum number fixed for the Board, but any
Alternate Director. Director so appointed shall hold office only up to the date of the next
Annual General Meeting of ICICI Bank and shall then be entitled for
Non Rotational Directors re-election.
Article 128 provides that Article 137 provides that
Not more than one third of the total number of Directors shall be Subject to the provisions of the Act, the continuing Directors may
non-rotational Directors and, except for the Debenture Director and act notwithstanding any vacancy in their body; but so that if the
the Government Director, such non-rotational Directors (hereinafter number falls below the minimum number fixed, the Directors shall
referred to as the ‘Non-Rotational Directors’) shall be appointed by not except in emergencies or for the purpose of filling up vacancies
the Board of Directors of ICICI Bank. The remaining Directors shall or for summoning a General Meeting of ICICI Bank act so long as the
be persons whose period of office is liable to determination by number is below the minimum and they may so act notwithstanding
rotation and subject to the provisions of the Act shall be appointed the absence of a necessary quorum.
by ICICI Bank in General Meeting.
Reconstitution of the Board
Government Director
Article 128 A (a) provides that a) If the requirements as to the constitution of the Board as laid
During such time as the Guarantee Agreement dated March 14, 1955 down in any of the Companies Act, 1956 and the Banking
or the Guarantee Agreement dated July 15, 1959 or the Guarantee Regulation Act are not fulfilled at any time, the Board shall
Agreement dated October 28, 1960 or the Guarantee Agreement reconstitute such Board so as to ensure that such requirements
dated February 28, 1962, between the President of India and the are fulfilled.
International Bank for Reconstruction and Development shall remain b) If, for the purpose of reconstituting the Board under sub-article
in force, the President of India shall have the right from time to time, (a) above, it is necessary to retire any Director or Directors, the
to appoint one person as a Director of ICICI Bank and to remove Board shall, by lots drawn at a Board Meeting, decide which
such person from office and on a vacancy being caused in such Director or Directors shall cease to hold office and such decision
office from any cause whether by resignation, death, removal or shall be binding on every Director.
otherwise to appoint a Director in the vacant place. The Company c) Every Director, if he is appointed under any casual or other
shall be entitled to agree with the President of India for the vacancy, shall hold office until the date up to which his
appointment of a Director of ICICI Bank by the President of India as predecessor would have held office, if the election had not
contemplated by this Article in respect of any future advance or been held or, as the case may be, the appointment had not
advances by the Government of India or in respect of any guarantee been made.
or guarantees that may be given by the Government of India in d) No act or proceeding of the Board of Directors of ICICI Bank
connection with ICICI Bank’s future borrowings from The International shall be invalid by reason only of any defect in the composition
Bank for Reconstruction and Development or any other financial thereof or on the ground that it is subsequently discovered that
institution. The Director appointed under this Article is herein referred any of its Members did not fulfil the requirements of this Article.
to as “the Government Director” and the term “Government Director”
means the Director for the time being in office under this Article. The Share Qualification of Directors
Government Director shall not be liable to retire by rotation or be The Directors of ICICI Bank are not required to hold any qualification
removed from office except by the President of India as aforesaid. shares.
234
March 2005
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION to as the Committee of Directors, effective May 3, 2002.
The contracts referred to below (not being contracts entered into in 11. Certified true copy of the resolution of the Board of Directors of
the ordinary course of business carried on by the Company or entered the Company, passed at its Meeting held on April 26, 2002
into more than two years before the date of Prospectus) which are or authorising the Committee of Directors to decide and finalise
may be deemed material, have been entered into by the Company. the terms and conditions of the Issue and stipulating the limit of
Copies of these contracts, together with the copies of the documents the Committee of Directors for the Issue of Bonds.
referred to below, all of which have been attached to a copy of this 12. Certified true copy of the resolution of the Committee of Directors
Prospectus, which have been delivered to the Registrar of Companies, passed at its Meeting held on August 24, 2004 and March 3,
Gujarat at Ahmedabad, for registration may be inspected at the 2005 authorising the Issue of Bonds.
registered or corporate office of the Company between 10.00 a.m. 13. The Report of the Auditors, M/s. S. R. Batliboi & Co. as set out
and 12.00 noon on any working day of the Company from the date herein dated February 4, 2005.
of Prospectus until the date of closing the subscription list.
14. Copies of the Balance Sheet and Profit and Loss Account for the
A. MATERIAL CONTRACTS five years ended March 31, 2000, 2001, 2002, 2003 and 2004 on
1. Copy of letter from the Company dated March 7, 2005 which Report of the Auditors, M/s. S.B. Billimoria & Co. (FY
appointing DSP Merrill Lynch Limited, Enam Financial 2000, 2001 & 2002), S.R. Batliboi & Co and N.M. Raiji & Co. (FY
2003) and S.R.Batliboi & Co. (FY 2004) of both the Company
Consultants Private Limited, JM Morgan Stanley Pvt. Ltd., Bajaj
and its subsidiaries is based.
Capital Limited, RR Financial Consultants Limited, KJMC Global
Market (India) Limited, ICICI Securities Limited, Karvy Investor 15. A copy of the tax benefit report dated March 9, 2005.
Services Limited, as Lead Manager to the Issue. 16. Consent dated March 8, 2005, from the Auditors of the Company
2. Copy of letter from the Company dated March 7, 2005, for inclusion of their report on Accounts in the form and context
appointing The Western India Trustee & Executor Company in which they appear in the Prospectus.
Ltd., as Trustees for the Bondholders. 17. Consents of: (a) Directors of the Company (b) Company
3. Copies of letters from the Company dated March 4, 2005 Secretary and Compliance Officer and Auditors. (c) Lead
appointing M/s. Amarchand & Mangaldas & Suresh A. Shroff & Managers, Solicitors & Advocates, Legal Advisors, Registrar,
Co. as Legal Advisors to the Issue. Bankers to the Issue and Trustees for the Bondholders, as referred
to in their respective capacities.
4. Copy of Memorandum of Understanding (MOU) between the
Company and DSP Merrill Lynch Limited, Enam Financial 18. Copy of Letter dated March 7, 2005 from the Trustee agreeing
Consultants Private Limited, JM Morgan Stanley Pvt. Ltd., Bajaj to execute the trustee agreement within 3 months of closure of
Capital Limited, RR Financial Consultants Limited, KJMC Global the Issue.
Market (India) Limited, ICICI Securities Limited, Karvy Investor 19. Attested General Power of Attorney executed by Directors of
Services Limited, dated March 10, 2005. the Company in favour of person(s) for signing and making
5. Copy of letter from the Company dated March 7, 2005, necessary changes in the Prospectus.
appointing MCS Limited as Registrar to the Issue. 20. Copy of letter from The Credit Analysis & Research Limited
dated September 8, 2004 and March 3, 2005 giving the credit
B. MATERIAL DOCUMENTS rating to the Bonds to be issued by the Company.
1. Certified true copy of the Memorandum and Articles of 21. Copy of letter from ICRA Limited dated August 19, 2004 and
Association of the Company as amended from time to time. March 1, 2005 giving the credit rating to the Bonds to be issued
