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Submitted in the partial fulfillment of required for the award of degree of Bachelor of Business Administration.
Submitted By: Akanksha Jain ENROLL No- 001 /KRCHE /BBA(B&I)/2006
Under the guidance (MR. A. Lenin Jothi) ( Mrs. Madhu Arora)
(AFFILATED TO GURU GOBIND SINGH UNIVERSITY, DELHI)
KASTURI RAM COLLEGE OF HIGHER EDUCATION
Getting a project ready requires the work and effort of many people. I would like to pay my sincere gratitude and thanks to those people, who directed me at every step in this project work. The present report is based on “ ANALYSIS OF FINANCIAL STATEMENT- CASE STUDY OF ICICI BANK”. I extended my sincere thank and gratitude to Mrs. Madhu Arora, internal faculty, for her help and valuable support throughout the term of the project. It was a learning experience to work under her guidance. I am also very thankful to Mr. A. Lenin Jothi who has given me the opportunity to do this project report. I am also thankful to my parents, all my friends and other sources who gave me their much needed support and inspiration in preparing this project report.
This is to certify that “Ms. Akanksha Jain” has accomplished the project titled “ANALYSIS OF FINANCIAL STATEMENT- CASE STUDY OF ICICI BANK” under my guidance and supervision. She has submitted this project in the partial fulfillment for the award of degree of Bachelor of Business Administration (B.B.A[B&I]) from Guru Gobind Singh Indraprastha University. The work has not been anywhere else for the award of degree. All source of information have been duly mentioned.
Mrs. Madhu Arora (Lecturer) (Kasturi Ram College Of Higher Education)
PAGE NO. A
Introduction 2 3 4 5 6 7 12 18 21 22 24
1.1Objectives 1.2ICICI Bank 1.2.1 History 1.2.2 Board of Directors 1.2.3 Board Committees 1.2.4 Organisational Structure 1.2.5 Products & Services 1.2.6 Risk Aspects 1.2.7 Subsidiary companies 1.2.8 Key Group Companies 1.2.9 Public Recognition
2. FINANCIAL STATEMENT AND IT’S ANALYSIS
2.1 Study of Profit & Loss A/C
27 28 38 40
2.2 Study of Balance-Sheet 2.3 Study of cash flow statement 2.3 Financial Statement Analysis
3. ANALYSIS OF FINANCIAL STATEMENT OF ICICI BANK
3.1 Management Discussion & Analysis
46 53 55 57 60
3.2 Comparative Income Statement 3.3 Comparative Financial Position Statement 3.4 Ratio Analysis- Financial Statement 3.5 Cash Flow Statement
4. CONCLUSION 5. RECOMMENDATION & SUGGESTION BIBLIOGRAPHY
62-64 65-66 67
ANNEXURE 70 Profit & Loss Account Balance-Sheet 69 68- CHAPTER-1 INTRODUCTION .
it is very necessary for every organization whether it is a financial or manufacturing etc. Analysis of financial statement is necessary because it help in depicting the financial position on the basis of past and current records.1 A BRIEF INTRODUCTION In any organization. Therefore. Analysis of financial statement help in making the future decision and strategies. 1. Analysis and interpretation of the financial statement has now become an important technique of credit appraisal.1. management executives and the bankers all analyze these statements. significant conclusions may be arrived regarding the changes in the financial position. to make financial statement and to analyse it. Profit and loss account shows the net profit or net loss of a company for a specified period of time. the liquidity position and the profitability or the earning capacity of borrowing concern. the important policies followed and trends in profit and loss etc. When these statements of the last few year of any organization are studied and analyzed. Balance sheet is a statement of the financial position of an enterprise at a particular point of time. financial experts.2 OBJECTIVE . A banker interprets the financial statement so as to evaluate the financial soundness and stability. Though the basic technique of appraisal remains the same in all the cases but the approach and the emphasis in analysis vary. the two important financial statements are the Balance sheet & Profit and loss account of the business. The investors.
58 billion (US$ 79 billion) at March 31. To learn about P&L Account. organizational structure. 3. history.300 ATMs in India and presence in 17 countries.3 ICICI BANK ICICI Bank is India’s second-largest bank with total assets of Rs. To understanding the meaning and need of Balance Sheet and profit and loss account. The Bank has a network of about 950 branches and 3. To evaluate the financial soundness . Balance-sheet and different type of Assets& Liabilities. balance sheet and profit and 1. ICICI Bank offers a wide range of banking 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 . ICICI Bank is the most valuable bank in India in terms of market capitalization and is ranked third amongst all the companies listed on the Indian stock exchanges. To analyse the financial statement i. subsidiary companies etc. In terms of free float market capitalization*.e P&L account and Balance sheet of ICICI BANK. 31. The purpose is to portray the financial position of ICICI BANK with the help of loss account.10 billion for fiscal 2007.stability and liquidity of ICICI BANK. 2007 and profit after tax of Rs.446.The main objective of this report are the following: To study about ICICI BANK and its related aspects like its products & services.
life and non-life insurance. UK subsidiary has established a branch in Belgium. and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. 1. ICICI was formed in 1955 at the initiative of the World Bank. South Africa.3. an Indian financial institution. both directly and through a number of . and was its wholly owned subsidiary. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. Russia and Canada. Sri Lanka and Dubai International Finance Center and representative offices in the United States. an equity offering in the form of ADRs listed on the NYSE in fiscal 2000. China. In the 1990s. ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services. Thailand. The Bank currently has subsidiaries in the United Kingdom. venture capital and asset management. Hong Kong. branches in Singapore. ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001. United Arab Emirates.1HISTORY ICICI Bank was originally promoted in 1994 by ICICI Limited.investment banking. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). Bangladesh. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998. Bahrain. the Government of India and representatives of Indian industry. Malaysia and Indonesia.
ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. greater opportunities for earning feebased income and the ability to participate in the payments system and provide transaction-banking services. with ICICI Bank. and the move towards universal banking. and by the High Citst of Judicature at Mumbai and the Reserve Bank of India in April 2002. particularly fee-based services. by the High Citst of Gujarat at Ahmedabad in March 2002. entry into new business segments. seamless access to ICICI's strong corporate relationships built up over five decades. and access to the vast talent pool of ICICI and its subsidiaries. . The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits. higher market share in various business segments. both wholesale and retail. have been integrated in a single entity. the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries. ICICI Personal Financial Services Limited and ICICI Capital Services Limited. the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities. In October 2001.subsidiaries and affiliates like ICICI Bank. the ICICI group's financing and banking operations. Consequent to the merger. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry. In 1999. and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations.
Vinod Rai MR. K. Chanda Kochhar (JOINT MANAGING DIRECTOR) MR. V. Kamath (MANAGING DIRECTOR & CEO) MR. K.Vaghul (CHAIRMAN) MR.M. Anupam Puri MR.ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. Vaidyanathan.2 BOARD OF DIRECTORS MR. N. Sinha Prof. M. Mittal MR.3. P. V. Narendra Murkumbi MR.3 BOARD COMMITTEES Audit Committee Board Governance & Remuneration Committee . (EXECUTIVE DIRECTOR) MR. Lakshmi N. Marti G. Prem Wasta MR. S. V. T. Vijayan MR.3. Sharma MR. Sonjoy Chatterjee (EXECUTIVE DIRECTOR) 1. Sridar Iyengar MR. 1. Subrahmanyam MR. Nachiket Mor (DEPUTY MANAGING DIRECTOR) MR.
M. M. V. K. Kochhar Ms. Marti G. M. K. K. M. Chanda D. Sinha Mr. Narendra Murkumbi Mr. M . Sharma Mr. Vaghul Mr. K. V. P. Sharma Mr. Kamath Risk Committee Mr. M. Subrahmanyam Mr.M. K.K. Narendra Murkumbi Mr. N. V. Vaghul Mr. Subrahmanyam Customer Service Committee Mr. Vaidyanathan Share Transfer & Shareholders/ Investors Grievance Committee Mr. M. Kamath Asset-Liability Management Committee Ms. Chanda D. Kochhar Mr. Prem Watsa Mr. Kamath Fraud Monitoring Committee Mr. Kamath Ms. N. Vaidyanathan . Chanda D. K. Sharma Mr. Madhabi Puri-Buch Credit Committee Mr. Sinha Mr. V. N. V.K. Nachiket Mor Ms. Vaghul Mr. Sinha Prof. Narendra Murkumbi Mr. N. P. K. Vaghul Mr. Kochhar Dr. Anupam Puri Mr. Narendra Murkumbi Ms. V. Madhabi Puri-Buch Mr. Narendra Murkumbi Mr. Sharma Mr. V. K. Marti G. M. Sharma Mr. Sridar Iyengar Prof.Mr. Sharma Mr. Sridar Iyengar Mr. P.
RETAIL BANKING The Retail Banking Group is responsible for products and services for retail customers and small enterprises including various credit products.3. including credit and .4 ORGANISATIONAL STRUCTURE OF ICICI BANK ICICI Bank’s organisation structure is designed to be flexible and customerfocused. V. V.Committee of Directors Mr. Madhabi Puri-Buch Mr. Kochhar Dr. Nachiket Mor Ms. Vaidyanathan - 1. K. Kamath Ms. The organisation structure is divided into six principal groups – Retail Banking. Chanda D. while seeking to ensure effective control and supervision and consistency in standards across the organisation and align all areas of operations to overall organisational objectives. WHOLESALE BANKING The Wholesale Banking Group is responsible for products and services for large and medium-sized corporate clients. liability products. distribution of third party investment and insurance products and transaction banking services. International Banking. Wholesale Banking. Rural (Micro-Banking) and Agriculture Banking. Government Banking and Corporate Center.
asset liability management. audit and legal). investor relations and corporate communications). . risk management. RURAL AND AGRICULTURAL BANKING The Rural. GOVERNMENT BANKING The Government Banking Group is responsible for government banking initiatives. structured finance and transaction banking services. project finance. including operations in various overseas markets as well as its products and services for non-resident Indians and its international trade finance and correspondent banking relationships. finance (including financial reporting. planning and strategy.treasury products. Micro-Banking & Agri-Business Group is responsible for envisioning and implementing rural banking strategy. and facilities management & administration. including agricultural banking and micro-finance. INTERNATIONAL BANKING The International Banking Group is responsible for its international operations. investment banking. CORPORATE CENTER The Corporate Center comprises the internal control environment functions (including operations. human resitsces management. compliance.
