1) During the year, the Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries); or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

2) There are no loans due by directors or other officers of the Company or any of them either severally or jointly with any other persons or amounts due by firms or private companies respectively in which any director is a partner or a director or a member.

3) There are no loans or advances in the nature of loans to promoters, directors, KMPs or related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person, that are:

(a) repayable on demand; or

(b) without specifying any terms or period of repayment

4) The Company provides ESOP Finance loans to its customers secured by the shares issued under ESOP plan. These loans have a tenure of 12 months from the date of disbursement and further extendable as agreed between both the parties, provided the interest dues have been fully serviced by the customer. During the year ended March 31, 2024, the Company has renewed ESOP finance loans to the tune of ^ 2,899.6 million (March 31, 2023: ^ 5,730.0 million) in the ordinary course of business.

1) The Company is not declared willful defaulter by any bank or financial institution or other lender.

2) During the year, the Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

3) Quarterly statements of current assets filed with banks for fund borrowed from those banks on the basis of security of current assets are in agreement with the books of accounts.

4) There are no charges or satisfaction of charges pending to be filed with Registrar of Companies.

(d) Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of ^ 5/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

During the year ended March 31, 2024, the Company has paid a final dividend for the year ended March 31, 2023 of ^ 9.25 per equity share as approved by its members at the Annual General Meeting held on August 29, 2023. The Board of Directors at its meeting held on October 16, 2023 had approved and paid an interim dividend of ^ 12.00 per equity share. The Board has approved payment of second interim dividend of ^ 17.00 per equity share for FY2024.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(g) There are no shares reserved for issue under options and contracts/commitments for the sale of shares or disinvestment.

(h) There are no shares allotted as fully paid up by way of bonus shares or allotted as fully paid up pursuant to contract without payment being received in cash, or bought back during the period of five years immediately preceding the reporting date.

(i) Capital management :

The Company’s objective for capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity, operating cash flows generated and short term debt. The Company is not subject to any externally imposed capital requirements.

Nature and purpose of reserve

(A) Securities premium

Securities premium is used to record the premium on issue of shares. It can be utilised only for limited purposes such as issuance of bonus shares, writing off the preliminary expenses in accordance with the provisions of the Companies Act, 2013.

(B) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

(C) Equity-settled share-based payment reserve

This reserve is created by debiting the statement of profit and loss account with the fair value of share options granted to the employees by the Company. On exercise of the options so granted, the reserve will move to share capital and securities premium and unvested portion if any, will be transferred to securities premium account.

(D) Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. It also includes actuarial gains and losses on defined benefit plans recognized in other comprehensive income (net of taxes).

(E) Exchange difference on translating the financial statements of a foreign operation

Where the functional currency of the foreign operation is different from the functional currency of the reporting entity, the translation differences are accounted in the other comprehensive income and disclosed under Other Equity.

(F) Deemed equity contribution from the parent company

This reserve is created by debiting the statement of profit and loss account with the fair value of share options granted to the employees by ICICI Bank Ltd ("parent company"). This reserve is in the nature of an equity contribution by the parent company in respect of options granted and not available for distribution to shareholders as dividend.

1 Excludes an amount of Nil (March 31, 2023: ^ 1.2 million) as claims paid directly by ICICI Prudential Life Insurance Company Limited pertaining to the employees of the Company.

2 Excludes an amount of ^ 0.7 million (March 31, 2023: ^ 15.6 million) received towards reimbursement of claims submitted by the employees under group health insurance policy. The Company has also received an amount of ^ 8.7 million (March 31, 2023: ^ 1.7 million) towards asset insurance claims.

3 Includes amount paid of ^ 111.8 million (March 31, 2023: ^ 138.3 million) towards royalty / license fees to the bank for use of “ICICI” trademarks.

4 The Company has a credit facility of ^ 10,000.0 million (March 31, 2023: ^ 10,000.0 million) from ICICI Bank Limited. The balance outstanding as on March 31, 2024 is Nil (March 31, 2023: 1,204.8).

The Company has contributed ^ 63.0 million (March 31, 2023: ^ Nil million) to ICICI Securities Employees Group Gratuity Fund during the year.

The Company has contributed ^ 209.0 million (March 31, 2023: ^ 159.0 million) to ICICI Foundation for Inclusive Growth for contribution towards CSR.

