ICICI Bank Ltd

Your Directors have pleasure in presenting the Seventeenth Annual Report of ICICI BankLimited with the audited statement of accounts for the year ended March 31, 2011.

FINANCIAL HIGHLIGHTS

The financial performance for fiscal 2011 is summarised in the following table:

1. Excludes provision for taxes.

Appropriations

The profit after tax of the Bank for fiscal 2011 is Rs. 51.51 billion after provisionsand contingencies (excluding provision for taxes) of Rs. 22.87 billion and all expenses.The disposable profit is Rs. 86.15 billion, taking into account the balance of Rs. 34.64billion brought forward from the previous year. Your Directors have recommended a dividendat the rate of Rs. 14 per equity share of face value Rs. 10 for the year and haveappropriated the disposable profit as follows:

1. Includes Rs. 2.00 billion on amalgamation of The Bank of Rajasthan Limited withICICI Bank Limited.

2. Includes dividend for the prior year paid on shares issued after the balance sheetdate and prior to the record date.

3. After taking into account transfer to Reserve Fund Rs. 0.4 million for fiscal 2011,making in all Rs. 11.3 million.

Internet Banking

Our comprehensive Internet Banking service is designed to give our customers aconvenient banking experience from the comfort of their homes or offices.

Our Internet Banking offering has evolved over time not only to enable basic onlinetransactions but also to provide cutting edge features.

Innovative features, such as applying for a new account, opening a fixed deposit andthe Money Manager, help our customers to manage almost all their financial needs online.Further, our Internet Banking service goes beyond fulfilling the routine banking needs ofcustomers by enabling them to buy mutual funds, insurance, forex and gold online.

MERGER OF THE BANK OF RAJASTHAN LIMITED WITH ICICI BANK

The Bank of Rajasthan Limited (Bank of Rajasthan), a banking company incorporatedwithin the meaning of Companies Act, 1956 and licensed by Reserve Bank of India (RBI)under the Banking Regulation Act, 1949 was amalgamated with ICICI Bank Limited (ICICIBank/the Bank) with effect from close of business on August 12, 2010 in terms of theScheme of Amalgamation (the Scheme) approved by RBI vide its order DBOD No. PSBD2599/16.01.056/2010-11 dated August 12, 2010 under sub section (4) of section 44A of theBanking Regulation Act, 1949. The consideration for the amalgamation was 25 equity sharesof ICICI Bank of the face value of Rs. 10 each fully paid-up for every 118 equity sharesof Rs. 10 each of Bank of Rajasthan. Accordingly, ICICI Bank allotted 31,323,951 equityshares to the shareholders of Bank of Rajasthan on August 26, 2010 and 2,860,170 equityshares, which were earlier kept in abeyance pending civil appeal, on November 25, 2010.

SUBSIDIARY COMPANIES

At March 31, 2011, ICICI Bank had 17 subsidiaries as listed in the following table:

1. Subsidiary of ICICI Prudential Life Insurance Company Limited.

2. Subsidiary of ICICI Securities Limited.

3. Subsidiary of ICICI Securities Holdings Inc.

The Ministry of Corporate Affairs (MCA) vide its Circular No.51/12/2007-CL-III datedFebruary 8, 2011 has granted general exemption under Section 212(8) of the Companies Act,1956 to companies from attaching the accounts of their subsidiaries in their annualreports subject to fulfillment of certain conditons prescribed. The Board of Directors ofthe Bank at its Meeting held on April 28, 2011 noted the provisions of the circular of MCAand passed the necessary resolution granting the requisite approvals for not attaching thebalance sheet, profit & loss account, report of the board of directors and report ofthe auditors of each of the subsidiary companies to the accounts of the Bank for fiscal2011. The

Bank will make available these documents/details upon request by any Member of theBank. These documents/details will be available on the Bank’s website(www.icicibank.com) and will also be available for inspection by any Member of the Bank atits Registered Office and Corporate Office and also at the registered offices of theconcerned subsidiaries. As required by Accounting Standard-21 (AS-21) issued by theInstitute of Chartered Accountants of India, the Bank’s consolidated financialstatements included in this Annual Report incorporate the accounts of its subsidiaries andother consolidating entities. A summary of key financials of the Bank’s subsidiariesis also included in this Annual Report.

DIRECTORS

The RBI vide its letter dated June 24, 2010 approved the appointment of Rajiv Sabharwalas an Executive Director of the Bank. The Members approved his appointment at theSixteenth Annual General Meeting (AGM) held on June 28, 2010. Narendra Murkumbi retired byrotation on June 28, 2010 at the last AGM and did not seek re-appointment. The valuableguidance and contribution made by Narendra Murkumbi was recognised by the Board.

Pursuant to the provisions of the Banking Regulation Act, 1949, M. K. Sharma retiredfrom the Board effective January 31, 2011 on completion of eight years as a non-executiveDirector of the Bank. The Board placed on record its deep appreciation and gratitude forhis guidance and contribution to the Bank. In terms of the provisions of the CompaniesAct, 1956 and the Articles of Association of the Bank, V. Prem Watsa, M. S. Ramachandranand K. Ramkumar would retire by rotation at the forthcoming AGM and are eligible forre-appointment. M. S. Ramachandran and K. Ramkumar have offered themselves forre-appointment. V. Prem Watsa has expressed his desire not to seek re-appointment as aDirector as his maximum permissible tenure of eight years as a non-executive Director ofthe Bank would end on January 28, 2012. A Resolution is proposed to the Members in theNotice of the current AGM to this effect and also not to fill up the vacancy caused by theretirement of V. Prem Watsa at this meeting or any adjourned meeting thereof.

