A project report on analysis of financial statement of icici bank

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A project report on analysis of financial statement of icici bank

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Transcript of "A project report on analysis of financial statement of icici bank"

1. Projectsformba.blogspot.com MINOR PROJECT REPORT ON THE STUDY OF ANALYSIS OF FINANCIAL STATEMENT OF ICICI BANK
Submitted in the partial fulfillment of required for the award of degree of Bachelor of Business Administration. Submitted By: Under the guidance
KASTURI RAM COLLEGE OF HIGHER EDUCATION (AFFILATED TO GURU GOBIND SINGH UNIVERSITY, DELHI)Projectsformba.blogspot.com
2. Projectsformba.blogspot.com ACKNOWLEDGEMENTGetting a project ready requires the work and effort of many people. Iwould like to pay my
sincere gratitude and thanks to those people, whodirected me at every step in this project work. The present report is basedon ANALYSIS OF
FINANCIAL STATEMENT- CASE STUDY OFICICI BANK.I extended my sincere thank and gratitude to .., internalfaculty, for her help
and valuable support throughout the term of theproject. It was a learning experience to work under her guidance.I am also very thankful to
who has given me theopportunity to do this project report. I am also thankful to myparents, all my friends and other sources who
gave me their muchneeded support and inspiration in preparing this project report.Projectsformba.blogspot.com
3. Projectsformba.blogspot.com CERTIFICATEThis is to certify that . has accomplished the project titledANALYSIS OF FINANCIAL
STATEMENT- CASE STUDY OF ICICIBANK under my guidance and supervision.She has submitted this project in the partial fulfillment for the

awardof degree of Bachelor of Business Administration (B.B.A[B&I]) fromGuru Gobind Singh Indraprastha University.The work has not been
anywhere else for the award of degree. All sourceof information have been duly mentioned.(Kasturi Ram College Of Higher
Education)Projectsformba.blogspot.com
4. Projectsformba.blogspot.com CONTENT PAGE NO. 1. INTRODUCTION 1-25A Brief Introduction2Objectives 2ICICI Bank 3History 4Board of
Directors 5Board Committees 6Organisational Structure 7Products & Services 12Risk Aspects 18Subsidiary companies 21Key Group Companies
22Public Recognition 24 2. FINANCIAL STATEMENT AND ITS ANALYSIS 26-44 2.1 Study of Profit & Loss A/C 27 2.2 Study of Balance-Sheet 28
2.3 Study of cash flow statement 38 2.3 Financial Statement Analysis 40 3. ANALYSIS OF FINANCIAL STATEMENT OF ICICI BANK 45-61 3.1
Management Discussion & Analysis 46 3.2 Comparative Income Statement 53 3.3 Comparative Financial Position Statement 55 3.4 Ratio
Analysis- Financial Statement 57 3.5 Cash Flow Statement 60 4. CONCLUSION 62-64 5. RECOMMENDATION & SUGGESTION 65-66
BIBLIOGRAPHY 67 ANNEXURE 68-70Projectsformba.blogspot.com
5. Projectsformba.blogspot.comProfit & Loss Account 69Balance-Sheet CHAPTER-1 INTRODUCTIONProjectsformba.blogspot.com
6. Projectsformba.blogspot.com1.1 A BRIEF INTRODUCTIONIn any organization, the two important financial statements are the Balancesheet &
Profit and loss account of the business. Balance sheet is astatement of the financial position of an enterprise at a particular point oftime. Profit
and loss account shows the net profit or net loss of a companyfor a specified period of time. When these statements of the last few year ofany
organization are studied and analyzed, significant conclusions may bearrived regarding the changes in the financial position, the important
policiesfollowed and trends in profit and loss etc. Analysis and interpretation of thefinancial statement has now become an important technique of
creditappraisal. The investors, financial experts, management executives and thebankers all analyze these statements. Though the basic
technique ofappraisal remains the same in all the cases but the approach and theemphasis in analysis vary. A banker interprets the financial
statement so asto evaluate the financial soundness and stability, the liquidity position andthe profitability or the earning capacity of borrowing
concern. Analysis offinancial statement is necessary because it help in depicting the financialposition on the basis of past and current records.
Analysis of financialstatement help in making the future decision and strategies. Therefore, it isvery necessary for every organization whether it is
a financial ormanufacturing etc. to make financial statement and to analyse it.Projectsformba.blogspot.com
7. Projectsformba.blogspot.com1.2 OBJECTIVEThe main objective of this report are the following: To study about ICICI BANK and its related
aspects like its products & services, history, organizational structure, subsidiary companies etc. To analyse the financial statement i.e P&L
account and Balance sheet of ICICI BANK. To learn about P&L Account, Balance-sheet and different type of Assets& Liabilities. To
understanding the meaning and need of Balance Sheet and profit and loss account. The purpose is to portray the financial position of ICICI
BANK with the help of balance sheet and profit and loss account. To evaluate the financial soundness ,stability and liquidity of ICICI BANK.1.3
ICICI BANKICICI Bank is Indias second-largest bank with total assets of Rs.3,446.58 billion (US$ 79 billion) at March 31, 2007 and profit after
taxof Rs. 31.10 billion for fiscal 2007. ICICI Bank is the most valuablebank in India in terms of market capitalization and is ranked thirdamongst all
the companies listed on the Indian stock exchanges. In terms ofProjectsformba.blogspot.com
8. Projectsformba.blogspot.comfree float market capitalization*. The Bank has a network of about 950branches and 3,300 ATMs in India and
presence in 17 countries. ICICIBank offers a wide range of banking products and financial services tocorporate and retail customer through a
variety of delivery channelsand through its specialized subsidiaries and affiliates in the areas ofinvestment banking, life and non-life insurance,
venture capital andasset management. The Bank currently has subsidiaries in the UnitedKingdom, Russia and Canada, branches in Singapore,
Bahrain, HongKong, Sri Lanka and Dubai International Finance Center andrepresentative offices in the United States, United Arab
Emirates,China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia.UK subsidiary has established a branch in Belgium.ICICI Banks
equity shares are listed in India on Bombay Stock Exchange(BSE) and the National Stock Exchange (NSE) of India Limited and itsAmerican
Depositary Receipts (ADRs) are listed on the New York Stock Exchange(NYSE).1.3.1HISTORYICICI Bank was originally promoted in 1994 by ICICI
Limited, an Indianfinancial institution, and was its wholly owned subsidiary. ICICIsshareholding in ICICI Bank was reduced to 46% through a public
offering ofshares in India in fiscal 1998, an equity offering in the form of ADRs listedon the NYSE in fiscal 2000, ICICI Banks acquisition of Bank of
MaduraLimited in an all-stock amalgamation in fiscal 2001, and secondary marketsales by ICICI to institutional investors in fiscal 2001 and fiscal
2002. ICICIwas formed in 1955 at the initiative of the World Bank, the Government ofIndia and representatives of Indian industry. The principal
objective was toProjectsformba.blogspot.com
9. Projectsformba.blogspot.comcreate a development financial institution for providing medium-term andlong-term project financing to Indian
businesses. In the 1990s, ICICItransformed its business from a development financial institution offeringonly project finance to a diversified
financial services group offering a widevariety of products and services, both directly and through a number ofsubsidiaries and affiliates like ICICI
Bank. In 1999, ICICI become the firstIndian company and the first bank or financial institution from non-JapanAsia to be listed on the NYSE.After
consideration of various corporate structuring alternatives in thecontext of the emerging competitive scenario in the Indian banking industry,and
the move towards universal banking, the managements of ICICI andICICI Bank formed the view that the merger of ICICI with ICICI Bankwould be
the optimal strategic alternative for both entities, and would createthe optimal legal structure for the ICICI groups universal banking strategy.The
merger would enhance value for ICICI shareholders through the mergedentitys access to low-cost deposits, greater opportunities for earning feebased income and the ability to participate in the payments system andprovide transaction-banking services. The merger would enhance value
forICICI Bank shareholders through a large capital base and scale ofoperations, seamless access to ICICIs strong corporate relationships built
upover five decades, entry into new business segments, higher market share invarious business segments, particularly fee-based services, and
access to thevast talent pool of ICICI and its subsidiaries. In October 2001, the Boards ofDirectors of ICICI and ICICI Bank approved the merger of
ICICI and two ofits wholly-owned retail finance subsidiaries, ICICI Personal FinancialServices Limited and ICICI Capital Services Limited, with ICICI
Bank. TheProjectsformba.blogspot.com
10. Projectsformba.blogspot.commerger was approved by shareholders of ICICI and ICICI Bank in January2002, by the High Citst of Gujarat at
Ahmedabad in March 2002, and by theHigh Citst of Judicature at Mumbai and the Reserve Bank of India in April2002. Consequent to the merger,
the ICICI groups financing and bankingoperations, both wholesale and retail, have been integrated in a single entity.ICICI Bank has formulated a
Code of Business Conduct and Ethics for itsdirectors and employees.1.3.2 BOARD OF DIRECTORS MR. N.Vaghul (CHAIRMAN) MR. Sridar
Iyengar MR. Lakshmi N. Mittal MR. Narendra Murkumbi MR. Anupam Puri MR. Vinod Rai MR. M. K. Sharma MR. P.M. Sinha
Prof. Marti G. Subrahmanyam MR. T. S. Vijayan MR. V. Prem Wasta MR. K. V. Kamath (MANAGING DIRECTOR & CEO) MR. Chanda
Kochhar (JOINT MANAGING DIRECTOR) MR. Nachiket Mor (DEPUTY MANAGING DIRECTOR) MR. V. Vaidyanathan, (EXECUTIVE

DIRECTOR) MR. Sonjoy Chatterjee (EXECUTIVE DIRECTOR)Projectsformba.blogspot.com

11. Projectsformba.blogspot.com1.3.3 BOARD COMMITTEESProjectsformba.blogspot.com
12. Projectsformba.blogspot.com Audit Committee Board Governance & Mr. Sridar Iyengar Remuneration Committee Mr. Narendra Murkumbi Mr.