2. Copy of Certificate of Incorporation of the Company dated by the Company.
January 5, 1994. 22. Certified true copy of the resolution of the Members of the
3. Copy of Certificate of Commencement of Business dated Company passed at the Annual General Meeting held on
February 24, 1994. September 20, 2004 appointing S.R. Batliboi & Co. as Auditors
for the year ending March 31, 2005.
4. Copy of Fresh Certificate of Incorporation consequent to change
of name dated September 10, 1999. 23. Certified true copy of the Resolution of the Members of ICICI
Bank passed at the Annual General Meeting held on June 11,
5. Scheme of Amalgamation of ICICI Limited, ICICI Capital Services 2001 approving the appointment and payment of remuneration
Limited and ICICI Personal Services Limited with ICICI Bank to Ms. Chanda Kochhar, Executive Director and Dr. Nachiket
Limited. Mor, Executive Director effective April 1, 2001.
6. Modification of the authorised share capital of ICICI Bank as per 24. Certified true copy of the Resolution of the Members of the
the scheme of amalgamation. Company passed at the Annual General Meeting held on
7. Increase in the borrowing powers of the Board of Directors in September 16, 2002, approving the appointment and payment
terms of Section 293(1)(d) of the Companies Act, 1956 as per of remuneration to Mr. K.V. Kamath, Managing Director & CEO,
the Scheme of Amalgamation. Ms. Lalita D. Gupte, Joint Managing Director and Ms. Kalpana
Morparia, Executive Director effective May 3, 2002.
8. Certified true copy of the resolution of the Members of the
Company passed at the Annual General Meeting held on June 25. Certified true copy of the resolutions passed by the Board at its
11, 2001 and September 16, 2002 modifying the Object Clause meeting held on January 29, 2004 re-appointing Ms. Lalita D.
of the Memorandum of Association. Gupte as Joint Managing Director and elevating Ms. Kalpana
Morparia as Deputy Managing Director.
9. Certified true copy of the resolution of the Board of Directors of
the Company, passed at its Meeting held on April 12, 2002 26. Certified true copy of the resolution of the Member of the
authorising issue of Bonds. Company passed at the extra-ordinary general meeting held
on March 12, 2004, approving the re-appointment of Ms. Lalita
10. Certified true copies of the resolution of the Board of Directors
of the Company, passed at its Meeting held on April 26, 2002, D. Gupte as Joint Managing Director and copy of letter dated
constituting a Committee of Whole-time Directors to be referred April 7, 2004 from Reserve Bank of India approving the re-
appointment.
235
March 2005
27. Certified true copy of the Resolution of the Members of ICICI 31. Copy of tripartite agreement dated April 23, 1999 between
Bank passed at the Annual General Meeting held on September ICICI Bank, ICICI Infotech (erstwhile ICICI Investor’s Services
20, 2004, revising the salary payable to Mr. K.V. Kamath, Ltd) and CDSL.
Managing Director & CEO, Ms. Lalita D. Gupte, Joint Managing 32. Copies of applications dated October 4, 2004 to NSDL and
Director, Ms. Kalpana Morparia, Deputy Managing Director, CDSL for umbrella approval to admit the Bonds offered in the
Ms. Chanda D. Kochhar, Executive Director and Dr. Nachiket financial year 2004-05 into their depository system and copies
Mor, Executive Director effective April 1, 2004. of letters dated December 3, 2004 and December 2, 2004 from
28. Copies of due diligence certificate dated October 28, 2004 to NSDL and CDSL respectively confirming the admission subject
SEBI from DSP Merrill Lynch Limited, SEBI observation letter to completion of other formalities.
No. CFD/DIL/UR/28436/2004 dated December 15, 2004 and No. 33. Copy of approval from CBDT vide letter F. No.178/63/2004-
CFD/DIL/UR/30760/2004 dated January 11, 2005 fresh due ITA.I dated January 6, 2005 approving the Tax Saving Bond as
diligence certificate from DSP Merrill Lynch Limited dated March eligible security under Section 88 of the Income-tax Act, 1961.
16, 2005. 34. Certified true copy of notification from Ministry of Finance,
29. Copy of initial listing letters dated March 14, 2005 for listing the notification F.No. 13/3/2002 - BOA dated April 17, 2002,
Bonds on BSE and NSE. exempting the Company from the restriction of section 12(1) of
the Banking Regulation Act, 1949 for a period of 5 years.
30. Copy of tripartite agreement dated June 23, 1997 between ICICI
Bank, ICICI Infotech (erstwhile ICICI Investor’s Services Ltd) and
NSDL.
236
March 2005
PART III
DECLARATION
We, the Directors of the Company, hereby declare that all relevant provisions of the Companies Act, 1956 and the guidelines issued by the
Government or the guidelines issued by the Securities and Exchange Board of India established under section 3 of the Securities and
Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this prospectus is contrary to
the provisions of the Companies Act, 1956 or the Securities and Exchange Board of India Act, 1992 or rules made thereunder or guidelines
issued, as the case may be.
SIGNED BY THE DIRECTORS*
Mr. Narayanan Vaghul (Chairman)
Mr. Uday Madhav Chitale
Mr. Prabhas Chandra Ghosh
Mr. Lakshmi Niwas Mittal
Mr. Anupam Pradip Puri
Mr. Vinod Rai
Mr. Somesh Ramchandra Sathe
Mr. Mahendra Kumar Sharma
Mr. Priya Mohan Sinha
Prof. Marti Gurunath Subrahmanyam
Mr. V. Prem Watsa
Mr. Kundapur Vaman Kamath (Managing Director & Chief Executive Officer)
Ms. Lalita Dileep Gupte (Joint Managing Director)
Ms. Kalpana Morparia (Deputy Managing Director)
Ms. Chanda D. Kochhar (Executive Director)
Dr. Nachiket Mor (Executive Director)
* (Through their constituted attorney Mr. Nilesh Trivedi)
Mr. N. S. Kannan (Chief Financial Officer & Treasurer)#
# (Through his constituted attorney Mr. Nilesh Trivedi)
PLACE :Mumbai
DATE : March 16, 2005
237
March 2005
INDEX
Title Page No.
Definitions
Preamble ................................................................................................................................................................................................. (i)
Risk Factors ............................................................................................................................................................................................. (ii)
Terms of the Bonds ................................................................................................................................................................................ (xiii)
PART I
GENERAL INFORMATION ..................................................................................................................................................................... 1
Offer of Bonds .................................................................................................................................................................................. 1
Authority for the Issue ...................................................................................................................................................................... 1
Disclaimer Clause ............................................................................................................................................................................ 1
Disclaimer in respect of Jurisdiction ............................................................................................................................................ 2
Disclaimer Clause of BSE ................................................................................................................................................................ 2
Disclaimer Clause of NSE ............................................................................................................................................................... 2
Listing ................................................................................................................................................................................................ 3
Filing ................................................................................................................................................................................................. 3
