UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

[ ] (Mark One) Registration statement pursuant to section 12(b) or (g) of the
Securities Exchange Act of 1934

[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended March 31, 2001

[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _____________ to
_____________

Commission File Number 1-14954

ICICI LIMITED
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant's name into English)

Mumbai, Maharashtra, India
(Jurisdiction of incorporation or organization)

ICICI Towers
Bandra-Kurla Complex
Mumbai - 400051
(Address of principal executive or organization)

Securities registered or to be registered pursuant to Section 12(b) of the
Act.

Title of Each Class Name of Each Exchange on Which Registered
None Not Applicable

Securities registered pursuant to Section 12(g) of
the Act.

American Depositary Share
each represented by 5 Equity Shares, par value Rs. 10 per share.
(Title of Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.
Not Applicable
(Title of Class)

Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of the close of the period covered by the
annual report - 785,344,448 Equity Shares

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 month (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---

Indicate by check mark which financial statement item the registrant has
elected to follow.

Item 17 Item 18 X
--- ---

TABLE OF CONTENTS

Page
----
Cross Reference Sheet......................................................... 3
Certain Definitions .......................................................... 5
Forward-Looking Statements.................................................... 6
Exchange Rates................................................................ 7
Risk Factors.................................................................. 8
Business
Overview.................................................................22
History .................................................................23
Shareholding Structure and Relationship with the Government of India.....24
Our Strategy.............................................................26
Overview of Our Products and Services....................................29
Corporate Banking Activities.............................................29
Retail Banking Activities................................................36
Client Coverage..........................................................39
Distribution Network.....................................................40
Investments..............................................................42
Technology...............................................................45
Competition..............................................................48
Other Activities.........................................................49
Subsidiaries and Affiliates..............................................51
Risk Management..........................................................54
Loan Portfolio...........................................................70
Impaired Loans...........................................................72
Funding .................................................................81
Properties...............................................................85
Legal and Regulatory Proceedings.........................................86
Employees................................................................87
Selected Consolidated Financial and Operating Data............................89
Operating and Financial Review and Prospects..................................94
Management ..................................................................126
Related Party Transactions...................................................141
Overview of the Indian Financial Sector......................................143
Supervision and Regulation...................................................154
Exchange Controls............................................................163
Market Price Information.....................................................165
Restriction on Foreign Ownership of Indian Securities........................168
Dividends ...................................................................171
Taxation.....................................................................172
Use of Proceeds..............................................................178
Presentation of Financial Information........................................179
Additional Information.......................................................180
Index to US GAAP Consolidated Financial Statements...........................F-1
Exhibit Index

CROSS REFERENCE SHEET

Form 20-F Item Number and Caption Location Page
--------- ----------------------- -------- ----

Part - I
1 Identity of Directors, Senior Not applicable
Management and Advisers

2 Offer Statistics and Expected Not applicable
Timetable

3 Key Information Exchange Rates.................................... 7
Risk Factors...................................... 8
Selected Consolidated Financial and
Operating Data................................. 89

4 Information on the Company Business.......................................... 22
Operating and Financial Review and
Prospects ..................................... 94
Overview of the Indian Financial Sector........... 143
Supervision and Regulation........................ 154
Note 25 to ICICI's US GAAP Consolidated
Financial Statements........................... F-31

5 Operating and Financial Operating and Financial Review and
Review and Prospects Prospects...................................... 94

6 Directors, Senior Management ....................................... 126
Management and Employees Business--Employees............................... 87

7 Major Shareholders and Business--Shareholding Structure and
Related Party Transactions Relationship with the Government of India...... 24
Related Party Transactions........................ 141

8 Financial Information Report of Independent Auditors on ICICI's
US GAAP Consolidated Financial
Statements..................................... F-2
ICICI's US GAAP Consolidated Financial
Statements and the notes thereto............... F-3

9 The Offer and Listing Market Price Information.......................... 165

10 Additional Information Exchange Controls................................. 163
Restriction on Foreign Ownership of Indian
Securities..................................... 168
Dividends......................................... 171
Taxation.......................................... 172
Additional Information............................ 180

Form 20-F Item Number and Caption Location Page
--------- ----------------------- -------- ----

11 Quantitative and Qualitative Business--Risk Management-Quantitative
Disclosures about Market and Qualitative Disclosures about Market
Risk Risk........................................... 61