N. Vaghul Mr. M. K. Sharma Mr. Anupam Puri Mr. M. K. Sharma Mr. P. M. Sinha Customer Service Committee Prof. Marti G. Subrahmanyam Mr. N.
Vaghul Mr. Narendra Murkumbi Credit Committee Mr. M.K. Sharma Mr. P.M. Sinha Mr. N. Vaghul Mr. K. V. Kamath Mr. Narendra Murkumbi Mr. M
.K. Sharma Mr. P. M. Sinha Fraud Monitoring Committee Mr. K. V. Kamath Mr. M. K. Sharma Mr. Narendra Murkumbi Risk Committee Mr. K. V.
Kamath Mr. N. Vaghul Ms. Chanda D. Kochhar Mr. Sridar Iyengar Mr. V. Vaidyanathan Prof. Marti G. Subrahmanyam Mr. V. Prem Watsa Mr. K. V.
Kamath Share Transfer & Shareholders/ Investors Asset-Liability Management Grievance Committee Committee Mr. M. K. Sharma Ms. Chanda D.
Kochhar Mr. Narendra Murkumbi Dr. Nachiket Mor Ms. Chanda D. Kochhar Ms. Madhabi Puri-Buch Ms. Madhabi Puri-Buch Mr. V. Vaidyanathan
Committee of Directors - Mr. K. V. Kamath Ms. Chanda D. Kochhar Dr. Nachiket Mor Ms. Madhabi Puri-Buch Mr. V.
VaidyanathanProjectsformba.blogspot.com
13. Projectsformba.blogspot.com1.3.4 ORGANISATIONAL STRUCTURE OF ICICIBANKICICI Banks organisation structure is designed to be
flexible and customer-focused, while seeking to ensure effective control and supervision andconsistency in standards across the organisation
and align all areas ofoperations to overall organisational objectives. The organisation structure isdivided into six principal groups Retail
Banking, Wholesale Banking,International Banking, Rural (Micro-Banking) and AgricultureBanking, Government Banking and Corporate
Center.RETAIL BANKINGThe Retail Banking Group is responsible for products and services forretail customers and small enterprises including
various creditproducts, liability products, distribution of third party investment andinsurance products and transaction banking
services.WHOLESALE BANKINGThe Wholesale Banking Group is responsible for products and servicesfor large and medium-sized corporate
clients, including credit andtreasury products, investment banking, project finance, structuredfinance and transaction banking
services.INTERNATIONAL BANKINGThe International Banking Group is responsible for its internationaloperations, including operations in various
overseas markets as well asProjectsformba.blogspot.com
14. Projectsformba.blogspot.comits products and services for non-resident Indians and its internationaltrade finance and correspondent banking
relationships.RURAL AND AGRICULTURAL BANKINGThe Rural, Micro-Banking & Agri-Business Group is responsible forenvisioning and
implementing rural banking strategy, includingagricultural banking and micro-finance.GOVERNMENT BANKINGThe Government Banking Group is
responsible for government bankinginitiatives.CORPORATE CENTERThe Corporate Center comprises the internal control environment
functions(including operations, risk management, compliance, audit and legal);finance (including financial reporting, planning and strategy, asset
liabilitymanagement, investor relations and corporate communications); humanresitsces management; and facilities management &
administration.Projectsformba.blogspot.com
15. Projectsformba.blogspot.comBUSINESS REVIEWDuring fiscal 2007, the Bank continued to grow and diversify its asset baseand revenue
streams by leveraging the growth platforms created over thepast few years. It maintained its leadership position in retail credit, achievedrobust
growth in its fee income from both corporate and retail customers,grew its deposit base and significantly scaled up its international operationsand
rural reach.RETAIL BANKINGICICI is the largest provider of retail credit in India. ICICIs total retaildisbursements in fiscal 2007 were approximately
Rs. 777.00 billion,compared to approximately Rs. 627.00 billion in fiscal 2006. Its totalretail portfolio increased from Rs. 921.98 billion at March
31, 2006 toRs. 1,277.03 billion at March 31, 2007, constituting 65% of its totalloans at that date. It continued its focus on retail deposits to create
astable funding base. At March 31, 2007 it had more than 25 millionretail customer accounts.During fiscal 2007, it expanded its branch network.
At March 31, 2007,it had 755 branches and extension counters compared to 614 branchesand extension counters at March 31, 2006. Pursuant
to theamalgamation of The Sangli Bank Limited with it effective April 19,2007, it acquired over 190additional branches and extension counters.
Itcontinued to expand its electronic channels, namely internet banking,mobile banking, call centres, point of sale terminals and ATMs, andmigrate
customer transaction volumes to these channels. During fiscalProjectsformba.blogspot.com
16. Projectsformba.blogspot.com2007, over 80% of customer induced transactions took place throughthese electronic channels. It increased its
ATM network to 3,271 ATMs.SMALL AND MEDIUM ENTERPRISESIn this segment its strategy has been focused around customerconvenience in
transaction banking services, and working capital loansto suppliers or dealers of large corporations and clusters of smallenterprises that have a
homogeneous profile. During fiscal 2007, itscustomer base increased by more than 50% to over 900,000 transactionbanking customers. These
customers are serviced by over 580 branchesof the Bank, covering over 200 locations. During fiscal 2007, theEmerging India Award entered in
the Limca Book of Records as thebiggest business award in India.CORPORATE BANKINGIts corporate banking strategy is based on providing
comprehensive andcustomized financial solutions to its corporate customers. It offer a completerange of corporate banking products including
rupee and foreign currencydebt, working capital credit, structured financing, syndication andtransaction banking products and services.Fiscal
2007 saw continuing demand for credit from the corporate sector,with growth and additional investment demand in almost all sectors. It isnow a
preferred partner for Indian companies for syndication of externalcommercial borrowings and other fund raising in international
markets.Projectsformba.blogspot.com
17. Projectsformba.blogspot.comRURAL BANKINGIts rural strategy is based on enhancing value at every level of the supplychain in all important
farm and non-farm sectors. Towards this end, it offer arange of financial products and services that cater to the rural masses in allthe important
sectors like infrastructure, horticulture, food processing, dairy,poultry, seeds, fertiliser and agrochemical industries. Customised financialsolutions
are offered to individual customers, agri small & mediumenterprises, agri corporates and members of their supply chains. On the ruralretail side,
the Bank offers crop loans, farm equipment financing,commodity-based loans, working capital loans for agri-enterprises,microfinance loans, jewel
loans as well as savings, investment and insuranceproducts. In addition bank is introducing products like rural housing financeto cater to the
needs of rural customers. During fiscal 2007, it introducedloans to rural educational institutions for expansion of their facilities.it have developed a
hybrid distribution channel strategy, a combination of branch and non-branch channels (credit access points). Ithas embarked on a no white
spaces strategy wherein it aim to setup an ICICI Bank touch point within 10 km of any customer. Theamalgamation of Sangli Bank would extend
its outreach in rural areas. During fiscal 2007, a provision of Rs. 0.9 billion (USS$ 22million) was made on account of identified frauds in
warehouse receipt financing business of agricultural credit.INTERNATIONAL BANKINGICICI Bank has established a strong franchise among nonresidentIndians (NRI). It has established strong customer relationships byoffering a comprehensive product suite, technology-enabled access
foroverseas customers, a wide distribution network in India and allianceswith local banks in various markets. It has over 450,000 NRI customers.It
has undertaken significant brand-building initiatives in internationalmarkets and have emerged as a well-recognised financial services brandfor

NRIs. Its market share in inward remittances into India hasProjectsformba.blogspot.com

18. Projectsformba.blogspot.comincreased to over 25%. It has consolidated its global remittanceinitiative, targeting non-Indian communities, by
leveraging its corecapabilities of technology-based service delivery. A large number ofremittance products were introduced to complement the
existing suite ofproducts. The business focus has been on rolling out successful productsacross multiple geographies and getting into high
volume correspondentarrangements.1.3.5 PRODUCTS AND SERVICESBANKING ACCOUNTSICICI Bank offers a wide range of banking accounts
such as Current, Saving, Life Plus Senior, Recurring Deposit, Young Stars,Salary Account etc. tailor-made for every customer segments, from
children to senior citizens. Convenience and ease to access are thebenefits of ICICI Bank accounts. YOUNG STARS ACCOUNT A special
portal for children to learn banking basics, manage personal finances and have a lot of fun. BANK@CAMPUS This student banking services
gives students access to their account details at the click of a mouse. Plus, the student gets a chequebook, debit card and annual statements.
