ICICI Bank 2014 Annual Report Download - page 139

F51
40. Small and micro enterprises
Under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 which came into force from October
2, 2006, certain disclosures are required to be made relating to enterprises covered under the Act. During the year ended
March 31, 2014, the amount paid after the due date to vendors registered under the MSMED Act, 2006 was ` 0.9 million
(March 31, 2013: ` 6.0 million). An amount of ` 0.01 million (March 31, 2013: ` 0.2 million) has been charged to profit &
loss account towards accrual of interest on these delayed payments.
41. Penalties/fines imposed by RBI and other banking regulatory bodies
The penalty imposed by RBI and other banking regulatory bodies during the year ended March 31, 2014 was ` 10.0
million (March 31, 2013: ` 3.1 million).
During the year ended March 31, 2014, RBI imposed a penalty of ` 10.0 million, in exercise of powers vested with it under
the provisions of section 47(A)(1)(c) read with section 46(4)(i)of the Banking Regulation Act, 1949 and subsection (3) of
section 11 of Foreign Exchange Management Act, 1999 (FEMA) on operating matters pertaining to Know Your Customer
(KYC).The Bank has paid this penalty to RBI.
42. Disclosure on Remuneration
Compensation policy and practices
(A) Qualitative disclosures
a) Information relating to the composition and mandate of the Remuneration Committee
The Board Governance, Remuneration & Nomination Committee (BGRNC) comprises three independent
Directors. The functions of the Committee include recommendation of appointments of Directors to the Board,
evaluation of the performance of the Whole Time Directors (WTDs) (Including the Managing Director & CEO) on
predetermined parameters, recommendation to the Board of the remuneration (including performance bonus
and perquisites) to WTDs, approval of the policy for and quantum of bonus payable to the members of the
staff, framing of guidelines for the Employees Stock Option Scheme (ESOS) and recommendation of grant of
the Bank’s stock options to employees and WTDs of the Bank and its subsidiary companies.
b) Information relating to design and structure of remuneration processes and the key features and objectives
of remuneration policy
The Bank has under the guidance of the Board and the BGRNC, followed compensation practices intended to
drive meritocracy within the framework of prudent risk management. This approach has been incorporated in
the Compensation Policy approved by the Board on January 31, 2012, pursuant to the guidelines issued by RBI.
The key elements of the Bank’s compensation practices are:
 • Effective governance of compensation: The BGRNC has oversight over compensation. The Committee
defines Key Performance Indicators (KPIs) for WTDs and equivalent positions and the organisational
performance norms for bonus based on the financial and strategic plan approved by the Board. The KPIs
include both quantitative and qualitative aspects. The BGRNC assesses organisational performance as
well as the individual performance for WTDs and equivalent positions. Based on its assessment, it makes
recommendations to the Board regarding compensation for WTDs and equivalent positions and bonus for
employees.
 • Alignment of compensation philosophy with prudent risk taking: The Bank seeks to achieve a prudent
mix of fixed and variable pay, with a higher proportion of variable pay at senior levels and no guaranteed
bonuses. Compensation is sought to be aligned to both financial and non-financial indicators of performance
including aspects like risk management and customer service. In addition, the Bank has an employee stock
option scheme aimed at aligning compensation to long term performance through stock option grants that
vest over a period of time. Compensation of staff in financial and risk control functions is independent of
the business areas they oversee and depends on their performance assessment.
c) Description of the ways in which current and future risks are taken into account in the remuneration
processes including the nature and type of the key measures used to take account of these risks.
The Board approves the risk framework for the Bank and the business activities of the Bank are undertaken
within this framework to achieve the financial plan. The risk framework includes the Bank’s risk appetite, limits
framework and policies and procedures governing various types of risk. KPIs of WTDs & equivalent positions,
forming part of the Accounts
schedules