12 Description of Securities Not applicable
Other than Equity Securities

Part - II
13 Defaults, Dividend Not applicable
Arrears and
Delinquencies

14 Material Modifications to the Use of Proceeds................................... 178
Rights of Security Holders
and Use of Proceeds

Part - III
18 Financial Statements Report of Independent Auditors on ICICI's
US GAAP Consolidated Financial
Statements .................................... F-2
ICICI's US GAAP Consolidated Financial
Statements and the notes thereto. ............. F-3

19 Exhibits Exhibit index and attached exhibits

CERTAIN DEFINITIONS

In this annual report, all references to the "ICICI group", "the group",
"we", "our" and "us" are to ICICI Limited and its consolidated subsidiaries.
They also include, as the context requires, references to activities that are
carried out by specific group entities. References to specific data applicable
to particular group companies are made by reference to the name of that
particular company. References to "ICICI" are to ICICI Limited on an
unconsolidated basis.

Our consolidated subsidiaries at and for the year ended March 31, 2001
did not include ICICI Bank Limited, ICICI's former commercial banking
subsidiary. Effective March 10, 2001, ICICI Bank acquired Bank of Madura
Limited, an old private sector bank in India, in an all stock merger and, as a
result, the ownership interest of ICICI was reduced from 62.2% to 55.6%. In
addition, during March 2001, ICICI reduced its interest in ICICI Bank to 46.4%
through sales of equity shares in the Indian secondary markets to institutional
investors. This was in line with the Reserve Bank of India's directive that
ICICI reduce its interest in ICICI Bank to not more than 40.0%. As a result of
the foregoing, ICICI Bank ceased to be a subsidiary of ICICI as of March 22,
2001 and was accounted for under the equity method of accounting from April 1,
2000, the beginning of the fiscal year in which our majority ownership in ICICI
Bank was deemed to be temporary. Consequently, the financial statements for
fiscal 2001 and fiscal 2000 are not strictly comparable. Further, during the
first five months (April to August) of fiscal 2002, ICICI sold another 0.4%
equity interest in ICICI Bank in the Indian secondary markets to institutional
investors. At August 31, 2001, ICICI held a 46.0% interest in ICICI Bank. See
"Business - History" for a discussion of the various corporate structuring
alternatives that ICICI is considering as part of its efforts to transform
itself into a universal bank.

FORWARD-LOOKING STATEMENTS

We have included statements in this annual report which contain words or
phrases such as "will", "aim", "will likely result", "is likely", "are likely",
"believe", "expect", "will continue", "will achieve", "anticipate", "estimate",
"intend", "plan", "contemplate", "seek to", "future", "objective", "goal",
"target", "outlook", "project", "should", "could", "may", "can", "will pursue"
and similar expressions or variations of such expressions, that are
"forward-looking statements". Actual results may differ materially from those
suggested by the forward-looking statements due to certain risks or
uncertainties associated with our expectations with respect to, but not limited
to, our ability to successfully implement our strategy, future levels of
impaired loans including restructured loans, our growth and expansion, growth
of the Indian retail financial services market, the adequacy of our allowance
for loan and investment losses, technological changes, the market acceptance of
and demand for Internet banking services, investment income, cash flow
projections, the outcome of any legal or regulatory proceedings we are party
to, the future impact of new accounting standards, our ability to implement our
dividend policy and our exposure to market risks. By their nature, certain of
the market risk disclosures are only estimates and could be materially
different from what actually occur in the future. As a result, actual future
gains, losses or impact on net income could materially differ from those that
have been estimated.

In addition, other factors that could cause actual results to differ
materially from those estimated by the forward-looking statements contained in
this annual report include, but are not limited to: general economic and
political conditions in India, south east Asia, and the other countries which
have an impact on our business activities or investments, political or
financial instability in India or any other country caused by the terrorist
attacks in the US in September 2001, any anti-terrorist attacks by the US, a
US-led coalition or any other country or any other acts of terrorism
world-wide, the monetary and interest rate policies of India, inflation,
deflation, unanticipated turbulence in interest rates, foreign exchange rates,
equity prices or other rates or prices, the performance of the financial
markets in India and globally, changes in domestic and foreign laws,
regulations and taxes, changes in competition and the pricing environment in
India, regional or general changes in asset valuations, our possible conversion
into a universal bank and the ability to integrate any recent or future mergers
or acquisitions. For further discussion on the factors that could cause actual
results to differ, see the discussion under "Risk Factors" contained in this
annual report. We undertake no obligation to update any of our forward-
looking statements.