SAVINGS ACCOUNTS Convenience is the name of the game with ICICI banks savings account. whether it is an ATM/debit card, easy withdrawal,
easy loan options or internet banking, ICICI banks saving account always keep you in touch of money. FIXED
DEPOSITSProjectsformba.blogspot.com
19. Projectsformba.blogspot.com ICICI Bank 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 requirements.INSURANCEThe ICICI group offers a range of insurance products to cover varying needs
ranging from life, pensions and health, to home, motorand travel insurance. The products are made accessible to customers through a wide
network of advisors, banking partners,Corporate agents and brokers with the added convenience of being able to buy online. LIFE
INSURANCE The ICICI group provides the many life insurance product through ICICI Prudential Life Insurance Company. GENERAL
INSURANCE The ICICI group provides the many general insurance products like motor, travel and home insurance through ICICI Lombard
General Insurance Company.LOANSICICI bank offers a range of deposits solutions to meet varying needs atevery stage of life. It offers a range
of tenures and other features to suit allrequirements. HOME LOAN The No. 1 Home Loans Provider in the country, ICICI Bank Home Loans
offers some unbeatable benefits to its customers -Projectsformba.blogspot.com
20. Projectsformba.blogspot.com Doorstep Service, Simplified Documentation and Guidance throughout the Process. Its really easy !
PERSONAL LOAN ICICI Bank Personal Loans are easy to get and absolutely hassle free. With minimum documentation you can now secure a
loan for an amount upto Rs. 15 lakhs. VEHICLE LOANS The No. 1 financier for car loans in the country. Network of more than 2500 channel
partners in over 1000 locations. Tie-ups with all leading automobile manufacturers to ensure the best deals. Flexible schemes & quick processing
are the main advantages are here. Avail attractive schemes at competitive interest rates from the No 1 Financier for Two Wheeler Loans in the
country . Finance facility upto 90% of the On Road Cost of the vehicle, repayable in convenient repayment options and comfortable tenors from 6
months to 36 monthsCARDSICICI Bank offers a variety of cards to suit different transactionalneeds. Its range includes Credit Cards, Debit Cards
and Prepaid cards.These cards offer you convenience for financial transactions like cashwithdrawal, shopping and travel. These cards are widely
accepted bothin India and abroad. CREDIT CARD ICICI Bank Credit Cards give you the facility of cash, convenience and a range of benefits,
anywhere in the world. These benefits range from life time free cards, Insurance benefits, globalProjectsformba.blogspot.com
21. Projectsformba.blogspot.com emergency assistance service, discounts, utility payments, travel discounts and much more. DEBIT CARD
The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around the clock, around the world.
The ICICI Bank Debit Card can be used for shopping at more than 3.5 Lakh merchants in India and 24 million merchants worldwide. TRAVEL
CARD ICICI Bank Travel Card. The Hassle Free way to Travel the world. Traveling with US Dollar, Euro, Pound Sterling or Swiss Francs; Looking
for security and convenience; take ICICI Bank Travel Card. Issued in duplicate. Offers the Pin based security. Has the convenience of usage of
Credit or Debit card.MOBILE BANKINGBank on the move with ICICI Bank Mobile Banking. With ICICI Bank,Banking is no longer what it used to be.
ICICI Bank offers MobileBanking facility to all its Bank, Credit Card, Demat and Loancustomers.ICICI Bank Mobile Banking can be divided into two
broad categories offacilities:Alert facility : ICICI Bank Mobile Banking Alerts facility keeps youinformed about the significant transactions in yits
Accounts. It keepsyou updated wherever you go.Request facility : ICICI Bank Mobile Banking Requests facility enablesyou to query for yits
account balance.Projectsformba.blogspot.com
22. Projectsformba.blogspot.comINVESTMENT PRODUCTS: Along with Deposit products and Loanofferings, ICICI Bank assists you to manage
yits finances by providingvarious investment options ranging from ICICI Bank Tax Saving Bondsto Equity Investments through Initial Public Offers
and Investment inPure Gold. 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, 2004TRADE-SERVICES: ICICI Bank offers online remittances as well asonline processing of letters of credit and bank
guarantees.ASSET-MANAGEMENT: Prudential ICICI Asset Management Companyoffers a wide range of retail mutual fund products tailored to
suit varied riskand maturity profiles.Projectsformba.blogspot.com
23. Projectsformba.blogspot.comCASH MANAGEMENT: ICICI Bank offers a complete range ofhighly customized solutions for managing both the
collections and paymentsrequirements of clients by leveraging technology. Daily customizedtransactions reports and real time web-enabled
downloads, provide on-tapinformation facilitating effective working capital management.CORPORATE BANKING: ICICI Bank offers comprehensive
andcustomized financial solutions for its corporate clients, includingrupee and foreign currency debts, working capital credit, structuredfinancing
syndication and transaction banking products and services.INTERNET BANKING: Internet banking is available to all ICICI banksavings and
deposit account holders, credit card, demat and loancustomers. Internet banking service offers customers a world ofconvenience with services
such as balance enquiry, transactionhistory, account statement, bill payments, fund transfers andaccounts related service requests.ATMs: With
more than 2500 ATMs across the country, ICICI Bank has oneof the largest ATM networks in IndiaProjectsformba.blogspot.com
24. Projectsformba.blogspot.comPHONE BANKING: Phone banking offers 24*7 service acrossliability, asset and investment products to both retail
and corporatecustomers.NRI-BANKING: A gamut of services to take care of all NRI bankingneeds including deposits, money transfers and private
banking.MONEY2INDIA: A complete range of online and offline moneytransfer solutions to send money to India.PROPERTY: For millions of home
buyers across the country, ICICI Bank offers not just great deals on home loans but also a wealthof expert advice. ICICI Bank offers home search
service which can help a customer identify the property of his choice based on hisbudget and other requirements.DEMAT ACCOUNTS: ICICI
Banks demat services after unique featureslike e-constructions, consolidation, digitally signed statements, mobilerequests and corporate benefit
tracking.RURAL-BANKING: Bank offers technology-based solutions, financialinnovations and multiple delivery channels to meet the financial
needs ofrural areas.MICROFINANCE: ICICI Bank assists over 2.5 million low income clientsto build livelihoods by partnering With over 100

microfinance institutions.BRANCHES: ICICI Bank has a network of over 630 branches ( of which51 are extension counters) across the country.
