Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
ON
THE STUDY OF ANALYSIS OF
FINANCIAL STATEMENT
OF
ICICI BANK
Submitted By:
Akanksha Jain
ENROLL No- 001 /KRCHE /BBA(B&I)/2006
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.
(AKANKSHA JAIN)
CERTIFICATE
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.
4. CONCLUSION 62-64
5. RECOMMENDATION & SUGGESTION 65-66
BIBLIOGRAPHY 67
ANNEXURE 68-
70
Profit & Loss Account 69
Balance-Sheet
CHAPTER-1
INTRODUCTION
1.1 A BRIEF INTRODUCTION
In any organization, the two important financial statements are the Balance
sheet & Profit and loss account of the business. Balance sheet is a
statement of the financial position of an enterprise at a particular point of
time. Profit and loss account shows the net profit or net loss of a company
for a specified period of time. When these statements of the last few year of
any organization are studied and analyzed, significant conclusions may be
arrived regarding the changes in the financial position, the important policies
followed and trends in profit and loss etc. Analysis and interpretation of the
financial statement has now become an important technique of credit
appraisal. The investors, financial experts, management executives and the
bankers all analyze these statements. Though the basic technique of
appraisal remains the same in all the cases but the approach and the
emphasis in analysis vary. A banker interprets the financial statement so as
to evaluate the financial soundness and stability, the liquidity position and
the profitability or the earning capacity of borrowing concern. Analysis of
financial statement is necessary because it help in depicting the financial
position on the basis of past and current records. Analysis of financial
statement help in making the future decision and strategies. Therefore, it is
very necessary for every organization whether it is a financial or
manufacturing etc. to make financial statement and to analyse it.
1.2 OBJECTIVE
The 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.
1.3.1HISTORY
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly owned subsidiary. ICICI's
shareholding in ICICI Bank was reduced to 46% through a public offering of
shares in India in fiscal 1998, an equity offering in the form of ADRs listed
on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura
Limited in an all-stock amalgamation in fiscal 2001, and secondary market
sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI
was formed in 1955 at the initiative of the World Bank, the Government of
India and representatives of Indian industry. The principal objective was to
create a development financial institution for providing medium-term and
long-term project financing to Indian businesses. 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, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first
Indian company and the first bank or financial institution from non-Japan
Asia to be listed on the NYSE.
RETAIL BANKING
The Retail Banking Group is responsible for products and services for
retail customers and small enterprises including various credit
products, liability products, distribution of third party investment and
insurance products and transaction banking services.
WHOLESALE BANKING
The Wholesale Banking Group is responsible for products and services
for large and medium-sized corporate clients, including credit and
treasury products, investment banking, project finance, structured
finance and transaction banking services.
INTERNATIONAL BANKING
The International Banking Group is responsible for its international
operations, 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.
GOVERNMENT BANKING
The Government Banking Group is responsible for government banking
initiatives.
CORPORATE CENTER
The Corporate Center comprises the internal control environment functions
(including operations, risk management, compliance, audit and legal);
finance (including financial reporting, planning and strategy, asset liability
management, investor relations and corporate communications); human
resitsces management; and facilities management & administration.
BUSINESS REVIEW
During fiscal 2007, 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 maintained its leadership position in retail
credit, achieved robust growth in its fee income from both corporate
and retail customers, grew its deposit base and significantly scaled
up its international operations and rural reach.
RETAIL BANKING
ICICI is the largest provider of retail credit in India. ICICI’s total retail
disbursements in fiscal 2007 were approximately Rs. 777.00 billion,
compared to approximately Rs. 627.00 billion in fiscal 2006. It’s total
retail portfolio increased from Rs. 921.98 billion at March 31, 2006 to
Rs. 1,277.03 billion at March 31, 2007, constituting 65% of it’s total
loans at that date. It continued its focus on retail deposits to create a
stable funding base. At March 31, 2007 it had more than 25 million
retail customer accounts.