EXCHANGE RATES

Fluctuations in the exchange rate between the Indian rupee and the US
dollar will affect the US dollar equivalent of the Indian rupee price of the
equity shares on the Indian stock exchanges and, as a result, will likely
affect the market price of the ADSs in the United States. These fluctuations
will also affect the conversion into US dollars by the depositary of any cash
dividends paid in Indian rupees (rupees) on the equity shares represented by
ADSs.

On an average annual basis, the rupee has consistently declined against
the dollar since 1980. In early July 1991, the government of India adjusted the
rupee downward by an aggregate of approximately 20.0% against the dollar as
part of an economic package designed to overcome an external payments crisis.

The following table sets forth, for the periods indicated, certain
information concerning the exchange rates between Indian rupees and US dollars
based on the noon buying rate:

Fiscal Year Period End(1) Average(1)(2)
--------------------------------------------------------------------------------

1997............................................ 35.88 35.70
1998............................................ 39.53 37.37
1999............................................ 42.50 42.27
2000............................................ 43.65 43.46
2001............................................ 46.85 45.88
2002 (through September 21, 2001)............... 48.08 45.66

Month High Low
--------------------------------------------------------------------------------
March 2001...................................... 46.85 46.53
April 2001...................................... 47.07 46.58
May 2001........................................ 47.06 46.83
June 2001....................................... 47.09 47.00
July 2001....................................... 47.21 47.11
August 2001..................................... 47.19 47.11
-------------
(1) The noon buying rate at each period end and the average rate for each
period differed from the exchange rates used in the preparation of our
consolidated financial statements.
(2) Represents the average of the noon buying rate on the last business day of
each month during the period.

Although we have translated in this annual report certain rupee amounts
into dollars for convenience, this does not mean that the rupee amounts
referred to could have been, or could be, converted into dollars at any
particular rate, the rates stated above, or at all. Except in certain sections
which are based on publicly available data, all translations from rupees to
dollars are based on the noon buying rate in the City of New York for cable
transfers in rupees at March 30, 2001. The Federal Reserve Bank of New York
certifies this rate for customs purposes on each date the rate is given. The
noon buying rate on March 30, 2001 was Rs. 46.85 per US$ 1.00. The noon buying
rate on September 21, 2001 was Rs. 48.08 per US$ 1.00. The exchange rates used
for convenience translations differ from the actual rates used in the
preparation of our consolidated financial statements.

RISK FACTORS

You should carefully consider the following risk factors as well as the
other information contained in this annual report in evaluating us and our
business.

Risks Relating to India

A slowdown in economic growth in India could cause our business to suffer.

Our performance and the quality and growth of our assets are necessarily
dependent on the health of the Indian economy. The Indian economy has shown
sustained growth over the five years ended fiscal 2001 with an average real GDP
growth rate of approximately 6.2%, compared to the average real GDP growth rate
of 5.8% achieved in the 1980s. However, industrial production in India
witnessed lower growth during the years 1997, 1998 and 1999 primarily due to
the global downturn in commodity prices, particularly in the man-made fibers,
iron and steel and textile sectors. There was a moderate improvement in
industrial growth in fiscal 2000. However, industrial growth again declined in
fiscal 2001 due to a slowdown in the manufacturing and electricity sectors. Any
future slowdown in the Indian economy or future volatility of global commodity
prices, in particular oil and steel prices, could adversely affect our
borrowers and contractual counterparties. This in turn could adversely affect
our business, including our ability to grow our asset portfolio, the quality of
our assets, our financial performance, our stockholders' equity, our ability to
implement our strategy and the price of our equity shares and ADSs.

A significant increase in the price of crude oil could adversely affect
the Indian economy, which could adversely affect our business.

India imports approximately 59.0% of its requirements of crude oil. The
sharp increase in global crude oil prices during fiscal 2001 adversely affected
the Indian economy in terms of volatile interest and exchange rates. This
adversely affected the overall state of liquidity in the banking system leading
to intervention by the Reserve Bank of India. Any significant increase in crude
oil prices could affect the Indian economy and the Indian banking and financial
system. This could adversely affect our business including our ability to grow,
the quality of our assets, our financial performance, our stockholders' equity,
our ability to implement our strategy and the price of our equity shares and
ADSs.

A significant change in the Indian government's economic liberalization
and deregulation policies could disrupt our business and cause the price
of our equity shares and our ADSs to go down.