2007 it had more than 25 million retail customer accounts. 777. the Bank continued to grow and diversify its asset base and revenue streams by leveraging the growth platforms created over the past few years. It’s total retail portfolio increased from Rs. 2006 to Rs.00 billion. It maintained its leadership position in retail credit. it had 755 branches and extension counters compared to 614 branches and extension counters at March 31. RETAIL BANKING ICICI is the largest provider of retail credit in India. ICICI’s total retail disbursements in fiscal 2007 were approximately Rs. 921. call centres. 1. During fiscal 2007.00 billion in fiscal 2006. achieved robust growth in its fee income from both corporate and retail customers. constituting 65% of it’s total loans at that date. and migrate customer transaction volumes to these channels. 2006. 2007.03 billion at March 31. it expanded its branch network. 2007. During fiscal . namely internet banking. it acquired over 190additional branches and extension counters. At March 31. grew its deposit base and significantly scaled up its international operations and rural reach. point of sale terminals and ATMs. 627.277. At March 31. It continued its focus on retail deposits to create a stable funding base.98 billion at March 31.BUSINESS REVIEW During fiscal 2007. 2007. It continued to expand its electronic channels. Pursuant to the amalgamation of The Sangli Bank Limited with it effective April 19. mobile banking. compared to approximately Rs.
During fiscal 2007. structured financing. These customers are serviced by over 580 branches of the Bank. It increased its ATM network to 3. syndication and transaction banking products and services. and working capital loans to suppliers or dealers of large corporations and clusters of small enterprises that have a homogeneous profile. During fiscal 2007. CORPORATE BANKING It’s corporate banking strategy is based on providing comprehensive and customized financial solutions to its corporate customers. with growth and additional investment demand in almost all sectors. It is now a preferred partner for Indian companies for syndication of external commercial borrowings and other fund raising in international markets. SMALL AND MEDIUM ENTERPRISES In this segment it’s strategy has been focused around customer convenience in transaction banking services. It offer a complete range of corporate banking products including rupee and foreign currency debt. . it’s customer base increased by more than 50% to over 900. covering over 200 locations. the Emerging India Award entered in the Limca Book of Records as the biggest business award in India. Fiscal 2007 saw continuing demand for credit from the corporate sector. working capital credit. over 80% of customer induced transactions took place through these electronic channels.000 transaction banking customers.2007.271 ATMs.
It has established strong customer relationships by offering a comprehensive product suite. working capital loans for agri-enterprises. it have developed a hybrid distribution channel strategy. a wide distribution network in India and alliances with local banks in various markets. commodity-based loans.RURAL BANKING It’s rural strategy is based on enhancing value at every level of the supply chain in all important farm and non-farm sectors. It has over 450. The amalgamation of Sangli Bank would extend its outreach in rural areas. It has undertaken significant brand-building initiatives in international markets and have emerged as a well-recognised financial services brand for NRIs. it introduced loans to rural educational institutions for expansion of their facilities. agri corporates and members of their supply chains. agri small & medium enterprises. dairy. a combination of branch and non-branch channels (credit access points). the Bank offers crop loans. fertiliser and agrochemical industries. food processing. farm equipment financing. investment and insurance products. 0. It has embarked on a “no white spaces” strategy wherein it aim to setup an ICICI Bank touch point within 10 km of any customer.9 billion (USS$ 22 million) was made on account of identified frauds in warehouse receipt financing business of agricultural credit. jewel loans as well as savings. During fiscal 2007. horticulture. poultry. It’s market share in inward remittances into India has . INTERNATIONAL BANKING ICICI Bank has established a strong franchise among non-resident Indians (NRI). During fiscal 2007. it offer a range of financial products and services that cater to the rural masses in all the important sectors like infrastructure. a provision of Rs. In addition bank is introducing products like rural housing finance to cater to the needs of rural customers.000 NRI customers. technology-enabled access for overseas customers. seeds. On the rural retail side. Towards this end. Customised financial solutions are offered to individual customers. microfinance loans.
targeting non-Indian communities. FIXED DEPOSITS . YOUNG STARS ACCOUNT A special portal for children to learn banking basics.increased to over 25%. Young Stars. SAVINGS ACCOUNTS Convenience is the name of the game with ICICI bank’s savings account. from children to senior citizens. Recurring Deposit. easy loan options or internet banking. The business focus has been on rolling out successful products across multiple geographies and getting into high volume correspondent arrangements. 1. A large number of remittance products were introduced to complement the existing suite of products.5 PRODUCTS AND SERVICES BANKING ACCOUNTS ICICI Bank offers a wide range of banking accounts such as Current. tailor-made for every customer segments. It has consolidated it’s global remittance initiative. Life Plus Senior. manage personal finances and have a lot of fun. the student gets a chequebook. Salary Account etc. easy withdrawal. Convenience and ease to access are the benefits of ICICI Bank accounts. BANK@CAMPUS This student banking services gives students access to their account details at the click of a mouse.3. Saving. Plus. by leveraging it’s core capabilities of technology-based service delivery. whether it is an ATM/debit card. debit card and annual statements. ICICI bank’s saving account always keep you in touch of money.
ICICI Bank offers a range of deposit solutions to meet varying needs at every stage of life. ICICI Bank Home Loans offers some unbeatable benefits to its customers - . HOME LOAN The No. 1 Home Loans Provider in the country. It offers a range of tenures and other features to suit all requirements. to home. travel and home insurance through ICICI Lombard General Insurance Company. GENERAL INSURANCE The ICICI group provides the many general insurance products like motor. The products are made accessible to customers through a wide network of advisors. motor and travel insurance. Corporate agents and brokers with the added convenience of being able to buy online. It offers a range of tenures and other features to suit all requirements. banking partners. pensions and health. INSURANCE The ICICI group offers a range of insurance products to cover varying needs ranging from life. LIFE INSURANCE The ICICI group provides the many life insurance product through ICICI Prudential Life Insurance Company. LOANS ICICI bank offers a range of deposits solutions to meet varying needs at every stage of life.
15 lakhs. VEHICLE LOANS The No. With minimum documentation you can now secure a loan for an amount upto Rs. These cards are widely accepted both in India and abroad. convenience and a range of benefits. Tie-ups with all leading automobile manufacturers to ensure the best deals. Simplified Documentation and Guidance throughout the Process. Its range includes Credit Cards. CREDIT CARD ICICI Bank Credit Cards give you the facility of cash. anywhere in the world. repayable in convenient repayment options and comfortable tenors from 6 months to 36 months CARDS ICICI Bank offers a variety of cards to suit different transactional needs. Finance facility upto 90% of the On Road Cost of the vehicle. 1 financier for car loans in the country. Avail attractive schemes at competitive interest rates from the No 1 Financier for Two Wheeler Loans in the country . It's really easy ! PERSONAL LOAN ICICI Bank Personal Loans are easy to get and absolutely hassle free. These cards offer you convenience for financial transactions like cash withdrawal. These .Doorstep Service. Debit Cards and Prepaid cards. shopping and travel. Flexible schemes & quick processing are the main advantages are here. Network of more than 2500 channel partners in over 1000 locations.
benefits range from life time free cards. With ICICI Bank. Credit Card. travel discounts and much more. Insurance benefits. ICICI Bank Mobile Banking can be divided into two broad categories of facilities: Alert facility : ICICI Bank Mobile Banking Alerts facility keeps you informed about the significant transactions in yits Accounts. DEBIT CARD The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around the clock. global emergency assistance service. Looking for security and convenience. Banking is no longer what it used to be. Demat and Loan customers. Traveling with US Dollar. The Hassle Free way to Travel the world. It keeps you updated wherever you go. utility payments. Euro. MOBILE BANKING Bank on the move with ICICI Bank Mobile Banking. Has the convenience of usage of Credit or Debit card. ICICI Bank offers Mobile Banking facility to all its Bank. The ICICI Bank Debit Card can be used for shopping at more than 3.5 Lakh merchants in India and 24 million merchants worldwide. Pound Sterling or Swiss Francs. . TRAVEL CARD ICICI Bank Travel Card. take ICICI Bank Travel Card. Issued in duplicate. around the world. discounts. Offers the Pin based security.
2004 TRADE-SERVICES: ICICI Bank offers online remittances as well as online processing of letters of credit and bank guarantees. ASSET-MANAGEMENT: Prudential ICICI Asset Management Company offers a wide range of retail mutual fund products tailored to suit varied risk and maturity profiles.Request facility : ICICI Bank Mobile Banking Requests facility enables you to query for yits account balance. ICICI Bank facilitates following investment products: • • • • • • • ICICI Bank Tax Saving Bonds Government of India Bonds Investment in Mutual Funds Initial Public Offers by Corporates Investment in "Pure Gold" Foreign Exchange Services Senior Citizens Savings Scheme. . INVESTMENT PRODUCTS: Along with Deposit products and Loan offerings. ICICI Bank assists you to manage yits finances by providing various investment options ranging from ICICI Bank Tax Saving Bonds to Equity Investments through Initial Public Offers and Investment in Pure Gold.