During fiscal 2007, it expanded its branch network. At March 31, 2007,
it had 755 branches and extension counters compared to 614 branches
and extension counters at March 31, 2006. Pursuant to the
amalgamation of The Sangli Bank Limited with it effective April 19,
2007, it acquired over 190additional branches and extension counters. It
continued to expand its electronic channels, namely internet banking,
mobile banking, call centres, point of sale terminals and ATMs, and
migrate customer transaction volumes to these channels. During fiscal
2007, over 80% of customer induced transactions took place through
these electronic channels. It increased its ATM network to 3,271 ATMs.
CORPORATE BANKING
It’s corporate banking strategy is based on providing comprehensive and
customized financial solutions to its corporate customers. It offer a complete
range of corporate banking products including rupee and foreign currency
debt, working capital credit, structured financing, syndication and
transaction 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 is
now a preferred partner for Indian companies for syndication of external
commercial borrowings and other fund raising in international markets.
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. Towards this end, it offer a
range of financial products and services that cater to the rural masses in all
the important sectors like infrastructure, horticulture, food processing, dairy,
poultry, seeds, fertiliser and agrochemical industries. Customised financial
solutions are offered to individual customers, agri small & medium
enterprises, agri corporates and members of their supply chains. On the rural
retail 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 insurance
products. In addition bank is introducing products like rural housing finance
to cater to the needs of rural customers. During fiscal 2007, it introduced
loans 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). 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. The
amalgamation of Sangli Bank would extend its outreach in rural areas. During fiscal 2007, a provision of Rs. 0.9 billion (USS$ 22
million) was made on account of identified frauds in warehouse receipt financing business of agricultural credit.
INTERNATIONAL BANKING
ICICI Bank has established a strong franchise among non-resident
Indians (NRI). It has established strong customer relationships by
offering a comprehensive product suite, technology-enabled access for
overseas customers, a wide distribution network in India and alliances
with local banks in various markets. It has over 450,000 NRI customers.
It has undertaken significant brand-building initiatives in international
markets and have emerged as a well-recognised financial services brand
for NRIs. It’s market share in inward remittances into India has
increased to over 25%. It has consolidated it’s global remittance
initiative, targeting non-Indian communities, by leveraging it’s core
capabilities of technology-based service delivery. A large number of
remittance products were introduced to complement the existing suite of
products. The business focus has been on rolling out successful products
across multiple geographies and getting into high volume correspondent
arrangements.
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 bank’s savings account.
whether it is an ATM/debit card, easy withdrawal, easy loan options or
internet banking, ICICI bank’s saving account always keep you in touch
of money.
FIXED DEPOSITS
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.
INSURANCE
The ICICI group offers a range of insurance products to cover varying needs ranging from life, pensions and health, to home, motor
and 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.
LOANS
HOME LOAN
The No. 1 Home Loans Provider in the country, ICICI Bank
Home Loans offers some unbeatable benefits to its customers -
Doorstep Service, Simplified Documentation and Guidance
throughout the Process. It's 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 months
CARDS
ICICI Bank offers a variety of cards to suit different transactional
needs. Its range includes Credit Cards, Debit Cards and Prepaid cards.
These cards offer you convenience for financial transactions like cash
withdrawal, shopping and travel. These cards are widely accepted both
in 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, global
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 BANKING
Bank on the move with ICICI Bank Mobile Banking. With ICICI Bank,
Banking is no longer what it used to be. ICICI Bank offers Mobile
Banking facility to all its Bank, Credit Card, Demat and Loan
customers.
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. It keeps
you updated wherever you go.
Request facility : ICICI Bank Mobile Banking Requests facility enables
you to query for yits account balance.
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. ICICI Bank offers home search service which can help a customer identify the property of his choice based on his
budget and other requirements.
MICROFINANCE: ICICI Bank assists over 2.5 million low income clients
to build livelihoods by partnering With over 100 microfinance institutions.
BRANCHES: ICICI Bank has a network of over 630 branches ( of which
51 are extension counters) across the country. The network puts a wide
range of banking products and financial services with in easy reach of retail
and corporate customers.