The Company has earned income from services and brokerage (commission and fees) Nil (March 31,2023: ^ 0.1 million) from ICICI Home Finance Company Limited Employee's Provident Fund.

During the year ended March 31, 2024 the Company has purchased securities amounting to Nil (Previous year ^ 22.6 million) from the key management personnel and close members of their family .

The compensation paid includes bonus paid, long term incentives paid and contribution to provident fund & gratuity fund.

The Directors and employees of the Company have received share options and stock units of ICICI Bank Limited and ICICI Securities Limited. The cost of the options and units granted to the Directors for the year ended March 31, 2024 is ^ 84.5 million (March 31, 2023 ^ 70.1 million).

During the year ended March 31, 2024, Nil employee stock options (March 31, 2023 Nil) were exercised by the key management personnel of the company.

The Company has paid Nil (March 31, 2023: ^ 0.5 million) to the close member of the family of director towards scholarship under employee benefit policy. The Company has received brokerage amounting to ^ 1.3 million (March 31, 2023: ^ 1.4 million) from the key management personnel and ^ 0.4 million (March 31, 2023: ^ 2.3 million) from close member of the family of key management personnel. The amount payable/(receivable) to / from key management personnel and their close members as on March 31, 2024 is ^ 0.5 million (March 31, 2023: ^ (0.1) million).

During the year ended March 31, 2024, the Company paid dividend amounting to ^ 0.4 million (March 31, 2023: ^ 0.7 million) to its KMPs and the close members of their family who are shareholders.

During the year ended March 31, 2024, the Company has paid ^ 8.1 million (March 31, 2023: ^ 7.0 million) sitting fees to the Directors of the Company. The Company also provided for commission for Financial Year 2024 amounting to ^ 4.6 million (March 31, 2023: ^ 4.0 million) to the Independent Directors of the Company.

^ 0.0 million indicates values are lower than ^ 0.1 million, where applicable.

As per Section 135 of The Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. During the year, the Company undertook twelve CSR initiatives including the two initiatives implemented through ICICI Foundation for Inclusive Growth (‘ICICI Foundation’) in specific areas, particularly vocational skills, livelihood enhancement and environment conservation initiatives.

The initiatives were implemented through implementing agencies (including ICICI Foundation) in the areas of skill development for sustainable livelihood, rain water harvesting, healthcare initiatives including preventive healthcare to support treatment and procurement of medical equipment to diagnose and treat critical illness such as cancer, to perform various complex surgeries of brain and spine, Computed Tomography(CT) Scan workstation upgradation to detect various diseases and injuries, support last mile surgery and treatment of needy children, to support cataract surgery for needy elderly patients and support for providing access to drinking water and sanitation facilities in rural households.

Managing organic waste and sludge through scaling up waste to value technologies was undertaken as an ongoing environment initiative. The Company contributed to Technology Business Incubator to support startups working in leveraging technology to provide solutions in various healthcare domains such as Cancer, Parkinson’s Diseases, artificial hands with senses and splints as well as environment initiatives such as treatment of water and carbon offset projects.

Pursuant to Rule 8 (3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, every company meeting the applicability threshold of having average CSR obligation of Rs. 10 Crore or more in pursuance of sub-section (5) of Section 135 of the Companies Act, 2013, in the three immediately preceding financial years, was required to undertake impact assessment, through an independent agency, of its CSR projects having outlays of Rs. 1 Crore or more and which had completed not less than one year. During the year, the Company undertook impact assessment of its’ five eligible CSR projects.

B. There has been a Supreme Court (SC) judgement dated February 28, 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. There are interpretative aspects related to the Judgement including the effective date of application. The Company will continue to assess any further developments in this matter for the implications on financial statements, if any.

Note:

i. It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/authorities

ii. The Company’s pending litigations comprise of claims against the Company pertaining to proceedings pending with Income Tax, Sales tax/VAT, Service Tax, Goods and Service tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its standalone financial statements.

iii. The Company does not expect any reimbursements in respect of the above contingent liabilities.

34 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is ^ 1,061.0 million (March 31, 2023: ^ 744.0 million).