The network puts a wideProjectsformba.blogspot.com
25. Projectsformba.blogspot.comrange of banking products and financial services with in easy reach of retailand corporate customers.1.3.6 RISK
ASPECTS OF ICICI BANKRISK MANAGEMENTRisk is an integral part of the banking business and bank aim atdelivering superior shareholder
value by achieving an appropriatetrade-off between risk and returns. Bank is exposed to various risks,including credit risk, market risk and
operational risk. Banks riskmanagement strategy is based on a clear understanding of various risks,disciplined risk assessment and
measurement procedures andcontinuous monitoring. The policies and procedures established for thispurpose are continuously benchmarked
with international bestpractices. Bank has two dedicated groups, the RISK MANAGEMENTGROUP (RMG) and COMPLIANCE & AUDIT GROUP
(CAG) whichis responsible for assessment, management and mitigation of risk inICICI Bank. These groups from part of the corporate center
arecompletely independent of all business operations and are accountableto the Risk and Audit committees of the Board of directors. RMG
isfurther organized into the Credit Risk Management group, MarketRisk Management group, Retail Risk Management group andOperational Risk
Management group. CAG is further organised intothe Credit Policies, RBI Inspection & Anti-Money Laundering Groupand the Internal Audit
Group.CREDIT RISKCredit risk is the risk that a borrower is unable to meet its financial obligations to the lender. Bank measure, monitor and
managecredit risk for each borrower and also at the portfolio level. Bank has standardized credit-approval processes, which include a wellestablished procedure for comprehensive credit appraisal and rating. ICICI Bank has well developed internal credit
ratingProjectsformba.blogspot.com
26. Projectsformba.blogspot.commethodologies for rating obligors. The rating factors in quantitative, qualitative issues and credit enhancement
features specific to thetransaction. The rating serves as a key input in the approval as well as post-approval credit processes. Industry knowledge
isconstantly updated through field visits and interactions with clients, regulatory bodies and industry experts. In retail credit operations,the Board
or a Board Committee approves all products, policies and authorizations. Credit approval authority lies only with the creditofficers who are distinct
from the sales team. Credit scoring models are used in the case of certain products like credit cards.External agencies such as field investigation
agencies and credit processing agencies are used to facilitate a comprehensive duediligence process including visits to offices and homes in the
case of loans to individual borrowers.MARKET RISKMarket risk is the risk of loss resulting from changes in interest rates, foreign currency
exchange rates, equity prices and commodityprices. The objective of market risk management is to minimize the impact of losses on earnings and
equity capital due to market risk.Market risk policies include the Investment Policy and the Asset-Liability Management (ALM) Policy. The policies
are approved bythe Board of Directors. The Asset Liability ManagementCommittee (ALCO) of the Board of Directors stipulate liquidity and
interest rate risk limits, monitors adherence to limits, articulatesthe organisations interest rate view and determines the strategy in light of the
current and expected environment. These policies andprocesses are articulated in the ALPM policy. The investment policy addresses issues
related to investment in various tradingproducts. RMG exercises independent control over the process of market risk management and
recommends changes in process andmethodologies for measuring market risk Interest rate risk is measured through the use of re-pricing gap
analysis and durationanalysis. Liquidity risk is measured through gap analysis. Bank ensure adequate liquidity at all time through systematic
funds planningand maintenance of liquid investment as well as focusing on more stable funding sitsces such as retail deposits. ICICI Bank
limitexposure to exchange rate risk by stipulating position limits. The treasury Middle Office Group monitors the asset-liability positionunder the
supervision of the ALCO. The Treasury Middle Office Group is also responsible for processing treasury transactions,tracking the daily funds
position and complying with all treasury related management and regulatory reporting requirements.OPREATIONAL RISKOperational risk is the
risk of loss that can result from a variety offactors, including failure to obtain proper internal authorizations,improperly documented transactions,
failure of operational andinformation security procedures, computer systems, software orequipment, fraud, inadequate training and employee
errors. Banksapproach to operational risk management is designed to mitigateoperational risk by maintaining a comprehensive system of
internalcontrols, establishing systems and procedures to monitor transactions,maintaining key back-up procedures and undertaking
regularcontingency planning. Effective operational risk management systemwould ensure that bank has sufficient information to make
appropriateProjectsformba.blogspot.com
27. Projectsformba.blogspot.comdecisions about additional controls, adjustments to controls, or otherrisk responses. Operational risk
management policy aims at minimizinglosses and customer dissatisfaction due to failure in processes, focusingon flaws in products and their
design that can expose the bank to lossesdue to fraud, analyzing the impact of failures in systems, developingmitigants to minimize the impact
and developing plans to meet externalshocks that can adversely impact continuity in the banks operations.1.3.7 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 ICICI Bank Eurasia Limited Liability
Company ICICI International Limited ICICI Securities Holding IncProjectsformba.blogspot.com
28. Projectsformba.blogspot.com ICICI Securities Inc ICICI Bank Uk Limited1.3.8 KEY GROUP COMPANIESICICI PRUDENTIAL INSURANCE
COMPANYICICI Life continued to maintain its market leadership among privatesector life insurance companies with a market share of 29% on the
basisof weighted received premium. Life insurance companies worldwidemake losses in the initial years, in view of business set-up and
customeracquisition costs in the initial years as well as reserving for actuarialliability. While the growing operations of ICICI Life had a
negativeProjectsformba.blogspot.com
29. Projectsformba.blogspot.comimpact of Rs. 480 crore (US$ 110 million) on the Banks consolidatedprofit after tax in FY2007 on account of the
above reasons, thecompanys unaudited New Business Achieved Profit (NBAP) forFY2007 was Rs. 881 crore (US$ 203 million) as compared to
Rs. 528crore (US$ 121 million) in FY2006.ICICI LOMBARD GENERAL INSURANCE COMPANYICICI Lombard General Insurance Company (ICICI
General) enhanced itsleadership position with a market share of about 35% among private sectorgeneral insurance companies and an overall
market share of about 12.4%during April 2006-February 2007. ICICI Generals gross written premiumgrew by 89% from Rs. 1,592 crore (US$ 366
million) in FY2006 to Rs.3,004 crore (US$ 691 million) in FY2007. ICICI General is required toexpense upfront, on origination of a policy, all
sitscing expenses related tothe policy. While ICICI Generals profit after tax for FY2007 was Rs. 68crore (US$ 16 million), its combined ratio for
FY2007 was 97%. Thecombined ratio is the sum of net claims and expenses as a percentage ofpremiums and indicates the surplus generated on
an annualised basis fromthe business written during a period (excluding investment income). Thesurplus based on the combined ratio, and

investment income aggregated Rs.180 crore (US$ 41 million) on a pre tax basis in FY2007.ICICI PRUDENTIAL AMC & TRUSTAt March 31, 2007,
ICICI Prudential Asset Management Company (ICICIAMC) was among the top two asset management companies in India withassets under
management of over Rs. 37,900 crore (US$ 8.7 billion). ICICIProjectsformba.blogspot.com
30. Projectsformba.blogspot.comAMCs profit after tax increased by 55% to Rs. 48 crore (US$ 11 million) inFY2007 from Rs. 31 crore in FY2006
(US$ 7 million).ICICI SECURITIES LIMITEDThe securities and primary dealership business of the ICICI group have beenreorganised. ICICI
Securities Limited has been renamed as ICICI PrimaryDealership Limited. ICICI Brokerage Services Limited has been renamed asICICI Securities
Limited and has become a direct subsidiary of ICICI Bank.Erstwhile ICICI Webtrade Limited was amalgamated with ICICI SecuritiesLimited during
fiscal 2007. ICICI Securities achieved a profit after tax ofRs. 0.63 billion and ICICI Securities Primary Dealership achieved a profitafter tax of Rs.
1.33 billion, in fiscal 2007.ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITEDICICI Venture Funds Management Company Limited (ICICI
Venture)strengthened its leadership position in private equity in India, with fundsunder management of about Rs. 98.00 billion at year-end fiscal
2007. ICICIVenture achieved a profit after tax of Rs. 0.70 billion in fiscal 2007compared to Rs. 0.50 billion in fiscal 2006.1.3.9 PUBLIC
RECOGNITIONProjectsformba.blogspot.com
31. Projectsformba.blogspot.comDuring fiscal 2007, ICICI Bank received several prestigiousaward in recognition of overall business strategies,
specificobjectives and technology focus: 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 DigestProjectsformba.blogspot.com
32. Projectsformba.blogspot.comCHAPTER-2 STUDY OFFINANCIAL STATEMENT AND ITS ANALYSISProjectsformba.blogspot.com
33. Projectsformba.blogspot.com2.1 STUDY OF PROFIT& LOSS A/CMEANING: It is a financial statement, which shows net loss of a company for
a specified period. The accounting year meanscalendar year of 12 months or less or more than 12 months.CONTENTS: This presents the
revenues and expenses of a company and shows the excess of revenues over expenses for profit andvice versa for a loss.FORMAT: The
Companies act does not provide any specific format for thisaccount. However it is required to be prepared on the basis of theinstructions given in
part ii of schedule (vi) of the companies act.MAIN ITEMS OF PROFIT AND LOSS ACCOUNTTurnover or sales: The aggregate amount of sales
and connected items withthe sales such as commission paid to sole-selling agents and other sellingagents and brokerage and discounts on sales
other than usual trade discount.Depreciation: The amount of depreciation of fixed assets and the arrears ofdepreciation as per section 205(2)
shall be disclosed by way of foot-note.Interest on loans and debentures: Interest on loans and debentures has tobe stated separately. It will
include the amount of interest paid as well asoutstanding.Miscellaneous expenses: In this head items such as rates and taxes,insurance premium
etc., must be stated separately.Preliminary expenses: Such expenses include the costs of formation of acompany and since their amount is
usually large, it is not desirable to writeoff them in one year.Provision for taxation: The profit and loss account of a company must bedebited with
the estimated liabilities for tax on the current profits at currentrates of taxation.Projectsformba.blogspot.com
34. Projectsformba.blogspot.comUnclaimed dividends: it is shown on the liabilities side of the balance sheet under theheading current liabilities
.Interim dividends: It is an item of appropriation. It is transferred to thedebit side of the Profit and loss appropriation account.Final dividend as an
item of the trial balance: This is shown in the debit side of theappropriation section of the profit and loss account.Proposed dividend or final
dividend proposed: Since it is an adjustmentitem, it has to be shown at two places- In the debit side of the profit and lossappropriation account
and on the liabilities side of the balance sheet underthe head current liabilities and provisions.Political donations: It must be shown as a separate
item in the profit andloss account.Dividend on interest income: This item is transferred to the credit side of the profitand loss account.Payment to
auditors: It must be stated separately. This will includeconsultancy fee, auditing fees management services etc.Managerial remuneration: This
includes the payments made to managerialremuneration directors fee, pension, other allowances and commission.2.2 STUDY OF BALANCE
SHEETMEANING: The balance sheet is a financial snapshot of a companyscondition at a single point in time. A balance sheet contains a listing of
thecompanys asset, liability and Capital accounts. When someone, whether acreditor or investor, asks you how your company is doing, youll want
tohave the answer ready and documented. The way to show off the success ofyour company is a balance sheet. A balance sheet is a
documented report ofyour companys assets and obligations, as well as the residual ownershipProjectsformba.blogspot.com
35. Projectsformba.blogspot.comclaims against your equity at any given point in time. It is a cumulativerecord that reflects the result of all
recorded accounting transactions sinceyour enterprise was formed. You need a balance sheet to specifically knowwhat your companys net worth
is on any given date. With a properlyprepared balance sheet, you can look at a balance sheet at the end of eachaccounting period and know if
your business has more or less value, if yourdebts are higher or lower, and if your working capital is higher or lower. Byanalyzing your balance
sheet, investors, creditors and others can assessyour ability to meet short-term obligations and solvency, as well as yourability to pay all current
and long-term debts as they come due. The balancesheet also shows the composition of assets and liabilities, the relativeproportions of debt and
equity financing and the amount of earnings thatyou have had to retain. Collectively, external parties to help assess yourcompanys financial
status, which is required by both lending institutionsand investors before they will allot any money toward your business, willuse this
information.LEARN THE DIFFERENT ASSETSCurrent assets: Current assets include cash and other assets that in thenormal course of events
are converted into cash within the operating cycle.For example, a manufacturing enterprise will use cash to acquire inventoriesof materials.
These inventories of materials are converted into finishedproducts and then sold to customers. Cash is collected from the customers.This circle
from cash back to cash is called an operating cycle. In amerchandising business one part of the cycle is eliminated. Materials are notpurchased
for conversion into finished products. Instead, the finishedproducts are purchased and are sold directly to the customers.
SeveralProjectsformba.blogspot.com
36. Projectsformba.blogspot.comoperating cycles may be completed in a year, or it may take more than a yearto complete one operating cycle.
The time required to complete an operatingcycle depends upon the nature of the business. It is conceivable that almostall of the assets that are
used to conduct your business, such as buildings,machinery, and equipment, can be converted into cash within the timerequired to complete an
operating cycle. However, your current assets areonly those that will be converted into cash within the normal course of yourbusiness. The other
assets are only held because they provide useful servicesand are excluded from the current asset classification. If you happen to holdthese

assets in the regular course of business, you can include them in theinventory under the classification of current assets. Current assets are
usuallylisted in the order of their liquidity and frequently consist of cash, temporaryinvestments, accounts receivable, inventories and prepaid
expenses.Cash: Cash is simply the money on hand and/or on deposit that is availablefor general business purposes. It is always listed first on a
balance sheet.Cash held for some designated purpose, such as the cash held in a fund foreventual retirement of a bond issue, is excluded from
current assets.Marketable Securities: These investments are temporary and are madefrom excess funds that you do not immediately need to
conduct operations.Until you need these funds, they are invested to earn a return.Accounts Receivable: Simply stated, accounts receivables are
the amountsowed to you and are evidenced on your balance sheet by promissory notes.Accounts receivable are the amounts billed to your
customers and owed toyou on the balance sheets date. You should label all other accountsreceivable appropriately and show them apart from
the accounts receivableProjectsformba.blogspot.com
37. Projectsformba.blogspot.comarising in the course of trade. If these other amounts are currently collectible,they may be classified as current
assets.Inventories: Your inventories are your goods that are available for sale,products that you have in a partial stage of completion, and the
materials thatyou will use to create your products. The costs of purchasing merchandiseand materials and the costs of manufacturing your
various product lines areaccumulated in the accounting records and are identified with either the costof the goods sold during the fiscal period or
as the cost of the inventoriesremaining.Prepaid expenses: These expenses are payments made for services that willbe received in the near
future. Strictly speaking, your prepaid expenses willnot be converted to current assets in order to avoid penalizing companiesthat choose to pay
current operating costs in advance rather than to holdcash. Often your insurance premiums or rentals are paid in advance.Investments:
Investments are cash funds or securities that you hold for adesignated purpose for an indefinite period of time. Investments includestocks or the
bonds you may hold for another company, real estate ormortgages that you are holding for income-producing purposes. Yourinvestments also
include money that you may be holding for a pension fund.Plant Assets: Often classified as fixed assets, or as plant and equipment,your plant
assets include land, buildings, machinery, and equipment that areto be used in business operations over a relatively long period of time. It isnot
expected that you will sell these assets and convert them into cash. Plantassets simply produce income indirectly through their use in
operations.Projectsformba.blogspot.com
38. Projectsformba.blogspot.comIntangible Assets: Your other fixed assets that lack physical substance arereferred to as intangible assets and
consist of valuable rights, privileges oradvantages. Although your intangibles lack physical substance, they stillhold value for your company.
Sometimes the rights, privileges andadvantages of your business are worth more than all other assets combined.Other Assets: During the course
of preparing your balance sheet you willnotice other assets that cannot be classified as current assets, investments,plant assets, or intangible
assets. These assets are listed on your balancesheet as other assets. Frequently, your other assets consist of advances madeto company
officers, the cash surrender value of life insurance on officers,the cost of buildings in the process of construction, and the miscellaneousfunds
held for special purposes.LEARN THE DIFFERENT LIABILITIESCurrent Liabilities: On the equity side of the balance sheet, as on the assetside,
you need to make a distinction between current and long-term items.Your current liabilities are obligations that you will discharge within thenormal
operating cycle of your business. In most circumstances your currentliabilities will be paid within the next year by using the assets you classifiedas
current. The amount you owe under current liabilities often arises as aresult of acquiring current assets such as inventory or services that will
beused in current operations. You show the amounts owed to trade creditorsthat arise from the purchase of materials or merchandise as
accountspayable. If you are obligated under promissory notes that support bank loansor other amounts owed, your liability is shown as notes
payable. Othercurrent liabilities may include the estimated amount payable for incomeProjectsformba.blogspot.com
39. Projectsformba.blogspot.comtaxes and the various amounts owed for wages and salaries of employees,utility bills, payroll taxes, local
property taxes and other services.Long-Term Liabilities: Your debts that are not due until more than a yearfrom the balance sheet date are
generally classified as long-term liabilities.Notes, bonds and mortgages are often listed under this heading. If a portionof your long-term debt is
due within the next year, it should be removedfrom the long-term debt classification and shown under current liabilities.Deferred Revenues: Your
customers may make advance payments formerchandise or services. The obligation to the customer will, as a generalrule, be settled by delivery
of the products or services and not by cashpayment. Advance collections received from customers are classified asdeferred revenues, pending
delivery of the products or services.Owners Equity: Your owners equity must be subdivided on your balancesheet: One portion represents the
amount invested directly by you, plus anyportion of retained earnings converted into paid-in capital. The other portionrepresents your net
earnings that are retained. This rigid distinction isnecessary because of the nature of any corporation. Ordinarily, stockholders,or owners, are not
personally liable for the debts contracted by a company. Astockholder may lose his investment, but creditors usually cannot look to hispersonal
assets for satisfaction of their claims. Under normal circumstances,the stockholders may withdraw as cash dividends an amount measured bythe
corporate earnings. The distinction in this rule gives the creditors someassurance that a certain portion of the assets equivalent to the
ownersinvestment cannot be arbitrarily withdrawn. Of course, this portion could bedepleted from your balance sheet because of operating losses.
The ownersProjectsformba.blogspot.com
40. Projectsformba.blogspot.comequity in an unincorporated business is shown more simply. The interest ofeach owner is given in total, usually
with no distinction being made betweenthe portion invested and the accumulated net earnings. The creditors are notconcerned about the amount
invested. If necessary, creditors can attach thepersonal assets of the owners.Basis of balance-sheet: Assets = Liability + EquityBALANCE-SHEET
STRUCTUREThe following Balance sheet structure is just an example. It does not showall possible kind of assets, equity and liabilities, but it
shows the most usualones. It could be a consolidated balance sheet. Monetary values are notshown and summary (total) rows are missing as
well. AssetsCurrent AssetsCash and cash equivalentsInventoriesAccount receivableInvestment held for tradingOther current assetsNon-Current
AssetsProperty, plant and equipmentGoodwillOther intangible fixed assetsInvestment in associatesDeferred tax
assetsProjectsformba.blogspot.com
41. Projectsformba.blogspot.comMiscellaneous Expenditure Equity And LiabilitiesCapital & ReserveShare capital reserveRevaluation
reserveTranslation reserveRetained earningsMinority interestNon-Current LiabilitiesBank loanIssued debt securitiesDeferred tax liabilityCurrent
LiabilitiesAccounts payableCurrent income tax liabilityShort-term part of bank loansShort-term provisionsOther current liabilitiesEQUITY
VALUATION:The real value to a purchaser of the business or ashareholder may be different from the net assets shown by the balance sheet.This
is because factors that affect the value of a business may not berecorded yet. For example, a purchaser will be interested in the futureearnings
of the business, whether assets such as property have been revaluedProjectsformba.blogspot.com
42. Projectsformba.blogspot.comrecently, and whether there are potential liabilities in the future such aslawsuits. The value of the assets in the

balance has also been based on theassumption that the business is a going concern, otherwise the break-upvalue of the assets may be far less
than the value in the balance sheet.PREPAIRING A BALANCE-SHEETTitle and Heading: In practice, the most widely used title is Balance
Sheet;however Statement of Financial Position is also acceptable. Naturally, whenthe presentation includes more than one time period the title
"BalanceSheets" should be used.Heading: In addition to the statement title, the heading of your balancesheet should include the legal name of
your company and the date or datesthat your statement is presented. For example, a comparative presentationmight be headed: XYZ
CORPORATION BALANCE SHEETS December 31, 2006Format: There are two basic ways that balance sheets can be arranged. InAccount
Form, your assets are listed on the left-hand side and totaled toequal the sum of liabilities and stockholders equity on the right-hand side.Another
format is Report Form, a running format in which your assets arelisted at the top of the page and followed by liabilities and stockholdersequity.
Sometimes total liabilities are deducted from total assets to equalstockholders equity.Captions: Captions are headings within your statement that
designate majorgroups of accounts to be totaled or subtotaled. Your balance sheet shouldProjectsformba.blogspot.com
43. Projectsformba.blogspot.cominclude three primary captions: Assets, Liabilities and Stockholders Equity.In the report form of presentation, the
placement of your primary captionswould be as follows: 2006 ASSETS, LIABILITIES ANDSTOCKHOLDERS EQUITY.Except in certain specialized
industries your balance sheet should includethe following secondary captions:CURRENT ASSETSCURRENT LIABILITIESOrder of Presentation of
Captions: First, start with items held primarilyfor conversion into cash and rank them in the order of their expectedconversion. Then, follow with
items held primarily for use in operations butthat could be converted into cash, and rank them in the order of liquidity.Finally, finish with items
whose costs you will defer to future periods or thatyou cannot convert into cash. Following these guidelines, your major assetsshould normally be
presented in the following order: Cash Short-term marketable securities Trade notes and accounts receivable Inventories Long-term
investments Property and equipment Intangible assets Deferred chargesLiabilities are ordinarily presented in the order of maturity as
follows:Projectsformba.blogspot.com
44. Projectsformba.blogspot.com Demand notes Trade accounts payable Accrued expenses Long-term debt Other long-term
liabilitiesComponents of stockholders equity are usually presented the followingorder: Preferred stock Common stock Additional paid-in
capital Retained earnings Accumulated other comprehensive income Treasury stock2.3 STUDY OF CASH FLOW STATEMENTMEANING:
Cash flow statement or statement of cash flows is a financialstatement that shows a companys incoming and outgoing money (sourcesand uses
of cash) during a time period (often monthly or quarterly). Thestatement shows how changes in balance sheet and income accounts affectedcash
and cash equivalents, and breaks the analysis down according tooperating, investing, and financing activities. As an analytical tool thestatement
of cash flows is useful in determining the short-term viability of acompany, particularly its ability to pay bills.PURPOSE: The cash flow statement
reflects a firms liquidity or solvency.The main purpose to make cash flow statement are as follows:Projectsformba.blogspot.com
45. Projectsformba.blogspot.com 1. provide information on a firms liquidity and solvency and its ability to change cash flows in future
circumstances 2. provide additional information for evaluating changes in assets, liabilities and equity 3. improve the comparability of different
firms operating performance by eliminating the effects of different accounting methods 4. indicate the amount, timing and probability of future
cash flowsACTIVITIES INVOLVED IN CASH FLOW: The cash flow statement ispartitioned into cash flow resulting from operating activities, cash
flowresulting from investing activities, and cash flow resulting from financingactivities.Operating activities: Operating activities include the
production, sales anddelivery of the companys product as well as collecting payment from itscustomers. This could include purchasing raw
materials, building inventory,advertising.Investing activities: Investing activities focus on the purchase of the long-term assets a company needs in
order to make and sell its products, and theselling of any long-term assets.Financing activities: Financing activities include the inflow of cash
frominvestors such as banks and shareholders, as well as the outflow of cashto shareholders as dividends as the company generates income.
Otheractivities which impact the long-term liabilities and equity of thecompany are also listed in the financing activities section of the cashflow
statement.Analysis of cash flow statement is necessary for every organisation to depict its cash inflow and outflow.Projectsformba.blogspot.com
46. Projectsformba.blogspot.com2.4 FINANCIAL STATEMENT ANALYSISMEANING:Financial statement analysis is the process of examining
relationships amongfinancial statement elements and making comparisons with relevantinformation. It is a valuable tool used by investors and
creditors, financialanalysts, and others in their decision-making processes related to stocks,bonds, and other financial instruments. With a great
understanding of thebalance sheet & p&l account and how it is constructed, we can look at sometechniques to analyze the information contained
within the balance sheet &p&l account.PURPOSE:The main purpose of analyzing the financial statement are thefollowing:- To assess past
performance and current financial position. To make predictions about the future performance of a company.TOOLS FOR ANALYSING 1.
PERCENTAGE CALCULATION 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, 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 toProjectsformba.blogspot.com
47. Projectsformba.blogspot.com comparing dollar amounts, the analyst computes percentage changes from year to year for all financial
statement balances, such as cash and inventory. Alternatively, in comparing financial statements for a number of years, the analyst may prefer to
use a variation of horizontal analysis called trend analysis. Trend analysis involves calculating each years financial statement balances as
percentages of the first year, also known as the base year. When expressed as percentages, the base year figures are always 100 percent, and
percentage changes from the base year can be determined. 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 analyst calculates each item on a single
financial statement as a percentage of a total. The term vertical analysis applies because each years figures are listed vertically on a financial
statement. The total used by the analyst on the income statement is net sales revenue, while on the balance sheet it is total assets. This
approach to financial statement analysis, also known as component percentages, produces common-size financial statements. Common-size
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 formula:Projectsformba.blogspot.com
48. Projectsformba.blogspot.com Percentage: current assets/total assets*100 2. RATIO ANALYSIS Financial ratio analysis uses formulas to gain
insight into the company and its operations. For the balance sheet, using financial ratios (like the debt-to-equity ratio) can show you a better idea
of the companys 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. Ratio analysis facilitates inter-firm and intra- firm
comparison. 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. Current Ratio: The current ratio is a rough indication of
a firm ability to service its current obligations. Generally, the higher the current ratio, the greater the cushion between current obligations and a
firm ability to pay them. 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, this is a refinement of the current
ratio and is a more conservative measure of liquidity. The quick ratio expresses the degree to which a companys current liabilities are recovered
by the most liquid current assets. quick ratio is calculated as follows:Projectsformba.blogspot.com
49. Projectsformba.blogspot.com Quick ratio= (cash + marketable securities + Receivables)/current liabilitiesSOLVENCY 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.
Debt/Worth Ratio: This ratio expresses the relationship between capital contributed by creditors and that contributed by owners. It expresses the
degree of protection provided by the owners for the creditors. The higher the ratio, the greater the risk being assumed by creditors. The lower
the ratio, the greater the long-term financial safety. A firm with a low debt/worth ratio usually has a greater flexibility to borrow in the future. A more
highly leveraged company has a more limited debt capacity.Debt/worth ratio=Total Liabilities / Tangible Net WorthPROFITABILITY RATIO
Profitability ratios are gauges of the companys operating success for a given period of time. Return On Assets: Return on assets is a measure
of how effectively the firms assets are being used to generate profit. It is calculated as follows: Return On Assets= Net Income/Total
AssetsProjectsformba.blogspot.com
50. Projectsformba.blogspot.com Return On Equity: Return on equity is the bottom line measure for the shareholders, measuring for the profits
earned for each rupee invested in business. It is calculated as follows: Return on Equity= Net income/shareholders equityFixed/Worth Ratio: This
ratio measures the extent to which ownersequity (capital) has been invested in plant and equipment (fixed assets).A lower ratio indicates a
proportionately smaller investment in fixedassets in relation to net worth and a better cushion for creditors in caseof liquidation. Similarly, a higher
ratio would indicate the oppositesituation. The presence of substantial leased fixed assets (not shown onthe balance-sheet ) may deceptively
lower this ratio. Fixed Worth Ratio=Net Fixed Assets/ Tangible Net WorthProjectsformba.blogspot.com
51. Projectsformba.blogspot.comCHAPTER-3 ANALYSIS OF FINANCIAL STATEMENT OF ICICI BANKProjectsformba.blogspot.com
52. Projectsformba.blogspot.com3.1 MANAGEMENT DISCUSSION & ANALYSIS SUMMARY: 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 non- interest 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 non- interest 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.Projectsformba.blogspot.com
53. Projectsformba.blogspot.com 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
fromProjectsformba.blogspot.com
54. Projectsformba.blogspot.com 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 ourProjectsformba.blogspot.com
55. Projectsformba.blogspot.com 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. Its 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
andProjectsformba.blogspot.com
56. Projectsformba.blogspot.com 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 year-end fiscal 2007 compared to Rs. 204.73 billion at year-end
fiscal 2006, reflecting an increase in investments in insurance and international subsidiaries, pass through certificates and credit linked notes.
Total assets (gross) of overseas branches (including overseas banking unit in Mumbai) increased by 90.2% to Rs. 524.71 billion at year-end
fiscal 2007 from Rs. 275.86 billion at year-end fiscal 2006. Its equity share capital and reserves at year-end fiscal 2007 increased to Rs. 243.13
billion as compared to Rs. 222.06 billion at year-end fiscal 2006 primarily due to retained earnings for the year and exercise of employee stock
options. As per the transition provision of Accounting Standard 15 - (Revised) on Accounting for retirement benefits in financial statements of
employer, the difference in the liability on account of retirement benefits created by the Bank at March 31, 2006 due to the revised standard
have been adjusted in Reserves and Surplus. Total deposits increased 39.6% to Rs. 2,305.10 billion at year end fiscal 2007 from Rs. 1,650.83
billion at year-end fiscal 2006. This is commensurateProjectsformba.blogspot.com
57. Projectsformba.blogspot.com with our focus of increased funding through deposits. Our savings account deposits increased to Rs. 288.38
billion at year-end fiscal 2007 from Rs. 209.37 billion at year-end fiscal 2006, while current deposits increased to Rs. 213.76 billion at year-end
fiscal 2007 from Rs. 165.73 billion at year-end fiscal 2006. Term deposits increased by 41.3% to Rs. 1,802.96 billion at year-end fiscal 2007 from
Rs. 1,275.73 billion at yearend fiscal 2006. Total deposits at year-end fiscal 2007 constituted 76.5% of our funding (i.e. deposit, borrowings and
subordinated debts). Borrowings (including subordinated debt) increased to Rs. 706.61 billion at year-end fiscal 2007 from Rs. 486.66 billion at
year-end fiscal 2006 primarily due to increase in borrowings of foreign branches. Contingent liabilities increased by 42.5% or Rs. 1,679.25
billion to Rs. 5,629.60 billion at year-end fiscal 2007 from Rs. 3,950.35 billion at year-end fiscal 2006 primarily due to a 35.4% increase in interest
rate swaps and currency options and a 45.0% increase in liability on account of outstanding forward exchang econtracts. NPAS (NON
PERFORMING ASSETS) The ratio of net non-performing assets to net customer assets increased to 0.98% at year-end fiscal 2007 compared to
0.71% at year-end fiscal 2006. At year-end fiscal 2007, the gross non- performing assets (net of write-offs and unpaid interest) were Rs. 41.68
billion compared to Rs. 22.73 billion at year end fiscal 2006. Gross of technical write-offs, the gross non-performing assets at year- end fiscal
2007 were Rs. 48.50 billon compared to Rs. 29.63 billion atProjectsformba.blogspot.com
58. Projectsformba.blogspot.com year-end fiscal 2006. The coverage ratio (i.e. total provisions and technical write-offs made against nonperforming assets as a percentage of gross non performing assets) at year-end fiscal 2007 was 58.37% compared to 63.72% at year-end fiscal
2006. In addition, total general provision made against standard assets was Rs. 12.95 billion at year-end fiscal 2007. Our investments in security
receipts issued by Asset Reconstruction Company (India) Limited, a reconstruction company registered with RBI were Rs. 25.38 billion at yearend fiscal 2007. Our net restructured standard loans decreased from Rs. 53.16 billion at year-end fiscal 2006 to Rs. 48.83 billion at year-end
fiscal 2007. The effective tax rate of 14.7% for fiscal 2007 was lower compared to the statutory tax rate of 33.66% primarily due to concessional
rate of tax on capital gains, exemption of dividend income, deduction towards special reserve and deduction of income of offshore banking unit.
(RS. IN BILLION) YEAR ENDED March 31, 2005 March 31, 2006 March 31, 2007 GROSS NPA 34.37 22.73 41.68 NET NPA 19.83 10.75 20.19
NET CUSTOMER 978.94 1,520.07 2,053.74 ASSETSProjectsformba.blogspot.com
59. Projectsformba.blogspot.com % OF NET NPA TO 2.03% 0.71% 0.98% NET CUSTOMER ASSETS DIVIDEND The Board has recommended
a higher dividend of 100% for FY2007 i.e. Rs. 10 per equity share (equivalent to US$ 0.46 per ADS) as compared to 85% for FY2006 primarily
due to higher provisions created on standard assets ,a higher level of specific provisioning on retail loans. CONSOLIDATED PROFIT The
consolidated profit after tax increased 14% to Rs. 2,761 crore (US$ 635 million) in FY2007 from Rs. 2,420 crore (US$ 557 million) in FY2006. The
consolidated profit was lower than the standalone profit due to the accounting losses of ICICI Prudential Life Insurance Company (ICICI Life). Its
profit under US GAAP accounts was Rs. 31.27 billion as compared to consolidated profit of Rs. 27.61 billion under Indian GAAP in fiscal 2007.3.2
COMPARATIVE INCOME STATEMENT TREND ANALYSIS SUMMARISED PROFIT & LOSS A/C (ON 31 MARCH, 2007) (RS. IN BILLION)
PARTICULARS 2005 2006 2007 %Change %Change (RS.) (RS.) (RS.) (2006) (2007)Interest income 94.10 143.06 229.94 46.5% 60.7%Interest
expense 65.71 95.97 163.8 46.1% 70.4%Projectsformba.blogspot.com
60. Projectsformba.blogspot.comNet interest income 28.39 47.09 66.36 47.5% 40.9%Non-interest income 27.05 42.42 59.14 49.9% 39.4% Fee
income 20.98 34.47 50.12 55.3% 45.4% Lease income 4.01 3.61 2.38 (10.0) (34.1) Others 2.06 4.34 6.64 111.2% 53.0%Core operating
income 55.44 89.51 125.50 48.7% 40.2%Operating expenses 25.17 35.47 49.79 40.9% 40.3%Direct marketing agency 4.85 11.77 15.24 35.1%
29.5%(DMA) expenseLease depreciation, net of 2.97 2.77 1.88 (6.7) (31.9)lease equalizationCore operating profit 22.45 39.50 58.59 67.6%
48.3%Net treasury income - (0.62) 0.15 - -Operating profit 29.56 38.88 58.74 58.7% 51.1%Provisions, net of write- 4.29 7.92 22.26 84.61%
181.1%backsProfit before tax 25.27 30.97 36.48 22.6% 17.8%Tax, net of deferred tax 5.22 5.56 5.38 6.7% (3.2)Profit after tax 20.05 25.40 31.10
26.7% 22.4%By anlysing the summarized profit & loss account of ICICIBank, the following trends are presented: Operating profit increased
51% to Rs. 5,874 crore for FY2007 from Rs. 3,888 crore for FY2006 which is less than as compared to increased 58.7% to Rs. 3,888 crore for
FY 2006 from Rs. 2,956 crore for FY2005. Profit after tax increased 22% to Rs. 3,110 crore for FY2007 from Rs. 2,540 crore for FY2006
which is less than as compared to increased 26.7% to Rs. 2,540 crore for FY2006 from Rs. 2,005 crore for FY2005.Projectsformba.blogspot.com
61. Projectsformba.blogspot.com Profit before tax increased 18% to Rs. 3,648 crore for FY2007 from Rs. 3,097 crore for FY2006 which is also
less than as compared to increased to 22.6 % to Rs. 3,097 crore for FY2006 fom Rs. 2,527 crore for FY2005. Net interest income increased
41% to Rs. 6,636 crore for FY2007 from Rs. 4,709 crore for FY2006 which is less than as compared to increased 47.5% to Rs. 4,709 crore for
FY2006 from Rs. 2,839 crore for FY2005. Fee income increased 45% in 2007 which is less than as compared to 55.3% increased in 2006
Interest expenses increased at a very high rate from 46.1% in FY2006 to 70% in FY2007. Interest income is increased at a higher rate than
the previous year i.e. 47% in 2006 to 61% in 2007. Increase in non-interest income is less than in 2007 49% as compared to increase in 2006
39%. Provision is increased at a high rate as compared to previous years 85% in 2006 to 181% in 2007.3.3 COMPARATIVE FINANCIAL
POSITIONSTATEMENT TREND ANALYSIS SUMMARIZED BALANCE-SHEETProjectsformba.blogspot.com
62. Projectsformba.blogspot.com (ON MARCH 31, 2007) (RS. In crore) PARTICULARS 2005 2006 2007 %Change %Change (RS.) (RS.) (RS.)
(2006) (2007)Cash balance with 47,412 68,115 104,489 43.7% 53%banks & SLR-Cash & bank balances 12,930 17,040 37,121 31.8% 118%SLR investment 34,482 51,075 67,368 48.1% 32%Advances 91,405 146,163 195,866 59.9% 34%Other Investment 2,854 20,473 23,890 41.9%
17%Fixed and other Assets 12,836 16,638 20,413 29.61% 23% TOTAL ASSETS 167,659 251,389 344,658 49.9% 37%Net Worth 12,550 22,206
24,313 76.9% 9%-Equity Capital 737 890 899 20.8% 1%-Reserves 11,813 21,316 23,414 80.4% 10%Preference Capital 350 350 350 - -

Deposits 99,819 165,083 230,510 65.4% 40%Erstwhile ICICI 19,348 13,190 10,837 (31.16%) (18%)BorrowingsOther Borrowings 22,405 35,477
59,823 58.2% 69%Other Liabilities 13,187 15,083 18,824 14.4% 25% TOTAL 167,659 251,389 344,658 49.9% 37% LIABILITIES By anlysing the
balance sheet of ICICI Bank, the following trends are presented: Total assets and total liabilities are increased in 2007 from Rs. 251389 crore
to Rs. 344658 Crore i.e. 37% which is less than as compared to increase in 2006 from Rs. 167659 crore to Rs. 251389 crore i.e.
49.9%.Projectsformba.blogspot.com
63. Projectsformba.blogspot.com Increase in cash balance with bank in 2007 is more than in the previous year 2006. In 2006 it is 32% and in
2007 it is 118%. But increase in SLR investment in 2007 is less than the previous year. In 2006 it is 48% and in 2007 it is 32%. 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. Increase in fixed and
other assets is also less than in 2007 from 2006 i.e 23% as compared to 30% in 2006 from 2005. Erstwhile ICICI borrowings is decreasing in
both years but rate of decreasing is less in 2007 i.e. 18% but in 2006 it is 31%. Increase in net worth is also less than from previous year in
2007 i.e 80% in 2006 to 9% in 2007. 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. from 10% to 80%.Projectsformba.blogspot.com
64. Projectsformba.blogspot.com 40%Deposits is increased in 2007 from 2006 which is less than as compared to 65% increase in deposits in
2006 from 2005. Increase in other liabilities is more in 2007 than in 2006 i.e from 14% in 2006 to 25% in 2007. 69%borrowing is increased
in 2007 from 2006 which is more than as compared to 58% increase in borrowing in 2006 from 2005.3.4 RATIO ANALYSIS 1) CURRENT RATIO:
Current Ratio= Current Assets/Current LiabilitiesIn 2006:Current Assets=170.40+1461.63=1632.03 billion (cash +advances)Current
Liabilities=165.73+354.77+131.90=652.40billion(short-term deposits+ borrowings) Current Ratio=1632.03/652.40=2.5:1In 2007:Current
Assets=371.21+1958.66=2329.87billion (cash +advances)Current Liabilities=213.76+108.37+598.23=920.36 billion(short-term deposits+
borrowings) Current Ratio=2329.87/920.36=2.6:1 2) QUICK RATIO:Projectsformba.blogspot.com
65. Projectsformba.blogspot.com Quick Ratio=Quick Assets/Current LiabilitiesIn 2006:Quick Assets=170.40billion (cash in hand and other
bank)Current Liabilities=652.40billion Quick Ratio=170.40/652.40=0.26:1In 2007:Quick Assets=371.21billion (cash in hand and other
bank)Current Liabilities=920.30billion Quick Ratio=371.21/920.30=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/2In 2006: net income=25.40 billionAverage
assets= (1676.59+ 2513.89)/2= 2095.24 Return on average assets= 25.40/2095.24*100 = 1.21%In 2007: net income= 31.10 billionAverage
assets= (2513.89+ 3446.58)/2= 2980.24 Return on average assets= 31.10/2980.24*100=1.04% 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/2In 2006: net
income=25.40 billionProjectsformba.blogspot.com
66. Projectsformba.blogspot.comAverage equity= (129.00+225.56)/2= 177.28 Return on average equity= 25.40/177.28*100 = 17.54%In 2007:
net income= 31.10 billionAverage equity= (225.56+246.63)/2= 236.10 Return on average equity = 31.10/236.10*100=13.17% 5) FIXED/WORTH
RATIO: Fixed Worth Ratio=Net Fixed Assets/ Tangible Net WorthIn 2006:Net Fixed Assets= 39.80 billionTangible Net Worth= 225.55 billion Fixed
Worth Ratio=39.80/225.55= 0.18:1In 2007:Net Fixed Assets= 39.23 billionTangible Net Worth= 246.62 billion Fixed Worth Ratio=39.23/246.62 =
0.16:1 6) OPERATING PROFIT TO WORKING FUNDS Operating Profit To Working Funds=operating profit/ average assets*100In
2006:Operating profit=38.80 billionAverage assets=2095.24Operating profit to working fund=38.80/2095.24*100= 1.85%In 2007:Operating
profit=58.84 billionAverage assets=2980.84Operating profit to working fund=58.84/2980.84*100= 1.98%Projectsformba.blogspot.com
67. Projectsformba.blogspot.com (approximately) RATIOS IN 2006 IN 2007Current Ratio 2.5:1 2.6:1Quick Ratio 0.26:1 0.40:1Return On Assets
1.21% 1.04%Return On Equity 17.54% 13.17%Fixed/worth Ratio 0.18:1 0.16:1Operating profit to working funds 1.85% 1.98%The above table
shows that:- both current ratio and quick ratiois liquidity ratio. The ideal ratio for current ratio is 2:1 and idealratio for quick ratio is 1:1. In these
table current ratio of bothyear is higher than the ideal ratio which shows that there isenough current assets which make the bank able to pay
itscurrent liabilities on time but quick ratio is lower than the idealratio which shows that bank have not enough liquid assets topay their current
liabilities. Therefore bank should keep someassets in the form of liquid assets such as cash, marketablesecurities etc.Return on equity, return on
assets and operating profit toworking funds are profitability ratio. The higher the profitabilityratio of any organization is show the better position of
thatorganization. The profitability ratio of ICICI bank is very low. Itis deceasing from the previous year.Fixed/worth ratio measures the extent to
which owners equityhas been invested in plant and equipment . A lower ratioindicates a proportionately smaller investment in fixed assets.This
ratio shows that bank has invested more in current assetsProjectsformba.blogspot.com
68. Projectsformba.blogspot.comthan the fixed assets. It could be a good position in case ofliquidation.3.5 CASH FLOW STATEMENT (AS ON
YEAR ENDED ON 31ST MARCH, 2007) (rs. In 000s) PARTICULARS FY2007 FY2006 Cash flow from operating activitiesNet profit before taxes .
36,480,391 30,966,076Adjustments for:Depreciation and amortisation 7,639,002 9,021,206Net (appreciation) / depreciation on 9,918,419
8,301,403investmentsProvision in respect of non-performing 21,592,999 7,947,244assetsProvision for contingencies & others 251,311
226,801Dividend from subsidiaries (4,484,915) (3,386,929)(Profit) / Loss on sale of fixed assets (1,152,224) (71,222) 70,244,982
53,004,579Adjustments for: (19,666,157) (141,019,247)Increase/decrease in investmentsIncrease/decrease in advances (511,255,267)
(552,112,941)Increase/decrease in borrowings 57,039,927 65,476,052Increase/decrease in deposits 654,270,149
652,643,939Increase/decrease in other assets (28,758,999) (36,704,232)Increase/decrease in other liabilities and 26,886,199
13,861,469provisions 178,515,85 2,145,040 2 (18,141,312) (8,620,283)Refund/(payment) of direct taxesNet cash generated from operating
230,619,52 46,529,336activities(A) 2Cash flow from investing activitiesProjectsformba.blogspot.com
69. Projectsformba.blogspot.comInvestments in subsidiaries and/or joint (15,758,166) (8,509,194)venturesIncome received on above investments
4,484,915 3,386,929Purchase of fixed assets (4,924,623) (5,474,001)Proceeds from sale of fixed assets 4,347,300 942,843(Purchase)/sale of
held to maturity (171,776,134) (69,286,381)securitiesNet cash generated from investing (183,626,70 (78,939,804)activities(B) 8)Cash flow from
financing activitiesProceeds from issue of share capital 2,074,414 79,813,833Net proceeds/(repayment) of bonds 160,717,380 869,592Dividend
and dividend tax paid (8,646,021) (7,174,390)Net cash generated from financing 154,145,77 73,509,035activities(C) 4Effect of exchange
fluctuation on (327,587) 3,955translation reserve(D)Net increase/(decrease) in cash and cash 200,811,00 41,102,522equivalents)(A+B+C+D)
1Cash and cash equivalents at 1st April 170,402,245 129,299,723Cash and cash equivalents at 31st March 371,213,247
170,402,245Projectsformba.blogspot.com
70. Projectsformba.blogspot.com CHAPTER-4 CONCLUSIONProjectsformba.blogspot.com

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