MARKET RISK
Market risk is the risk of loss resulting from changes in interest rates, foreign currency exchange rates, equity prices and commodity
prices. 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 by
the Board of Directors. The Asset Liability Management
Committee (ALCO) of the Board of Directors stipulate liquidity and interest rate risk limits, monitors adherence to limits, articulates
the organisation’s interest rate view and determines the strategy in light of the current and expected environment. These policies and
processes are articulated in the ALPM policy. The investment policy addresses issues related to investment in various trading
products. 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. Liquidity risk is measured through gap analysis. 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. ICICI Bank limit
exposure to exchange rate risk by stipulating position limits. The treasury Middle Office Group monitors the asset-liability position
under 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 RISK
Operational risk is the risk of loss that can result from a variety of
factors, including failure to obtain proper internal authorizations,
improperly documented transactions, failure of operational and
information security procedures, computer systems, software or
equipment, fraud, inadequate training and employee errors. Bank’s
approach to operational risk management is designed to mitigate
operational risk by maintaining a comprehensive system of internal
controls, establishing systems and procedures to monitor transactions,
maintaining key back-up procedures and undertaking regular
contingency planning. Effective operational risk management system
would ensure that bank has sufficient information to make appropriate
decisions about additional controls, adjustments to controls, or other
risk responses. Operational risk management policy aims at minimizing
losses and customer dissatisfaction due to failure in processes, focusing
on flaws in products and their design that can expose the bank to losses
due to fraud, analyzing the impact of failures in systems, developing
mitigants to minimize the impact and developing plans to meet external
shocks that can adversely impact continuity in the bank’s operations.
INTERNATIONAL SUSIDIARIES
ICICI Bank Canada
ICICI Bank Eurasia Limited Liability Company
ICICI International Limited
ICICI Securities Holding Inc
ICICI Securities Inc
ICICI Bank Uk Limited
The securities and primary dealership business of the ICICI group have been
reorganised. ICICI Securities Limited has been renamed as ICICI Primary
Dealership Limited. ICICI Brokerage Services Limited has been renamed as
ICICI Securities Limited and has become a direct subsidiary of ICICI Bank.
Erstwhile ICICI Webtrade Limited was amalgamated with ICICI Securities
Limited during fiscal 2007. ICICI Securities achieved a profit after tax of
Rs. 0.63 billion and ICICI Securities Primary Dealership achieved a profit
after tax of Rs. 1.33 billion, in fiscal 2007.
MEANING: It is a financial statement, which shows net loss of a company for a specified period. The accounting year means
calendar 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 and
vice versa for a loss.
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.
Current assets: Current assets include cash and other assets that in the
normal course of events are converted into cash within the operating cycle.
For example, a manufacturing enterprise will use cash to acquire inventories
of materials. These inventories of materials are converted into finished
products and then sold to customers. Cash is collected from the customers.
This circle from cash back to cash is called an operating cycle. In a
merchandising business one part of the cycle is eliminated. Materials are not
purchased for conversion into finished products. Instead, the finished
products are purchased and are sold directly to the customers. Several
operating cycles may be completed in a year, or it may take more than a year
to complete one operating cycle. The time required to complete an operating
cycle depends upon the nature of the business. It is conceivable that almost
all of the assets that are used to conduct your business, such as buildings,
machinery, and equipment, can be converted into cash within the time
required to complete an operating cycle. However, your current assets are
only those that will be converted into cash within the normal course of your
business. The other assets are only held because they provide useful services
and are excluded from the current asset classification. If you happen to hold
these assets in the regular course of business, you can include them in the
inventory under the classification of current assets. Current assets are usually
listed in the order of their liquidity and frequently consist of cash, temporary
investments, accounts receivable, inventories and prepaid expenses.
Cash: Cash is simply the money on hand and/or on deposit that is available
for 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 for
eventual retirement of a bond issue, is excluded from 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 that
you will use to create your products. 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.