35 Micro, Small and Medium enterprises

There are no micro, small and medium enterprises, to which company owes dues, as at March 31, 2024. This information is required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act, 2006’) that has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

36 Lease

The Company has recognised ^ 2.2 million towards short term lease (March 31, 2023: Nil) and ^ 3.6 million towards low value assets (March 31, 2023: ^ 2.2 million) during the year ended March 31, 2024.

During the financial year, the Company has not revalued any of its Right of Use assets.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments of ^ 448.8 million (March 31, 2023: ^ 412.7 million) have been classified as cash flow generated from financing activity.

Company as a lessor

At the inception of the lease the Company classifies each of its leases as either an operating lease or a finance lease. The Company recognises lease payments received under operating leases as income on a straight- line basis over the lease term. The company has recognised Nil (March 31, 2023: Nil) towards income from sub-lease.

A. Employees Stock Option Scheme, 2017 (ESOS- 2017)

The Company has formulated the ICICI Securities Limited - Employees Stock Option Scheme, 2017 (ESOS- 2017). This scheme envisaged grant of share options to eligible employees to enhance employee motivation, to enable employees to participate in the long term growth and financial success of the Company and to act as a retention mechanism, by enabling employee participation in the business as an active stakeholder to usher in an 'owner-manager' culture.

The Members of the Company had, at the Extra-Ordinary General Meeting held on December 8, 2017, approved the ICICI Securities Limited - Employees Stock Option Scheme, 2017 (ESOS- 2017) Scheme. Pursuant to Regulation 12 of the SEBI Regulations, the Company could not make any fresh grant which involved allotment or transfer of shares to its employees under any scheme formulated prior to its initial public offer and listing of its equity shares, unless such scheme is ratified by the shareholders of the Company. The equity shares of the Company were listed on National Stock Exchange of India Limited and BSE Limited with effect from April 4, 2018 and accordingly, the Scheme along with some amendments, was ratified by the shareholders of the Company at the Annual General Meeting held on August 30, 2018. The amendments were done to align the Scheme to ICICI Group norms and market practice. No grants had been made under the Scheme before its ratification.

The scheme is compliant with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014, options are granted by the Board Governance, Remuneration & Nomination Committee (BGRNC) and approved by the Board.

Eligibility as defined in the scheme “ESOS - 2017” means (i) permanent employee of the Company who has been working in India or outside India, or (ii) a director of the Company whether a whole time director or not but excluding an independent director, or (iii) employees of the Subsidiaries of the Company (the ‘Subsidiaries’), or (iv) employees of the Holding Company of the Company (the ‘Holding Company’). Under this scheme, the maximum number of options granted to any eligible employee/director in a financial year shall not, except with the approval of the Board of Directors of ICICI Securities Limited, exceed 0.10% of the issued shares of the Company at the time of grant of options and the aggregate of all such options granted to the eligible employees shall not exceed 5% of the aggregate of the number of issued shares of the Company, from time to time, on the date(s) of grant of option(s). The options granted but not vested and the options vested but not exercised in accordance with this Scheme or the Award Confirmation or the Vesting Confirmation shall terminate and the shares covered by such terminated options shall become available for future grant under this Scheme. The options granted represents a European call option that provides a right but not an obligation to the employees of the Company to exercise the option by paying the strike price at any time on completion of the vesting period, subject to an outer boundary on the exercise period.

The expected price volatility is based on the historic volatility (based on the remaining life of units), adjusted for any expected changes to future volatility due to publicly available information.

During the year, ^ 292.4 million was charged to the statement of profit and loss in respect of equity-settled share-based payment transactions (March 31, 2023: ^ 231.5 million).

B. ICICI Bank Employee Stock Option Scheme

During the year, ^ 8.6 million was charged to the statement of profit and loss in respect of equity-settled share-based payment transactions (March 31, 2023: ^ 16 million). This expense, which was computed from the fair values of the share-based payment transactions when granted, arose under employee share options made in accordance with the reward structure of ICICI Bank Limited.

The details of the options granted to eligible employees of the Company by ICICI Bank Limited are as follows:

In terms of the ESOS of the Parent Bank, the options are granted to eligible employees and Directors of the Bank and its subsidiaries. As per the ESOS, as amended, the maximum number of options granted to any eligible employees/Directors in a financial year shall not exceed 0.05% of the Parent Bank’s issued equity shares at the time of the grant of the options and aggregate of all such options shall not exceed 10% of the aggregate number of the Parent Bank’s issued equity shares on the date(s) of the grant of options in line with SEBI Regulations.