AUDITORS

The auditors, S.R. Batliboi & Co., Chartered Accountants, will retire at theensuing AGM. As recommended by the Audit Committee, the Board has proposed the appointmentof S.R. Batliboi & Co., Chartered Accountants as statutory auditors for fiscal 2012.Their appointment is subject to approval of RBI. You are requested to consider theirappointment.

PERSONNEL

As required by the provisions of Section 217(2A) of the Companies Act, 1956, read withCompanies (Particulars of Employees) Rules, 1975, as amended, the names and otherparticulars of the employees are set out in the Annexure to the Directors’ Report.

APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARDS OF ASSISTED COMPANIES

Erstwhile ICICI Limited (ICICI) had a policy of appointing nominee directors on theboards of certain borrower companies based on loan covenants, with a view to enablemonitoring of the operations of those companies. Subsequent to the merger of ICICI withICICI Bank, the Bank continues to nominate directors on the boards of assisted companies.Apart from the Bank’s employees, experienced professionals from various fields areappointed as nominee directors. At March 31, 2011, ICICI Bank had 19 nominee directors ofwhom 16 were employees of the Bank, on the boards of 34 assisted companies. The Bank has aNominee Director Cell for maintaining records of nominee directorships.

Mobile Banking

Our innovations in Mobile Banking have transformed the mobile phone into a personalbanking assistant for our customers. Be it simple SMS alerts, service requests usingInstant Messaging or the iMobile application, our wide range of Mobile Banking servicestakes care of our customers’ varied needs.

Today, customers can use their mobile phones not only to check account balances andtransfer funds but also to apply for a loan. Our innovative Mobile Banking service takesconvenience to a different level by enabling customers to buy flight and movie tickets andalso shop for apparels, books and flowers.

ATM

The ICICI Bank ATM is much more than just a money-dispensing machine. Ourstate-of-the-art technology has led to redefining convenience for the customer. With newlyintroduced innovative features, our ATM is now equipped to take care of banking needs thatgo beyond basic cash withdrawal. Today our ATMs offer services such as opening fixeddeposits, payment of credit card & utility bills, payment of insurance premium, mobilere-charges and ‘Ultra Fast Cash’ which facilitates withdrawal of Rs. 5,000 in asingle click.

We have used technology to transform our vast network of ATMs to provide greaterconvenience & efficiency to our customers, thereby almost making them a network ofmini branches.

RISK MANAGEMENT FRAMEWORK

The Bank’s risk management strategy is based on a clear understanding of variousrisks, disciplined risk assessment and measurement procedures and continuous monitoring.The policies and procedures established for this purpose are continuously benchmarked withinternational best practices. The Board of Directors has oversight on all the risksassumed by the Bank. Specific Committees have been constituted to facilitate focusedoversight of various risks, as follows:

• The Risk Committee of the Board reviews risk management policies of the Bank inrelation to various risks. The Risk Committee reviews various risk policies pertaining tocredit, market, liquidity, operational and outsourcing risks, review of the Bank’sstress testing framework and group risk management framework. The Committee reviews therisk profile of the Bank through periodic review of the key risk indicators and riskprofile templates and annual review of the Internal Capital Adequacy Assessment Process.The Committee also reviews the risk profile of its overseas banking subsidiaries annually.The Risk Committee reviews the Bank’s compliance with risk management guidelinesstipulated by the Reserve Bank of India and of the status of implementation of theadvanced approaches under the Basel framework. The Risk Committee also reviews thestress-testing framework as part of the Internal Capital Adequacy Assessment Process(ICAAP). The stress testing frame work included a wide range of Bank-specific and market(systemic) scenarios. Linkage of macroeconomic factors to stress test scenarios wasdocumented as a part of ICAAP. The ICAAP exercise covers the domestic and overseasoperations of the Bank, the banking subsidiaries and the material non-bankingsubsidiaries. The Risk Committee also reviews the Liquidity Contingency Plan (LCP) for theBank and the threshold limits.

• Apart from sanctioning credit proposals, the Credit Committee of the Boardreviews developments in key industrial sectors and the Bank’s exposure to thesesectors as well as to large borrower accounts. The Credit Committee also reviews thenon-performing loans, accounts under watch, overdues and incremental sanctions.

• The Audit Committee of the Board provides direction to and also monitors thequality of the internal audit function and also monitors compliance with inspection andaudit reports of RBI and statutory auditors.

• The Asset Liability Management Committee is responsible for managing liquidityand interest rate risk and reviewing the asset-liability position of the Bank. A summaryof reviews conducted by these committees are reported to the Board on a regular basis.Policies approved from time to time by the Board of Directors/Committees of the Board formthe governing framework for each type of risk. The business activities are undertakenwithin this policy framework. Independent groups and sub-groups have been constitutedacross the Bank to facilitate independent evaluation, monitoring and reporting of variousrisks. These groups function independently of the business groups/sub-groups.

The Bank has dedicated groups namely the Risk Management Group (RMG), Compliance Group,Corporate Legal Group, Internal Audit Group and the Financial Crime Prevention andReputation Risk Management Group (FCPRRMG), with a mandate to identify, assess and monitorall of the Bank’s principal risks in accordance with well-defined policies andprocedures. RMG is further organised into Credit Risk Management Group, Market RiskManagement Group and Operational Risk

Management Group. These groups are completely independent of all business operationsand coordinate with representatives of the business units to implement ICICI Bank’srisk management policies and methodologies. The internal audit and compliance groups areresponsible to the Audit Committee of the Board.