TABLE OF CONTENT

S.NO TOPIC PAGE NO

CERTIFICATE
ACKNOWLEDGEMENT
1
EXECUTIVE SUMMARY
2
INTRODUCTION
Objective Of Study
Company Profie
!
RESEARCH METHODOLOGY
Statement of t"e probem
#e$earc" %e$i&n
Sampin& Tec"ni'ue
Sampe $i(e
Source$ Of %ata Coection
%ata Coection In$trument
%ata Anay$i$ Tec"ni'ue
)imitation Of T"e Study
*
DATA ANALYSIS
+
FINDINGS
,
CONCLUSIONS & SUGGESTIONS
-
BIBLIOGRAPHY
8 ANNEXURE
1
EXECUTIVE
SUMMARY
2
EXECUTIVE SUMMARY
In any organization, the two important financial statements are the Balance
sheet & Profit and loss account of the business. Balance sheet is a statement of
the financial position of an enterprise at a particular point of time. Profit and
loss account shows the net profit or net loss of a company for a specified period
of time. When these statements of the last few year of any organization are
studied and analyzed, significant conclusions may be arrived regarding the
changes in the financial position, the important policies followed and trends in
profit and loss etc. nalysis and interpretation of the financial statement has
now become an important techni!ue of credit appraisal. "he investors, financial
e#perts, management e#ecutives and the ban$ers all analyze these statements.
"hough the basic techni!ue of appraisal remains the same in all the cases but
the approach and the emphasis in analysis vary. ban$er interprets the financial
statement so as to evaluate the financial soundness and stability, the li!uidity
position and the profitability or the earning capacity of borrowing concern.
nalysis of financial statement is necessary because it help in depicting the
financial position on the basis of past and current records. nalysis of financial
statement helps in ma$ing the future decision and strategies. "herefore, it is
very necessary for every organization whether it is a financial or manufacturing
etc. to ma$e financial statement and to analyse it.
%
INTRODUCTION
Object!e O" St#$%
C&'()*% P+&",e
&
Object!e O" St#$%
T"e main objective$ of t"i$ project are t"e foo.in&/
To $tudy about ICICI 0AN1 and it$ reated a$pect$ i2e it$
product$ 3 $ervice$4 "i$tory4 or&ani(ationa $tructure4
$ub$idiary companie$ etc.
To anay$e t"e financia $tatement i.e P3) account and
0aance $"eet of ICICI 0AN1.
To earn about P3) Account4 0aance5$"eet and
different type of A$$et$3 )iabiitie$.
To under$tandin& t"e meanin& and need of 0aance S"eet
and profit and o$$ account.
T"e purpo$e i$ to portray t"e financia po$ition of ICICI
0AN1 .it" t"e "ep of 0aance $"eet and profit and o$$
account.
To evauate t"e financia $oundne$$ 4$tabiity and i'uidity
of ICICI 0AN1.
'
C&'()*% P+&",e
ICICI BANK
I(I(I Ban$ is India)s second*largest ban$ with total assets of %,++,.+' billion
-./0 111 billion2 at 3arch %1, 2114 and profit after ta# of #$. *1.+6 biion for t"e
year ended 7arc" !14 2886. I(I(I Ban$ is the most valuable ban$ in India in terms
of mar$et capitalization and is ran$ed second amongst all the companies listed
on the Indian stock exchanges. In terms of free float mar$et capitalization5.
"he Ban$ has a networ$ of about 1%14 branches and 3,950 !"s in India and
presence in 14 countries. I(I(I Ban$ offers a wide range of ban$ing products
and financial services to corporate and retail customer through a variety of
delivery channels and through its specialized subsidiaries and affiliates in the
areas of investment ban$ing, life and non*life insurance, venture capital and
asset management. "he Ban$ currently has subsidiaries in the .nited 6ingdom,
7ussia and (anada, branches in /ingapore, Bahrain, 8ong 6ong, /ri 9an$a and
:ubai International ;inance (enter and representative offices in the .nited
/tates, .nited rab <mirates, (hina, /outh frica, Bangladesh, "hailand,
3alaysia and Indonesia. .6 subsidiary has established a branch in Belgium.
I(I(I Ban$=s e#uit$ shares are listed in India on Bomba$ %tock &xchange
'B%&( and the )ational %tock &xchange ')%&( of India *imited and its
merican +epositar$ ,eceipts '+,s( are listed on the )e- .ork %tock
&xchange ').%&(.
>
3.1.1HISTORY
I(I(I Ban$ was originally promoted in /990 b$ I1I1I *imited, an Indian
financial institution, and was its wholly owned subsidiary. I(I(I=s shareholding
in I(I(I Ban$ was reduced to &>? through a public offering of shares in India
in fiscal 1++4, an e!uity offering in the form of :7s listed on the @A/< in
fiscal 2111, I(I(I Ban$=s ac!uisition of Ban$ of 3adura 9imited in an all*stoc$
amalgamation in fiscal 2111, and secondary mar$et sales by I(I(I to
institutional investors in fiscal 2111 and fiscal 2112. I(I(I was formed in 1+''
at the initiative of the World Ban$, the Bovernment of India and representatives
of Indian industry. "he principal obCective was to create a development financial
institution for providing medium*term and long*term proCect financing to Indian
businesses. In the 1++1s, I(I(I transformed its business from a development
financial institution offering only proCect finance to a diversified financial
services group offering a wide variety of products and services, both directly
and through a number of subsidiaries and affiliates li$e I(I(I Ban$. In 1+++,
I(I(I become the first Indian company and the first ban$ or financial institution
from non*Dapan sia to be listed on the @A/<.
fter consideration of various corporate structuring alternatives in the conte#t
of the emerging competitive scenario in the Indian ban$ing industry, and the
move towards universal ban$ing, the managements of I(I(I and I(I(I Ban$
formed the view that the merger of I(I(I with I(I(I Ban$ would be the optimal
strategic alternative for both entities, and would create the optimal legal
structure for the I(I(I group=s universal ban$ing strategy. "he merger would
enhance value for I(I(I shareholders through the merged entity=s access to low*
cost deposits, greater opportunities for earning fee*based income and the ability
to participate in the payments system and provide transaction*ban$ing services.
"he merger would enhance value for I(I(I Ban$ shareholders through a large
capital base and scale of operations, seamless access to I(I(I=s strong corporate
relationships built up over five decades, entry into new business segments,
higher mar$et share in various business segments, particularly fee*based
services, and access to the vast talent pool of I(I(I and its subsidiaries. In
,
Ectober 2111, the Boards of :irectors of I(I(I and I(I(I Ban$ approved the
merger of I(I(I and two of its wholly*owned retail finance subsidiaries, I(I(I
Personal ;inancial /ervices 9imited and I(I(I (apital /ervices 9imited, with
I(I(I Ban$. "he merger was approved by shareholders of I(I(I and I(I(I
Ban$ in Danuary 2112, by the 8igh (itst of BuCarat at hmedabad in 3arch
2112, and by the 8igh (itst of Dudicature at 3umbai and the 7eserve Ban$ of
India in pril 2112. (onse!uent to the merger, the I(I(I group=s financing and
ban$ing operations, both wholesale and retail, have been integrated in a single
entity. I(I(I Ban$ has formulated a (ode of Business (onduct and <thics for
its directors and employees.
4
3.1.2 BOARD OF DIRECTORS
37. @.Faghul -(8I73@2
37. /ridar Iyengar
37. 9a$shmi @. 3ittal
37. @arendra 3ur$umbi
37. nupam Puri
3r. run 7amanathan
37. 3. 6. /harma
37. P.3. /inha
Prof. 3arti B. /ubrahmanyam
37. ". /. FiCayan
37. F. Prem Wasta
37. 6. F. 6amath -3@BI@B :I7<("E7 G (<E2
37. (handa 6ochhar -DEI@" 3@BI@B :I7<("E72
37. F. Faidyanathan, -<H<(."IF< :I7<("E72
3s. 3adhabi Puri*Buch, <#ecutive :irector
37. /onCoy (hatterCee -<H<(."IF< :I7<("E72
+
3.1.3 BOARD COMMITTEES
udit 1ommittee Board 2o3ernance & ,emuneration
1ommittee
3r. /ridar Iyengar
3r. @arendra 3ur$umbi
3r. 3. 6. /harma

3r. @. Faghul
3r. nupam Puri
3r. 3. 6. /harma
3r. P. 3. /inha
Prof. 3arti B. /ubrahmanyam

1ustomer %er3ice 1ommittee
Credit Committee
3r. @. Faghul
3r. @arendra 3ur$umbi
3r. 3.6. /harma
3r. P.3. /inha
3r. 6. F. 6amath
3r. @. Faghul
3r. @arendra 3ur$umbi
3r. 3 .6. /harma
3r. P. 3. /inha
3r. 6. F. 6amath
4raud "onitoring 1ommittee
Risk Committee
3r. 3. 6. /harma
3r. @arendra 3ur$umbi
3r. 6. F. 6amath
3s. (handa :. 6ochhar
3r. F. Faidyanathan
3r. @. Faghul
3r. /ridar Iyengar
Prof. 3arti B. /ubrahmanyam
3r. F. Prem Watsa
3r. 6. F. 6amath
%hare !ransfer & %hareholders5
In3estors 2rie3ance 1ommittee
sset6*iabilit$ "anagement
1ommittee
3r. 3. 6. /harma
3r. @arendra 3ur$umbi
3s. (handa :. 6ochhar
3s. 3adhabi Puri*Buch
3s. (handa :. 6ochhar
3s. 3adhabi Puri*Buch
3r. /onCoy (hatterCee
3r. F. Faidyanathan
Committee of Directors -
3r. 6. F. 6amath
3s. (handa :. 6ochhar
3s. 3adhabi Puri*Buch
3r. /onCoy (hatterCee
3r. F. Faidyanathan
11
3.1.4 ICICI Banks global n!"o#k$ !o%a&$ s'ans 1(
)o*n!#+s.
11
3.1., -ISION AND MISSION
-+s+on
"o be the leading provider of financial services in India and a
maCor global ban$.
M+ss+on
7e -ill le3erage our people, technolog$, speed and financial capital to8
Be the ban$er of first choice for our customers by delivering
high !uality, world*class products and services.
<#pand the frontiers of our business globally.
Play a proactive role in the full realisation of India)s potential.
3aintain a healthy financial profile and diversify our earnings
across businesses and geographies.
3aintain high standards of governance and ethics.
(ontribute positively to the various countries and mar$ets in
which we operate.
(reate value for our sta$eholders.
12
3.1.. OR/ANISATIONA0 STR1CT1RE OF ICICI BANK
I(I(I Ban$)s organisation structure is designed to be fle#ible and customer*
focused, while see$ing to ensure effective control and supervision and
consistency in standards across the organisation and align all areas of operations
to overall organisational obCectives. "he organisation structure is divided into
si# principal groups I 7etail Ban$ing, Wholesale Ban$ing, International
Ban$ing, 7ural -3icro*Ban$ing2 and griculture Ban$ing, Bovernment
Ban$ing and (orporate (enter.
RETAI0 BANKIN/
"he 7etail Ban$ing Broup is responsible for products and services for retail
customers and small enterprises including various credit products, liability
products, distribution of third party investment and insurance products and
transaction ban$ing services.
2HO0ESA0E BANKIN/
"he Wholesale Ban$ing Broup is responsible for products and services for large
and medium*sized corporate clients, including credit and treasury products,
investment ban$ing, proCect finance, structured finance and transaction
ban$ing services.
INTERNATIONA0 BANKIN/
"he International Ban$ing Broup is responsible for its international operations,
including operations in various overseas mar$ets as well as its products and
services for non*resident Indians and its international trade finance and
correspondent ban$ing relationships.
1%
R1RA0 AND A/RIC10T1RA0 BANKIN/
"he 7ural, 3icro*Ban$ing G gri*Business Broup is responsible for
envisioning and implementing rural ban$ing strategy, including agricultural
ban$ing and micro*finance.
/O-ERNMENT BANKIN/
"he Bovernment Ban$ing Broup is responsible for government ban$ing
initiatives.
COR3ORATE CENTER
"he (orporate (enter comprises the internal control environment functions
-including operations, ris$ management, compliance, audit and legal2J finance
-including financial reporting, planning and strategy, asset liability
management, investor relations and corporate communications2J human
resitsces managementJ and facilities management G administration.
B1SINESS RE-IE2
:uring fiscal 2114, the Ban$ continued to grow and diversify its asset base and
revenue streams by leveraging the growth platforms created over the past few
years. We maintained our leadership position in retail credit, achieved robust
growth in our fee income from both corporate and retail businesses,
strengthened our deposit franchise and significantly scaled up our corporate and
international ban$ing operations.
RETAI0 BANKIN/
We are the largest provider of retail credit in India. Eur total retail portfolio was
7s. 1,%1>.>% billion at 3arch %1,2114, constituting '4? of our total loans at
that date.
1&
:uring fiscal 2114, we continued our focus on strengthening our retail deposit
franchise to create a stable funding base. Eur current and savings account
-(/2 deposits as a percentage of total deposits increased from 22? at 3arch
%1, 211, to 2>? at 3arch %1, 2114, with savings account deposits increasing by
%>? during fiscal 2114.
:uring the year, we have e#panded our branch networ$ substantially. t 3arch
%1, 2114, we had 1,2>2 branches G e#tension counters compared to ,''
branches G e#tension counters at 3arch %1, 211,, including the addition of
about 211 branches through the merger of /angli Ban$. Eur branch networ$ has
further increased to 1,%>, as of 3ay %1, 2114. We continued to e#pand our
electronic channels, namely internet ban$ing, mobile ban$ing, call centres,
point of sale terminals and "3s, and migrate customer transaction volumes to
these channels. We increased our "3 networ$ to %,441 "3s at 3arch %1,
2114 from %,2,1 "3s at 3arch %1, 211,.
SMA00 AND MEDI1M ENTER3RISES
:uring fiscal 2114, our small enterprises customer base increased by 2>? to
about 1.1 million accounts. We have introduced our service offerings in over
&11 new branches, increasing our coverage to over 1,111 branches. :uring the
year, we have focused on product specialisation including investment ban$ing
for /3<s. We have continued to focus on shaping the small and medium
enterprises sphere in India through initiatives such as the K<merging India
wardsL, the /3< (<E 6nowledge /eries * a platform to mentor and assist
/3< entrepreneurs, and the K/3< :ialogueL * a wee$ly feature in a leading
financial newspaper sharing /3< best practices and success stories. :uring the
year, we have launched several new products and services li$e the /3< tool$it
I an online business and advisory resource for /3<s.
.
1'
COR3ORATE BANKIN/
It)s corporate ban$ing strategy is based on providing comprehensive and
customized financial solutions to its corporate customers. It offer a complete
range of corporate ban$ing products including rupee and foreign currency debt,
wor$ing capital credit, structured financing, syndication and transaction ban$ing
products and services.
;iscal 2114 saw continued demand for credit from the corporate sector, with
growth and additional investment demand across all sectors. We were able to
leverage our international presence and deep corporate relationships to wor$ on
overseas ac!uisitions made by Indian companies and infrastructure proCects in
India. :uring fiscal 2114 we were involved in ,'? of outbound mergers and
ac!uisitions deals from India. We are now a preferred partner for Indian
companies for syndication of e#ternal commercial borrowings and other fund
raising in international mar$ets and have been ran$ed number one in offshore
loan syndications of Indian corporates in calendar year 211,.
.
R1RA0 BANKIN/
It)s rural strategy is based on enhancing value at every level of the supply chain in all
important farm and non*farm sectors. "owards this end, it offer a range of financial products
and services that cater to the rural masses in all the important sectors li$e infrastructure,
horticulture, food processing, dairy, poultry, seeds, fertiliser and agrochemical industries.
(ustomised financial solutions are offered to individual customers, agri small G medium
enterprises, agri corporates and members of their supply chains. En the rural retail side, the
Ban$ offers crop loans, farm e!uipment financing, commodity*based loans, wor$ing capital
loans for agri*enterprises, microfinance loans, Cewel loans as well as savings, investment and
insurance products. In addition ban$ is introducing products li$e rural housing finance to
cater to the needs of rural customers.
1>
INTERNATIONA0 BANKIN/
I(I(I Ban$ has established a strong franchise among non*resident Indians
-@7I2. It has established strong customer relationships by offering a
comprehensive product suite, technology*enabled access for overseas
customers, a wide distribution networ$ in India and alliances with local ban$s in
various mar$ets. It has over ',11,111 @7I customers.
It has underta$en significant brand*building initiatives in international mar$ets
and have emerged as a well*recognised financial services brand for @7Is. It)s
mar$et share in inward remittances into India has increased to over 2'?. It has
consolidated it)s global remittance initiative, targeting non*Indian communities,
by leveraging it)s core capabilities of technology*based service delivery. large
number of remittance products were introduced to complement the e#isting
suite of products. "he business focus has been on rolling out successful products
across multiple geographies and getting into high volume correspondent
arrangements.
1,
3.1., 3ROD1CTS AND SER-ICES
BANKIN/ ACCO1NTS
I(I(I Ban$ offers a wide range of ban$ing accounts such as (urrent, /aving,
9ife Plus /enior, 7ecurring :eposit, Aoung /tars, /alary ccount etc. tailor*
made for every customer segments, from children to senior citizens.
(onvenience and ease to access are the benefits of I(I(I Ban$ accounts.
YO1N/ STARS ACCO1NT
special portal for children to learn ban$ing basics, manage personal
finances and have a lot of fun.
BANK4CAM31S
"his student ban$ing services gives students access to their account details at
the clic$ of a mouse. Plus, the student gets a che!ue boo$, debit card and
annual statements.
SA-IN/S ACCO1NTS
(onvenience is the name of the game with I(I(I ban$)s savings account.
whether it is an "3Mdebit card, easy withdrawal, easy loan options or
internet ban$ing, I(I(I ban$)s saving account always $eep you in touch of
money.
FI5ED DE3OSITS
I(I(I Ban$ offers a range of deposit solutions to meet varying needs at
every stage of life. It offers a range of tenures and other features to suit all
re!uirements.
INS1RANCE
"he I(I(I group offers a range of insurance products to cover varying needs
ranging from life, pensions and health, to home, motor and travel insurance. "he
14
products are made accessible to customers through a wide networ$ of
advisors, ban$ing partners, (orporate agents and bro$ers with the added
convenience of being able to buy online.
0IFE INS1RANCE
"he I(I(I group provides the many life insurance product through I(I(I
Prudential 9ife Insurance (ompany.
/ENERA0 INS1RANCE
"he I(I(I group provides the many general insurance products li$e motor,
travel and home insurance through I(I(I 9ombard Beneral Insurance
(ompany.
0OANS
I(I(I ban$ offers a range of deposits solutions to meet varying needs at every
stage of life. It offers a range of tenures and other features to suit all
re!uirements.
HOME 0OAN
"he @o. 1 8ome 9oans Provider in the country, I(I(I Ban$ 8ome 9oans
offers some unbeatable benefits to its customers * :oorstep /ervice,
/implified :ocumentation and Buidance throughout the Process. It=s
really easy N
3ERSONA0 0OAN
I(I(I Ban$ Personal 9oans are easy to get and absolutely hassle free.
With minimum documentation you can now secure a loan for an amount
upto 7s. 1' la$hs.
-EHIC0E 0OANS
"he @o. 1 financier for car loans in the country. @etwor$ of more than
2'11 channel partners in over 1111 locations. "ie*ups with all leading
automobile manufacturers to ensure the best deals. ;le#ible schemes G
1+
!uic$ processing are the main advantages are here. vail attractive
schemes at competitive interest rates from the @o 1 ;inancier for !-o
7heeler *oans in the country . ;inance facility upto +1? of the En
7oad (ost of the vehicle, repayable in convenient repayment options and
comfortable tenors from > months to %> months
CARDS
I(I(I Ban$ offers a variety of cards to suit different transactional needs. Its
range includes (redit (ards, :ebit (ards and Prepaid cards. "hese cards offer
you convenience for financial transactions li$e cash withdrawal, shopping and
travel. "hese cards are widely accepted both in India and abroad.
CREDIT CARD
I(I(I Ban$ (redit (ards give you the facility of cash, convenience and a
range of benefits, anywhere in the world. "hese benefits range from life
time free cards, Insurance benefits, global emergency assistance service,
discounts, utility payments, travel discounts and much more.
DEBIT CARD
"he I(I(I Ban$ :ebit (ard is a revolutionary form of cash that allows
customers to access their ban$ account around the cloc$, around the
world. "he I(I(I Ban$ :ebit (ard can be used for shopping at more than
%.' 9a$h merchants in India and 2& million merchants worldwide.
TRA-E0 CARD
I(I(I Ban$ "ravel (ard. "he 8assle ;ree way to "ravel the
world. "raveling with ./ :ollar, <uro, Pound /terling or /wiss ;rancsJ
9oo$ing for security and convenienceJ ta$e I(I(I Ban$ "ravel (ard.
Issued in duplicate. Effers the Pin based security. 8as the convenience of
usage of (redit or :ebit card.
21
MOBI0E BANKIN/
Ban$ on the move with I(I(I Ban$ 3obile Ban$ing. With I(I(I Ban$,
Ban$ing is no longer what it used to be. I(I(I Ban$ offers 3obile Ban$ing
facility to all its Ban$, (redit (ard, :emat and 9oan customers.
I(I(I Ban$ 3obile Ban$ing can be divided into two broad categories of
facilitiesO
Al#! 6a)+l+!& 8 I(I(I Ban$ 3obile Ban$ing lerts facility $eeps you
informed about the significant transactions in yits ccounts. It $eeps you
updated wherever you go.
R7*s! 6a)+l+!& 8 I(I(I Ban$ 3obile Ban$ing 7e!uests facility
enables you to !uery for yits account balance.
IN-ESTMENT 3ROD1CTS8 long with :eposit products and 9oan
offerings, I(I(I Ban$ assists you to manage yits finances by providing various
investment options ranging from I(I(I Ban$ "a# /aving Bonds to <!uity
Investments through Initial Public Effers and Investment in Pure Bold. I(I(I
Ban$ facilitates following investment productsO
I(I(I Ban$ "a# /aving Bonds
Bovernment of India Bonds
Investment in 3utual ;unds
Initial Public Effers by (orporates
Investment in PPure BoldP
;oreign <#change /ervices
/enior (itizens /avings /cheme, 288*
TRADE9SER-ICES8 I(I(I Ban$ offers online remittances as well as
online processing of letters of credit and ban$ guarantees.
21
ASSET9MANA/EMENT 8 Prudential I(I(I sset 3anagement
(ompany offers a wide range of retail mutual fund products tailored to suit
varied ris$ and maturity profiles.
CASH MANA/EMENT: I(I(I Ban$ offers a complete range of highly
customized solutions for managing both the collections and payments
re!uirements of clients by leveraging technology. :aily customized
transactions reports and real time web*enabled downloads, provide on*tap
information facilitating effective wor$ing capital management.
COR3ORATE BANKIN/: I(I(I Ban$ offers comprehensive and
customized financial solutions for its corporate clients, including rupee
and foreign currency debts, wor$ing capital credit, structured financing
syndication and transaction ban$ing products and services.
INTERNET BANKIN/8 Internet ban$ing is available to all I(I(I ban$
savings and deposit account holders, credit card, demat and loan
customers. Internet ban$ing service offers customers a world of
convenience with services such as balance en!uiry, transaction history,
account statement, bill payments, fund transfers and accounts related
service re!uests.
ATMs8 With more than 2'11 "3s across the country, I(I(I Ban$ has one of
the largest "3 networ$s in India
3HONE BANKIN/: Phone ban$ing offers 2&5, service across liability,
asset and investment products to both retail and corporate customers.
22
NRI9BANKIN/8 gamut of services to ta$e care of all @7I ban$ing
needs including deposits, money transfers and private ban$ing.
MONEY2INDIA8 complete range of online and offline money transfer
solutions to send money to India.
3RO3ERTY8 ;or millions of home buyers across the country, I(I(I Ban$
offers not Cust great deals on home loans but also a wealth of e#pert advice.
I(I(I Ban$ offers home search service which can help a customer identify the
property of his choice based on his budget and other re!uirements.
DEMAT ACCO1NTS8 I(I(I Ban$)s demat services after uni!ue features
li$e e*constructions, consolidation, digitally signed statements, mobile re!uests
and corporate benefit trac$ing.
R1RA09BANKIN/8 Ban$ offers technology*based solutions, financial
innovations and multiple delivery channels to meet the financial needs of rural
areas.
MICROFINANCE8 I(I(I Ban$ assists over 2.' million low income clients
to build livelihoods by partnering With over 111 microfinance institutions.
BRANCHES8 I(I(I Ban$ has a networ$ of over >%1 branches - of which '1
are e#tension counters2 across the country. "he networ$ puts a wide range of
ban$ing products and financial services with in easy reach of retail and
corporate customers.
3.1.: RISK AS3ECTS OF ICICI BANK
2%
RISK MANA/EMENT
7is$ is an integral part of the ban$ing business and ban$ aim at delivering
superior shareholder value by achieving an appropriate trade*off between ris$
and returns. Ban$ is e#posed to various ris$s, including credit ris$, mar$et ris$
and operational ris$. Ban$)s ris$ management strategy is based on a clear
understanding of various ris$s, disciplined ris$ assessment and measurement
procedures and continuous monitoring. "he policies and procedures established
for this purpose are continuously benchmar$ed with international best practices.
Ban$ has two dedicated groups, the 7I/6 3@B<3<@" B7E.P -73B2
and (E3P9I@(< G .:I" B7E.P -(B2 which is responsible for
assessment, management and mitigation of ris$ in I(I(I Ban$. "hese groups
from part of the corporate center are completely independent of all business
operations and are accountable to the 7is$ and udit committees of the Board
of directors. 73B is further organized into the (redit 7is$ 3anagement group,
3ar$et 7is$ 3anagement group, 7etail 7is$ 3anagement group and
Eperational 7is$ 3anagement group. (B is further organised into the (redit
Policies, 7BI Inspection G nti*3oney 9aundering Broup and the Internal
udit Broup.
CREDIT RISK
(redit ris$ is the ris$ that a borrower is unable to meet its financial obligations
to the lender. Ban$ measure, monitor and manage credit ris$ for each borrower
and also at the portfolio level. Ban$ has standardized credit*approval processes,
which include a well*established procedure for comprehensive credit appraisal
and rating. I(I(I Ban$ has well developed internal credit rating methodologies
for rating obligors. "he rating factors in !uantitative, !ualitative issues and
credit enhancement features specific to the transaction. "he rating serves as a
$ey input in the approval as well as post*approval credit processes. Industry
$nowledge is constantly updated through field visits and interactions with
clients, regulatory bodies and industry e#perts. In retail credit operations, the
Board or a Board (ommittee approves all products, policies and authorizations.
2&
(redit approval authority lies only with the credit officers who are distinct from
the sales team. (redit scoring models are used in the case of certain
products li$e credit cards. <#ternal agencies such as field investigation agencies
and credit processing agencies are used to facilitate a comprehensive due
diligence process including visits to offices and homes in the case of loans to
individual borrowers.
MARKET RISK
3ar$et ris$ is the ris$ of loss resulting from changes in interest rates, foreign
currency e#change rates, e!uity prices and commodity prices. "he obCective of
mar$et ris$ management is to minimize the impact of losses on earnings and
e!uity capital due to mar$et ris$. 3ar$et ris$ policies include the Investment
Policy and the sset*9iability 3anagement -932 Policy. "he policies are
approved by the Board of :irectors. "he sset 9iability 3anagement
(ommittee -9(E2 of the Board of :irectors stipulate li!uidity and interest
rate ris$ limits, monitors adherence to limits, articulates the organisation)s
interest rate view and determines the strategy in light of the current and
e#pected environment. "hese policies and processes are articulated in the
9P3 policy. "he investment policy addresses issues related to investment in
various trading products. 73B e#ercises independent control over the process
of mar$et ris$ management and recommends changes in process and
methodologies for measuring mar$et ris$ Interest rate ris$ is measured through
the use of re*pricing gap analysis and duration analysis. 9i!uidity ris$ is
measured through gap analysis. Ban$ ensure ade!uate li!uidity at all time
through systematic funds planning and maintenance of li!uid investment as well
as focusing on more stable funding sitsces such as retail deposits. I(I(I Ban$
limit e#posure to e#change rate ris$ by stipulating position limits. "he treasury
3iddle Effice Broup monitors the asset*liability position under the supervision
of the 9(E. "he "reasury 3iddle Effice Broup is also responsible for
processing treasury transactions, trac$ing the daily funds position and
2'
complying with all treasury related management and regulatory reporting
re!uirements.
O3REATIONA0 RISK
Eperational ris$ is the ris$ of loss that can result from a variety of factors,
including failure to obtain proper internal authorizations, improperly
documented transactions, failure of operational and information security
procedures, computer systems, software or e!uipment, fraud, inade!uate
training and employee errors. Ban$)s approach to operational ris$ management
is designed to mitigate operational ris$ by maintaining a comprehensive system
of internal controls, establishing systems and procedures to monitor
transactions, maintaining $ey bac$*up procedures and underta$ing regular
contingency planning. <ffective operational ris$ management system would
ensure that ban$ has sufficient information to ma$e appropriate decisions about
additional controls, adCustments to controls, or other ris$ responses. Eperational
ris$ management policy aims at minimizing losses and customer dissatisfaction
due to failure in processes, focusing on flaws in products and their design that
can e#pose the ban$ to losses due to fraud, analyzing the impact of failures in
systems, developing mitigants to minimize the impact and developing plans to
meet e#ternal shoc$s that can adversely impact continuity in the ban$)s
operations.
3.1.. S1BSIDIARY COM3ANIES
2>
DOMESTIC S1BSIDIARIES
I(I(I 8ome ;inance (ompany 9imited
I(I(I Investment 3anagement (ompany 9imited
I(I(I 9ombard Beneral Insurance (ompany 9imited
I(I(I Prudential 9ife Insurance (ompany 9imited
I(I(I /ecurities 9imited
I(I(I "rusteeship /ervices 9imited
I(I(I Fenture ;unds 3anagement (ompany 9imited
I(I(I /ecurities Primary :ealership 9imited
I(I(I Prudential sset 3anagement (ompany 9imited
I(I(I Prudential "rust 9imited
INTERNATIONA0 S1SIDIARIES
I(I(I Ban$ (anada
I(I(I Ban$ <urasia 9imited 9iability (ompany
I(I(I International 9imited
I(I(I /ecurities 8olding Inc
I(I(I /ecurities Inc
I(I(I Ban$ .$ 9imited
2,
-./.8 KEY GROUP COMPANIES
ICICI 3R1DENTIA0 INS1RANCE COM3ANY
I(I(I 9ife continued to maintain its mar$et leadership among private sector life
insurance companies with a mar$et share of 12.,1? on the basis of weighted
received premium. 9ife insurance companies worldwide ma$e losses in the
initial years, in view of business set*up and customer ac!uisition costs in the
initial years as well as reserving for actuarial liability. While the growing
operations of I(I(I 9ife had a negative impact of 7s. 11.%1 billion on the
Ban$)s consolidated profit after ta# in ;A2114 on account of the above reasons,
the company)s unaudited @ew Business chieved Profit -@BP2 for ;A2114
was 7s. 12.'& billion as compared to 7s. 4.41 billion in fiscal 211,.
ICICI 0OMBARD /ENERA0 INS1RANCE COM3ANY
I(I(I 9ombard Beneral Insurance (ompany -I(I(I Beneral2 enhanced its
leadership position with a mar$et share of about 2+.4? among private sector
general insurance companies and an overall mar$et share of about 11.+? during
fiscal 2114. I(I(I Beneral)s gross written premium grew by 11.&? from 7s.
24
%1.1% billion in fiscal 211, to 7s. %%.&' billion in fiscal 2114. I(I(I Beneral is
re!uired to e#pense upfront, on origination of a policy, all sitscing e#penses
related to the policy. While I(I(I Beneral)s profit after ta# for 7s. 1.1% billion
in fiscal 2114,a growth of '1.'? over fiscal 211,."he combined ratio is the sum
of net claims and e#penses as a percentage of premiums and indicates the
surplus generated on an annualised basis from the business written during a
period -e#cluding investment income2.
ICICI 3R1DENTIA0 AMC ; TR1ST
I(I(I Prudential sset 3anagement (ompany -I(I(I 3(2 was the second
largest asset management company in India with average assets under
management of 7s. '&%.'' billion for 3arch 2114. I(I(I 3( achieved a
profit after ta# of 7s. 1.42 billion in fiscal 2114, a growth of >+.,? over fiscal
211,.
ICICI SEC1RITIES 0IMITED
"he securities and primary dealership business of the I(I(I group have been
reorganised. I(I(I /ecurities 9imited has been renamed as I(I(I /ecurities
Primary :ealership 9imited. I(I(I Bro$erage /ervices 9imited has been
renamed as I(I(I /ecurities 9imited and has become a direct subsidiary of
I(I(I Ban$. I(I(I /ecurities achieved a profit after ta# of 7s. 1.'1 billion and
I(I(I /ecurities Primary :ealership achieved a profit after ta# of 7s. 1.&1
billion, in fiscal 2114.
ICICI -ENT1RE F1NDS MANA/EMENT COM3ANY 0IMITED
I(I(I Fenture ;unds 3anagement (ompany 9imited -I(I(I Fenture2 strengthened its
leadership position in privatee!uity in India, with funds under management of about 7s.
+'.'1 billion at year*end fiscal 2114. I(I(I Fenture achieved a profit after ta# of 7s. 1.+1
billion in fiscal 2114 compared to 7s. 1.,1 billion in fiscal 211,.
2+
3.1.< KEY FINANCIA0 INDICATORS
%1
3.1.1= Ma#k! 3#+) In6o#>a!+on
%1
3.1.11 31B0IC RECO/NITION

On Ma& ,$ 2==($ M#. K. -. Ka>a!?$ MD;CEO "as
a"a#%% !? '#s!+g+o*s 3a%>a B?*s?an b& !? 3#s+%n!
o6 In%+a
%2
"he Ban$ received several awards during fiscal 2114, including the
followingO
KBest Ban$ in siaL by <uromoney
KBest Ban$ in IndiaL by <uromoney
K;abulous '1 companies in siaL by ;orbes sia
KBest :omestic Ban$ in IndiaL by sset "riple
KBest Ban$ of the Aear -India2L by "he Ban$er
KBest Private /ector Ban$L by Eutloo$ 3oney @:"F Profit
wards 211,
Ksia)s Best ;inancial Borrower 211,K by <uromoney
K<#cellence in 7emittance BusinessK by sian Ban$er
K3ost Preferred BrandL for home loans, auto loans, credit cards
and financial advisory services by (@B( waaz
KInnovative "echnology wardL by (IE
KBest 7egional Private Ban$L by "he Ban$er
%%
K<#cellence in ;inancial 7eportingL by Institute of (hartered
ccountants of India -I(I2
RESEARCH
%&
METHODOLOGY
LIMITATIONS
%'
DATA
ANA0YSIS
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4.1 ST1DY OF 3ROFIT; 0OSS A@C
0././ MEANING8 It is a financial statement, which shows net loss of a
company for a specified period. "he accounting year means calendar year of 12
months or less or more than 12 months.
0./.1 CONTENTSO "his presents the revenues and e#penses of a company
and shows the e#cess of revenues over e#penses for profit and vice versa for a
loss.
0./.- FORMAT8 "he (ompanies act does not provide any specific format
for this account. 8owever it is re!uired to be prepared on the basis of the
instructions given in part ii of schedule -vi2 of the companies act.
0./.0 MAIN ITEMS OF PROFIT AND LOSS ACCOUNT
!urno3er or sales8 "he aggregate amount of sales and connected items
with the sales such as commission paid to sole*selling agents and other
selling agents and bro$erage and discounts on sales other than usual trade
discount.
+epreciation8 "he amount of depreciation of fi#ed assets and the arrears
of depreciation as per section 21'-22 shall be disclosed by way of foot*
note.
%,
Interest on loans and debentures8 Interest on loans and debentures has
to be stated separately. It will include the amount of interest paid as well
as outstanding.
"iscellaneous expenses8 In this head items such as rates and ta#es,
insurance premium etc., must be stated separately.
Preliminar$ expenses8 /uch e#penses include the costs of formation of a
company and since their amount is usually large, it is not desirable to
write off them in one year.
Pro3ision for taxation8 "he profit and loss account of a company must
be debited with the estimated liabilities for ta# on the current profits at
current rates of ta#ation.
9nclaimed di3idendsO It is shown on the liabilities side of the balance
sheet under the heading Qcurrent liabilities Q.
Interim di3idends8 It is an item of appropriation. It is transferred to the
debit side of the Profit and loss appropriation account.
4inal di3idend as an item of the trial balanceO "his is shown in the
debit side of the appropriation section of the profit and loss account.
Proposed di3idend or final di3idend proposed8 /ince it is an
adCustment item, it has to be shown at two places* In the debit side of the
profit and loss appropriation account and on the liabilities side of the
balance sheet under the head Qcurrent liabilities and provisions).
Political donations8 It must be shown as a separate item in the profit and
loss account.
+i3idend on interest incomeO "his item is transferred to the credit side
of the profit and loss account.
Pa$ment to auditors8 It must be stated separately. "his will include
consultancy fee, auditing fees management services etc.
"anagerial remuneration8 "his includes the payments made to
managerial remuneration director)s fee, pension, other allowances and
commission.
%4
4.2 ST1DY OF BA0ANCE SHEET
0.1./ MEANING8 "he balance sheet is a financial snapshot of a company=s
condition at a single point in time. balance sheet contains a listing of the
company=s asset, liability and (apital accounts. When someone, whether a
creditor or investor, as$s you how your company is doing, you=ll want to have
the answer ready and documented. "he way to show off the success of your
company is a balance sheet. balance sheet is a documented report of your
company=s assets and obligations, as well as the residual ownership claims
against your e!uity at any given point in time. It is a cumulative record that
reflects the result of all recorded accounting transactions since your enterprise
was formed. Aou need a balance sheet to specifically $now what your
company=s net worth is on any given date. With a properly prepared balance
sheet, you can loo$ at a balance sheet at the end of each accounting period and
$now if your business has more or less value, if your debts are higher or lower,
and if your wor$ing capital is higher or lower. By analyzing your balance sheet,
investors, creditors and others can assess your ability to meet short*term
obligations and solvency, as well as your ability to pay all current and long*term
debts as they come due. "he balance sheet also shows the composition of assets
and liabilities, the relative proportions of debt and e!uity financing and the
amount of earnings that you have had to retain. (ollectively, e#ternal parties to
help assess your company)s financial status, which is re!uired by both lending
%+
institutions and investors before they will allot any money toward your
business, will use this information.
0.1.1 LEARN THE DIFFERENT ASSETS
1urrent assets O (urrent assets include cash and other assets that in the
normal course of events are converted into cash within the operating cycle. ;or
e#ample, a manufacturing enterprise will use cash to ac!uire inventories of
materials. "hese inventories of materials are converted into finished products
and then sold to customers. (ash is collected from the customers. "his circle
from cash bac$ to cash is called an operating cycle. In a merchandising business
one part of the cycle is eliminated. 3aterials are not purchased for conversion
into finished products. Instead, the finished products are purchased and are sold
directly to the customers. /everal operating cycles may be completed in a year,
or it may ta$e more than a year to complete one operating cycle. "he time
re!uired to complete an operating cycle depends upon the nature of the
business. It is conceivable that almost all of the assets that are used to conduct
your business, such as buildings, machinery, and e!uipment, can be converted
into cash within the time re!uired to complete an operating cycle. 8owever,
your current assets are only those that will be converted into cash within the
normal course of your business. "he other assets are only held because they
provide useful services and are e#cluded from the current asset classification. If
you happen to hold these assets in the regular course of business, you can
include them in the inventory under the classification of current assets. (urrent
assets are usually listed in the order of their li!uidity and fre!uently consist of
cash, temporary investments, accounts receivable, inventories and prepaid
e#penses.
1ash8 (ash is simply the money on hand andMor on deposit that is
available for general business purposes. It is always listed first on a
balance sheet. (ash held for some designated purpose, such as the cash
held in a fund for eventual retirement of a bond issue, is e#cluded from
current assets.
&1
"arketable %ecurities8 "hese investments are temporary and are made
from e#cess funds that you do not immediately need to conduct
operations. .ntil you need these funds, they are invested to earn a return.
ccounts ,ecei3able8 /imply stated, accounts receivables are the
amounts owed to you and are evidenced on your balance sheet by
promissory notes. ccounts receivable are the amounts billed to your
customers and owed to you on the balance sheet=s date. Aou should label
all other accounts receivable appropriately and show them apart from the
accounts receivable arising in the course of trade. If these other amounts
are currently collectible, they may be classified as current assets.
In3entories8 Aour inventories are your goods that are available for sale,
products that you have in a partial stage of completion, and the materials
that you will use to create your products. "he costs of purchasing
merchandise and materials and the costs of manufacturing your various
product lines are accumulated in the accounting records and are identified
with either the cost of the goods sold during the fiscal period or as the
cost of the inventories remaining.
Prepaid expenses8 "hese e#penses are payments made for services that
will be received in the near future. /trictly spea$ing, your prepaid
e#penses will not be converted to current assets in order to avoid
penalizing companies that choose to pay current operating costs in
advance rather than to hold cash. Eften your insurance premiums or
rentals are paid in advance.
In3estments8 Investments are cash funds or securities that you hold for a
designated purpose for an indefinite period of time. Investments include stoc$s
or the bonds you may hold for another company, real estate or mortgages that
you are holding for income*producing purposes. Aour investments also include
money that you may be holding for a pension fund.
Plant ssets8 Eften classified as fi#ed assets, or as plant and e!uipment, your
plant assets include land, buildings, machinery, and e!uipment that are to be
&1
used in business operations over a relatively long period of time. It is not
e#pected that you will sell these assets and convert them into cash. Plant assets
simply produce income indirectly through their use in operations.
Intangible ssets8 Aour other fi#ed assets that lac$ physical substance are
referred to as intangible assets and consist of valuable rights, privileges or
advantages. lthough your intangibles lac$ physical substance, they still hold
value for your company. /ometimes the rights, privileges and advantages of
your business are worth more than all other assets combined.
:ther ssetsO :uring the course of preparing your balance sheet you will
notice other assets that cannot be classified as current assets, investments, plant
assets, or intangible assets. "hese assets are listed on your balance sheet as other
assets. ;re!uently, your other assets consist of advances made to company
officers, the cash surrender value of life insurance on officers, the cost of
buildings in the process of construction, and the miscellaneous funds held for
special purposes.
0.1.- LEARN THE DIFFERENT LIABILITIES
1urrent *iabilitiesO En the e!uity side of the balance sheet, as on the asset
side, you need to ma$e a distinction between current and long*term items. Aour
current liabilities are obligations that you will discharge within the normal
operating cycle of your business. In most circumstances your current liabilities
will be paid within the ne#t year by using the assets you classified as current.
"he amount you owe under current liabilities often arises as a result of
ac!uiring current assets such as inventory or services that will be used in current
operations. Aou show the amounts owed to trade creditors that arise from the
purchase of materials or merchandise as accounts payable. If you are obligated
under promissory notes that support ban$ loans or other amounts owed, your
liability is shown as notes payable. Ether current liabilities may include the
estimated amount payable for income ta#es and the various amounts owed for
&2
wages and salaries of employees, utility bills, payroll ta#es, local property ta#es
and other services.
*ong6!erm *iabilitiesO Aour debts that are not due until more than a year from
the balance sheet date are generally classified as long*term liabilities. @otes,
bonds and mortgages are often listed under this heading. If a portion of your
long*term debt is due within the ne#t year, it should be removed from the long*
term debt classification and shown under current liabilities.
+eferred ,e3enues8 Aour customers may ma$e advance payments for
merchandise or services. "he obligation to the customer will, as a general rule,
be settled by delivery of the products or services and not by cash payment.
dvance collections received from customers are classified as deferred
revenues, pending delivery of the products or services.
:-ner;s &#uit$8 Aour owner=s e!uity must be subdivided on your balance
sheetO Ene portion represents the amount invested directly by you, plus any
portion of retained earnings converted into paid*in capital. "he other portion
represents your net earnings that are retained. "his rigid distinction is necessary
because of the nature of any corporation. Erdinarily, stoc$holders, or owners,
are not personally liable for the debts contracted by a company. stoc$holder
may lose his investment, but creditors usually cannot loo$ to his personal assets
for satisfaction of their claims. .nder normal circumstances, the stoc$holders
may withdraw as cash dividends an amount measured by the corporate earnings.
"he distinction in this rule gives the creditors some assurance that a certain
portion of the assets e!uivalent to the owner=s investment cannot be arbitrarily
withdrawn. Ef course, this portion could be depleted from your balance sheet
because of operating losses. "he owner=s e!uity in an unincorporated business is
shown more simply. "he interest of each owner is given in total, usually with no
distinction being made between the portion invested and the accumulated net
earnings. "he creditors are not concerned about the amount invested. If
necessary, creditors can attach the personal assets of the owners.
&%
0.1.0 BALANCE2SHEET STRUCTURE
B)33 &" b),)*ce234eet5 A33et3 6 L)b,t% 7 E8#t%
"he following Balance sheet structure is Cust an e#ample. It does not show all
possible $ind of assets, e!uity and liabilities, but it shows the most usual ones. It
could be a consolidated balance sheet. 3onetary values are not shown and
summary -total2 rows are missing as well.
ssets
1urrent ssets
(ash and cash e!uivalents
Inventories
ccount receivable
Investment held for trading
Ether current assets
)on61urrent ssets
Property, plant and e!uipment
Boodwill
Ether intangible fi#ed assets
Investment in associates
:eferred ta# assets
3iscellaneous <#penditure
&#uit$ nd *iabilities
1apital & ,eser3e
/hare capital reserve
7evaluation reserve
"ranslation reserve
7etained earnings
&&
3inority interest
)on61urrent *iabilities
Ban$ loan
Issued debt securities
:eferred ta# liability
1urrent *iabilities
ccounts payable
(urrent income ta# liability
/hort*term part of ban$ loans
/hort*term provisions
4.2., EA1ITY -A01ATION8"he real value to a purchaser of the
business or a shareholder may be different from the net assets shown by the
balance sheet. "his is because factors that affect the value of a business may not
be recorded yet. ;or e#ample, a purchaser will be interested in the future
earnings of the business, whether assets such as property have been revalued
recently, and whether there are potential liabilities in the future such as lawsuits.
"he value of the assets in the balance has also been based on the assumption
that the business is a going concern, otherwise the brea$*up value of the assets
may be far less than the value in the balance sheet.
4.2.: 3RE3AIRIN/ A BA0ANCE9SHEET
!itle and <eading8 In practice, the most widely used title is Balance
/heetJ however /tatement of ;inancial Position is also acceptable.
@aturally, when the presentation includes more than one time period the
title PBalance /heetsP should be used.
<eading8 In addition to the statement title, the heading of your balance
sheet should include the legal name of your company and the date or
dates that your statement is presented. ;or e#ample, a comparative
presentation might be headedO
=.> 1:,P:,!I:)
B*)1& %<&&!%
+ecember 3/, ?00@
&'
4ormat8 "here are two basic ways that balance sheets can be arranged. In
ccount ;orm, your assets are listed on the left*hand side and totaled to
e!ual the sum of liabilities and stoc$holders= e!uity on the right*hand
side. nother format is 7eport ;orm, a running format in which your
assets are listed at the top of the page and followed by liabilities and
stoc$holders= e!uity. /ometimes total liabilities are deducted from total
assets to e!ual stoc$holders= e!uity.
1aptions8 (aptions are headings within your statement that designate
maCor groups of accounts to be totaled or subtotaled. Aour balance sheet
should include three primary captionsO ssets, 9iabilities and
/toc$holders= <!uity. In the report form of presentation, the placement of
your primary captions would be as followsO 211> //<"/, 9IBI9I"I</
@: /"E(68E9:<7)/ <R.I"A.
:rder of Presentation of 1aptionsO ;irst, start with items held primarily
for conversion into cash and ran$ them in the order of their e#pected
conversion. "hen, follow with items held primarily for use in operations
but that could be converted into cash, and ran$ them in the order of
li!uidity. ;inally, finish with items whose costs you will defer to future
periods or that you cannot convert into cash.
&>
4.3 ST1DY OF CASH F0O2 STATEMENT
0.-./ MEANING8 (ash flow statement or statement of cash flows is a
financial statement that shows a company=s incoming and outgoing money
-sources and uses of cash2 during a time period -often monthly or !uarterly2.
"he statement shows how changes in balance sheet and income accounts
affected cash and cash e!uivalents, and brea$s the analysis down according to
operating, in3esting, and financing activities. s an analytical tool the
statement of cash flows is useful in determining the short*term viability of a
company, particularly its ability to pay bills.
0.-.1 PURPOSE8 "he cash flow statement reflects a firms li!uidity or
solvency. "he main purpose to ma$e cash flow statement are as followsO
1. provide information on a firm=s li!uidity and solvency and its ability to
change cash flows in future circumstances
2. provide additional information for evaluating changes in assets, liabilities
and e!uity
%. improve the comparability of different firms= operating performance by
eliminating the effects of different accounting methods
&. indicate the amount, timing and probability of future cash flows
&,
0.-.- ACTIVITIES INVOLVED IN CASH FLOW5 "he cash flow
statement is partitioned into cash flow resulting from operating activities, cash
flow resulting from investing activities, and cash flow resulting from financing
activities.
:perating acti3ities8 Eperating activities include the production, sales and
delivery of the company=s product as well as collecting payment from its
customers. "his could include purchasing raw materials, building inventory,
advertising.
In3esting acti3ities8 Investing activities focus on the purchase of the long*term
assets a company needs in order to ma$e and sell its products, and the selling of
any long*term assets.
4inancing acti3ities8 ;inancing activities include the inflow of cash from
in3estors such as banks and shareholders, as well as the outflow of cash
to shareholders as di3idends as the company generates income. Ether
activities which impact the long*term liabilities and e!uity of the
company are also listed in the financing activities section of the cash flow
statement.
nalysis of cash flow statement is necessary for every organisation to depict its
cash inflow and outflow.
4.4 FINANCIA0 STATEMENT ANA0YSIS
0.0./ MEANINGO ;inancial statement analysis is the process of e#amining
relationships among financial statement elements and ma$ing comparisons with
relevant information. It is a valuable tool used by investors and creditors,
financial analysts, and others in their decision*ma$ing processes related to
stoc$s, bonds, and other financial instruments. With a great understanding of the
balance sheet G pGl account and how it is constructed, we can loo$ at some
techni!ues to analyze the information contained within the balance sheet G pGl
account.
&4
0.0.1 PURPOSE5 "he main purpose of analyzing the financial statement are
the followingO*
"o assess past performance and current financial position.
"o ma$e predictions about the future performance of a company.
0.0.- TOOLS FOR ANALYSING
1.3ERCENTA/E CA0C10ATION
"here are two popular methods by which we can analyze the financial
statement by calculating percentage as ta$ing a common base.
<oriAontal nal$sis
When an analyst compares financial information for two or more years
for a single company, the process is referred to as horizontal analysis,
since the analyst is reading across the page to compare any single line
item, such as sales revenues. In addition to comparing dollar amounts, the
analyst computes percentage changes from year to year for all financial
statement balances, such as cash and inventory. lternatively, in
comparing financial statements for a number of years, the analyst may
prefer to use a variation of horizontal analysis called trend anal$sis.
"rend analysis involves calculating each year=s financial statement
balances as percentages of the first year, also $nown as the base year.
When e#pressed as percentages, the base year figures are always 111
percent, and percentage changes from the base year can be determined.
If we want to calculate ? change in sales then we apply the following
formulaO
PercentageSchange in sales MBase Aear /ales5111
&+
Bertical nal$sis
When using vertical analysis, the analyst calculates each item on a single
financial statement as a percentage of a total. "he term vertical analysis
applies because each year=s figures are listed vertically on a financial
statement. "he total used by the analyst on the income statement is net
sales revenue, while on the balance sheet it is total assets. "his approach
to financial statement analysis, also $nown as component percentages,
produces common*size financial statements. 1ommon6siAe balance
sheets and income statements can be more easily compared, whether
across the years for a single company or across different companies.
If we want to calculate ? change of current assets then we apply the
following formulaO
PercentageO current assetsMtotal assets5111
2.RATIO ANA0YSIS
;inancial ratio analysis uses formulas to gain insight into the company
and its operations. ;or the balance sheet, using financial ratios -li$e the
debt*to*e!uity ratio2 can show you a better idea of the company)s
financial condition along with its operational efficiency. It is important to
note that some ratios will need information from more than one financial
statement, such as from the balance sheet and the income statement. 7atio
analysis facilitates inter*firm and intra*firm comparison.
7atios are often classified using the following terms8
*IC9I+I!. ,!I:
9i!uidity ratios are measures of the short*term ability of the company to
pay its debts when they come due and to meet une#pected needs for cash.
1urrent ,atio8 "he current ratio is a rough indication of a firm ability to
service its current obligations. Benerally, the higher the current ratio, the
'1
greater the cushion between current obligations and a firm ability to pay
them. "he stronger ratio reflects a numerical superiority of current assets
over current liabilities (urrent ratio is calculated as followsO
C*##n! #a!+oB C*##n! Ass!s@C*##n! 0+ab+l+!+s
Cuick ,atio8 It is also $nown as the Kacid testL ratio, this is a refinement
of the current ratio and is a more conservative measure of li!uidity. "he
!uic$ ratio e#presses the degree to which a company)s current liabilities
are recovered by the most li!uid current assets. !uic$ ratio is calculated
as followsO
A*+)k #a!+oB C)as? D >a#k!abl s)*#+!+s D
R)+EablsF@)*##n!
l+ab+l+!+s
%:*B&)1. ,!I:
/olvency ratios indicate the ability of the company to meet its long*term
obligations on a continuing basis and thus to survive over a long period of
time.
+ebt57orth ,atio8 "his ratio e#presses the relationship between capital
contributed by creditors and that contributed by owners. It e#presses the
degree of protection provided by the owners for the creditors. "he higher
the ratio, the greater the ris$ being assumed by creditors. "he lower the
ratio, the greater the long*term financial safety. firm with a low
debtMworth ratio usually has a greater fle#ibility to borrow in the future.
more highly leveraged company has a more limited debt capacity.
Db!@"o#!? #a!+oBTo!al 0+ab+l+!+s @ Tang+bl N! 2o#!?
P,:4I!BI*I!. ,!I:
Profitability ratios are gauges of the company=s operating success for a
given period of time.
'1
,eturn :n ssetsO 7eturn on assets is a measure of ho- effecti3el$ the
firmDs assets are being used to generate profit. It is calculated as
follo-s8
R!*#n On Ass!sB N! In)o>@To!al Ass!s
,eturn :n &#uit$O ,eturn on e#uit$ is the bottom line measure for
the shareholders, measuring for the profits earned for each rupee
in3ested in business. It is calculated as follo-s8
R!*#n on E7*+!&B N! +n)o>@s?a#?ol%#s 7*+!&
4ixed57orth ,atio8 "his ratio measures the e#tent to which owner)s
e!uity -capital2 has been invested in plant and e!uipment -fi#ed assets2.
lower ratio indicates a proportionately smaller investment in fi#ed assets
in relation to net worth and a better cushion for creditors in case of
li!uidation. /imilarly, a higher ratio would indicate the opposite situation.
"he presence of substantial leased fi#ed assets -not shown on the
balance*sheet 2 may deceptively lower this ratio.
F+G% 2o#!? Ra!+oBN! F+G% Ass!s@ Tang+bl N! 2o#!?

'2
FINDINGS
'%
,.1 MANA/EMENT DISC1SSION ; ANA0YSIS
%ummar$
Profit before provisions and ta# increased by %'.'? to 7s. ,+.>1 billion in
fiscal 2114 from 7s. '4.,& billion in fiscal 211, primarily due to an increase
in net interest income by 2+.>? to 7s. ,%.1& billion in fiscal 2114 from 7s.
'>.%, billion in fiscal 211, and an increase in non*interest income by 2,.2?
to 7s.44.11 billion in fiscal 2114 from 7s. >+.24 billion in fiscal 211,, offset,
in part, by an increase in non*interest e#penses by 21.+? to 7s. 41.'& billion
in fiscal 2114 from 7s. >>.+1 billion in fiscal 211,. Provisions and
contingencies -e#cluding provision for ta#2 increased by %1.'? during fiscal
2114 primarily due to a higher level of specific provisioning on non*
performing loans, offset, in part by a reduction in general provision on loans.
Profit before ta# increased by %4.>? to 7s. '1.'> billion in fiscal 2114 from
7s. %>.&4 billion in fiscal 211,. Profit after ta# increased by %%.,? to 7s.
&1.'4 billion in fiscal 2114 from 7s. %1.11 billion in fiscal 211,.
@et interest income increased by 2+.>? to 7s. ,%.1& billion in fiscal 2114
from 7s. '>.%, billion in fiscal 211,, reflecting an increase of 2,.>? or 7s.
,11.1, billion in the average volume of interest*earning assets and an
'&
increase in net interest margin to 2.22? in fiscal 2114 compared to 2.1+? in
fiscal 211,.
@on*interest income increased by 2,.2? to 7s. 44.11 billion in fiscal 2114
from 7s. >+.24 billion in fiscal 211, primarily due to a %2.2? increase in fee
income and a 1&.1? increase in treasury and other non*interest income.
@on*interest e#penses increased by 21.+? to 7s. 41.'& billion in fiscal 2114
from 7s. >>.+1 billion in fiscal 211, primarily due to a 24.>? increase in
employee e#penses and a %1.>? increase in other administrative e#penses.
Provisions and contingencies -e#cluding provision for ta#2 increased to 7s.
2+.1' billion in fiscal 2114 from 7s. 22.2> billion in fiscal 211, primarily
due to higher level of specific provisioning on retail loans due to change in
the portfolio mi# towards non*collateralised loans and seasoning of the loan
portfolio, offset in part by a reduction in general provision on loans due to
lower growth in the loan portfolio relative to fiscal 211,.
"otal assets increased by 1>.1? to 7s. %,++,.+' billion at year*end fiscal
2114 from 7s. %,&&>.'4 billion at year*end fiscal 211, primarily due to an
increase in advances by 1'.2? and an increase in investments by 22.1?.
:uring the year, we made a follow*on public offering of e!uity shares in
India and an issuance of merican :epository /hares -:/s2 aggregating to
7s. 1++.>, billion.
"he /angli Ban$ 9imited -/angli Ban$2 was amalgamated with I(I(I Ban$
with effect from pril 1+, 211, in terms of the scheme of amalgamation
approved by 7eserve Ban$ of India -7BI2 vide its order :BE: @o. P/B:
112>4M1>.11.124M211>*1, dated pril 14, 211, under section && -&2 of the
Ban$ing 7egulation ct, 1+&+. /angli Ban$ was a ban$ing company
incorporated under the (ompanies ct, 1+'> and licensed by 7BI under the
Ban$ing 7egulation ct, 1+&+. "he consideration for the amalgamation was
111 e!uity shares of I(I(I Ban$ of face value 7s. 11 each fully paid*up for
''
every +2' e!uity shares of face value of 7s. 11 each of /angli Ban$.
ccordingly, on 3ay 24, 211,, I(I(I Ban$ allotted %,&'',114 e!uity shares
of 7s. 11 each, credited as fully paid up, to the shareholders of /angli Ban$.
"he e#cess of the paid*up value of the shares issued over the fair value of the
net assets ac!uired -including reserves2 of 7s. %.2> billion and amalgamation
e#penses of 7s. 1.22 billion have been deducted from the securities premium
account.
,.2 COM3ARATI-E INCOME STATEMENT
TREND ANALYSIS
SUMMARISED PROFIT & LOSS A/C
-E@ %1 37(8, 21142
'>
By anlysing the summarized profit G loss account of I(I(I Ban$, the following trends are
presentedO
Eperating profit increased to 7s. ,+.>1 Billion for ;A2114 from 7s. '4.,& Billion for
;A211, which is less than as compared to increased to 7s. ',4,& crore for ;A211,
from 7s. %,444 crore for ;A211>
',
Profit after ta# increased to 7s. &1.'4 Billion for ;A2114 from 7s. %1.11 Billion for
;A211, which is less than as compared to increased to 7s %,111 crore for ;A211,
from 7s. 2,'&1 crore for ;A211>.
Profit before ta# increased to 7s. '1.'> Billion for ;A2114 from 7s. %>.&4 Billion
for ;A211, which is also less than as compared to increased to 7s. %,>&4 crore for
;A211, from 7s. %,1+, crore for ;A211>.
"otal interest income increased by %,.4? to 7s. %1>.4> billion in fiscal 2114 from 7s.
22+.+& billion in fiscal 211, and interest income, net of amortisation on Bovernment
securities, increased by &1.1? to 7s. %1,.44 billion in fiscal 2114 from 7s. 21+.+'
billion in fiscal 211, primarily due to an increase of 2,.>? in the average interest
earning assets and an increase of 4% basis points.
;ee income increased by %2.2? to 7s. >>.2, billion in fiscal 2114 from 7s. '1.12
billion in fiscal 211, primarily due to growth in fee income from structuring and
advisory fees, fees from international operations, third party distribution fees.
"otal non*interest e#pense increased by 21.+? to 7s. 41.'& billion in fiscal 2114 from
7s. >>.+1 billion in fiscal 211, primarily due to a 24.>? increase in employee
e#penses and %1.>? increase in other administrative e#penses.
Interest income is increased at a higher rate than the previous year i.e. &,? in 211, to
>1? in 2114.
Increase in non*interest income is less than in 2114 &+? as compared to increase in
211, %+?.
Provisions and contingencies -e#cluding provision for ta#2 increased to 7s. 2+.1'
billion in fiscal 2114 from 7s. 22.2> billion in fiscal 211,
,.3 COM3ARATI-E FINANCIA0 3OSITION STATEMENT
'4
TREND ANALSIS
SUMMARI!ED "ALANCE-S#EET
$ON MARC# %&' ())*+
B$ anl$sing the balance sheet of I1I1I Bank, the follo-ing
trends are presented8
'+
Eur total assets increased by 1>.1? to 7s. %,++,.+' billion at year*end
fiscal 2114 from 7s. %,&&>.'4 billion at year*end fiscal 211,.
Increase in cash balance with ban$ in 2114 is more than in the previous
year 211,. In 211, it is 7s.%,1.21 Billion and in 2114 it is 7s.%41.&1
Billion
But increase in /97 investment in 2114 is also more than the previous
year. In 211, it is >,%.>4 Billion and in 2114 it is ,'1.%1 Billion.
Increase in advances in 2114 from 7s 22'>.1> Billion to 7s1+'4.>>
Billion in 211,.
Increase in fi#ed and other assets is also less than in 2114 from 211, i.e
2%? as compared to %1? in 211, from 211>.
<rstwhile I(I(I borrowings is decreasing in both years but rate of
decreasing is less in 2114 i.e. 14? but in 211, it is %1?.
Increase in net worth is also less than from previous year in 2114 i.e 41?
in 211, to +? in 2114.
Eur e!uity share capital and reserves at year*end fiscal 2114 increased to
7s. &>&.,1 billion as compared to 7s. 2&%.1% billion at year*end fiscal
211,
"otal deposits increased by >.1? to 7s. 2,&&&.%1 billion at year*end fiscal
2114 from 7s. 2,%1'.11 billion at year*end fiscal 211,.
>1
Increase in other liabilities is more in 2114 than in 211, i.e from 1&? in
211, to 2'? in 2114.
>+?borrowing is increased in 2114 from 211, which is more than as
compared to '4? increase in borrowing in 211, from 211>.
,.4 RATIO ANA0YSIS
/( 19,,&)! ,!I:8
>1
1urrent ,atioE 1urrent ssets51urrent *iabilities
In ?00@8
(urrent ssetsS%41.&1T22'>.1>S2>%>.', billion -cash T advances2
(urrent 9iabilitiesS2&>.+1T4>%.++S111+.+billion -short*term depositsT
borrowings2
(urrent 7atioS2>%>.',M111+.+S?.08/
In ?00F8
(urrent ssetsS%,1.21T1+'4.>>S2%2+.4,billion -cash T advances2
(urrent 9iabilitiesS21%.,>T114.%,T'+4.2%S+21.%> billion -short*term
depositsT borrowings2
(urrent 7atioS2%2+.4,M+21.%>S?.G8/
?( C9I1H ,!I:8
Ruic$ 7atioSRuic$ ssetsM(urrent 9iabilities
In ?00@8
Ruic$ ssetsS%41.&1billion -cash in hand and other ban$2
(urrent 9iabilitiesS111+.+billion
Ruic$ 7atioS%41.&1M111+.+S0.008/
In ?00F8
Ruic$ ssetsS%,1.21billion -cash in hand and other ban$2
(urrent 9iabilitiesS+21.%1billion
Ruic$ 7atioS%,1.21M+21.%1S0.008/
3( ,&!9,) :) B&,2& %%&!%8
>2
,eturn on a3erage assetsE )et income5a3erage assetsI/00
a3erage assetsE total assets at the beginning J total assets at the end5?
In ?00@O net incomeS2'.&1 billion
verage assetsS -1>,>.'+T 2'1%.4+2M2S 21+'.2&
7eturn on average assetsS 2'.&1M21+'.2&5111 S /.?/K
In ?00FO net incomeS %1.11 billion
verage assetsS -2'1%.4+T %&&>.'42M2S 2+41.2&
7eturn on average assetsS %1.11M2+41.2&5111S/.00K
0( ,&!9,) :) B&,2& &C9I!.8
,eturn on a3erage e#uit$ E )et income5a3erage e#uit$I/00
a3erage e#uit$E total e#uit$ at the beginning J total e#uit$ at the end5?
In ?00@O net incomeS2'.&1 billion
verage e!uityS -12+.11T22'.'>2M2S 1,,.24
7eturn on average e!uityS 2'.&1M1,,.245111 S /F.50K
In ?00FO net incomeS %1.11 billion
verage e!uityS -22'.'>T2&>.>%2M2S 2%>.11
7eturn on average e!uity S %1.11M2%>.115111S/3./FK
5( 4I=&+57:,!< ,!I:8
4ixed 7orth ,atioE)et 4ixed ssets5 !angible )et 7orth
In ?00@8
@et ;i#ed ssetsS %+.41 billion
"angible @et WorthS 22'.'' billion
;i#ed Worth 7atioS%+.41M22'.''S 0./@8/
In ?00F8
>%
@et ;i#ed ssetsS %+.2% billion
"angible @et WorthS 2&>.>2 billion
;i#ed Worth 7atioS%+.2%M2&>.>2 S 0./G8/
G( :P&,!I)2 P,:4I! !: 7:,HI)2 49)+%
:perating Profit !o 7orking 4undsEoperating profit5 a3erage assetsI/00
In ?00@8
Eperating profitS%4.41 billion
verage assetsS21+'.2&
Eperating profit to wor$ing fundS%4.41M21+'.2&5111S /.@5K
In ?00F8
Eperating profitS'4.4& billion
verage assetsS2+41.4&
Eperating profit to wor$ing fundS'4.4&M2+41.4&5111S /.9@K
-appro#imately2
,!I:% I) ?00@ I@ 211,
(urrent 7atio ?.08/ 2.>O1
Ruic$ 7atio 0.008/ 1.&1O1
>&
7eturn En ssets /.?/K 1.1&?
7eturn En <!uity /F.50K 1%.1,?
;i#edMworth 7atio 0./@8/ 1.1>O1
Eperating profit to wor$ing funds /.@5K 1.+4?
"he above table shows thatO* both current ratio and !uic$ ratio is li!uidity ratio.
"he ideal ratio for current ratio is 2O1 and ideal ratio for !uic$ ratio is 1O1. In
these table current ratio of both year is higher than the ideal ratio which shows
that there is enough current assets which ma$e the ban$ able to pay its current
liabilities on time but !uic$ ratio is lower than the ideal ratio which shows that
ban$ have not enough li!uid assets to pay their current liabilities. "herefore
ban$ should $eep some assets in the form of li!uid assets such as cash,
mar$etable securities etc.
7eturn on e!uity, return on assets and operating profit to wor$ing funds are
profitability ratio. "he higher the profitability ratio of any organization is show
the better position of that organization. "he profitability ratio of I(I(I ban$ is
very low. It is deceasing from the previous year.
;i#edMworth ratio measures the e#tent to which owner)s e!uity has been
invested in plant and e!uipment . lower ratio indicates a proportionately
smaller investment in fi#ed assets. "his ratio shows that ban$ has invested more
in current assets than the fi#ed assets. It could be a good position in case of
li!uidation.
,., CASH F0O2 STATEMENT
>'
>>
CONCLUSION
AND
SUGGESTIONS
CONCLUSION
>,
"he balance*sheet along with the income statement is an important tools for
investors and many other parties who are interested in it to gain insight into a
company and its operation. "he balance sheet is a snapshot at a single point of
time of the company)s accounts* covering its assets, liabilities and shareholder)s
e!uity. "he purpose of the balance*sheet is to give users an idea of the
company)s financial position along with displaying what the company owns and
owes. It is important that all investors $now how to use, analyze and read
balance*sheet. P G 9 account tells the net profit and net loss of a company and
its appropriation.
In the case of I(I(I Ban$, during fiscal 2114, the ban$ continued to grow and
diversify its assets base and revenue streams. Ban$ maintained its leadership in
all main areas such as retail credit, wholesale business, international operation,
insurance, mutual fund, rural ban$ing etc. (ontinuous increase in the number of
branches, "3 and electronic channels shows the growth ta$e place in ban$.
"rend analysis of profit G loss account and balance sheet shows the ? change
in items of p G l aMc and balance sheet i.e. ? change in 211> from 211' and ?
change in 211, from 211>. It shows that all items are increased mostly but
increase in this year is less than as compared to increase in previous year. In p G
l aMc, all items li$e interest income, non*interest income, interest e#penses,
operating e#penses, operating profit, profit before ta# and after ta# is increased
but in mostly cases it is less than from previous year but in some items li$e
interest income, interest e#penses, provision ? increase is more. /ome items
li$e ta#, depreciation, lease income is decreased. /imilarly in balance sheet all
items li$e advances, cash, liabilities, deposits is increased e#cept borrowings
which is decreased. ? increase in some item is more than previous year and in
some items it is less.
>4
7atio analysis of financial statement shows that ban$)s current ratio is better
than the !uic$ ratio and fi#edMworth ratio. It means ban$ has invested more in
current assets than the fi#ed assets and li!uid assets. Ban$ have given more
advances to its customer and they have less cash in their hand. Profitability
ratio of ban$ is lower than as compared to previous year. 7eturn on e!uity is
better than the return on assets.
"he cash flow statement shows that net increase in cash generated from
operating and financing activities is much more than the previous year but cash
generated from investing activities is negative in both year. "here is increase of
1'+,,14,&,+ thousand 7/. in Increase in cash G cash e!uivalents from previous
year. "herefore analysis of cash flow statement shows that cash inflow is more
than the cash outflow in I(I(I Ban$.
"hus, the ratio analysis and trend analysis and analysis of cash flow statement
shows that I(I(I Ban$)s financial position is good. Ban$)s profitability is
increasing but not at high rate. Ban$)s li!uidity position is fair but not good
because ban$ invest more in current assets than the li!uid assets. s we all
$now that I(I(I Ban$ is on the first position among all the private sector ban$
of India in all areas but it should pay attention on its profitability and li!uidity.
Ban$)s position is stable.
>+
SUGGESTIONS
/ome of the recommendation and suggestion are as followsO
o "he attention is re!uired on the areas of growth, profitability ,service
level and building talent.
o "o increase the profit of ban$, ban$ should decrease their operating
e#penses and increase their income.
o "o increase its li!uidity, ban$ should $eep some more cash in its hand
instead of giving more and more advances.
o Introduce !uality consciousness and standardization of the wor$ system
and procedures.
o 3a$e manager competitive and introduce spirit of mar$et*orientation and
culture of wor$ing for customer satisfaction.
o "here is need to build the $nowledge and s$ill base among the employees
in the conte#t of technology.
o Performance measure should not only cover financial aspects i.e.
!uantitatively aspects but also the !ualitative aspects.
o It is high time to focus on wor$ than the wor$*achieved.
o Ban$ should increase its retail portfolio.
o Ban$ should manage its all ris$ such as credit, mar$et and operational
ris$ properly and should be managed by a person who are highly s$illed
and !ualified.
o Ban$ should pay attention on its subsidiary KI(I(I Prudential 9ife
Insurance (ompany 9imitedL
,1
BIBLOGRAPHY
,1
BIBLOGRAPHY
,2
ANNEXURE
,%
3ROFIT AND 0OSS A@C

,&
BA0ANCE9SHEET

,'