We are an Indian group and almost all of our assets and customers are
located in India. The Indian government has traditionally exercised and
continues to exercise a dominant influence over many aspects of the economy.
Its economic policies have had and could continue to have a significant effect
on private-sector entities, including us, and on market conditions and prices
of Indian securities, including our equity shares and our ADSs.

Since 1996, the government of India has changed four times. The most
recent parliamentary elections were completed in October 1999. A coalition
government led by the Bhartiya Janata Party was formed with A.B. Vajpayee as
the prime minister of India. Although the Vajpayee government has continued
India's current economic liberalization and deregulation policies, a
significant change in the government's policies could adversely affect business
and economic conditions in India in general as well as our business, our future
financial performance, our stockholders' equity and the price of our equity
shares and our ADSs.

Financial instability in other countries, particularly emerging market
countries in Asia, could disrupt our business and cause the price of our
equity shares and our ADSs to go down.

The Indian market and the Indian economy are influenced by economic and
market conditions in other countries, particularly emerging market countries in
Asia. Financial turmoil in Asia, Russia and elsewhere in the world in past
years has affected the Indian economy even though India was relatively
unaffected by the financial and liquidity crisis experienced elsewhere.
Although economic conditions are different in each country, investors'
reactions to developments in one country can have adverse effects on the
securities of companies in other countries, including India. A loss of investor
confidence in the financial systems of other emerging markets may cause
increased volatility in Indian financial markets and indirectly, in the Indian
economy in general. Any world-wide financial instability could also have a
negative impact on the Indian economy. For example, the terrorist attacks in
the US in September 2001 are likely to have an adverse effect on the US
economy, which could adversely affect the Indian economy. This in turn could
negatively impact the movement of exchange rates and interest rates in India,
which could adversely affect the Indian financial sector, including us. Any
financial disruption could have an adverse effect on our business, our future
financial performance, our stockholders' equity and the price of our equity
shares and our ADSs.

If regional hostilities or terrorist attacks increase, our business could
suffer and the price of our equity shares and our ADSs could go down.

India has from time to time experienced social and civil unrest and
hostilities with neighboring countries. In recent years, there have been
military confrontations between India and Pakistan in the Kashmir region.
Currently, there are tensions involving Afghanistan, a neighbor of Pakistan.
These hostilities and tensions could lead to political or economic instability
in India and a possible adverse effect on our business, our future financial
performance and the price of our equity shares and our ADSs. This is important
in the current context, as the terrorist attacks in the US in September 2001
have affected the markets all over the world. The possible prolonged battle
against terrorism by the US could lengthen these regional hostilities and
tensions, thereby affecting the Indian economy as well as our business, our
financial performance, our stockholders' equity and the price of our equity
shares and our ADSs.

Trade deficits could cause our business to suffer and the price of our
equity shares and our ADSs to go down.

India's trade relationships with other countries can also influence Indian
economic conditions. In fiscal 2001, India experienced a trade deficit of Rs.
653.8 billion (US$ 14.4 billion). If trade deficits increase or are no longer
manageable, the Indian economy, and therefore our business, our financial
performance, our stockholders' equity and the price of our equity shares and
our ADSs, could be adversely affected.

A significant change in the composition of the Indian economy may affect
our business.

The Indian economy is in a state of transition. The share of the services
sector of total GDP is rising while that of the agricultural sector is
declining. The share of the services sector of total GDP increased to 54.2% in
fiscal 2001 from 48.7% in fiscal 1997 and the share of the agricultural sector
of total GDP declined to 24.0% in fiscal 2001 from 28.6% in fiscal 1997. It is
difficult to gauge the impact of such fundamental economic changes on our
business. We cannot be certain that these changes will not have a material
adverse effect on our business.

Financial difficulty and other problems in certain long-term lending
institutions and investment institutions in India could cause our business
to suffer and the price of our equity shares and our ADSs could go down.

Unit Trust of India, a large investment institution in India with
substantial exposure to equity investments, is currently facing problems due to
a significant decline in the market value of its securities portfolio caused by
depressed equity capital markets. IFCI Limited, a long-term lending institution
in India, is facing financial difficulty due to inadequate capitalization,
asset-liability mismatch and deteriorating asset quality. These developments
could create adverse market perception about other financial institutions and
banks which in turn could adversely affect our business, our future financial
performance, our stockholders' equity and the price of our equity shares and
our ADSs.

The recent down-grading of the sovereign rating of India could cause our
business to suffer and the price of our equity shares and our ADSs could go
down.

