financials auditors’report TOTHEMEMBERSOFICICILIMITED WehaveauditedtheattachedBalanceSheetofICICILimitedasatMarch31,2000andtheannexedRevenue Accountfortheyearendedonthatdateandreportthat: (1) AsrequiredbytheManufacturingandOtherCompanies(Auditor’sReport)Order,1988issuedbytheCompany LawBoardintermsofSection227(4A)oftheCompaniesAct,1956,weencloseintheAnnexureastatement onthemattersspecifiedinparagraphs4and5ofthesaidOrdertotheextentapplicabletotheCompany. (2) FurthertoourcommentsintheAnnexurereferredtoinparagraph(1)above: (a) wehaveobtainedalltheinformationandexplanationswhich,tothebestofourknowledgeandbelief, werenecessaryforthepurposesofouraudit; (b) inouropinion,properbooksofaccountasrequiredbylawhavebeenkeptbytheCompanysofaras appearsfromourexaminationofthebooks; (c) theBalanceSheetandRevenueAccountdealtwithbythisreportareinagreementwiththebooksof accountoftheCompany; (d) inouropinion,theBalanceSheetandRevenueAccountdealtwithbythisreportareincompliancewith theAccountingStandardsreferredtoinSection211(3C)oftheCompaniesAct,1956,insofarastheyare applicabletotheCompany; (e) inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thesaid accountsreadwiththenotesthereon,givetheinformationrequiredbytheCompaniesAct,1956,inthe mannersorequiredandgiveatrueandfairview: (i) inthecaseoftheBalanceSheet,ofthestateofaffairsoftheCompanyasatMarch31,2000;and (ii) inthecaseoftheRevenueAccount,oftheprofitfortheyearendedonthatdate. ForN.M.RAIJI&CO. ForS.B.BILLIMORIA&CO. CharteredAccountants CharteredAccountants A.R.GANDHI S.J.MERCHANT Partner Partner Mumbai,April28,2000 F2 annexure totheAuditors’Report Referredtoinparagraph1ofourReportofevendate 1. TheCompanyhasmaintainedproperrecordsshowingfullparticularsincludingquantitativedetailsandsituationoffixed assets.TheCompanyhasaprogrammeofphysicallyverifyingallfixedassets,otherthanleasedassets,inayear,which, accordingtous,isreasonable.Thesaidfixedassetshavebeenaccordinglyverifiedbythemanagement.Nomaterial discrepancieshavebeennoticedonsuchphysicalverification.Inrespectoftheleasedassets,theverificationisby periodicphysicalcheckatclientlocationandobtainingconfirmationsfromlessees;thefrequencyofphysicalcheckis determinedbasedonassetvalues.Theaboveprocedureisconsideredreasonable,takingintoaccounttheconstraintsin arrangingforphysicalverificationoftheassetslocatedatthepremisesofthevariouslessees. 2. Noneofthefixedassetshavebeenrevaluedduringtheyear. 3. Aspertheinformationfurnished,theCompanyhasinthenormalcourseofitsbusinessgrantedloans,securedorunsecured, tocompanies,firmsorotherpartieslistedintheregistermaintainedpursuanttotheprovisionsofSection301ofthe CompaniesAct,1956.TherateofinterestandothertermsareprimafacienotprejudicialtotheinterestoftheCompany. WehavebeenfurtherinformedthattherearenocompaniesunderthesamemanagementwithinthemeaningofSection 370(1-B)oftheAct. 4. Aspertheinformationfurnished,theCompanyhasinthenormalcourseofitsbusiness,takenunsecuredloansfrom companies,firmsorotherpartieslistedintheregistermaintainedpursuanttotheprovisionsofSection301ofthe CompaniesAct,1956.Wehavebeenfurtherinformedthattherearenocompaniesunderthesamemanagementwithin themeaningofSection370(1-B)oftheAct. 5. ThepartiestowhomloansandadvancesinthenatureofloanshavebeengrantedbytheCompany,aregenerallyrepaying theprincipalamountsasstipulatedandarealsogenerallyregularinthepaymentofinterest.Incases,whereinstalments ofprincipaland/orinterestarenotreceived,itisthepracticeoftheCompanytoreviewtheoperationsoftheborrowerand onthebasisofsuchreview,totakesuchstepsasareconsideredreasonableinthecircumstances,havingregardtothe overallobjectivesoftheCompany.Normally,thesestepsconsistofrephasingtheloanamortizationscheduleand,in somecases,financialrestructuringtowardsfinalrecoveryorresortingtolegalremediesforrecovery. TheCompanyhasalsograntedloanstoemployees,whoarerepayingtheprincipalamountsasstipulatedandarealso regularinthepaymentofinterest. 6. Inouropinionandaccordingtotheinformationandexplanationsgiventous,thereareadequateinternalcontrolprocedures whicharecommensuratewiththesizeoftheCompanyandthenatureofitsbusinesswithregardtothepurchaseofplant andmachinery,equipmentandotherassets,includingleasedassets. 7. TheprovisionsofSection58AoftheCompaniesAct,1956arenotapplicabletotheCompany.Further,ReserveBankof IndiahasexemptedtheCompanyfromcompliancewiththeprovisionsoftheNon-BankingFinancialCompanies(Reserve Bank)Directions,1977subjecttocertainconditionswhichhavebeencompliedwith. 8. Inouropinion,theCompanyhasaninternalauditsystemwhichisbroadlycommensuratewiththesizeoftheCompany andthenatureofitsbusiness. 9. AspertherecordsoftheCompany,theprovidentfunddueshavebeenregularlydepositedwiththeappropriateauthorities duringtheyear. 