Prepaid expenses: These expenses are payments made for services that will
be received in the near future. Strictly speaking, 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. Often your insurance premiums or rentals are paid in advance.
Investments: Investments are cash funds or securities that you hold for a
designated purpose for an indefinite period of time. Investments include
stocks or the bonds you may hold for another company, real estate or
mortgages that you are holding for income-producing purposes. Your
investments also include money that you may be holding for a pension fund.
Intangible Assets: Your other fixed assets that lack physical substance are
referred to as intangible assets and consist of valuable rights, privileges or
advantages. Although your intangibles lack physical substance, they still
hold value for your company. Sometimes the rights, privileges and
advantages of your business are worth more than all other assets combined.
Other Assets: During the course of preparing your balance sheet you will
notice other assets that cannot be classified as current assets, investments,
plant assets, or intangible assets. These assets are listed on your balance
sheet as other assets. Frequently, your other assets consist of advances made
to company officers, the cash surrender value of life insurance on officers,
the cost of buildings in the process of construction, and the miscellaneous
funds held for special purposes.
Current Liabilities: On the equity side of the balance sheet, as on the asset
side, you need to make a distinction between current and long-term items.
Your current liabilities are obligations that you will discharge within the
normal operating cycle of your business. In most circumstances your current
liabilities will be paid within the next year by using the assets you classified
as current. 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. You show the amounts owed to trade creditors
that arise from the purchase of materials or merchandise as accounts
payable. If you are obligated under promissory notes that support bank loans
or other amounts owed, your liability is shown as notes payable. Other
current liabilities may include the estimated amount payable for income
taxes 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 year
from the balance sheet date are generally classified as long-term liabilities.
Notes, bonds and mortgages are often listed under this heading. If a portion
of your long-term debt is due within the next year, it should be removed
from the long-term debt classification and shown under current liabilities.
BALANCE-SHEET STRUCTURE
The following Balance sheet structure is just an example. It does not show
all possible kind of assets, equity and liabilities, but it shows the most usual
ones. It could be a consolidated balance sheet. Monetary values are not
shown and summary (total) rows are missing as well.
Assets
Current Assets
Cash and cash equivalents
Inventories
Account receivable
Investment held for trading
Other current assets
Non-Current Assets
Property, plant and equipment
Goodwill
Other intangible fixed assets
Investment in associates
Deferred tax assets
Miscellaneous Expenditure
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
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.
This is because factors that affect the value of a business may not be
recorded yet. For example, a purchaser will be interested in the future
earnings of the business, whether assets such as property have been revalued
recently, and whether there are potential liabilities in the future such as
lawsuits. The value of the assets in the balance has also been based on the
assumption that the business is a going concern, otherwise the break-up
value of the assets may be far less than the value in the balance sheet.
PREPAIRING A BALANCE-SHEET
Title and Heading: In practice, the most widely used title is Balance Sheet;
however Statement of Financial Position is also acceptable. Naturally, when
the presentation includes more than one time period the title "Balance
Sheets" should be used.
XYZ CORPORATION
BALANCE SHEETS
December 31, 2006
Format: There are two basic ways that balance sheets can be arranged. In
Account Form, 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.
Another format is Report Form, a running format in which your assets are
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.
Captions: Captions are headings within your statement that designate major
groups of accounts to be totaled or subtotaled. Your balance sheet should
include three primary captions: Assets, Liabilities and Stockholders' Equity.
In the report form of presentation, the placement of your primary captions
would be as follows: 2006 ASSETS, LIABILITIES AND
STOCKHOLDER’S EQUITY.
• Cash
• Short-term marketable securities
• Trade notes and accounts receivable
• Inventories
• Long-term investments
• Property and equipment
• Intangible assets
• Deferred charges
• Demand notes
• Trade accounts payable
• Accrued expenses
• Long-term debt
• Other long-term liabilities
• Preferred stock
• Common stock
• Additional paid-in capital
• Retained earnings
• Accumulated other comprehensive income
• Treasury stock
PURPOSE:
The main purpose of analyzing the financial statement are the
following:-
To assess past performance and current financial position.