Standard and Poor's, an international rating agency, has recently
adversely revised its outlook from stable to negative on India's "BB-"
long-term foreign currency rating. It has also adversely revised its rating
from "BBB" to "BBB-" on India's long-term local currency rating. Another
international rating agency, Moody's, has also recently adversely revised its
outlook from positive to stable on India's "Ba2" long-term foreign currency
rating. Moody's has also adversely revised its outlook from positive to
negative on India's "Ba2" long-term domestic currency rating. Although the
revision in the sovereign rating may not affect our business, we cannot assure
you that any further adverse revisions in the sovereign rating will not
adversely affect our business, our future financial performance, our
stockholders' equity and the price of our equity shares and our ADSs.

The recent down-grading of our credit rating by an international rating
agency could cause our business to suffer and the price of our equity
shares and our ADSs could go down.

Standard and Poor's, an international rating agency, has recently
adversely revised its outlook from stable to negative on ICICI's "BB-"
long-term foreign currency rating. Although the revision in our credit rating
may not affect our business, we cannot assure you that any further adverse
revisions in our credit rating by international and domestic rating agencies
will not adversely affect our business, our future financial performance, our
stockholders' equity and the price of our equity shares and our ADSs.

Risks Relating to Our Business

We are likely to classify and reserve against impaired loans significantly
later than our counterparts in more developed countries, such as the US.

ICICI identifies a commercial loan as a "troubled debt restructuring" or
an "other impaired loan" (collectively referred to as an impaired loan) and
places it on a non-accrual basis (that is, ICICI no longer recognizes interest
accrued or due unless and until payments are actually received) when it is
probable that ICICI will be unable to collect the scheduled payments of
principal and interest due under the contractual terms of the loan agreement. A
commercial loan is also considered to be impaired and placed on a non-accrual
basis, when interest is greater than 180 days overdue (typically two interest
payments) or principal is greater than 360 days overdue (typically four
principal repayments). Effective fiscal 2002, the time period of 360 days
overdue for principal repayments will be reduced to 180 days. Delays or
shortfalls in loan payments are evaluated along with other factors to determine
if a loan should be classified as impaired. This time period of 180 days and
360 days is substantially longer than in more developed countries, like the US,
where loans are generally placed on a non-accrual basis when any payment,
including any periodic principal payment, is not made for a 90-day period. In
India, payments on most loans are on a quarterly basis unlike in more developed
countries, like the US, where payments on most loans are on a monthly basis. As
a result, we obtain

information later than they would in developed countries and this delay in
receiving current information may impact the classification of, and reserving
against, impaired loans. Consequently, we are likely to classify and reserve
against impaired loans significantly later than they would in more developed
countries. For a discussion of impaired loans under Indian GAAP, see
"Supervision and Regulation--Loan Loss Provisions and Non Performing Assets".

A large proportion of our loans is project finance assistance, a
substantial portion of which is particularly vulnerable to completion
risk.

Long-term project finance assistance is a significant proportion of our
asset portfolio, and we expect that it will continue to be a significant
proportion of our asset portfolio. The viability of these projects depends upon
a number of factors, including completion risk, market demand, government
policies and the overall economic environment in India and international
markets. We cannot be sure that these projects will perform as anticipated.
Over the last several years, we have experienced a high level of impaired loans
in our project finance loan portfolio to manufacturing companies as a result of
the downturn in certain global commodity markets and increased competition in
India. In addition, a significant portion of infrastructure projects financed
by us are still under implementation and present risks such as delays in the
commencement of operations and breach of contractual obligations by
counterparties involved and therefore delays in the project's ability to
generate revenues. We have provided project assistance to a large private
sector power generation project in the state of Maharashtra. On account of a
dispute between the power project and the purchaser, the state electricity
board, the project implementation is currently suspended. The matter is
currently pending before the Indian courts, while parallel efforts are
continuing for an out of court settlement. We believe that based on the current
status and the large requirement of power in the state and country, there is no
impairment in our assistance. However, we cannot assure that any future
impairment of this assistance and such other assistances would not have a
materially adverse effect on the quality of our loan portfolio. Our
infrastructure project finance loans are largely recent loans and, as a result,
asset quality problems may not appear until the future. If a substantial
portion of these loans were to become impaired, the quality of our loan
portfolio could be adversely affected.

We have high concentrations of loans to certain customers and to certain
sectors and if a substantial portion of these loans were to become
impaired, the quality of our loan portfolio could be adversely affected.