Cautionary Note ............................................................................................................................................................................... 3
Minimum-Maximum Target ............................................................................................................................................................ 3
Minimum Subscription .................................................................................................................................................................... 3
Letter of Allotment/Refund Order and Interest in case of delay in despatch .............................................................................. 3
Issue Programme ............................................................................................................................................................................ 3
ISSUE MANAGEMENT TEAM .............................................................................................................................................................. 4
Lead Managers to the Issue ............................................................................................................................................................ 4
Co-Managers to the Issue ................................................................................................................................................................ 4
Registrar to the Issue ....................................................................................................................................................................... 4
Solicitors & Advocates .................................................................................................................................................................... 4
Legal Advisor to the Issue .............................................................................................................................................................. 4
Auditors ............................................................................................................................................................................................ 4
Trustee for the Bondholders ........................................................................................................................................................... 4
Bankers to the Issue ......................................................................................................................................................................... 5
Brokers/Agents to the issue ............................................................................................................................................................. 5
Compliance Officer .......................................................................................................................................................................... 5
Credit Rating ..................................................................................................................................................................................... 5
Underwriting .................................................................................................................................................................................... 5
CAPITAL STRUCTURE ........................................................................................................................................................................... 6
TERMS OF THE PRESENT ISSUE ........................................................................................................................................................ 22
Nature of Bonds ............................................................................................................................................................................... 22
z Tax Saving Bond ..................................................................................................................................................................... 22
z Regular Income Bond ............................................................................................................................................................. 23
z Children Growth Bond ............................................................................................................................................................ 23
Common Features, Terms and Conditions of the Bonds ............................................................................................................. 23
Interest on Application Money ............................................................................................................................................... 23
Deemed Date of Allotment ..................................................................................................................................................... 23
Market Lot ................................................................................................................................................................................. 23
Terms of Payment .................................................................................................................................................................... 24
Payment of Interest on Tax Saving Bond (Option I) and Regular Income Bond ................................................................ 24
Payment of Interest subject to Deduction of Tax at Source ................................................................................................. 24
Electronic Clearing Service for Payment of Interest/Redemption. ...................................................................................... 24
Printing of Bank Particulars on Interest/Redemption Warrants ............................................................................................ 25
Status ........................................................................................................................................................................................ 25
Loan Against Bonds ................................................................................................................................................................ 25
Lien ........................................................................................................................................................................................... 25
Lien on Pledge of Bonds ........................................................................................................................................................ 25
Depository Arrangement ........................................................................................................................................................ 25
On-line Applications ................................................................................................................................................................ 26
Form and Denomination ......................................................................................................................................................... 26
Procedure for Redemption by Bondholders ........................................................................................................................ 26
Payment on Redemption ........................................................................................................................................................ 26
Purchase ................................................................................................................................................................................... 27
Right to Re-Issue Bond(s) ........................................................................................................................................................ 27