Internet banking service offers customers a world of convenience with services such as balance enquiry.CASH MANAGEMENT: ICICI Bank offers a complete range of highly customized solutions for managing both the collections and payments requirements of clients by leveraging downloads. provide Daily on-tap customized transactions reports and real time web-enabled management. technology. structured financing syndication and transaction banking products and services. information facilitating effective working capital CORPORATE BANKING: ICICI Bank offers comprehensive and customized financial solutions for its corporate clients. including rupee and foreign currency debts. working capital credit. INTERNET BANKING: Internet banking is available to all ICICI bank savings and deposit account holders. transaction history. account statement. fund transfers and accounts related service requests. credit card. . bill payments. demat and loan customers.
5 million low income clients to build livelihoods by partnering With over 100 microfinance institutions. . ICICI Bank offers home search service which can help a customer identify the property of his choice based on his budget and other requirements. MONEY2INDIA: A complete range of online and offline money transfer solutions to send money to India. money transfers and private banking. PROPERTY: For millions of home buyers across the country. ICICI Bank offers not just great deals on home loans but also a wealth of expert advice. RURAL-BANKING: Bank offers technology-based solutions. DEMAT ACCOUNTS: ICICI Bank’s demat services after unique features like e-constructions.ATMs: With more than 2500 ATMs across the country. mobile requests and corporate benefit tracking. digitally signed statements. MICROFINANCE: ICICI Bank assists over 2. ICICI Bank has one of the largest ATM networks in India PHONE BANKING: Phone banking offers 24*7 service across liability. NRI-BANKING: A gamut of services to take care of all NRI banking needs including deposits. asset and investment products to both retail and corporate customers. consolidation. financial innovations and multiple delivery channels to meet the financial needs of rural areas.
Bank has two dedicated groups.3.6 RISK ASPECTS OF ICICI BANK RISK MANAGEMENT Risk is an integral part of the banking business and bank aim at delivering superior shareholder value by achieving an appropriate trade-off between risk and returns. These groups from part of the corporate center are completely independent of all business operations and are accountable to the Risk and Audit committees of the Board of directors. Bank’s risk management strategy is based on a clear understanding of various risks. Bank is exposed to various risks. Market Risk Management group. disciplined risk assessment and measurement procedures and continuous monitoring. Retail Risk Management group and Operational Risk Management group. 1. The policies and procedures established for this purpose are continuously benchmarked with international best practices. RBI Inspection & Anti-Money Laundering Group and the Internal Audit Group. market risk and operational risk. . The network puts a wide range of banking products and financial services with in easy reach of retail and corporate customers. RMG is further organized into the Credit Risk Management group. including credit risk. management and mitigation of risk in ICICI Bank. the RISK MANAGEMENT GROUP (RMG) and COMPLIANCE & AUDIT GROUP (CAG) which is responsible for assessment.BRANCHES: ICICI Bank has a network of over 630 branches ( of which 51 are extension counters) across the country. CAG is further organised into the Credit Policies.
including failure to obtain proper internal authorizations. monitor and manage credit risk for each borrower and also at the portfolio level. policies and authorizations. computer systems. The Treasury Middle Office Group is also responsible for processing treasury transactions. OPREATIONAL RISK Operational risk is the risk of loss that can result from a variety of factors. The rating serves as a key input in the approval as well as post-approval credit processes. equity prices and commodity prices. In retail credit operations. Credit scoring models are used in the case of certain products like credit cards. ICICI Bank limit exposure to exchange rate risk by stipulating position limits. inadequate training and employee errors. The treasury Middle Office Group monitors the asset-liability position under the supervision of the ALCO. Bank ensure adequate liquidity at all time through systematic funds planning and maintenance of liquid investment as well as focusing on more stable funding sitsces such as retail deposits. These policies and processes are articulated in the ALPM policy. monitors adherence to limits. The policies are approved by the Board of Directors. establishing systems and procedures to monitor transactions. The rating factors in quantitative. improperly documented transactions. tracking the daily funds position and complying with all treasury related management and regulatory reporting requirements. The investment policy addresses issues related to investment in various trading products. The Asset Liability Management Committee (ALCO) of the Board of Directors stipulate liquidity and interest rate risk limits. qualitative issues and credit enhancement features specific to the transaction. Market risk policies include the Investment Policy and the Asset-Liability Management (ALM) Policy. Bank’s approach to operational risk management is designed to mitigate operational risk by maintaining a comprehensive system of internal controls. Credit approval authority lies only with the credit officers who are distinct from the sales team. MARKET RISK Market risk is the risk of loss resulting from changes in interest rates. failure of operational and information security procedures. The objective of market risk management is to minimize the impact of losses on earnings and equity capital due to market risk. fraud. Bank measure. ICICI Bank has well developed internal credit rating methodologies for rating obligors. which include a wellestablished procedure for comprehensive credit appraisal and rating. foreign currency exchange rates. Bank has standardized credit-approval processes. Liquidity risk is measured through gap analysis. External 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. articulates the organisation’s interest rate view and determines the strategy in light of the current and expected environment. RMG exercises independent control over the process of market risk management and recommends changes in process and methodologies for measuring market risk Interest rate risk is measured through the use of re-pricing gap analysis and duration analysis. the Board or a Board Committee approves all products.CREDIT RISK Credit risk is the risk that a borrower is unable to meet its financial obligations to the lender. software or equipment. Industry knowledge is constantly updated through field visits and interactions with clients. regulatory bodies and industry experts. maintaining key back-up procedures and undertaking regular .
Effective operational risk management system would ensure that bank has sufficient information to make appropriate decisions about additional controls.contingency planning.3. focusing on flaws in products and their design that can expose the bank to losses due to fraud. developing mitigants to minimize the impact and developing plans to meet external shocks that can adversely impact continuity in the bank’s operations. Operational risk management policy aims at minimizing losses and customer dissatisfaction due to failure in processes. adjustments to controls.7 SUBSIDIARY COMPANIES DOMESTIC SUBSIDIARIES ICICI Home Finance Company Limited ICICI Investment Management Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Trusteeship Services Limited ICICI Venture Funds Management Company Limited ICICI Securities Primary Dealership Limited ICICI Prudential Asset Management Company Limited ICICI Prudential Trust Limited INTERNATIONAL SUSIDIARIES ICICI Bank Canada . 1. or other risk responses. analyzing the impact of failures in systems.
8 KEY GROUP COMPANIES ICICI PRUDENTIAL INSURANCE COMPANY ICICI Life continued to maintain its market leadership among private sector life insurance companies with a market share of 29% on the basis of weighted received premium. Life insurance companies worldwide . ICICI Bank Eurasia Limited Liability Company ICICI International Limited ICICI Securities Holding Inc ICICI Securities Inc ICICI Bank Uk Limited 1.3.
its combined ratio for FY2007 was 97%. ICICI General is required to expense upfront. 881 crore (US$ 203 million) as compared to Rs. 3.4% during April 2006-February 2007. ICICI PRUDENTIAL AMC & TRUST .make losses in the initial years. ICICI General’s gross written premium grew by 89% from Rs.004 crore (US$ 691 million) in FY2007. 1. While the growing operations of ICICI Life had a negative impact of Rs. the company’s unaudited New Business Achieved Profit (NBAP) for FY2007 was Rs. The surplus based on the combined ratio. all sitscing expenses related to the policy. 68 crore (US$ 16 million). 480 crore (US$ 110 million) on the Bank’s consolidated profit after tax in FY2007 on account of the above reasons. The combined ratio is the sum of net claims and expenses as a percentage of premiums and indicates the surplus generated on an annualised basis from the business written during a period (excluding investment income). on origination of a policy.592 crore (US$ 366 million) in FY2006 to Rs. in view of business set-up and customer acquisition costs in the initial years as well as reserving for actuarial liability. and investment income aggregated Rs. ICICI LOMBARD GENERAL INSURANCE COMPANY ICICI Lombard General Insurance Company (ICICI General) enhanced its leadership position with a market share of about 35% among private sector general insurance companies and an overall market share of about 12. 180 crore (US$ 41 million) on a pre tax basis in FY2007. While ICICI General’s profit after tax for FY2007 was Rs. 528 crore (US$ 121 million) in FY2006.
ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED ICICI Venture Funds Management Company Limited (ICICI Venture) strengthened its leadership position in private equity in India. 98.70 billion in fiscal 2007 compared to Rs.At March 31. 1. ICICI SECURITIES LIMITED The securities and primary dealership business of the ICICI group have been reorganised. 48 crore (US$ 11 million) in FY2007 from Rs. 0. . Erstwhile ICICI Webtrade Limited was amalgamated with ICICI Securities Limited during fiscal 2007.50 billion in fiscal 2006. 31 crore in FY2006 (US$ 7 million). 0.33 billion.900 crore (US$ 8. ICICI Securities Limited has been renamed as ICICI Primary Dealership Limited.7 billion). 0. with funds under management of about Rs. ICICI Securities achieved a profit after tax of Rs.63 billion and ICICI Securities Primary Dealership achieved a profit after tax of Rs. 2007. ICICI Prudential Asset Management Company (ICICI AMC) was among the top two asset management companies in India with assets under management of over Rs. in fiscal 2007. ICICI AMC’s profit after tax increased by 55% to Rs. ICICI Brokerage Services Limited has been renamed as ICICI Securities Limited and has become a direct subsidiary of ICICI Bank.00 billion at year-end fiscal 2007. 37. ICICI Venture achieved a profit after tax of Rs.
