October 25, 2001

Performance Review - Half-year ended September 30, 2001: 26% increase in profit before tax

The Board of Directors of ICICI at its meeting held in Mumbai today, approved the audited accounts of ICICI (NYSE: IC) for the half-year ended September 30, 2001 (H1-2002). The Board also approved the unaudited consolidated accounts under Indian GAAP and considered the unaudited consolidated US GAAP financial statements of ICICI for H1-2002. In order to facilitate comparison with earlier years, the key highlights of the unconsolidated accounts of ICICI under Indian GAAP are given below.

Results - Indian GAAP

The profit before tax increased 26% to Rs. 742 crore in H1-2002 from Rs. 590 crore in the half-year ended September 30, 2000 (H1-2001). Provision for taxation increased to Rs. 134 crore (including Rs. 60 crore on account of deferred tax provision) in H1-2002 from Rs. 49 crore in H1-2001, due to the creation of deferred tax provision as per the accounting standard, which came into effect in the current year. The profit after tax increased 12% to Rs. 608 crore in H1-2002 from Rs. 541 crore in H1-2001.

The profit before tax increased 29% to Rs. 356 crore in the quarter ended September 30, 2001 (Q2-2002) from Rs. 277 crore in the quarter ended September 30, 2000 (Q2-2001). The profit after tax increased 11% to Rs. 282 crore in Q2-2002 from Rs. 254 crore in Q2-2001.

Asset Quality

ICICI's net NPA ratio was 5.2% at September 30, 2001 and net NPAs outstanding were Rs. 3,183 crore. ICICI has been able to restrict the level of NPAs due to its focussed efforts for recovery from existing NPA cases and increased monitoring of stress cases.

Rapid liberalisation and globalisation has changed the operating environment for Indian companies and necessitated restructuring of operations and credit facilities of some intrinsically viable companies. ICICI has focused on proactive restructuring of such viable companies to maximise their economic value, with appropriate contractual mechanisms to mitigate credit risk and safeguard lenders' interests. The Reserve Bank of India's guidelines issued in March 2001 provide a strong impetus to proactive and meaningful restructuring. During H1-2002, ICICI restructured assets aggregating Rs. 2,865 crore.

Capital Adequacy

ICICI's capital adequacy at September 30, 2001 was 14.8% including Tier2 capital adequacy of 9.5% and Tier-2 capital adequacy of 5.3% (including revaluation reserve as per RBI guidelines).

Unaudited Consolidated Accounts under Indian GAAP

Profit after tax increased by 21% to Rs. 691 crore in H1-2002 from Rs. 572 crore in H1-2001. Profit after tax increased by 16% to Rs. 320 crore in Q2-2002 from Rs. 275 crore in Q2-2001.

Unaudited Consolidated Accounts under US GAAP

Income before tax and cumulative effect of change in accounting principle increased 1% to Rs. 538 crore (US$ 112 million) in H1-2002 from Rs. 533 crore (US$ 111 million) in H1-2001. Net income after cumulative effect of change in accounting principle increased 11% to Rs. 501 crore (US$ 105 million) in H1-2002 from Rs. 450 crore (US$ 94 million) in H1-2001.

Summary Profit and Loss Statement (Indian GAAP Unconsolidated)                                                                     Rs. crore

Q2 2001  Q2 2002  H1 2001  H1 2002  FY 2001  Fund based income  2,018  2,164  4,018  4,371  8,211  Less : Interest and depreciation charges  1,725  1,840  3,350  3,676  6,912  Net fund based income  293  324  668  695  1,299  Add : Fees and commissions  169  173  268  339  522  Net income from operations  462  497  936  1,034  1,821  Less : Operating expenses  83  82  167  160  337  Profit from operations  379  415  769  874  1,484  Less : Provisions and write-offs for loans & debentures  99  81  214  191  608  Profit before income from investments and other income  280  334  555  683  876  Add : Dividend income  10  49  61  95  108  Add: Net capital gain / (loss)  (19)  (31)  (40)  (44)  344  Add: Other income  6  4  14  8  62  Profit before accelerated provisioning and tax  277  356  590  742  1,390  Profit before tax  277  356  590  742  577  Less : Provision for tax  23  741  49  1341  40  Profit after tax  254  282  541  608  537  Less: Extraordinary items2  -  (131)2  -  (131)  -   Appropriated from capital reserves  -  131  -  131  -  Preference dividend  1  -  18  -  18  Profit to equity holders  253  282  523  608  519

Summary Balance Sheet (Indian GAAP Unconsolidated)                                                                                        Rs. crore

Sep 30, 2000  Sep 30, 2001  Growth %  Mar 31, 2001  Net loans and debentures  52,072  57,440  10.3  56,002  Other Investments  3,683  5,320  44.4  4,404  Current assets  7,081  5,723  (19.2)  7,583  Leased assets  4,267  3,795  11.1  4,069  Other fixed assets  984  1,809  83.8  1,042  Miscellaneous expenditure  332  284  (14.3)  314  Total assets  68,419  74,371  8.7  73,414  Shareholders' equity and reserves  8,558  87,7773  2.6  7,973  Of which : Equity capital  785  785  -  785  Preference capital  350  350  -  350  Borrowings  54,996  59,669  8.5  59,835  Current & other liabilities  4,515  5,575  23.5  5,256  Total liabilities  68,419  74,371  8.7  73,414

Note :
1. Provision for taxation for H1-2002 includes deferred tax provision as per the accounting standard , which came into effect in the current year.

2. On October 16, RBI issued clarifications on the guidelines for the classification and valuation of investments. In compliance with the clarification, ICICI has effected changes in investment classification and the consequent impact on valuation. This has resulted in an additional charge to the Revenue Account relating to the period upto March 31, 2001 amounting to Rs. 131 crore which is disclosed as an extraordinary item. As per the accounting policy followed by ICICI in earlier years, realised profit on sale of investments has been credited to the Revenue Account and transferred from the Revenue Account to the Capital Reserve account before arriving at the disposable profit. In accordance with its accounting policy, ICICI has utilised this component of the Capital Reserve to transfer to the Revenue Account an amount equivalent to the extraordinary charge referred to above.

3. Shareholders' equity and reserves includes revaluation reserve of Rs. 716 crore.

4. The Board of ICICI Limited has approved the merger of ICICI Limited with ICICI Bank Limited. The merger will be subject to various approvals, including those of RBI, shareholders of ICICI and ICICI Bank and the High Courts of Mumbai and Gujarat. The Appointed Date of the merger will be March 31, 2002 or the date of final approval by RBI, whichever is later. The Board of ICICI Bank has also approved the merger.

For press queries please call Madhvendra Das at 91-22-653 6124 or email at das@icici.com

For investor queries please call Rakesh Jha at 91-22-653 8902 or Sandeep Guhagarkar at 91-22-653 6157 or email at ir@icici.com