At year-end fiscal 2001, our 20 largest net loans, based on outstanding
balances, totaled approximately Rs. 165.9 billion (US$ 3.5 billion), which
represented approximately 27.6% of our total net loans outstanding. Our largest
single loan outstanding at that date was approximately Rs. 25.0 billion (US$
534 million), which represented approximately 4.2% of our total net loans
outstanding. The largest group of companies under the same management control
accounted for approximately 3.9% of our total net loans outstanding. If a
substantial portion of these loans were to become impaired, the quality of our
loan portfolio could be adversely affected.

At year-end fiscal 2001, we had extended loans to several industrial
sectors in India. At that date, approximately 55.5% of our gross restructured
loan portfolio was concentrated in three sectors: textiles (28.5%), iron and
steel (16.6%) and man-made fibers (10.4%). At that date, approximately 35.7% of
our gross other impaired loan portfolio was concentrated in three sectors:
textiles (14.5%), iron and steel (14.1%) and metal products (7.1%). Our total
loan portfolio also has a significant concentration of loans in these sectors.
These sectors have been adversely affected by economic conditions over the last
few years in varying degrees. Although our loan portfolio contains loans to a
wide variety of businesses, financial difficulties in these sectors could
increase our level of impaired loans and adversely affect our business, our
future financial performance, our stockholders' equity and the price of our
equity shares and our ADSs.

If we are not able to control or reduce the level of impaired loans in our
portfolio, our business will suffer.

Our gross restructured loans represented 6.9% of our gross loan portfolio
at year-end fiscal 2001 compared to 3.1% at year-end fiscal 2000. Our gross
other impaired loans represented 6.6% of our gross loan portfolio at year-end
fiscal 2001 compared to 8.5% at year-end fiscal 2000. Our net restructured
loans represented 5.4% of our net loans at year-end fiscal 2001 compared to
1.9% at year-end fiscal 2000. Our net other impaired loans represented 3.3% of
our net loans at year-end fiscal 2001 compared to 4.3% at year-end fiscal 2000.
Although we believe that our allowance for loan losses is adequate to cover all
known losses in our portfolio of assets, the level of our impaired loans is
higher than the average percentage of impaired loans in the portfolios of banks
in more developed countries. In addition, in absolute terms, our gross impaired
loans grew by 23.6% in fiscal 2001, 18.2% in fiscal 2000 and 29.6% in fiscal
1999. The growth in impaired loans can be attributed to several factors,
including increased competition arising from economic liberalization in India,
a slowdown in industrial growth, a sharp decline in commodity prices, which
reduced profitability for certain of our borrowers, and the restructuring of
certain Indian companies in sectors such as textiles, iron and steel and
man-made fibers. Further, our growth-oriented strategy has involved a
significant increase in our loan portfolio. We cannot assure you that there
will be no additional impaired loans on account of these new loans.

A number of factors will affect our ability to control and reduce impaired
loans. Some of these, including developments in the Indian economy, movements
in global commodity markets, global competition, interest rates and exchange
rates, are not within our control. Although we are increasing our efforts to
improve collections and to foreclose on existing impaired loans, we cannot
assure you that we will be successful in our efforts or that the overall
quality of our loan portfolio will not deteriorate in the future. If we are not
able to control and reduce our impaired loans, our business, our future
financial performance, our stockholders' equity and the price of our equity
shares and our ADSs could be adversely affected.

A significant increase in the level of restructured loans forming part of
impaired loans in our portfolio could affect our business.

Our gross restructured loans increased by 135.5% to Rs. 43.7 billion (US$
932 million) at year-end fiscal 2001 from Rs. 18.5 billion (US$ 396 million) at
year-end fiscal 2000. As a result of the impact of the economic environment on
the industrial sector, certain Indian corporations are gradually undergoing a
process of restructuring and repositioning. This restructuring process is
taking place in several industries such as textiles, iron and steel and
man-made fibers. As a result, the level of restructured loans in our portfolio
has increased substantially in fiscal 2001. Any further significant increase in
restructured loans could cause our business to suffer and our future financial
performance, our stockholders' equity and the price of our equity shares and
our ADSs could be adversely affected.

If we are not able to improve our allowance for loan losses as a
percentage of impaired loans, the price of our equity shares and our ADSs
could go down.