Transfer/Transmission of Bond(s) ........................................................................................................................................... 27
Jointholders ............................................................................................................................................................................. 27
Nomination ............................................................................................................................................................................... 27
Succession ............................................................................................................................................................................... 27
238
March 2005
INDEX
Title Page No.
Sharing of Information ............................................................................................................................................................ 28
Notices ...................................................................................................................................................................................... 28
Issue of Duplicate Bond Certificate(s) .................................................................................................................................... 28
Trustees for the Bondholders .................................................................................................................................................. 28
Rights, Powers and Discretion of Trustees ............................................................................................................................ 28
DER and NDSCR ...................................................................................................................................................................... 29
Future Borrowings ................................................................................................................................................................... 29
Bondholder not a Shareholder .............................................................................................................................................. 29
Rights of Bondholders ............................................................................................................................................................ 29
Debenture Redemption Reserve ............................................................................................................................................ 29
PROCEDURE FOR APPLICATION ........................................................................................................................................................ 29
Availability of Prospectus and Application Forms ...................................................................................................................... 29
Who can apply ................................................................................................................................................................................. 29
How to apply ................................................................................................................................................................................... 30
Payment Instructions ........................................................................................................................................................................ 31
Submission of Completed Application Forms ............................................................................................................................. 32
Rejection of Applications ................................................................................................................................................................ 32
Letters of Allotment/Bond Certificates/Refund Orders .................................................................................................................. 32
Undertakings by the Issuer .............................................................................................................................................................. 32
Utilization of Application Money ................................................................................................................................................... 32
Declaration as a Public Security/Approved Security ................................................................................................................... 32
Application by Provident Funds, Superannuation Funds and Gratuity Funds ........................................................................... 33
Utilization of Proceeds .................................................................................................................................................................... 33
Tax Benefits ...................................................................................................................................................................................... 33
PARTICULARS OF THE ISSUE .............................................................................................................................................................. 36
Objects of the Issue .......................................................................................................................................................................... 36
COMPANY INFORMATION .................................................................................................................................................................... 36
Overview .......................................................................................................................................................................................... 36
History ............................................................................................................................................................................................... 37
Strategy ............................................................................................................................................................................................ 37
Overview of our Operations ........................................................................................................................................................... 39
Commercial Banking Productions and Services for Retail Customers ....................................................................................... 39
Commercial Banking Productions and Services for Coporate Customers ................................................................................ 42
Commercial Banking Productions and Services for International Customers ........................................................................... 44
Loan Pricing ..................................................................................................................................................................................... 45
Delivery Channels ............................................................................................................................................................................ 45
Treasury ............................................................................................................................................................................................ 46
Asset Composition and Classification ........................................................................................................................................... 47
Competition ...................................................................................................................................................................................... 53
Funding ............................................................................................................................................................................................. 54
Developmental Activities ................................................................................................................................................................ 55
Risk Management ............................................................................................................................................................................ 55
Technology ...................................................................................................................................................................................... 65
Employees ....................................................................................................................................................................................... 66
Properties ......................................................................................................................................................................................... 66
Certain Corporate Matters ............................................................................................................................................................... 66
Board of Directors and Management ............................................................................................................................................ 68
Stock Market Data ............................................................................................................................................................................ 69
Details of the Other Listings ............................................................................................................................................................ 69
Promise Vs. Performance ................................................................................................................................................................ 69
Servicing Behaviour ........................................................................................................................................................................ 69
Management .................................................................................................................................................................................... 70
Key Managerial Personnel .............................................................................................................................................................. 74
Changes in Key Managerial Personnel in the last 3 years ............................................................................................................ 74
Corporate Governance .................................................................................................................................................................... 75
Changes in our Board of Directors and Auditors ......................................................................................................................... 76
Interest of Directors and Key Managerial Personnel .................................................................................................................... 77
Subsidiaries and Other Group Companies .................................................................................................................................... 77
ICICI Securities Limited ................................................................................................................................................................... 78
ICICI Brokerage Services Limited ................................................................................................................................................... 78
ICICI Securities Holding Inc ............................................................................................................................................................ 78
ICICI Securities Inc. .......................................................................................................................................................................... 79
ICICI Prudential Life Insurance Company Limited ........................................................................................................................ 79
ICICI Lombard General Insurance Company Limited ................................................................................................................... 79
ICICI Venture Funds Management Company Limited ................................................................................................................... 80
239
March 2005
INDEX
Title Page No.
ICICI Home Finance Company Limited ......................................................................................................................................... 80
ICICI Bank UK Limited ...................................................................................................................................................................... 81
ICICI Bank Canda .............................................................................................................................................................................. 81
ICICI International Limited ............................................................................................................................................................... 82
ICICI Trusteeship Services Limited ................................................................................................................................................. 82
ICICI Investment Management Company Limited ........................................................................................................................ 82
ICICI Distribution Finance Private Limited ..................................................................................................................................... 83
Prudential ICICI Asset Management Company Limited ............................................................................................................... 83
Prudential ICICI Trust Limited ......................................................................................................................................................... 83
3i Infotech Limited ........................................................................................................................................................................... 84
OPERATIONAL & FINANCIAL PERFORMANCE FOR LAST FIVE YEARS AND MANAGEMENT DISCUSSION .......................... 85
Operating Result Data ...................................................................................................................................................................... 86
Taxation Statement .......................................................................................................................................................................... 88
Balance Sheet Data .......................................................................................................................................................................... 89
Fixed and Floating Rate Liabilities and Assets ............................................................................................................................. 90
Financial Ratios ............................................................................................................................................................................... 91
Capital Adequacy ............................................................................................................................................................................ 92
Changes in the Accounting Policies ............................................................................................................................................... 92
Related Party Transactions .............................................................................................................................................................. 93
Capitalization Statement .................................................................................................................................................................. 95
Management’s Discussion and Analysis of Results of Operations and Financial Condition .................................................... 95
Merger of ICICI with ICICI Bank ....................................................................................................................................................... 95
Half year ended September 30, 2004 compared with Half year ended September 30, 2003 ................................................. 95
Fiscal 2004 compared to Fiscal 2003 ............................................................................................................................................ 97
REGULATIONS AND POLICIES ............................................................................................................................................................ 103
INDIAN LICENCES, APPROVALS, REGISTRATIONS AND PERMISSIONS ...................................................................................... 113
OUTSTANDING LITIGATIONS OR DEFAULTS AND MATERIAL DEVELOPMENTS ....................................................................... 114
OTHER REGULATORY DISCLOSURES ................................................................................................................................................ 124
COMPANIES UNDER THE SAME MANAGEMENT ............................................................................................................................ 124
CHANGES IN MEMORANDUM OF ASSOCIATION ............................................................................................................................ 124
MECHANISM EVOLVED FOR REDRESSAL OF INVESTOR GRIEVANCES ..................................................................................... 125
SPECIFIC DISCLOSURES ...................................................................................................................................................................... 126
Share Capital .................................................................................................................................................................................... 126
Accounting Ratios ........................................................................................................................................................................... 126
Servicing Behaviour ........................................................................................................................................................................ 126
Accounting Policies ......................................................................................................................................................................... 126
PART II
A GENERAL INFORMATION .............................................................................................................................................................. 127
Consents ........................................................................................................................................................................................... 127
Expert Opinion ................................................................................................................................................................................. 127
Allotment/Refund ............................................................................................................................................................................. 127
Retention of Oversubscription ........................................................................................................................................................ 127
Basis of Allotment ............................................................................................................................................................................ 127
Issue of Certificates .......................................................................................................................................................................... 128
Interest on delayed refund .............................................................................................................................................................. 128
B FINANCIAL INFORMATION ............................................................................................................................................................ 129
C STATUTORY AND OTHER INFORMATION .................................................................................................................................. 217
Minimum Subscription .................................................................................................................................................................... 217
Expenses of the Issue ...................................................................................................................................................................... 217
Commission and Brokerage on Previous Issues .......................................................................................................................... 217
Issues Otherwise than for Cash ....................................................................................................................................................... 218
Previous Rights and Public Issues .................................................................................................................................................. 218
Previous Bond Issues ...................................................................................................................................................................... 219
Capitalization of Reserves or Profits .............................................................................................................................................. 228
Previous Issues of Preference Shares ............................................................................................................................................ 228
Option to Subscribe ........................................................................................................................................................................ 228
Purchase of Property ....................................................................................................................................................................... 228
Revaluation of Assets ...................................................................................................................................................................... 228
Classes of Shares ............................................................................................................................................................................. 228
Payment or Benefit to Our Promoters or Officers ......................................................................................................................... 228
Main Provisions of the Articles of Association and Related Matters .......................................................................................... 228
Share Qualification .......................................................................................................................................................................... 234
Material Contracts and Documents for Inspection ....................................................................................................................... 235
PART III
DECLARATION ....................................................................................................................................................................................... 237
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March 2005
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Icicibank

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CONTENTS (For detailed index refer to page 238)

Title Page No.

DEFINITIONS AND ABBREVIATIONS

ATM …………………………………….. Automated Teller Machine

ICICI Venture ...................................... ICICI Venture Funds Management Company Limited

Over Subscription Option

@ Post Issue formalities are being completed.

TERMS OF THE BONDS

Invest FULL Rs. 1,00,000/- in Tax Saving Bond** under Section 88

Choose any/all of the following options :

ICICI BANK LIMITED

ISSUE OPENS ON : SATURDAY MARCH 26, 2005

ISSUE MANAGEMENT TEAM SOLICITORS & ADVOCATES

ICICI SECURITIES LIMITED THE WESTERN INDIA TRUSTEE &

II. CAPITAL STRUCTURE

(As on December 31, 2004) (Rs. in Crore)

2. DEPOSITS AND BORROWINGS

(i) Borrowings in India

Unsecured Redeemable Debentures/ Bonds (Subordinated for Tier-II capital) 8,176.36

3. PRESENT ISSUE TO PUBLIC THROUGH THIS PROSPECTUS

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

Date of No.of Equity Face Value Issue Price Nature of Payment

November 26, 2004 Ms. Chanda D. Kochhar 1,000 Sale

December 3, 2004 Ms. Chanda D. Kochhar 1,000 Sale

December 6, 2004 Ms. Chanda D. Kochhar 6,000 ESOS Allotment

December 10, 2004 Ms. Chanda D. Kochhar 300 Sale

February 28, 2005 Ms. Chanda D. Kochhar 3,500 ESOS Allotment

b. September 2, 2004 Dr. Nachiket Mor 3,616 Sale

September 3, 2004 Dr. Nachiket Mor 19,967 Sale

September 4, 2004 Dr. Nachiket Mor 7,417 Sale

c September 3, 2004 Ms. Lalita D. Gupte 10,000 ESOS Allotment

October 18, 2004 Ms. Lalita D. Gupte 10,000 ESOS Allotment

b. At At February 26, 2005

15. Employee Stock Option Scheme

1. TAX SAVING BOND Option I (Annual Interest)

Section 88D of the I.T. Act Minimum Application 2 Bonds 2 Bonds

Commercial Business and upon which cheques can be drawn; and

Private Banking was approximately 7.9 million as at December 31, 2004.

General requirements of our corporate clients. The products and services

We deal in several major foreign currencies and take deposits from

We provide customer specific products and services and risk hedging

Provisioning and Write-Offs Our policy

* Net of write-offs and interest suspense]

Sector-wise Analysis of Gross Non-Performing Assets

Our risk management set-up is organised as shown in the following chart:

Risk/ Credit Committee Managing Director Audit Committee of

Asset Liability Deputy Managing Director

Chief Financial Officer and Head - Compliance and Audit

Borrower credit Developing and Approval of Development of Comprehensive Ensuring

activities and in the management of trading positions. It includes Notes

collected and the returns guaranteed to policyholders. ICICI Technology Organisation

Mr. Narayanan Vaghul 68 B.Com. (Hons.), Chairman

Mr. Uday Madhav Chitale 55 B.Com., F.C.A. Partner

Mr. Prabhas Chandra Ghosh 60 B.Sc. - Phy. Director