Options granted prior to March 2014, vested in a graded manner over a four-year period with 20%, 20%, 30% and 30% of the grants vesting in each year, commencing from the end of 12 months from the date of grant. Options granted after March 2014, vest in a graded manner over a three-year period with 30%, 30% and 40% of the grant vesting in each year, commencing from the end of 12 months from the date of grant.

In April 2016, the Parent bank modified the exercise period from 10 years from the date of grant or five years from the date of vesting, whichever is later, to 10 years from the date of vesting of options. In June 2017, the exercise period was further modified by the Parent Bank to not exceed 10 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee of the Parent Bank to be applicable for future grants. In May 2018, exercise period was further modified by the Parent Bank to not exceed 5 years from the date of vesting of options as may be determined by the Board Governance, Remuneration & Nomination Committee of the Parent Bank to be applicable for future grants.

C. Employees Stock Unit Scheme, 2022 (ESUS-2022)

The Company has formulated the ICICI Securities Limited - Employees Stock Units Scheme, 2022 (ESUS - 2022). This scheme envisaged grant of share units to eligible employees to enhance employee motivation, to enable employees to participate in the long-term growth and overall success of the Company and to act as a retention mechanism, by enabling employee participation in the business as an active stakeholder to usher in an 'owner-manager' culture.

Pursuant to the recommendation of the Board of Directors in its Meeting held on July 21, 2022, the Members of the Company at the Annual General Meeting held on August 26, 2022 approved the ICICI Securities Limited - Employees Stock Unit Scheme - 2022. No grants had been made under the Scheme before it was approved by the Members of the Company.

The scheme is compliant with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. Pursuant to SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, units are granted by the Nomination & Remuneration Committee and approved by the Board.

Eligibility as defined in the scheme “ESUS - 2022" means (i) an employee as designated by the Company, who is exclusively working in India or outside India, but does not include (1) Managing Director & CEO; (2) Executive Directors; (3) Whole-time Directors; OR (ii) all employees of the Company’s Subsidiaries who are exclusively working in India or outside of India, which are aligned as a key delivery engine of the Company’s core operating franchise and in essence compliment the business delivery of the Company including but not limited to ICICI Securities Inc. . The maximum number of Units granted to an individual Eligible Employee in a year shall not exceed 1,00,000 Units (One Lakh). When Shares are issued pursuant to the Exercise of a Unit, the maximum number of Shares that can be issued under the Unit Scheme will stand reduced to the extent of such Shares being issued. The Units Granted but not Vested and the Units Vested but not Exercised in accordance with this Unit Scheme or the Award Confirmation or the Vesting Confirmation shall terminate and the Shares covered by such terminated Units shall become available for future Grant under this Unit Scheme.

Prior approval of shareholders of the Company in the general meeting by passing special resolution shall be obtained in case the Grant of Units to any Eligible Employee, in any one financial year, is equal to or exceeding 1% (one percent) of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of Grant of Units

41 Segment Reporting

The Company also prepares the consolidated financial statements. In accordance with Ind AS 108 on Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

42 Employee benefits Defined Contribution Plan

The Company makes contributions towards Provident Fund, National Pension Scheme, and Employee State Insurance Scheme which are defined contribution retirement benefit plans for qualifying employees.

Amount of ^ 278.8 Million (March 31, 2023: ^ 243.5 Million) is recognised as expenses, which is classified as a part of “Contribution to gratuity / provident and other funds”. (Refer Note No. 28)

Defined Benefit Plan

Gratuity

Governance of the Plan:

The Company has setup an income tax approved irrevocable trust fund to finance the plan liability. The trustees of the trust fund are responsible for the overall governance of the plan.

Funding arrangements and Policy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested. The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively. There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. Company’s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan. The expected contribution payable to the plan next year is ^ 40 million.

The Company is engaged in the business of retail and institutional broking, distribution of financial products and investment banking. In accordance with Ind AS 115, Revenue from Contracts with Customers, the revenue is accounted in the following manner for each head:

A) Brokerage income:

The Company provides trade execution and settlement services to the customers in retail and institutional segment. There is only one performance obligation of execution of the trade and settlement of the transaction which is satisfied at a point in time. The brokerage charged is the transaction price and is recognised as revenue on trade date basis. Related receivables are generally recovered in a period of 2 days or 1 day as per the settlement cycle. Amount not recovered and which remain overdue for a period exceeding 90 days, are provided for.

B) Income from service:

Income from service consists of income from distribution of financial products and income from investment banking activities (advisory income).

1) Distribution of financial products:

The Company distributes various financial products and other services to the customers on behalf of third party i.e. the Company acts as an intermediary for distribution of financial products and services. The Company executes contracts with the Principal, viz. AMC’s, Mutual Funds, Banks, Insurance Companies etc. to acquire customers for its products. As a consideration, the Company earns commission income from the third parties for the distribution of their financial products. The commission is accounted net of claw back if any, due to non-fulfilment of contract by the customer with the principal. The customer obtains control of the service on the date when customer enters into a contract with principal and hence subscription or contract date is considered as the point in time when the performance obligation has been satisfied. In case of continuing services, the same are recognised over a period of time.

The Company recognizes the revenue on completion of the performance obligation either on point in time or over a period of time, as the case may be.

In case of third party financial products, transaction price is determined as per contract and mutual terms agreed between the parties. The commission is a percentage of transaction value.

The distribution fee earned from the following products contributed to a major proportion of overall fee earned from distribution of financial products in current financial year:

i. Mutual funds

ii. Life insurance policies

iii. Portfolio management products

2) Advisory income:

The Company provides investment banking services to its customers and earns revenue in the form of advisory fees on issue management services, mergers and acquisitions, debt syndication, sale of business etc.

In case of these advisory transactions, the performance obligation and its transaction price is enumerated in contract with the customer. For arrangements with a fixed term, the Company may commit to deliver services in the future. Revenue associated with these remaining performance obligations typically depends on the occurrence of future events or underlying asset values, and is not recognized until the outcome of those events or values are known. The right to receive the fees is based on the milestones defined in accordance with the terms of the contracts entered into between the company and the counterparty which also defines its performance obligation. In case of contracts, which have a component of success fee or variable fee, the same is considered in the transaction price when the uncertainty regarding the consideration is resolved.

The Company has used practical expedient and have not disclosed the amount of remaining performance obligations since its contract with customers have duration of less than one year.

Contract Liability relates to payments received in advance of performance under the contract. Contract Liabilities are recognized as revenue on completing the performance obligation.

Fair value hierarchy:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.

The investments included in level 1 of fair value hierarchy have been valued using quoted prices for instruments in an active market. The investments included in level 2 of fair value hierarchy have been valued using valuation techniques based on observable market data. The investments included in Level 3 of fair value hierarchy have been valued using the income approach and breakup value to arrive at their fair value. There is no movement from between Level 1, Level 2 and Level 3. There is no change in Inputs use for measuring Level 3 fair value.

Financial risk management Risk management framework

The Company has established a comprehensive system for risk management and internal controls for all its businesses to manage the risks that it is exposed to. The objective of its risk management framework is to ensure that various risks are identified, measured and mitigated and also that policies, procedures and standards are established to address these risks and ensure a systematic response in the case of crystallisation of such risks.

The Company has exposure to the following risk arising from financial instruments:

a) Credit risk

b) Liquidity risk

c) Market risk

The Company has established various policies with respect to such risks which set forth limits, mitigation strategies and internal controls to be implemented by the three lines of defence approach provided below. The Board oversees the Company’s risk management and has constituted a Risk Management Committee (“RMC”), which frames and reviews risk management processes and controls.

The risk management system features a “three lines of defence” approach:

1. The first line of defence comprises its operational departments, which assume primary responsibility for their own risks and operate within the limits stipulated in various policies approved by the Board or by committees constituted by the Board.

2. The second line of defence comprises specialised departments such as risk management and compliance. They employ specialised methods to identify and assess risks faced by the operational departments and provide them with specialised risk management tools and methods, facilitate and monitor the implementation of effective risk management practices, develop monitoring tools for risk management, internal control and compliance, report risk related information and promote the adoption of appropriate risk prevention measures.

3. The third line of defence comprises the internal audit department. They monitor and conduct periodic evaluations of the risk management, internal control and compliance activities to ensure the adequacy of risk controls and appropriate risk governance, and provide the Board with comprehensive feedback.

a) Credit risk:

It is risk of financial loss that the Company will incur a loss because its customer or counterparty to financial instruments fails to

meet its contractual obligation.

The Company’s financial assets comprise of Cash and bank balance, Securities for trade, Trade receivables, Loans, Investments

and Other financial assets which comprise mainly of deposits and unbilled revenues.

The maximum exposure to credit risk at the reporting date is primarily from Company’s trade receivable and loans.

Trade Receivables:

The Company has followed simplified method of ECL in case of Trade receivables and the Company recognises lifetime expected losses for all trade receivables that do not constitute a financing transaction. At each reporting date, the Company assesses the impairment requirements.

Based on the industry practices and business environment in which the entity operates, management considers that the trade receivables are in default if the payment is 90 days overdue. Out of the total trade receivables of ^ 9,810.1 million (March 31, 2023: ^ 7,865.3 million), ^ 220.9 million (March 31, 2023: ^ 132.7 million) are overdue for a period in excess of 90 days. Probability of default (PD) on this balance is considered at 100% and treated as credit impaired.

Loans: Loans comprise of margin trade funding and ESOP funding for which a staged approach is followed for determination of ECL.

Stage 1: All Open positions in the MTF and ESOP loan book are considered as stage 1 assets for computation of expected credit loss. Exposure at default (EAD) for stage 1 assets is computed considering different scenarios of market movements based on an analysis of historical price movements of the index and macro-economic environment.

Stage 2: Exposures under stage 2 include dues upto 30 days pertaining to principal amount on closed positions and interest on all open positions of MTF and ESOP loan book.

Stage 3: Exposures under stage 3 include dues past 30 days pertaining to principal amount on closed positions and interest on all open positions of MTF and ESOP loan book.

Based on historical data, the company assigns PD to stage 1 and stage 2 and applies it to the EAD to compute the ECL. For Stage 3 assets PD is considered as 100%

Other financial assets considered to have a low credit risk:

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks with high credit ratings assigned by international and domestic credit rating agencies. Stock in trade comprise of Quoted Equity instruments, Bonds, Mutual Funds and Commercial papers which are market tradeable. Other financial assets include deposits for assets acquired on lease and with qualified clearing counterparties and exchanges as per the prescribed statutory limits.

b) Liquidity risk

Liquidity represents the ability of the Company to generate sufficient cash flow to meet its financial obligations on time, both in normal and in stressed conditions, without having to liquidate assets or raise funds at unfavourable terms thus compromising its earnings and capital.

Liquidity risk is the risk that the Company may not be able to generate sufficient cash flow at reasonable cost to meet expected and / or unexpected claims. It arises in the funding of lending, trading and investment activities and in the management of trading positions.

The Company aims to maintain the level of its cash and cash equivalents and other highly marketable investments at an amount in excess of expected cash outflow on financial liabilities.

Funds required for short period is taken care by borrowings through issuing Commercial paper and utilizing overdraft facility from ICICI Bank.

The table below summarises the maturity profile of the undiscounted cash flows of the Company’s financial assets and liabilities as at March 31, 2024.

Market risk arises when movements in market factors (foreign exchange rates, interest rates, credit spreads and equity prices) impact the Company’s income or the market value of its portfolios. The Company, in its course of business, is exposed to market risk due to change in equity prices, interest rates and foreign exchange rates. The objective of market risk management is to maintain an acceptable level of market risk exposure while aiming to maximize returns. The Company classifies exposures to market risk into either trading or non-trading portfolios. Both the portfolios are managed using the following sensitivity analyses:

i) Other Risk (Equity Price Risk)

ii) Interest Rate Risk

iii) Currency Risk

i) Equity Price Risk

The Company’s exposure to equity price risk arises primarily on account of its proprietary positions and on account of margin-based positions of its clients in equity cash and derivative segments.

The Company’s equity price risk is managed in accordance with its Corporate Risk and Investment Policy (CRIP) approved by its Risk Management Committee. The CRIP specifies exposure limits and risk limits for the proprietary desk of the Company and stipulates risk-based margin requirements for margin-based trading in equity cash and derivative segment by its clients.