Our allowance for loan losses on restructured loans represented 26.0% of
our gross restructured loans at year-end fiscal 2001. Our allowance for loan
losses on other impaired loans represented 51.9% of our gross other impaired
loans at year-end fiscal 2001. Although we believe that our allowance for loan
losses is adequate to cover all known losses in our asset portfolio, we cannot
assure you that there will be no further deterioration in the allowance for
loan losses as a percentage of gross impaired loans or otherwise. In the event
of any further deterioration in our impaired loan portfolio, there could be an
adverse impact on our business, our future financial performance, our
stockholders' equity and the price of our equity shares and our ADSs.

We may experience delays in enforcing our collateral when borrowers
default on their obligations to us which may result in failure to recover
the expected value of collateral security exposing us to a potential loss.

A substantial portion of ICICI's loans are secured by real property,
including property, plant and equipment. Although it is our practice to lend
between 60.0% and 80.0% of the appraised value of this type of collateral
security, an economic downturn could result in a fall in relevant collateral
values. In India, foreclosure on collateral generally requires a written
petition to an Indian court. An application, when made, may be subject to
delays and administrative requirements that may result, or be accompanied by, a
decrease in the value of the collateral. These delays can last for several
years. In the event a borrower makes a reference to a specialized
quasi-judicial authority called the Board for Industrial and Financial
Reconstruction, foreclosure and enforceability of collateral is stayed. We
cannot guarantee that we will be able to realize the full value on our
collateral, as a result of, among other factors, delays in bankruptcy
foreclosure proceedings, defects in the perfection of collateral and fraudulent
transfers by borrowers. A failure to recover the expected value of collateral
security could expose us to a potential loss. Any unexpected losses could
adversely affect our business, our future financial performance, our
stockholders' equity and the price of our equity shares and our ADSs.

We face greater credit risks than banks in developed countries.

Our principal business is providing financing to our clients, virtually
all of whom are based in India. In the past, we have focused our activities on
large-scale project finance projects. Increasingly, we are focusing on large
corporate customers, many of whom have strong credit ratings, as well as on
select middle market companies and individuals. Our loans to middle market
companies can be expected to be more severely affected by adverse developments
in the Indian economy than loans to large corporations. In all of these cases,
we are subject to the credit risk that our borrowers may not pay us in a timely
fashion or at all. The credit risk of all our borrowers is higher than in more
developed countries due to the higher uncertainty in our regulatory, political,
economic and industrial environment and difficulties that many of our borrowers
face in adapting to instability in world markets and technological advances
taking place across the world. In fiscal 2001, India experienced a slowdown in
overall growth, which reduced the profitability of certain of our borrowers.
Higher credit risk may expose us to a potential loss which would adversely
affect our business, our future financial performance, our stockholders' equity
and the price of our equity shares and our ADSs.

Our business is particularly vulnerable to volatility in interest rates
caused by deregulation of the financial sector in India.

Over the last few years, the Indian government has deregulated the
financial sector, which has increased competition. Before 1991, our operations
and profitability substantially reflected our lending at interest rates set by
the Indian government and were funded to a large extent by relatively low-cost
government guaranteed rupee funds. From August 1991, ICICI was permitted
flexibility in setting interest rates on virtually all of the loans it extends.
Since 1992, ICICI was also required to raise all its new domestic funds at
market rates. These developments have resulted in greater volatility of
interest rates and margins for substantially all financial institutions in
India, including ICICI. Based on our lending book's asset-liability position at
year-end fiscal 2001, our net interest income would decline with an increase in
interest rates. Further, in our trading book, the value of our fixed income
trading portfolio would decline with an increase in interest rates. The
volatility in interest rates could adversely affect our business, our future
financial performance and the price of our equity shares and our ADSs.

If we cannot access low-cost funds, our business could suffer.

ICICI traditionally relied on wholesale funding from institutional sources
such as banks, financial institutions and other investment institutions. By
comparison, many of our competitors are banks that have a greater proportion of
low-cost demand deposits and transaction accounts. As a

result, the sources of our funds tend to be higher in cost, more easily
affected by external factors such as credit ratings, and subject to greater
volatility compared to savings and demand deposits in India. Further, ICICI
Bank ceased to be our subsidiary in fiscal 2001 and was deconsolidated as of
April 1, 2000. Consequently, our cost of funds could increase due to the
absence of the low-cost savings and demand deposits of ICICI Bank. As part of
its efforts to transform itself into a universal bank, ICICI is considering
various corporate structuring alternatives including the possibility of a
merger between ICICI and ICICI Bank and the re-organization of its holdings in
its subsidiary companies. In this respect, ICICI has initiated a dialogue with
the government of India and regulatory agencies, including the Reserve Bank of
India. As of the date of this annual report, no firm proposal for any such
action has been approved by the board of directors or the shareholders of
either ICICI or ICICI Bank. We cannot guarantee that we will be able to
increase or maintain our current levels of funding at competitive rates and any
failure to do so could adversely affect our business, our future financial
performance, our stockholders' equity and the price of our equity shares and
our ADSs.