10. AspertherecordsoftheCompanyandtheinformationandexplanationsgiventous,noundisputedamountspayablein respectofIncomeTax,SalesTaxandCustomsDutyareoutstandingasatthelastdayoftheyearforaperiodofmorethan sixmonthsfromthedatetheybecamepayable. 11. AspertherecordsoftheCompanyandtheinformationandexplanationsgiventous,nopersonalexpenseshavebeen chargedtoRevenueAccountotherthanthosepayableundercontractualobligationsorinaccordancewithgenerally acceptedbusinesspractice. 12. InrelationtotheserviceactivitiesoftheCompany,thereexistsareasonableinternalcontrolsystemcommensuratewith thesizeoftheCompanyandthenatureofitsbusiness. 13. Adequatedocumentsandrecordsaregenerallymaintainedincases,wheretheCompanyhasgrantedloansandadvances onthebasisofsecuritybywayofpledgeofshares,debenturesandothersimilarsecurities. 14. InrespectoftheinvestmentsanddealingsbytheCompanyinshares,securities,debenturesandotherMoneyMarket instrumentsetc.,properrecordshavebeenmaintainedofthetransactionsandcontractsandtimelyentrieshavebeen madetherein;alltheshares,securities,debenturesandotherinvestmentsareheldinthenameoftheCompanyexcept forsecuritiesheldasstock-in-tradeandsuchinvestmentsacquireduponamalgamationandtotheextentofexemptions grantedunderSection49oftheCompaniesAct,1956. ForN.M.RAIJI&CO. ForS.B.BILLIMORIA&CO. CharteredAccountants CharteredAccountants A.R.GANDHI S.J.MERCHANT Partner Partner Mumbai,April28,2000 F3 balancesheet asatMarch31,2000 ScheduleNo. (Rupeesinmillion) March31,1999 I. SOURCESOFFUNDS (1) Shareholders’Funds: A. ShareCapital ............................................................................... I 20,907.2 18,627.5 B. ReservesandSurplus ................................................................. II 72,394.7 46,550.9 93,301.9 65,178.4 (2) LoanFunds: UnsecuredLoans: III A. RupeeLoans .............................................................................. 415,309.0 376,373.8 B. ForeignCurrencyLoans .............................................................. 93,504.0 100,211.7 508,813.0 476,585.5 602,114.9 541,763.9 II. APPLICATIONOFFUNDS (1) Investments ....................................................................................... IV 105,598.0 82,901.8 (2) LoansandOtherCreditFacilities ..................................................... V 408,147.5 365,181.9 (3) CurrentAssets,LoansandAdvances: VI A. CurrentAssets– (a) InterestAccruedonLoans................................................ 6,988.6 6,644.0 (b) OtherAccruedandOutstandingIncome ......................... 9,507.9 7,653.5 (c) BillsReceivable ................................................................. 104.9 511.5 (d) SecuritiesheldasStock-in-trade ...................................... 17,679.4 16,163.2 (e) StockonHireunderHirePurchaseAgreements ............. 827.9 2,436.4 (f) SundryDebtors ................................................................. 1,035.9 1,215.7 (g) CashandBankBalancesandDeposits ............................ 35,325.6 39,610.9 71,470.2 74,235.2 B. LoansandAdvances 20,236.8 22,611.5 91,707.0 96,846.7 Less: CurrentLiabilitiesandProvisions: VII A. CurrentLiabilities .............................................................. 40,283.7 33,128.5 B. Provisions .......................................................................... 11,497.0 10,574.7 51,780.7 43,703.2 NetCurrentAssetsandAdvances ..................................................... 39,926.3 53,143.5 (4) FixedAssets ....................................................................................... VIII 44,986.9 37,342.8 (5) MiscellaneousExpenditure .............................................................. IX 3,456.2 3,193.9 602,114.9 541,763.9 NotesFormingPartoftheAccounts ........................................................ XIII SignificantAccountingPolicies ................................................................. XIV PerourReportattached ForandonbehalfoftheBoard ForN.M.RAIJI&CO. ForS.B.BILLIMORIA&CO. N.VAGHUL CharteredAccountants CharteredAccountants Chairman K.V.KAMATH A.R. GANDHI S.J. MERCHANT ManagingDirector&CEO Partner Partner LALITAD.GUPTE JointManagingDirector&COO JYOTINMEHTA SHALINIS.SHAH S.H.BHOJANI JointGeneralManager GeneralManager DeputyManagingDirector Mumbai &CompanySecretary April28,2000 F4 revenueaccount fortheyearendedMarch31,2000 ScheduleNo. (Rupeesinmillion) 1998-99 NetIncomefromOperations: X (A) IncomefromOperations— (a) FromLoansandOtherCreditFacilities .................................................... 51,824.7 47,451.4 (b) FromInvestments .................................................................................... 12,067.0 9,549.6 (c) FromLeasingandOtherOperations........................................................ 17,223.1 15,298.7 81,114.8 72,299.7 (B) ProfitonSaleofInvestments(net) ................................................................. 2,934.3 444.2 84,049.1 72,743.9