Movement of 17.74% represents highest single day market (nifty) movement in last 15 years. The Company, based on past experience, is able to recover 66% of the client’s default therefore the loss on client’s position included in the above figures is post considering recoveries from clients.

ii) Interest Rate Risk

The Company’s exposure to interest rate risk arises primarily on account of its proprietary positions (Refer note 5 on securities for trade) and on account of margin based positions of its clients in exchange traded interest rate derivatives on government securities.

The Company’s interest rate risk is managed in accordance with its CRIP approved by its Risk Management Committee. The CRIP specifies exposure limits and risk limits for the proprietary desk of the Company and stipulates risk-based margin requirements for margin based trading in interest rate derivatives by its clients.

Shift of 2.06% represents highest 10 consecutive days’ yield movement in last 15 years among AAA/AA/AA /AA- rated debt instruments with 5-year maturity period.

The non-traded Financial Assets and liabilities are fixed rate instruments and are valued at amortised cost. Any shifts in yield curve will not impact their carrying amount and will therefore not have any impact on the Company’s statement of profit and loss.

iii) Foreign Exchange Risk / Currency Risk

The Company’s exposure to currency risk arises primarily on account of its proprietary positions and on account of margin positions of its clients in exchange traded currency derivatives.

The fluctuations in foreign currency may also affect statement of profit and loss, other comprehensive income and equity as the Company also operates in US and Singapore through its subsidiaries.

The Company’s currency risk is managed in accordance with its CRIP, approved by its Risk Management Committee. The CRIP specifies gross open position limit and risk limits for the proprietary desk of the Company and stipulates risk-based margin requirements for margin based trading in currency derivatives by its clients.

The below sensitivity depicts a scenario where a severe movement in foreign exchange rates, everything else remaining constant, would result in following impact for both proprietary positions and client positions.

Movement of 7.23% represents highest single day price movement in last 15 years across currency pairs. The Company, based on past experience, is able to recover 66% of the client’s default therefore the loss on client’s position included in the above figures is post considering recoveries from clients.

The table below indicates the currencies to which the Company had significant exposure at the end of the reported periods for the non-traded component. The analysis calculates the effect of a reasonably possible movement of the currency rate against the INR (all other variables being constant) on the statement of profit and loss.

iv) Commodity Risk

The Company’s exposure to commodity risk arises primarily on account of margin positions of its clients in exchange traded commodity derivatives.

The Company’s commodity risk is managed in accordance with its CRIP, approved by its Risk Management Committee. The CRIP stipulates risk-based margin requirements for margin based trading in commodity derivatives by its clients.

46 The company does not have any transactions with companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act,1956.

47 Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios, is not applicable to the Company as it is in not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.

48 The Board of Directors of the Company, at their Meeting held on June 29, 2023, approved the draft scheme of arrangement amongst ICICI Bank Limited and ICICI Securities Limited and their respective shareholders for delisting of equity shares of the Company ("Scheme"), pursuant to which ICICI Bank Limited (Holding Company) will issue equity shares of the Holding Company to the public shareholders of the Company in lieu of cancellation of their equity shares in the Company, thereby making the Company a wholly owned subsidiary of the Holding Company, in accordance with Chapter VI, Part C, Regulation 37 of the SEBI (Delisting of Equity Shares) Regulations, 2021 and Section 230 of the Companies Act, 2013, subject to receipt of requisite approvals. During the quarter, National Company Law Tribunal (‘NCLT’), Mumbai Bench directed the Company to, inter alia, convene and hold meeting of equity shareholders of the Company, through Video Conference/Other Audio Visual Means which was duly held on March 27, 2024 and based on the Scrutinizer’s reports dated March 28, 2024, the resolution for approval of the arrangement embodied in the Scheme as set out in the Notice dated February 20, 2024 convening the Meeting was passed with requisite statutory majority as prescribed under the provisions of the Companies Act, 2013 and the applicable SEBI regulations. We are in the process of completing the requisite remaining procedural requirements to give effect to the arrangements envisaged under the scheme.

49 Subsequent event - Proposed dividend

The Board of Directors at its meeting held on April 18, 2024, has approved payment of second interim dividend of ^ 17.00 per equity share (on face value of ^ 5.00 per equity share) for FY 2024. In terms of Ind AS 10 “Events after the Reporting Period”, the company has not recognised second interim dividend (including tax, if any) as a liability at the end of the reporting period.

50 Recent pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

51 Events after reporting date

There have been no events after the reporting date that require disclosure in these financial statements.