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 year's 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:
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 company’s
financial condition along with its operational efficiency.
It is important to note that some ratios will need
information from more than one financial statement,
such as from the balance sheet and the income
statement. 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
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.
• 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.
PROFITABILITY RATIO
Profitability ratios are gauges of the company's
operating success for a given period of time.
• 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.
• It’s 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.
• 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 March March 31,
31, 2005 31, 2006 2007
• 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.
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.
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.
The above table shows that:- both current ratio and quick
ratio is liquidity ratio. The ideal ratio for current ratio is 2:1
and ideal ratio for quick ratio is 1:1. 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. Therefore
bank should keep some assets in the form of liquid assets
such as cash, marketable securities etc.
Return on equity, return on assets and operating profit to
working funds are profitability ratio. The higher the
profitability ratio of any organization is show the better
position of that organization. The profitability ratio of ICICI
bank is very low. It is deceasing from the previous year.
Fixed/worth ratio measures the extent to which owner’s
equity has been invested in plant and equipment . A lower
ratio indicates a proportionately smaller investment in fixed
assets. This ratio shows that bank has invested more in
current assets than the fixed assets. It could be a good
position in case of liquidation.
Bank should pay attention on its subsidiary “ICICI Prudential Life Insurance
Company Limited
BIBLIOGRAPHY
REFERENCE BOOKS
P.N. VARSHNEY “Banking Law And Practices” Sultan Chand &
Sons
WEBSITES
www.icicibank.com
www.pruicici.com
www.investopedia.com
II. EXPENDITURE
Interest expended 15 163,584,984 95,974,483
Operating expenses 16 66,905,564 50,011,537
Provision and contingencies 17 27,641,854 13,483,417
258,132,402 159,469,437
TOTAL EXPENDITURE
III. PROFIT/LOSS
Net profit for the year 31,102,200 25,400,747
Profit brought forward 2,934,416 1,882,221
TOTAL PROFIT/(LOSS) 34,036,616 27,282,221
IV. APPROPRIATIONS/ TRANSFERS
7,800,000 6,360,000
Transfer to Statutory reserve
Transfer to reserve fund 1,168 222
Transfer to capital reserve 1,210,000 680,000
Transfer to investment fluctuation - 5,900,000
reserve
Transfer from investment fluctuation - (13,203,350)
reserve
Transfer to special reserve 4,500,000 2,750,000
Transfer to revenue and other reserves - 13,203,350
Proposed equity share dividend 9,011,694 7,593,326
Proposed preference share dividend 35 35
Corporate dividend tax 1,530,978 1,064,969
Balance carried over to balance sheet 982,741 2,934,416
34,036,616 27,282,968
TOTAL
18
Significant policies& notes to accounts
EARNING PER SHARES
Basic(rs.) 34.84 32.49
Diluted(rs.) 34.64 32.15
Face value per share(rs.) 10.00 10.00
(II) BALANCE-SHEET
(Balance sheet of ICICI bank as on March 31,2007)
(Rs. In ‘000’s)
Particulars Schedule As on As on
31.03.2007 31.03.2006
(RS.) (RS.)
CAPITAL & LIABILITIES
1 12,493,437 12,398,345
Capital
Reserve & Surplus 2 234,139,207 213,161,571
Deposits 3 2,305,101,863 1,650,831,713
Borrowings 4 512,560,263 385,219,136
Other liabilities & provisions 5 382,286,356 252,278,777
3,446,581,126 2,513,889,542
TOTAL CAPITAL &
LIABILITIES
ASSETS
Cash and Balance with Reserve 6 187,068,794 89,343,737
Bank Of India
Balances with banks and money at 7 184,1441452 81,058,508
calls and short notice
Investment 8 912,578,418 715,473,944
Advances 9 1,958,655,996 1,461,631,089
Fixed Assets 10 39,234,232 39,807,115
Other Assets 11 164,889,234 126,575,149
3.446,581,126 2,513,889,542
TOTAL ASSETS