The conversion of ICICI into a universal bank could impact the price of
our equity shares and our ADSs.

As part of its efforts to transform itself into a universal bank, ICICI is
considering various corporate structuring alternatives including the
possibility of a merger between ICICI and ICICI Bank and the re-organization of
its holdings in its subsidiary companies. In this respect, ICICI has initiated
a dialogue with the government of India and regulatory agencies, including the
Reserve Bank of India. As of the date of this annual report, no firm proposal
for any such action has been approved by the board of directors or the
shareholders of either ICICI or ICICI Bank. Any corporate action resulting from
these discussions would be subject to the approval of the board of directors
and shareholders of ICICI and ICICI Bank and necessary statutory and regulatory
approvals including from the Reserve Bank of India and the government of India.
At this stage, there can be no certainty that any definitive agreement will be
reached or that such agreement will be approved by the relevant regulatory
agencies. In the event that ICICI Bank and ICICI were to merge, the businesses
currently being conducted by ICICI would become subject for the first time to a
number of banking regulations under Indian law, including directed lending,
maintenance of statutory reserve ratios and higher effective income tax rates.
These regulatory changes will impact the profitability of the combined
businesses in any new universal bank. The combined universal bank will have a
different mix of assets and funding sources than the two separate companies.
The impact of the statutory reserve ratios, which requires that a significant
portion of an Indian bank's liabilities be held in Indian government
securities, may increase market risk in a combined universal bank. The income,
profitability and market risk profile of any merged universal bank may
therefore be adversely affected by the impact of these regulatory requirements.
This may result in lower income in the initial years after conversion.
Any combined universal bank may not be able to maintain the business, growth
and financial performance of the two separate companies and any failure to do
so could adversely affect the price of our equity shares and our ADS.

If we are not able to succeed in our new business areas, we may not be
able to meet our projected earnings and growth targets.

Throughout ICICI's existence, ICICI has primarily been in the business of
providing project financing. In recent periods, we have been developing our
corporate finance businesses. These businesses are different from our
historical project finance business and require new skills in order to succeed.
We have also sought to develop our retail banking business with the creation of
ICICI Bank in 1994 and our personal financial services group in fiscal 1999. We
also recognize that retail banking is a substantially different business than
corporate banking and requires very different personnel, skills and
infrastructure. Growing our corporate finance and retail businesses is a
critical component of our future growth strategy and our projections of
earnings.

We cannot assure you that we have accurately estimated the relevant demand
for our new banking products. In particular, we are a new entrant in the retail
banking market and existing competition may impede our ability to penetrate
this sector. Retail banking could expose us to the risk of financial
irregularities by various intermediaries and investors. We cannot assure you
that we will be able to master and deliver the skills and management
information systems necessary to successfully manage these new businesses. We
are also looking at business opportunities in certain sectors of the economy
with which we have not traditionally been involved, including the public
sector, the agri-business sector and the information technology sector. In
addition, we have launched several Internet-based products for our retail and
corporate customers including online broking services. We have also recently
entered the life insurance business and the non-life insurance business. The
life insurance and non-life insurance businesses are expected to require
substantial capital in the initial period. We are exploring the possibility of
international expansion by leveraging on our home country links and technology
competencies in financial services. We are a new entrant in international
business and the skills required for this business are different from those for
our domestic businesses. We cannot be certain that these new businesses will
perform as anticipated. Our inability to grow in new business areas may
adversely affect our business, our future financial performance, our
stockholders' equity and the price of our equity shares and our ADSs.

The success of our Internet-related strategy will depend, in part, on the
development of adequate infrastructure for the Internet in India.

The Internet may not be accepted as a viable commercial marketplace in
India for a number of reasons, including inadequate development of the
necessary network infrastructure. There can be no assurance that the Internet
infrastructure will be able to support the demands of its anticipated growth.
Inadequate infrastructure could result in slower response times and adversely
affect usage of the Internet generally. If the infrastructure for the Internet
does not effectively support growth that may occur, we will not be able to
execute our growth strategy for our Internet-related businesses. