ICICI Bank 2015 Annual Report Download - page 30

28 Annual Report 2014-2015
Directors’ Report
DISCLOSURE UNDER FOREIGN EXCHANGE MANAGEMENT ACT, 1999
The Bank has obtained a certificate from its statutory auditors that it is in compliance with the Foreign Exchange Management
Act, 1999 provisions with respect to investments made in its consolidated subsidiaries during FY2015.
RELATED PARTY TRANSACTIONS
The Bank undertakes various transactions with related parties in the ordinary course of business. The Bank has a Board
approved policy on Related Party Transactions, which has been disclosed on the website of the Bank and can be viewed
at http://www.icicibank.com/managed-assets/docs/personal/general-links/related-party-transactions-policy.pdf. The Bank
also has a Board approved Group Arms’ Length Policy which requires transactions with the group companies to be at
arm’s length. The transactions between the Bank and its related parties, during the year ended March 31, 2015, were in the
ordinary course of business and based on the principles of arm’s length. The details of material related party transactions
at an aggregate level for year ended March 31, 2015 is annexed as Annexure C.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure D.
BUSINESS RESPONSIBILITY REPORTING
Business Responsibility Report as mandated by Securities and Exchange Board of India (SEBI) vide its circular dated August
13, 2012 has been hosted on the website of the Bank (http://www.icicibank.com/aboutus/annual.html). Any Member interested
in obtaining a physical copy of the same may write to the Company Secretary at the Registered Office of the Bank.
RISK MANAGEMENT FRAMEWORK
The Bank’s risk management framework is based on a clear understanding of various risks, disciplined risk assessment
and measurement procedures and continuous monitoring. The policies and procedures established for this purpose are
continuously benchmarked with international best practices. The Board of Directors has oversight on all the risks assumed
by the Bank. Specific Committees have been constituted to facilitate focused oversight of various risks as follows:
The Risk Committee of the Board reviews risk management policies of the Bank pertaining to credit, market, liquidity,
operational, outsourcing and reputation risks and business continuity management. The Committee also reviews the
Risk Appetite & Enterprise Risk Management frameworks, Internal Capital Adequacy Assessment Process (ICAAP) and
stress testing. The stress testing framework includes a wide range of Bank-specific and market (systemic) scenarios.
The ICAAP exercise covers the domestic and overseas operations of the Bank, banking subsidiaries and material non-
banking subsidiaries. The Committee reviews migration to the advanced approaches under Basel II and implementation
of Basel III, risk return profile of the Bank, compliance with RBI guidelines pertaining to credit, market and operational
risk management systems and the activities of the Asset Liability Management Committee. The Committee reviews the
level and direction of major risks pertaining to credit, market, liquidity, operational, compliance, group, management
and capital at risk as part of risk profile templates. In addition, the Committee has oversight on risks of subsidiaries
covered under the Group Risk Management Framework. The Risk Committee also reviews the Liquidity Contingency
Plan for the Bank and the threshold limits.
The Credit Committee of the Board, apart from sanctioning credit proposals based on the Bank’s credit authorisation
framework, reviews developments in key industrial sectors and the Bank’s exposure to these sectors as well as
to large borrower accounts and borrower groups. The Credit Committee also reviews the major credit portfolios,
non-performing loans, accounts under watch, overdues and incremental sanctions.
The Audit Committee of the Board provides direction to and monitors the quality of the internal audit function and also
monitors compliance with inspection and audit reports of Reserve Bank of India, other regulators and statutory auditors.
The Asset Liability Management Committee is responsible for managing liquidity and interest rate risk and reviewing
the asset-liability position of the Bank.