ANALYSIS AND INTERPRETATION OF ANNUAL REPORT OF A COMPANY

FROM BANKING INDUSTRY

ICICI BANK
REFERENCE: ANNUAL REPORT 2012-13




















INDEX

1. ABOUT ICICI BANK

2. CONTENTS OF THE ANNUAL REPORT

3. ANALYSIS

4. FACTORS INFLUENCING COMPANYS FINANCIAL PERFORMANCE

5. PRIMARY ASSETS HELD BY THE COMPANY

6. FUTURE PROSPECTS OF THE COMPANY

7. KEY AREAS IN CORPORATE SOCIAL RESPONSIBILITY OF THE COMPANY













ICICI BANK khayaal aapka

ICICI Bank was established by the Industrial Credit and Investment Corporation of India, an
Indian financial institution, as a wholly owned subsidiary in 1994.
In 1998 ICICI Bank made its first IPO .It acquired Bank of Madurai in the year 2001.In 2002
ICICI Ltd, the parent and its subsidiaries merged with ICICI Bank.
ICICI Bank is an Indian multinational bank and financial services company, headquartered
in Mumbai. Based on 2013 information, it is the second largest bank in India by assets and third
largest by market capitalization. It offers a wide range of banking products and financial services
to corporate and retail customers through a variety of delivery channels and through its
specialized subsidiaries in the areas of:
Investment Banking
Life and Non-Life insurance
Venture Capital and
Asset Management.
The Bank has a network of 3,350 branches and 10,486 ATM's in India, and has a presence in 19
countries.
ICICI Bank is one of the Big Four banks of India ranking as under:
1
st
: State Bank of India
2
nd
: ICICI Bank Limited
3
rd
: Punjab National Bank
4
th
: Canara Bank
The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance
Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh,
Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in
Belgium and Germany.





CONTENTS OF ANNUAL REPORT

An annual report is a comprehensive report on a company's activities throughout the preceding
year. Annual reports are intended to give shareholders and other interested people information
about the company's activities and financial performance.
The following are the main contents of the Annual Report of ICICI Bank:
1. Message from Chairman and Managing Director
Chairman K.V. Kamath
Managing Director & CEO Chanda Kocchar

2. Details of Board of Directors and Board Committees

3. Directors Report

4. Auditors Certificate of Corporate Governance

Auditor S R Batliboi & Co., LLP

5. Business Overview

6. Management discussion and analysis

7. Key Financial Indicators

8. Financials (Including Auditors Report)

9. Notice of AGM (Including Attendance Slip and Proxy Form)





ANALYSIS OF PROFIT AND LOSS ACCOUNT
(Rs. in 100 Crore)
PARTICULARS F.Y. - 2013 F.Y. - 2012 % CHANGE

Interest Income 400.75 335.42 19.5%
Interest Expense 262.09 228.08 14.9%
Net Interest Income 138.66 107.34 29.2%
Non Interest Income
-Fee Income 69.01 67.07 2.9%
-Treasury Income 4.95 (0.13) -
-Dividend from subsidiaries 9.12 7.36 23.9%
-Other Income (Including Lease
Income)
0.38 0.72 (47.2%)
Operating Income 222.12 182.36 21.8%
Operating Expenses (Include lease
depreciation and Direct Marketing
Expenses)
90.13 78.50 14.8%
Operating profit 131.99 103.86 27.1%
Provisions (net of write-backs) 18.03 15.83 13.9%
Profit before Tax 113.96 88.03 29.5%
Tax (including deferred tax) 30.71 23.38 31.4%
Profit after Tax 83.25 64.65 28.8%

Key Ratios
2013 2012
Return on Average Equity (%) 12.94 11.09
Return on Average Assets (%) 1.66 1.44
Earnings per Share 72.20 56.11

OBSERVATION
Profit after tax increased by 28.8% in FY 2012-13 mainly due to 29.9% increase in net interest
income and 11.3% increase in non-interest income. On the other hand non-interest expenses saw
an increase of 14.8%. And since the Profit after Tax increased by 28.8%, the Return on Average
Equity and Return on Average Assets increased by 1.85% and 0.22% respectively. Also the EPS
of the shareholders marked a remarkable increase.
ANALYSIS OF ASSETS
(Rs. in 100 Crore)
ASSETS AS AT 31
ST

MARCH 2013
AS AT 31
ST

MARCH 2012
% CHANGE

Cash and Bank Balances 414.18 362.29 14.3%
Investments 1713.94 1595.60 7.4%
- Govt. & other Approved
Investments
923.76 869.48 6.2%
- RIDF and other related
investments
201.98 181.03 11.6%
- Equity Investments in
subsidiaries
123.22 124.53 (1.1%)
- Other Investments 464.98 420.56 10.6%
Advances 2902.49 2537.28 14.4%
- Domestic 2168.92 1843.25 17.7%
- Overseas branches 733.57 694.03 5.7%
Fixed Assets (including leased
assets)
46.47 46.15 0.7%
Other Assets 290.87 349.37 (16.7%)
Total Assets 5367.95 4890.69 9.8%

*RIDF Rural Infrastructure Development Fund

OBSERVATION
- Total assets increased by 9.8% primarily due to an increase in advances and investments.
- Net advances increased by 14.4% whereas Investments increased by 7.4%.
- Also Cash and Bank Balances increased remarkably by 14.3%.
- This shows the good liquidity position of the Bank.
- Also there was not much increase in Government and other Approved Investments since
Banks have to maintain a specific, currently 23% of their net demand and time liabilities
by way of liquid assets like cash, gold or other approved securities.





ANALYSIS OF LIABILITIES
(Rs. in 100 Crore)
LIABILITIES AS AT 31
ST

MARCH 2013
AS AT 31
ST

MARCH 2012
% CHANGE

Equity Share Capital 11.54 11.53 0.1%
Reserves 655.52 592.52 10.6%
Deposits 2926.14 2555.00 14.5%
- Savings account deposits 856.51 760.46 12.6%
- Current account deposits 369.26 349.73 5.6%
- Term deposits 1700.37 1444.81 17.7%
Borrowings 1053.29 1022.00 3.1%
- Domestic 402.98 377.38 6.8%
- Overseas Branches 650.31 644.62 0.9%
Subordinated Debt 396.62 376.15 5.4%
- Domestic 378.21 358.90 5.4%
- Overseas Branches 18.41 17.25 6.7%
Preference Share Capital 3.50 3.50 0.0%
Other liabilities 321.34 329.99 (2.6%)
Total Liabilities 5367.95 4890.69 9.8%

*Subordinate Debt Debt which ranks after other debts should a company fall into liquidation or
bankruptcy because debt providers have subordinate status in relationship to Normal debt.
OBSERVATION
- Increase in share capital indicates that Capital has been issued during the year.
- Total Liabilities have increased by 9.8% mainly due to increase in Deposits by 14.5%
and Subordinate Debt by 5.4%.
- Customers term deposit has increased remarkably by 17.7% during the year which is
beneficial to the Bank.





FACTORS INFLUENCING THE PERFORMANCE OF THE COMPANY

In the financial year 2012-13, ICICI Bank followed a strategy of balancing growth, profitability
and risk management. Through this approach, they achieved several key milestones, thereby
further strengthening their platform for profitable growth. The year witnessed several challenges
in the operating and business environment. While Indias long-term economic fundamentals and
growth potential are strong, the current challenges have had implications for business sentiment,
corporate profitability and banking sector growth & asset quality. Despite these developments,
the strategy of balancing growth, profitability and risk management has enabled ICICI Bank to
make continued progress.

In face of these challenges some of the key achievements of the Bank during the fiscal year 2013
are as follows:
1. It was the first full year where ICICI Bank achieved full year net interest margins of
above 3.0%.

2. The trends in asset quality for the banking sector have not been encouraging in financial
year 2012-2013. The banking sector has seen significant additions to non-performing
assets (NPA) and restructured loans during the year. Despite these systemic trends, ICICI
Banks asset quality continued to remain stable.
March 31, 2013 March 31, 2012
NPA ratio 0.64% 0.62%.

3. The combined effect of improvement in profitability parameters and growth in business
volumes is reflected through the 29% growth in ICICI Banks profit after Tax to Rs. 83.25
billion in the financial year 2012-13.

4. The Banks Return on Assets has increased to 1.66%.

5. The return on equity also improved in the financial year 2012-13:

March 31, 2013 March 31, 2012
Return on Equity 14.7% 13%

6. During the year, they continued to focus on enhancing their customer proposition through
a combination of physical & technological platforms and innovative product offerings.

7. In financial year 2012-2013, 348 branches and 1,475 ATMs were added to their network,
taking the branch and ATM network to 3,100 and 10,481 respectively at March 31, 2013.

8. They also focused on increasing convenience for customers by expanding their
technology-based offerings, including 24x7 electronic branches and tab banking.

9. They introduced innovative product features such as the MySavings Rewards
programme and the iWish flexible recurring deposit product.

10. With over 2.0 million fans at March 31, 2013, the Facebook page of ICICI Bank not only
had the largest fan base, but also the highest engagement rates in comparison to other
Indian banks.

11. The ICICI Groups current activities in regard to protective role in nation building range
from financial inclusion to working in the areas of education, healthcare and sustainable
livelihoods.

12. During fiscal 2013, ICICI Bank substantially expanded its presence in rural markets
through a combination of branches and business correspondent channels.

13. ICICI Group established 152 rural branches (including 127 low cost branches in
unbanked villages) which represents over 40% of the total branch additions in the current
financial year.

14. As at 31
st
March 2013, ICICI Bank has about 14.9 million financial inclusion accounts
with over 13,500 villages under the coverage of the financial inclusion plan.

15. The number of customer complaints has also reduced from 3837 at the beginning of the
year to 2628 at the end of the year.






PRIMARY ASSETS HELD BY THE COMPANY

The following table set forth indicates the principal components of assets:
Sr.
No
Name of Asset Current Year Previous Year
1 Cash and balances with Reserve Bank of India 190,527,309 204,612,935
i) Cash in Hand ((including foreign
currency notes)
46,774,823 46,696,165
ii) Balances with Reserve Bank of India
in current accounts
143,752,486 157,916,770
2 Balances with Bank and Money at Call and
Short Notice

223,647,879 157,680,199
IN INDIA
i) Balances with Bank
a) In Current Account 3,462,734 2,828,505
b) In other deposit account 36,008,368 36,822,361
ii) Money at call and Short Notice
a) With Banks 53,000,000 5,087,500
b) With other institutions --- 4,568,688
OUTSIDE INDIA
i) In Current Accounts 19,249,648 23,470,339
ii) In other Deposit Accounts 87,128,213 35,029,254
iii) Money at call and Short Notice 24,798,916 49,873,552
3 Investments Rs. 1,713,935,993 Rs. 1,595,600,430
IN INDIA
i) Government securities 923,762,915 869,480,205
ii) Other approved securities - 4,250
iii) Shares (includes equity and
preference shares)
25,050,852 22,922,636
iv) Debentures and bonds 174,775,171 195,135,236
v) Subsidiaries and/or joint ventures 65,482,766 64,796,927
vi) Others (commercial paper, mutual
fund units, pass through
certificates,security receipts,
certificate of deposits, Rural
Infrastructure Development Fund
deposits and other related
investments)
447,127,306 361,872,334

OUTSIDE INDIA
i) Government securities 6,574,742 4,399,569
ii) Subsidiaries and/or joint ventures
abroad (includes equity and
preference shares)
62,475,493 66,864,257
iii) Others (equity shares, bonds and
certificate of deposits)
8,686,748 10,125,016
4 Advances 2,902,494,351 2,537,276,579
i) Bills purchased and discounted 61,532,333 48,693,815
ii) Cash credits, overdrafts and loans
repayable on demand
451,092,674 334,851,948
iii) Term loans 2,389,869,344 2,153,730,816
5 Fixed Assets 46,470,587 46,146,870
i) Premises 31,279,021 31,709,026
ii) Other fixed assets (including
furniture and fixtures)
12,843,252 12,043,515
iii) Assets given on lease 2,348,314 2,394,329
6 Other Assets Rs. 290,870,692 Rs. 349,370,958
i) Inter-office adjustments (net) - -
ii) Interest accrued 44,902,010 42,175,150
iii) Tax paid in advance/tax deducted at
source (net)
36,098,478 34,161,502
iv) Stationery and stamps 10,045 10,308
v) Non-banking assets acquired in
satisfaction of claims
576,833 600,575
vi) Advances for capital assets 1,154,106 1,344,889
vii) Deposits 10,868,027 10,669,329
viii) Deferred Tax asset (net) 24,793,018 25,453,167
ix) Others 172,468,175 234,956,038
TOTAL ASSETS 5,367,946,811 4,890,687,971


Total assets increased by 9.8% from Rs. 4,890.69 billion at March 31, 2012 to
Rs. 5,367.95 billion at March 31, 2013, primarily due to an increase in advances and
investments.
Net advances increased by 14.4% from Rs. 2,537.28 billion at March 31, 2012 to Rs.
2,902.49 billion at March 31, 2013.
Investments increased by 7.4% from Rs. 1,595.60 billion at March 31, 2012 to Rs.
1,713.94 billion at March 31, 2013.








Cash and cash equivalents

Cash and cash equivalents include cash in hand and balance with RBI and other banks,
including money at call and short notice.
Cash and cash equivalents increased from Rs. 362.29 billion at March 31, 2012 to Rs.
414.18 billion at March 31, 2013.
The increase was primarily due to an increase in term and call money lending.
The balances with RBI decreased from Rs. 157.92 billion at March 31, 2012 to Rs.
143.75 billion at March 31, 2013 primarily due to reduction in CRR.

I nvestments

Total investments increased by 7.4% from Rs.1595.60 billion at March 31, 2012 to Rs.
1,713.94 billion at March 31, 2013, primarily due to an increase in investment in
government securities by Rs. 54.28 billion,
Rural Infrastructure Development Fund and other related investments (pursuant to
shortfall in achievement of directed lending requirements) by Rs. 20.96 billion, pass
through certificates by Rs. 35.20 billion and commercial paper and certificates of deposit
by Rs. 34.87 billion.
The investment in mutual funds decreased by Rs. 21.54 billion and corporate bonds and
debentures decreased by Rs. 20.36 billion during fiscal 2013.
At March 31, 2013, we had an outstanding net investment of Rs. 11.47 billion in security
receipts issued by asset reconstruction companies in relation to sale of non-performing
loans compared to Rs. 18.32 billion at March 31, 2012.
At March 31, 2013, we had notional non-funded credit derivatives outstanding of Rs.
3.07 billion compared to Rs. 10.25 billion at March 31, 2012.
We had no funded credit derivatives outstanding at March 31, 2013.

Advances

Net advances increased by 14.4% from Rs. 2,537.28 billion at March 31, 2012 to Rs.
2,902.49 billion at March 31, 2013 primarily due to increase in the domestic corporate
and retail loan book.
Net retail advances Managements Discussion & Analysis Annual Report 2012-2013 63
increased by 11.4% from Rs. 963.63 billion at March 31, 2012 to Rs. 1,073.59 billion at
March 31, 2013.
Net advances of overseas branches (including offshore banking unit) decreased in USD
terms by 0.7% from US$ 13.6 billion at March 31, 2012 to US$ 13.5 billion at March 31,
2013.
In rupee terms, net advances of overseas branches (including offshore banking unit)
increased by 5.7% from Rs. 694.03 billion at March 31, 2012 to Rs. 733.57 billion at
March 31, 2013.



Fixed and other assets

Net fixed assets increased marginally from Rs. 46.15 billion at March 31, 2012 to Rs.
46.47 billion at March 31, 2013.
Other assets decreased by 16.7% from Rs. 349.37 billion at March 31, 2012 to Rs. 290.87
billion at March 31, 2013.
At March 31, 2013, we have presented mark-to-market on forex and derivatives trading
transactions (including revaluation on outstanding funding swaps) and interest accrual on
hedge swaps on gross basis.
Accordingly, the gross positive mark-to-market amounting to Rs. 113.24 billion has been
included in other assets at March 31, 2013.
Consequent to the change, other assets have increased by Rs. 154.22 billion at March 31,
2012. This was previously presented on a net basis and the net positive mark-to-market
was recorded in Other Assets and the net negative mark-to-market was recorded in
Other Liabilities.

Advances































FUTURE PROSPECTS OF ICICI BANK

Vision

To be the leading provider of financial services in India and enhance our positioning among
global banks through sustainable value creation.

Mission

To create value for our stakeholders by:

Being the financial services provider of first choice for our customers by delivering high
quality, world-class products and services.

Playing a proactive role in the full realisation of Indias potential and contributing
positively in all markets where we operate

Maintaining high standards of governance and ethics; and balancing growth, profitability
and risk to deliver and sustain healthy returns on capital

ICICI CEO on Banks Future Plans
Foreseeing Indian economy back on a high-growth trajectory in the coming months, ICICI Bank
is looking at expanding its fund-generation profile and revenue streams to capitalise on the
forthcoming opportunities.
"Looking ahead, we see favourable prospects for the Indian economy. . . India has weathered the
global storm with a high degree of resilience and we expect the Indian economy to return to a
robust growth path ahead of other economies that are experiencing recessionary conditions,"
ICICI Bank managing director and chief executive officer Chanda Kochhar has said.
"As we prepare ourselves for the next phase of growth, we will work on further diversifying our
funding profile and revenue streams," Kochhar said in her message to the country's largest
private sector bank's shareholders.
Since 2007, as the global and Indian economic environment has changed rapidly, the bank has
focused on a conscious strategy of capital conservation, risk containment and efficiency
improvement.
"We have healthy capital adequacy, sound liquidity and improved cost efficiencies," she added.
The bank's chairman K V Kamath also expressed confidence that 'the Indian economy's robust
fundamentals and domestic growth drivers will impart it the resilience to emerge stronger from
this period'.
"I believe the economic recovery, some signs of which are already visible, will gather
momentum in the coming months and in due course see India returning to a high growth
trajectory," he noted in his message to shareholders.
Kamath, who handed over the role of MD and CEO to Kochhar last month, further said, "The
last year has been an exceptionally challenging year for the global economy and financial sector.
"India, while fundamentally in a much stronger position, has also experienced the impact of
these events as they were transmitted through trade and capital channels."
Kochhar said that against the backdrop of an imminent recovery in Indian economy, "The ICICI
Group sees before it a wide opportunity spectrum: increasing household incomes and
consumption in both rural and urban India; significant industrial and infrastructure investment
potential; and the vast Indian spanning the globe.
"We, as a multi specialist financial services group, are well positioned to capitalise on these
opportunities. We will continue to participate in India's growth by meeting the financial services
needs of the Indian economy."
The annual report also quoted ICICI Bank's executive director Sonjoy Chatterjee as saying,
"Indian economy has strong fundamentals and will provide robust growth opportunities for
industry."
"The Indian corporate sector has demonstrated its ability to withstand the global economic
challenges and we will extend full support to the industry as it reorients strategies in this
environment. We will focus on deepening our client relationships to enhance the diversity and
resilience of our revenue streams," Chatterjee said.
Kamath further said that ICICI Bank was able to meet the challenge posed by the developments
in global economy 'due to its strong capital position and the fundamental strengths of its
franchise.'
"We have demonstrated our success over a long period of time. In fiscal 1985, we had a net
worth of Rs 1.75 billion, assets of about Rs 21 billion and profits of Rs 0.36 billion.
"Over the past few years, we have built a strong franchise in the Indian corporate and retail
segments, the non-resident Indian segment, and the wider deposit market in certain countries. We
believe that the strategy that we have followed and the franchise that we have built provide a
strong foundation for our growth in the years to come," Kochhar said.

In a major expansion drive, ICICI Bank plans to add about 1,500 branches over a period of four
years against the existing strength of about 2,500.

With the addition, the branch network to go up to 4,000 by 2015, a senior official of ICICI Bank
said.

The branch expansion will help increase its presence as well as business, the official said, adding
it will help mobilise cheap resources.

PROMOTING INCLUSIVE GROWTH

ICICI Foundation for Inclusive Growth (ICICI Foundation) was set up by the ICICI Group in
early 2008 with a view to carry forward and build upon its legacy of promoting inclusive growth.
ICICI Foundation works primarily with government authorities and specialised grass-root
organisations to support developmental work in identified focus areas.
In fiscal 2012, ICICI Foundation moved its focus from being just a donor to becoming a key
stakeholder in design, implementation and impact evaluation of its programmes and projects.
During fiscal 2013, ICICI Foundation further strengthened its efforts in identified areas
Elementary Education
Sustainable Livelihoods
Primary Health and
Financial Inclusion.
All of ICICI Foundations activities are focused around building capabilities and developing
innovative models that can be replicated and scaled up in the future.

Areas of Focus

1. Elementary Education

(i.) School and Teacher Education Reform Programme (STERP), Rajasthan:
ICICI Foundations flagship education programme, STERP, is being implemented through
a six-year partnership with the Government of Rajasthan. The programme endeavours to
deliver a child-centric learning environment in Government elementary schools with the
aim of instilling critical thinking and meaningful learning among students. In its second year
now, STERP aims to bring about a strategic shift in the States elementary education
system and bring it in line with the National Curriculum Framework (NCF) 2005, the
National Curriculum Framework for Teacher Education (NCFTE) 2009 and the Right to
Education (RTE) Act 2009.
The STERP programme has four key objectives, the progress of which is as below:

(a. Revision and renewal of curriculum, syllabus guidelines and development of new textbooks:
During fiscal 2013, the curricula and syllabi for Classes I to VIII have been revised and new
English textbooks for Classes VI, VII and VIII have been developed. Publication of 13 new
textbooks has also since been approved, taking the total number of new textbooks developed to
16.

(b. Education and training of in-service teachers: At least 300,000 in-service teachers in Rajasthan
need proper training to professionally develop themselves in line with NCF 2005, NCFTE 2009
and RTE 2009. The training is being conducted on a cascade model through a two-tier structure
involving 250 Key Resource Persons (KRPs) and 2,500 Master Trainers (MTs). Training modules
for English textbooks (Class VI to VIII) were developed and training was conducted by 70 KRPs
and 500 MTs for 25,000 in-service teachers. The curriculum and syllabus for the Basic School
Training Certificate (BSTC) programme have also been revised, approved and placed in the
public domain for feedback.

(c. Governance and Institutional Accountability: The RTE Act 2009 specifies that every child in the
age group of 6 to 14 years has a right to good quality and free education. The RTE also
mandates recruitment and training of an adequate number of trained teachers to be able to meet
the required ratio of one teacher for every 30 students. Apart from training teachers, STERP also
supports professional development of administrative functionaries, including District Education
Officers, Block Education Officers and District Project Coordinators. Through STERP, ICICI
Foundation aims to cover the issues impacting the learning environment.
At the district level, Teacher Support Units
(TSUs) have been created within the District
Institute of Education and Training (DIET).
150 demonstration schools from the districts
of Baran, Churu and Jaipur in Rajasthan have
been taken up as part of the endeavour for
capacity building and making the schools RtE
compliant.
This includes establishment of School
Management Committees (SMCs) comprising
community-based groups of parents and
stakeholders to oversee on these schools.
TSUs provide full support to on-ground
resource personnel delivering academic inputs
and support to school teachers.
Work is continuing with SMCs having been
constituted in 127 schools. Further, 40 Nodal
Head Masters have completed training. They
will be responsible for management of a cluster
of schools.
(d) Impact Assessment:
The programme seeks to assess the impact of
its intervention continuously. An independent
baseline study identified poor knowledge and
learning indicators of teachers and students.
Some insights from this study were taken