9 PUBLIC RECOGNITION During fiscal 2007. specific technology focus: objectives and Bank of the Year 2006 India by The Banker Best Transaction Bank in India by Asset Triple AAA Best Trade Finance in India by Asset Triple AAA Best Domestic Custody in India by Asset Triple AAA Best Bank of the Year 2006 by Business India Business Leadership Award in the Banking category by NDTV Profit National Award for Excellence in Energy Management by CII Most Admired Bank by Business Baron Best Integrated Consumer Bank Site in Asia by Global Finance Best Presentment and Payment in Asia by Global Finance Best Consumer Internet Bank in India by Global Finance Best Corporate/Institutional Internet Bank in India by Global Finance Best Retail Bank India by Asian Banker Excellence in Multi Channel Distribution by Asian Banker Excellence in Automobile Lending Award by Asian Banker Most Trusted Brand Award by Readers Digest .1.3. ICICI Bank received several prestigious award in recognition of overall business strategies.
CHAPTER-2 STUDY OF FINANCIAL STATEMENT AND IT’S ANALYSIS .
Miscellaneous expenses: In this head items such as rates and taxes. Preliminary expenses: Such expenses 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. It will include the amount of interest paid as well as outstanding. . CONTENTS: This presents the revenues and expenses of a company and shows the excess of revenues over expenses for profit and vice versa for a loss. The accounting year means calendar year of 12 months or less or more than 12 months. insurance premium etc. FORMAT: The Companies act does not provide any specific format for this account. However it is required to be prepared on the basis of the instructions given in part ii of schedule (vi) of the companies act. Depreciation: The amount of depreciation of fixed assets and the arrears of depreciation as per section 205(2) shall be disclosed by way of foot-note.1 STUDY OF PROFIT& LOSS A/C MEANING: It is a financial statement. MAIN ITEMS OF PROFIT AND LOSS ACCOUNT Turnover or sales: The aggregate amount of sales and connected items with the sales such as commission paid to sole-selling agents and other selling agents and brokerage and discounts on sales other than usual trade discount. must be stated separately. Interest on loans and debentures: Interest on loans and debentures has to be stated separately. which shows net loss of a company for a specified period.2.
Provision for taxation: The profit and loss account of a company must be debited with the estimated liabilities for tax on the current profits at current rates of taxation. Final dividend as an item of the trial balance: This is shown in the debit side of the appropriation section of the profit and loss account.2 STUDY OF BALANCE SHEET MEANING: The balance sheet is a financial snapshot of a company's condition at a single point in time. Interim dividends: It is an item of appropriation. Unclaimed dividends: it is shown on the liabilities side of the balance sheet under the heading ‘current liabilities ‘. Managerial remuneration: This includes the payments made to managerial remuneration director’s fee. you'll want to . It is transferred to the debit side of the Profit and loss appropriation account. Payment to auditors: It must be stated separately. 2.In the debit side of the profit and loss appropriation account and on the liabilities side of the balance sheet under the head ‘current liabilities and provisions’. other allowances and commission. pension. Dividend on interest income: This item is transferred to the credit side of the profit and loss account. it has to be shown at two places. whether a creditor or investor. Political donations: It must be shown as a separate item in the profit and loss account. A balance sheet contains a listing of the company's asset. This will include consultancy fee. Proposed dividend or final dividend proposed: Since it is an adjustment item. When someone. asks you how your company is doing. liability and Capital accounts. auditing fees management services etc.
LEARN THE DIFFERENT ASSETS Current assets: Current assets include cash and other assets that in the normal course of events are converted into cash within the operating cycle. if your debts are higher or lower. With a properly prepared balance sheet. These inventories of materials are converted into finished products and then sold to customers. investors. a manufacturing enterprise will use cash to acquire inventories of materials. For example. you can look at a balance sheet at the end of each accounting period and know if your business has more or less value. the relative proportions of debt and equity financing and the amount of earnings that you have had to retain. Cash is collected from the customers. creditors and others can assess your ability to meet short-term obligations and solvency. will use this information. as well as the residual ownership claims against your equity at any given point in time. A balance sheet is a documented report of your company's assets and obligations. which is required by both lending institutions and investors before they will allot any money toward your business. and if your working capital is higher or lower. By analyzing your balance sheet. The balance sheet also shows the composition of assets and liabilities. The way to show off the success of your company is a balance sheet. In a . You need a balance sheet to specifically know what your company's net worth is on any given date. external parties to help assess your company’s financial status. This circle from cash back to cash is called an operating cycle. Collectively. It is a cumulative record that reflects the result of all recorded accounting transactions since your enterprise was formed.have the answer ready and documented. as well as your ability to pay all current and long-term debts as they come due.
and equipment. Instead. Current assets are usually listed in the order of their liquidity and frequently consist of cash. or it may take more than a year to complete one operating cycle. the finished products are purchased and are sold directly to the customers. accounts receivables are the amounts owed to you and are evidenced on your balance sheet by promissory notes. temporary investments. The other assets are only held because they provide useful services and are excluded from the current asset classification. is excluded from current assets. Cash: Cash is simply the money on hand and/or on deposit that is available for general business purposes. you can include them in the inventory under the classification of current assets. can be converted into cash within the time required to complete an operating cycle. Several operating cycles may be completed in a year.merchandising business one part of the cycle is eliminated. they are invested to earn a return. If you happen to hold these assets in the regular course of business. such as the cash held in a fund for eventual retirement of a bond issue. Until you need these funds. Marketable Securities: These investments are temporary and are made from excess funds that you do not immediately need to conduct operations. It is always listed first on a balance sheet. Cash held for some designated purpose. The time required to complete an operating cycle depends upon the nature of the business. However. machinery. Materials are not purchased for conversion into finished products. It is conceivable that almost all of the assets that are used to conduct your business. such as buildings. your current assets are only those that will be converted into cash within the normal course of your business. . inventories and prepaid expenses. Accounts Receivable: Simply stated. accounts receivable.
Strictly speaking. Inventories: Your inventories are your goods that are available for sale. buildings. machinery. your plant assets include land. and the materials that you will use to create your products. and equipment that are . Your investments also include money that you may be holding for a pension fund.Accounts receivable are the amounts billed to your customers and owed to you on the balance sheet's date. The 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. Investments: Investments are cash funds or securities that you hold for a designated purpose for an indefinite period of time. real estate or mortgages that you are holding for income-producing purposes. they may be classified as current assets. You should label all other accounts receivable appropriately and show them apart from the accounts receivable arising in the course of trade. products that you have in a partial stage of completion. your prepaid expenses 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. or as plant and equipment. Prepaid expenses: These expenses are payments made for services that will be received in the near future. Often your insurance premiums or rentals are paid in advance. Investments include stocks or the bonds you may hold for another company. If these other amounts are currently collectible. Plant Assets: Often classified as fixed assets.
privileges and advantages of your business are worth more than all other assets combined. privileges or advantages. investments. or intangible assets. The amount you owe under current liabilities often arises as a result of acquiring current assets such as inventory or services that will be used in current operations.to be used in business operations over a relatively long period of time. Your current liabilities are obligations that you will discharge within the normal operating cycle of your business. It is not expected that you will sell these assets and convert them into cash. These assets are listed on your balance sheet as other assets. they still hold value for your company. You show the amounts owed to trade creditors that arise from the purchase of materials or merchandise as accounts . you need to make a distinction between current and long-term items. Frequently. LEARN THE DIFFERENT LIABILITIES Current Liabilities: On the equity side of the balance sheet. and the miscellaneous funds held for special purposes. Other Assets: During the course of preparing your balance sheet you will notice other assets that cannot be classified as current assets. as on the asset side. Intangible Assets: Your other fixed assets that lack physical substance are referred to as intangible assets and consist of valuable rights. your other assets consist of advances made to company officers. In most circumstances your current liabilities will be paid within the next year by using the assets you classified as current. Although your intangibles lack physical substance. Sometimes the rights. plant assets. the cost of buildings in the process of construction. Plant assets simply produce income indirectly through their use in operations. the cash surrender value of life insurance on officers.
Notes. This rigid distinction is necessary because of the nature of any corporation. local property taxes and other services. your liability is shown as notes payable. bonds and mortgages are often listed under this heading.payable. The distinction in this rule gives the creditors some . but creditors usually cannot look to his personal assets for satisfaction of their claims. or owners. Owner's Equity: Your owner's equity must be subdivided on your balance sheet: One portion represents the amount invested directly by you. The other portion represents your net earnings that are retained. stockholders. A stockholder may lose his investment. Deferred Revenues: Your customers may make advance payments for merchandise or services. the stockholders may withdraw as cash dividends an amount measured by the corporate earnings. If you are obligated under promissory notes that support bank loans or other amounts owed. payroll taxes. Advance collections received from customers are classified as deferred revenues. pending delivery of the products or services. Other current liabilities may include the estimated amount payable for income taxes and the various amounts owed for wages and salaries of employees. Long-Term Liabilities: Your debts that are not due until more than a year from the balance sheet date are generally classified as long-term liabilities. The obligation to the customer will. be settled by delivery of the products or services and not by cash payment. utility bills. it should be removed from the long-term debt classification and shown under current liabilities. Ordinarily. as a general rule. Under normal circumstances. are not personally liable for the debts contracted by a company. If a portion of your long-term debt is due within the next year. plus any portion of retained earnings converted into paid-in capital.
It does not show all possible kind of assets. If necessary. The owner's equity in an unincorporated business is shown more simply. It could be a consolidated balance sheet. plant and equipment Goodwill . The interest of each owner is given in total. Of course.assurance that a certain portion of the assets equivalent to the owner's investment cannot be arbitrarily withdrawn. Assets Current Assets Cash and cash equivalents Inventories Account receivable Investment held for trading Other current assets Non-Current Assets Property. The creditors are not concerned about the amount invested. this portion could be depleted from your balance sheet because of operating losses. usually with no distinction being made between the portion invested and the accumulated net earnings. Monetary values are not shown and summary (total) rows are missing as well. Basis of balance-sheet: Assets = Liability + Equity BALANCE-SHEET STRUCTURE The following Balance sheet structure is just an example. creditors can attach the personal assets of the owners. but it shows the most usual ones. equity and liabilities.
Other intangible fixed assets Investment in associates Deferred tax assets Miscellaneous Expenditure Equity And Liabilities Capital & Reserve Share capital reserve Revaluation reserve Translation reserve Retained earnings Minority interest Non-Current Liabilities Bank loan Issued debt securities Deferred tax liability Current Liabilities Accounts payable Current income tax liability Short-term part of bank loans Short-term provisions Other current liabilities .
otherwise the break-up value of the assets may be far less than the value in the balance sheet. Another format is Report Form. Heading: In addition to the statement title. In Account Form. PREPAIRING A BALANCE-SHEET Title and Heading: In practice.EQUITY VALUATION:The real value to a purchaser of the business or a shareholder may be different from the net assets shown by the balance sheet. a running format in which your assets are . For example. however Statement of Financial Position is also acceptable. the most widely used title is Balance Sheet. 2006 Format: There are two basic ways that balance sheets can be arranged. when the presentation includes more than one time period the title "Balance Sheets" should be used. The value of the assets in the balance has also been based on the assumption that the business is a going concern. This is because factors that affect the value of a business may not be recorded yet. whether assets such as property have been revalued recently. your assets are listed on the left-hand side and totaled to equal the sum of liabilities and stockholders' equity on the right-hand side. a comparative presentation might be headed: XYZ CORPORATION BALANCE SHEETS December 31. and whether there are potential liabilities in the future such as lawsuits. For example. a purchaser will be interested in the future earnings of the business. Naturally. the heading of your balance sheet should include the legal name of your company and the date or dates that your statement is presented.
Then. follow with items held primarily for use in operations but that could be converted into cash.listed at the top of the page and followed by liabilities and stockholders' equity. Sometimes total liabilities are deducted from total assets to equal stockholders' equity. your major assets should normally be presented in the following order: • • • • Cash Short-term marketable securities Trade notes and accounts receivable Inventories . Except in certain specialized industries your balance sheet should include the following secondary captions: CURRENT ASSETS CURRENT LIABILITIES Order of Presentation of Captions: First. and rank them in the order of liquidity. finish with items whose costs you will defer to future periods or that you cannot convert into cash. Your balance sheet should include three primary captions: Assets. the placement of your primary captions would be as follows: 2006 ASSETS. Following these guidelines. Finally. LIABILITIES AND STOCKHOLDER’S EQUITY. Captions: Captions are headings within your statement that designate major groups of accounts to be totaled or subtotaled. In the report form of presentation. start with items held primarily for conversion into cash and rank them in the order of their expected conversion. Liabilities and Stockholders' Equity.
The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents.• • • • Long-term investments Property and equipment Intangible assets Deferred charges Liabilities are ordinarily presented in the order of maturity as follows: • • • • • Demand notes Trade accounts payable Accrued expenses Long-term debt Other long-term liabilities Components of stockholders' equity are usually presented the following order: • • • • • • Preferred stock Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Treasury stock 2.3 STUDY OF CASH FLOW STATEMENT MEANING: Cash flow statement or statement of cash flows is a financial statement that shows a company's incoming and outgoing money (sources and uses of cash) during a time period (often monthly or quarterly). and breaks the analysis down according to .
This could include purchasing raw materials. . Operating activities: Operating activities include the production. sales and delivery of the company's product as well as collecting payment from its customers. timing and probability of future cash flows ACTIVITIES INVOLVED IN CASH FLOW: The cash flow statement is partitioned into cash flow resulting from operating activities. and financing activities. and cash flow resulting from financing activities. investing. particularly its ability to pay bills. Investing activities: Investing activities focus on the purchase of the longterm assets a company needs in order to make and sell its products. provide information on a firm's liquidity and solvency and its ability to change cash flows in future circumstances 2. liabilities and equity 3. improve the comparability of different firms' operating performance by eliminating the effects of different accounting methods 4. The main purpose to make cash flow statement are as follows: 1. and the selling of any long-term assets. indicate the amount. PURPOSE: The cash flow statement reflects a firms liquidity or solvency. provide additional information for evaluating changes in assets. cash flow resulting from investing activities. advertising.operating. building inventory. As an analytical tool the statement of cash flows is useful in determining the short-term viability of a company.
Other activities which impact the long-term liabilities and equity of the company are also listed in the financing activities section of the cash flow statement.4 FINANCIAL STATEMENT ANALYSIS MEANING: Financial statement analysis is the process of examining relationships among financial statement elements and making comparisons with relevant information. With a great understanding of the balance sheet & p&l account and how it is constructed. TOOLS FOR ANALYSING 1.Financing activities: Financing activities include the inflow of cash from investors such as banks and shareholders. Analysis of cash flow statement is necessary for every organisation to depict its cash inflow and outflow. and others in their decision-making processes related to stocks. To make predictions about the future performance of a company. bonds. we can look at some techniques to analyze the information contained within the balance sheet & p&l account. financial analysts. 2. and other financial instruments. as well as the outflow of cash to shareholders as dividends as the company generates income. It is a valuable tool used by investors and creditors. PURPOSE: The main purpose of analyzing the financial statement are the following: To assess past performance and current financial position. PERCENTAGE CALCULATION .
such as sales revenues. such as cash and inventory. Alternatively. in comparing financial statements for a number of years. Trend analysis involves calculating each year's financial statement balances as percentages of the first year. since the analyst is reading across the page to compare any single line item. also known as the base year. The total used by the analyst . and percentage changes from the base year can be determined. When expressed as percentages.There are two popular methods by which we can analyze the financial statement by calculating percentage as taking a common base. Horizontal Analysis When an analyst compares financial information for two or more years for a single company. If we want to calculate % change in sales then we apply the following formula: Percentage=change in sales /Base Year Sales*100 Vertical Analysis When using vertical analysis. the base year figures are always 100 percent. The term vertical analysis applies because each year's figures are listed vertically on a financial statement. the analyst calculates each item on a single financial statement as a percentage of a total. the process is referred to as horizontal analysis. In addition to comparing dollar amounts. the analyst computes percentage changes from year to year for all financial statement balances. the analyst may prefer to use a variation of horizontal analysis called trend analysis.
on the income statement is net sales revenue. produces common-size financial statements. such as from the balance sheet and the income statement. It is important to note that some ratios will need information from more than one financial statement. Ratios are often classified using the following terms: LIQUIDITY RATIO Liquidity ratios are measures of the short-term ability of the company to pay its debts when they come due and to meet unexpected needs for cash. using financial ratios (like the debt-to-equity ratio) can show you a better idea of the company’s financial condition along with its operational efficiency. while on the balance sheet it is total assets. Common-size balance sheets and income statements can be more easily compared. RATIO ANALYSIS Financial ratio analysis uses formulas to gain insight into the company and its operations. This approach to financial statement analysis. If we want to calculate % change of current assets then we apply the following formula: Percentage: current assets/total assets*100 2. For the balance sheet. whether across the years for a single company or across different companies. Ratio analysis facilitates inter-firm and intrafirm comparison. . also known as component percentages.
Generally. the higher the current ratio. The quick ratio expresses the degree to which a company’s current liabilities are recovered by the most liquid current assets. • Debt/Worth Ratio: This ratio expresses the relationship between capital contributed by creditors and that contributed by owners. The stronger ratio reflects a numerical superiority of current assets over current liabilities Current ratio is calculated as follows: Current ratio= Current Assets/Current Liabilities • Quick Ratio: It is also known as the “acid test” ratio. quick ratio is calculated as follows: Quick ratio= (cash + marketable securities + Receivables)/current liabilities SOLVENCY RATIO Solvency 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. this is a refinement of the current ratio and is a more conservative measure of liquidity.• Current Ratio: The current ratio is a rough indication of a firm ability to service its current obligations. It expresses the degree of protection provided by the owners for the . the greater the cushion between current obligations and a firm ability to pay them.
The higher the ratio. A more highly leveraged company has a more limited debt capacity. A lower ratio indicates a proportionately smaller investment in fixed assets in relation to net worth and a better cushion for creditors in case . the greater the long-term financial safety. the greater the risk being assumed by creditors.creditors. The lower the ratio. It is calculated as follows: Return on Equity= Net income/shareholder’s equity Fixed/Worth Ratio: This ratio measures the extent to which owner’s equity (capital) has been invested in plant and equipment (fixed assets). measuring for the profits earned for each rupee invested in business. It is calculated as follows: Return On Assets= Net Income/Total Assets • Return On Equity: Return on equity is the bottom line measure for the shareholders. A firm with a low debt/worth ratio usually has a greater flexibility to borrow in the future. • Return On Assets: Return on assets is a measure of how effectively the firm’s assets are being used to generate profit. Debt/worth ratio=Total Liabilities / Tangible Net Worth PROFITABILITY RATIO Profitability ratios are gauges of the company's operating success for a given period of time.
Similarly.of liquidation. a higher ratio would indicate the opposite situation. Fixed Worth Ratio=Net Fixed Assets/ Tangible Net Worth . The presence of substantial leased fixed assets (not shown on the balance-sheet ) may deceptively lower this ratio.
1 MANAGEMENT DISCUSSION & ANALYSIS SUMMARY: .CHAPTER-3 ANALYSIS OF FINANCIAL STATEMENT OF ICICI BANK 3.
• Profit before provisions and tax increased 51.1% to Rs. 58.74 billion in fiscal 2007 from Rs. 38.88 billion in fiscal 2006 primarily due to an increase in net interest income by 40.9% to Rs. 66.36 billion in fiscal 2007 from Rs. 47.09 billion in fiscal 2006 and an increase in noninterest income by 39.4% to Rs. 59.14 billion in fiscal 2007 from Rs. 42.42 billion in fiscal 2006, offset, in part, by an increase in noninterest expenses by 33.8% to Rs. 66.91 billion in fiscal 2007 from Rs. 50.01 billion in fiscal 2006.
Provisions increased significantly during fiscal 2007 due to higher provisions created on standard assets and lower level of write-backs. Profit before general provisioning and tax increased 27.4% to Rs. 43.79 in fiscal 2007 from Rs. 34.36 billion in fiscal 2006. Profit after tax increased 22.4% to Rs. 31.10 billion in fiscal 2007 from Rs. 25.40 billion in fiscal 2006.
• Net interest income increased 40.9% to Rs. 66.36 billion in fiscal 2007 from Rs. 47.09 billion in fiscal2006, reflecting an increase of 49.8% in the average volume of interest-earning assets. • Non-interest income increased by 39.4% to Rs. 59.14 billion in fiscal 2007 from Rs. 42.42 billion in fiscal 2006 primarily due to a 45.4% increase in fee income. • Non-interest expenses increased 33.8% to Rs. 66.91 billion in fiscal 2007 from Rs. 50.01 billion in fiscal 2006 primarily due to
49.4% increase in employee expenses and 41.9% increase in other administrative expenses. • Provisions and contingencies (excluding provision for tax) increased to Rs. 22.26 billion in fiscal 2007 from Rs. 7.92 billion in fiscal 2006 primarily due to higher provisions created on standard assets in accordance with the revised guidelines issued by RBI, a higher level of specific provisioning on retailloans due to change in the portfolio mix towards non collateralised loans and seasoning of the loan portfolio and lower level of write-backs. • Total assets increased 37.1% to Rs. 3,446.58 billion at year-end fiscal 2007 from Rs. 2,513.89 billion at year-end fiscal 2006 primarily due to an increase in loans by 34.0% and an increase in investments by 27.5%. • FEE INCOME Fee income increased by 45.4% to Rs. 50.12 billion in fiscal 2007 from Rs. 34.47 billion in fiscal 2006 primarily due to growth in fee income from retail products and services, including fee arising from retail assets products and retail liability related fee income like account servicing charges and third party distribution fees. Fees from corporate banking and international business also witnessed a strong growth. • TREASURY INCOME
The gross treasury income increased to Rs. 10.14 billion in fiscal 2007 from Rs. 7.40 billion in fiscal 2006 primarily due to higher level of gains from equity divestments, offset in part by 24.6% increase in premium amortisation on Government securities to Rs. 9.99 billion in fiscal 2007 from Rs. 8.02 billion in fiscal 2006 and lower profits on proprietory trading as a result of the sharp fall in the equity markets in May 2006 and adverse conditions in debt markets. The amortisation of premium on Government securities which was earlier shown as provisions and contingencies has been reclassified under income from treasury-related activities as per the revised guidelines of RBI.
LEASE & OTHER INCOME
Lease income decreased by 34.1% to Rs. 2.38 billion in fiscal 2007 from Rs. 3.61 billion in fiscal 2006 primarily because of a decrease in leased assets to Rs. 10.03 billion at year-end fiscal 2007 compared to Rs. 11.74 billion at year-end fiscal 2006 since we are not entering into new lease transactions. Other income increased by 53.0% to Rs. 6.64 billion for fiscal 2007 compared to Rs. 4.34 billion in fiscal 2006 primarily due to increase in income by way of dividend from our subsidiary companies and increase in profit on sale of land, buildings and other assets. • PROVISIONS AND TAX Provisions and contingencies (excluding provision for tax) increased to Rs. 22.26 billion in fiscal 2007 from Rs. 7.92 billion in fiscal 2006 primarily due to higher provisions created on standard assets, in
accordance with the revised guidelines issued by RBI, a higher level of specific provisioning on retail loans due to change in the portfolio mix towards non collateralised loans and seasoning of the loan portfolio and lower level of write-backs.
It’s total assets increased by 37.1% to Rs. 3,446.58 billion at year-end fiscal 2007 from Rs. 2,513.89 billion at year-end fiscal 2006 primarily due to increase in advances and investments. Net advances increased by 34.0% to Rs. 1,958.66 billion at year-end fiscal 2007 from Rs. 1,461.63 billion at year-end fiscal 2006 primarily due to increase in retail advances in accordance with our strategy of growth in our retail portfolio, offset, in part, by reduction in advances due to repayments and securitisation. Retail advances increased 38.5% to Rs. 1,277.03 billion at year-end fiscal 2007 from Rs. 921.98 billion at year-end fiscal 2006.
Total investments at year-end fiscal 2007 increased by 27.5% to Rs. 912.58 billion compared to Rs. 715.47 billion at year-end fiscal 2006 primarily due to 31.9% increase in investment in Government and other approved securities in India to Rs. 673.68 billion at year-end fiscal 2007 from 510.74 billion at year-end fiscal 2006 in line with the increase in our net demand and time liabilities. Banks in India are required to maintain a specified percentage, currently 25.0%, of their net demand and time liabilities by way of liquid assets like cash, gold or approved unencumbered securities. Other investments (including debentures and bonds) increased by 16.7% to Rs. 238.90 billion at
1. 524.3% to Rs. 288. • It’s equity share capital and reserves at year-end fiscal 2007 increased to Rs. 275. Our savings account deposits increased to Rs.10 billion at year end fiscal 2007 from Rs. reflecting an increase in investments in insurance and international subsidiaries. 1.73 billion at year-end fiscal 2006.96 billion at year-end fiscal 2007 from Rs.73 billion at year-end fiscal 2006. Term deposits increased by 41. the difference in the liability on account of retirement benefits created by the Bank at March 31. 1.71 billion at year-end fiscal 2007 from Rs.year-end fiscal 2007 compared to Rs.13 billion as compared to Rs. 204. pass through certificates and credit linked notes.(Revised) on “Accounting for retirement benefits in financial statements of employer”. 165. This is commensurate with our focus of increased funding through deposits.650.83 billion at year-end fiscal 2006.305.76 billion at year-end fiscal 2007 from Rs.2% to Rs. 209.73 billion at yearend fiscal 2006. 2. 2006 due to the revised standard have been adjusted in “Reserves and Surplus”. 213.86 billion at year-end fiscal 2006. while current deposits increased to Rs.38 billion at year-end fiscal 2007 from Rs. Total assets (gross) of overseas branches (including overseas banking unit in Mumbai) increased by 90. Total deposits at year-end .37 billion at year-end fiscal 2006. • As per the transition provision of Accounting Standard 15 .802. Total deposits increased 39. 243.6% to Rs.275.06 billion at year-end fiscal 2006 primarily due to retained earnings for the year and exercise of employee stock options. 222.
1. 41.679.73 billion at year end fiscal 2006.0% increase in liability on account of outstanding forward exchang econtracts.68 billion compared to Rs.60 billion at year-end fiscal 2007 from Rs. total general provision made against standard assets was Rs.50 billon compared to Rs.950. 5.72% at year-end fiscal 2006. The coverage ratio (i.629.98% at year-end fiscal 2007 compared to 0. 12. Gross of technical write-offs. 3.71% at year-end fiscal 2006. deposit. a . Our investments in security receipts issued by Asset Reconstruction Company (India) Limited.5% of our funding (i.4% increase in interest rate swaps and currency options and a 45.fiscal 2007 constituted 76. Borrowings (including subordinated debt) increased to Rs. the gross non-performing assets at yearend fiscal 2007 were Rs. • NPAS (NON PERFORMING ASSETS) The ratio of net non-performing assets to net customer assets increased to 0.35 billion at year-end fiscal 2006 primarily due to a 35. In addition. • Contingent liabilities increased by 42. 29. 706. 22.e.5% or Rs.25 billion to Rs. total provisions and technical write-offs made against non-performing assets as a percentage of gross non performing assets) at year-end fiscal 2007 was 58.95 billion at year-end fiscal 2007.66 billion at year-end fiscal 2006 primarily due to increase in borrowings of foreign branches. At year-end fiscal 2007. 486. 48.63 billion at year-end fiscal 2006. the gross nonperforming assets (net of write-offs and unpaid interest) were Rs. borrowings and subordinated debts).61 billion at year-end fiscal 2007 from Rs.e.37% compared to 63.
03% March March 31.68 20. 2006 2007 22.37 19. 31.07 0. (RS. Our net restructured standard loans decreased from Rs. 53.19 2. 25.520.71% 41.38 billion at year-end fiscal 2007.83 billion at year-end fiscal 2007.66% primarily due to concessional rate of tax on capital gains.053. deduction towards special reserve and deduction of income of offshore banking unit.74 0. Rs.16 billion at year-end fiscal 2006 to Rs. 2005 34. IN BILLION) YEAR ENDED GROSS NPA NET NPA NET CUSTOMER ASSETS % OF NET NPA TO NET CUSTOMER ASSETS • DIVIDEND March 31. exemption of dividend income.73 10.94 2. • The effective tax rate of 14. 10 per equity share .7% for fiscal 2007 was lower compared to the statutory tax rate of 33.98% The Board has recommended a higher dividend of 100% for FY2007 i.reconstruction company registered with RBI were Rs.e. 48.75 1.83 978.
14 50.9% 55.61 billion under Indian GAAP in fiscal 2007.06 95.38 6.4% (34.06 55.2% 48. • CONSOLIDATED PROFIT The consolidated profit after tax increased 14% to Rs.05 20.761 crore (US$ 635 million) in FY2007 from Rs.2 COMPARATIVE INCOME STATEMENT TREND ANALYSIS SUMMARISED PROFIT & LOSS A/C (ON 31 MARCH.01 2.51 35.0% 40.7% 70.71 28.17 143.1% 47.9% 39.39 27.27 billion as compared to consolidated profit of Rs.7% 40.3% 94.9% 60.34 89.47 3.61 4.09 42. 2.47 229.50 49.64 125.42 34. The consolidated profit was lower than the standalone profit due to the accounting losses of ICICI Prudential Life Insurance Company (ICICI Life).12 2. 2.4% 45.98 4.97 47.3% (10.79 . 2007) (RS.94 163.4% 40.2% 40.8 66.1) 53. 3.(equivalent to US$ 0.36 59.10 65. 31.) %Change %Change (2006) (2007) 46.) 200 6 (RS.5% 46.a higher level of specific provisioning on retail loans. 27.5% 49.46 per ADS) as compared to 85% for FY2006 primarily due to higher provisions created on standard assets . IN BILLION) PARTICULARS Interest income Interest expense Net interest income Non-interest income – Fee income – Lease income – Others Core operating income Operating expenses 200 5 (RS.) 2007 (RS.44 25.0) 111.420 crore (US$ 557 million) in FY2006. Its profit under US GAAP accounts was Rs.
88 58.56 25.527 crore for FY2005. the following trends are presented: Operating profit increased 51% to Rs.85 2.7% to Rs.Direct marketing agency (DMA) expense Lease depreciation.05 11.56 4. 3.9) 48. 3.45 29.4% By anlysing the summarized profit & loss account of ICICI Bank.59 0. 5. Profit before tax increased 18% to Rs.88 7.92 30.5% (31.15 58.48 5.97 22.29 25.38 31. 2.7% 29.40 15.61% 22.8% (3. net of deferred tax Profit after tax 4.1% 181.888 crore for FY2006 which is less than as compared to increased 58. .005 crore for FY2005.62) 38.540 crore for FY2006 from Rs.874 crore for FY2007 from Rs.648 crore for FY2007 from Rs.74 22. 3. 2.77 2.097 crore for FY2006 which is also less than as compared to increased to 22.24 1.7% 26.6% 58.1% 17.6% 6.888 crore for FY 2006 from Rs.540 crore for FY2006 which is less than as compared to increased 26.1% (6. net of lease equalization Core operating profit Net treasury income Operating profit Provisions.77 39.26 36. 3.22 20.2) 22.097 crore for FY2006 fom Rs.50 (0.7) 67.27 5.6 % to Rs. 2.7% to Rs.110 crore for FY2007 from Rs.3% 51. net of writebacks Profit before tax Tax.10 35.97 5. 3. 2. 2.956 crore for FY2005. Profit after tax increased 22% to Rs.7% 84. 3.
) 47. 3.7% 53% .636 crore for FY2007 from Rs.839 crore for FY2005.709 crore for FY2006 from Rs.1% in FY2006 to 70% in FY2007.) 68. Interest income is increased at a higher rate than the previous year i. 2007) (RS.489 %Change %Change (2006) (2007) 43. Increase in non-interest income is less than in 2007 49% as compared to increase in 2006 39%.709 crore for FY2006 which is less than as compared to increased 47. Net interest income increased 41% to Rs. Provision is increased at a high rate as compared to previous years 85% in 2006 to 181% in 2007.3% increased in 2006 Interest expenses increased at a very high rate from 46. In crore) PARTICULARS Cash balance with banks & SLR 2005 (RS. 47% in 2006 to 61% in 2007. 2. 6.) 104.e.3 COMPARATIVE FINANCIAL POSITION STATEMENT TREND ANALYSIS SUMMARIZED BALANCE-SHEET (ON MARCH 31. 4. Fee income increased 45% in 2007 which is less than as compared to 55.412 2006 (RS.5% to Rs.115 2007 (RS. 4.
405 2.187 167.658 24.824 344.837 59.482 91.510 10. .4% 65. 251389 crore i.368 195.854 12.659 17.e.9% 76.316 350 165.9%.-Cash & bank balances -SLR investment Advances Other Investment Fixed and other Assets TOTAL ASSETS Net Worth -Equity Capital -Reserves Preference Capital Deposits Erstwhile ICICI Borrowings Other Borrowings Other Liabilities 12. 37% which is less than as compared to increase in 2006 from Rs.083 251.819 19.389 22.866 23.e.836 167.190 35.823 18.638 251. Increase in cash balance with bank in 2007 is more than in the previous year 2006. 49.8% 48.813 350 99. the following trends are presented: Total assets and total liabilities are increased in 2007 from Rs.405 13.4% 49.890 20.389 37.659 12.313 899 23.413 344.61% 49.8% 80.930 34. 251389 crore to Rs.083 13.9% 118% 32% 34% 17% 23% 37% 9% 1% 10% 40% (18%) 69% 25% 37% TOTAL LIABILITIES By anlysing the balance sheet of ICICI Bank.9% 41.16%) 58.4% (31.121 67.1% 59.348 22.473 16.414 350 230.075 146.9% 29.206 890 21.2% 14.040 51.9% 20.658 31.477 15. 167659 crore to Rs.163 20.550 737 11. 344658 Crore i. In 2006 it is 32% and in 2007 it is 118%.
Increase in advances in 2007 is 60% from 2006 which is less than as compared to increase in advances in 2006 is 34% from 2005.e 80% in 2006 to 9% in 2007. 40%Deposits is increased in 2007 from 2006 which is less than as compared to 65% increase in deposits in 2006 from 2005. But increase in SLR investment in 2007 is less than the previous year. . In 2006 it is 48% and in 2007 it is 32%. Erstwhile ICICI borrowings is decreasing in both years but rate of decreasing is less in 2007 i.e 23% as compared to 30% in 2006 from 2005. 18% but in 2006 it is 31%. from 10% to 80%.e. Increase in net worth is also less than from previous year in 2007 i. Increase in equity capital is only 1% in 2007 whereas in 2006 it is 21% and increase in reserve in 2007 is very less as compared to increase in 2006 i.e. Increase in fixed and other assets is also less than in 2007 from 2006 i.
40billion (short-term deposits+ borrowings) Current Ratio=1632.77+131.40+1461.e from 14% in 2006 to 25% in 2007.36 billion (short-term deposits+ borrowings) Current Ratio=2329.66=2329. 3.36=2.37+598.21+1958. 69%borrowing is increased in 2007 from 2006 which is more than as compared to 58% increase in borrowing in 2006 from 2005.40=2.90=652.5:1 In 2007: Current Assets=371.63=1632.76+108.4 RATIO ANALYSIS 1) CURRENT RATIO: Current Ratio= Current Assets/Current Liabilities In 2006: Current Assets=170.73+354.23=920.87billion (cash + advances) Current Liabilities=213.03/652.40billion (cash in hand and other bank) .87/920.6:1 2) QUICK RATIO: Quick Ratio=Quick Assets/Current Liabilities In 2006: Quick Assets=170. Increase in other liabilities is more in 2007 than in 2006 i.03 billion (cash + advances) Current Liabilities=165.
10/2980.28 Return on average equity= 25.24*100=1.24 Return on average assets= 31.89)/2= 2095.28*100 = 17.56)/2= 177.40=0.40:1 3) RETURN ON AVERAGE ASSETS: Return on average assets= Net income/average assets*100 average assets= total assets at the beginning + total assets at the end/2 In 2006: net income=25.30=0.26:1 In 2007: Quick Assets=371.54% .21billion (cash in hand and other bank) Current Liabilities=920.40 billion Average assets= (1676.40/2095.40billion Quick Ratio=170.59+ 2513.21/920.21% In 2007: net income= 31.89+ 3446.40/177.10 billion Average assets= (2513.40 billion Average equity= (129.58)/2= 2980.24 Return on average assets= 25.30billion Quick Ratio=371.24*100 = 1.Current Liabilities=652.40/652.04% 4) RETURN ON AVERAGE EQUITY: Return on average equity = Net income/average equity*100 average equity= total equity at the beginning + total equity at the end/2 In 2006: net income=25.00+225.
10 Return on average equity = 31.10 billion Average equity= (225.55= 0.63)/2= 236.62 billion Fixed Worth Ratio=39.80/225.84 billion Average assets=2980.55 billion Fixed Worth Ratio=39.18:1 In 2007: Net Fixed Assets= 39.62 = 0.56+246.24 Operating profit to working fund=38.10/236.16:1 6) OPERATING PROFIT TO WORKING FUNDS Operating Profit To Working Funds=operating profit/ average assets*100 In 2006: Operating profit=38.23/246.80/2095.17% 5) FIXED/WORTH RATIO: Fixed Worth Ratio=Net Fixed Assets/ Tangible Net Worth In 2006: Net Fixed Assets= 39.85% In 2007: Operating profit=58.10*100=13.In 2007: net income= 31.23 billion Tangible Net Worth= 246.80 billion Tangible Net Worth= 225.24*100= 1.80 billion Average assets=2095.84 .
18:1 1.98% The above table shows that:.Operating profit to working fund=58.6:1 0. The profitability ratio of ICICI bank is very low. marketable securities etc.40:1 1.26:1 1.both current ratio and quick ratio is liquidity ratio. The higher the profitability ratio of any organization is show the better position of that organization. A lower .21% 17.84*100= 1. In these table current ratio of both year is higher than the ideal ratio which shows that there is enough current assets which make the bank able to pay its current liabilities on time but quick ratio is lower than the ideal ratio which shows that bank have not enough liquid assets to pay their current liabilities.84/2980.98% (approximately) RATIOS Current Ratio Quick Ratio Return On Assets Return On Equity Fixed/worth Ratio Operating profit to working funds IN 2006 2. Return on equity. Fixed/worth ratio measures the extent to which owner’s equity has been invested in plant and equipment .85% IN 2007 2. The ideal ratio for current ratio is 2:1 and ideal ratio for quick ratio is 1:1.04% 13. It is deceasing from the previous year. Therefore bank should keep some assets in the form of liquid assets such as cash.54% 0.5:1 0. return on assets and operating profit to working funds are profitability ratio.16:1 1.17% 0.
149 (28.157) (511.704.5 CASH FLOW STATEMENT (AS ON YEAR ENDED ON 31ST MARCH.484.619.311 (4.224) 70.336 Refund/(payment) of direct taxes Net cash generated from operating .999) 26.85 2 (18.947.620.112.040 (8.939 (36.941) 65.152.579 (141.861.019.021.270.758.222) 53.076 9.052 652.515. Adjustments for: Depreciation and amortisation Net (appreciation) / depreciation on investments Provision in respect of non-performing assets Provision for contingencies & others Dividend from subsidiaries (Profit) / Loss on sale of fixed assets Adjustments for: Increase/decrease in investments Increase/decrease in advances Increase/decrease in borrowings Increase/decrease in deposits Increase/decrease in other assets Increase/decrease in other liabilities and provisions FY2007 36. In “000’s) PARTICULARS Net profit before taxes .918.476.244 226.643. This ratio shows that bank has invested more in current assets than the fixed assets.52 FY2006 Cash flow from operating activities 30. It could be a good position in case of liquidation.391 7.929) (71.145.283) 46.244.004.267) 57.002 9.ratio indicates a proportionately smaller investment in fixed assets.232) 13.966.403 7.592.386.982 (19.886.529.801 (3.247) (552.480.255.419 21.141. 2007) (rs.999 251.469 2.039.301.666.927 654.915) (1.639.312) 230. 3.206 8.199 178.
626.035 3.300 (171.77 4 (327.924.00 1 126.96.36.1995 41.001) 942.915 (4.646.380 (8.402.245 371.074.245 .758.811.587) 200.299.174.194) 3.509.804) 79.021) 154.134) (183.70 8) 2.381) (78.102.286.402.723 170.776.166) 4.833 869.activities(A) Cash flow from investing activities Investments in subsidiaries and/or joint ventures Income received on above investments Purchase of fixed assets Proceeds from sale of fixed assets (Purchase)/sale of held to maturity securities Net cash generated from investing activities(B) Cash flow from financing activities Proceeds from issue of share capital Net proceeds/(repayment) of bonds Dividend and dividend tax paid Net cash generated from financing activities(C) Effect of exchange fluctuation on translation reserve(D) Net increase/(decrease) in cash and cash equivalents)(A+B+C+D) Cash and cash equivalents at 1st April Cash and cash equivalents at 31st March 2 (15.347.843 (69.474.813.929 (5.522 129.939.414 160.247 (8.484.386.509.623) 4.390) 73.717.592 (7.
CHAPTER-4 CONCLUSION .
The balance sheet is a snapshot at a single point of time of the company’s accounts. P & L account tells the net profit and net loss of a company and its appropriation. insurance.covering its assets. analyze and read balance-sheet. rural banking etc. mutual fund. wholesale business. It is important that all investors know how to use. international operation. the bank continued to grow and diversify its assets base and revenue streams. In the case of ICICI Bank. The 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. liabilities and shareholder’s equity.The 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. Bank maintained its leadership in all main areas such as retail credit. . during fiscal 2007.
Bank have given more advances to its customer and they have less cash in their hand. interest expenses. liabilities. It means bank has invested more in current assets than the fixed assets and liquid assets. Trend analysis of profit & loss account and balance sheet shows the % change in items of p & l a/c and balance sheet i. like tax. It shows that all items are increased mostly but increase in this year is less than as compared to increase in previous year. % increase in some item is more than previous year and in some items it is less. interest expenses. operating expenses. profit before tax and after tax is increased but in mostly cases it is less than from previous year but in some items like interest income. cash. Similarly in balance sheet all items like advances. Ratio analysis of financial statement shows that bank’s current ratio is better than the quick ratio and fixed/worth ratio. all items like interest income. lease income is decreased. ATM and electronic channels shows the growth take place in bank. deposits is increased except borrowings which is decreased. % change in 2006 from 2005 and % change in 2007 from 2006.Continuous increase in the number of branches. Profitability ratio of bank is lower than as . In p & l a/c.e. operating profit. Some items depreciation. non-interest income. provision % increase is more.
the ratio analysis and trend analysis and analysis of cash flow statement shows that ICICI Bank’s financial position is good. Bank’s position is stable.708. Therefore analysis of cash flow statement shows that cash inflow is more than the cash outflow in ICICI Bank. Return on equity is better than the return on assets. . The 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. Thus.479 thousand RS. There is increase of 159. Bank’s liquidity position is fair but not good because bank invest more in current assets than the liquid assets. in Increase in cash & cash equivalents from previous year. Bank’s profitability is increasing but not at high rate. As we all know that ICICI Bank is on the first position among all the private sector bank of India in all areas but it should pay attention on its profitability and liquidity.compared to previous year.
CHAPTER-5 RECOMMENDATION & SUGGESTION .
.Some of the recommendation and suggestion are as follows: o The attention is required on the areas of growth. o To increase the profit of bank. bank should keep some more cash in its hand instead of giving more and more advances. o There is need to build the knowledge and skill base among the employees in the context of technology. profitability . bank should decrease their operating expenses and increase their income. o Introduce quality consciousness and standardization of the work system and procedures. o Make manager competitive and introduce spirit of market-orientation and culture of working for customer satisfaction.service level and building talent. o To increase its liquidity.
S.e.com www.pruicici. o Bank should manage its all risk such as credit.com .o Performance measure should not only cover financial aspects i. MAHESHWARI “Principles Of Accounting” Sultan Chand & Sons WEBSITES www. quantitatively aspects but also the qualitative aspects. VARSHNEY “Banking Law And Practices” Sultan Chand & Sons SUNDRAM & VARSHNEY “Banking.icicibank. Bank should pay attention on its subsidiary “ICICI Prudential Life Insurance Company Limited BIBLIOGRAPHY REFERENCE BOOKS P.N. Theory Law And Practices” Sultan Chand & Sons DR. market and operational risk properly and should be managed by a person who are highly skilled and qualified. o It is high time to focus on work than the work-achieved. o Bank should increase its retail portfolio. N.
investopedia.641.584.942.291.808.2007 (RS.03.03.2006 I.854 95. INCOME Interest earned Other income TOTAL INCOME II.184 15 16 17 163.417 .870.com (I) PROFIT AND LOSS A/C For The Year Ended March 31.483.483 50.974.2007 AS ON 31.061.859 184.905. www.686 289.984 66.234. EXPENDITURE Interest expended Operating expenses Provision and contingencies 229.537 13. IN ‘000S) PARTICULARS SCHEDU LE 13 14 AS ON 31.325 41.011.564 27.602 143.916 59.
469.132.694 35 1.84 34. APPROPRIATIONS/ TRANSFERS Transfer to reserve fund Transfer to capital reserve Transfer to investment fluctuation reserve Transfer from investment fluctuation reserve Transfer to special reserve Transfer to revenue and other reserves Proposed equity share dividend Proposed preference share dividend Corporate dividend tax Balance carried over to balance sheet TOTAL Significant policies& notes to accounts EARNING PER SHARES Basic(rs.210.102.800.011.741 34.282.49 32.00 (II) BALANCE-SHEET (Balance sheet of ICICI bank as on March 31.00 32.64 10.747 1.402 159.) Diluted(rs.750.000 9.282.416 27.616 18 25.200 2.000 4.437 31.TOTAL EXPENDITURE III.221 27.900.969 2.978 982.350) 2.350 7.000 13. PROFIT/LOSS Net profit for the year Profit brought forward TOTAL PROFIT/(LOSS) Transfer to Statutory reserve 258.593.203.968 IV.064. In ‘000’s) .168 1.) Face value per share(rs.203.) 34.500.000 222 680.416 34.2007) (Rs.882.221 6.934.036.616 7.934.036.000 (13.400.530.15 10.000 5.326 35 1.360.000 1.
101.581.060 Bills for Collection 40.493.219.631.650.465.089 39.) 12.777 2.542 3.581.126 As on 31.234.058.136 252.542 CAPITAL & LIABILITIES Capital Reserve & Surplus Deposits Borrowings Other liabilities & provisions TOTAL CAPITAL & LIABILITIES ASSETS Cash and Balance with Reserve Bank Of India Balances with banks and money at calls and short notice Investment Advances Fixed Assets Other Assets TOTAL ASSETS 6 7 8 9 10 11 187.336.356 3.398.508 715.944 1.889.126 89.996 39.794 184.578.655.629.575.343.149 2.232 164.115 126.950.571 1.889.234 3.958.2006 (RS.03.305.446.831.889.278.807.1441452 912.446.513.384.03.161.513.560.418 1.2007 (RS.610 Significant accounting policies and 18 notes to accounts (The Schedule refer to above form an integral part of balance sheet) .737 81.139.068.Particulars Schedule As on 31.713 385.437 234.207 2.286.594.345 213.655 43.648 Contingent Liabilities 12 5.473.263 382.) 1 2 3 4 5 12.461.863 512.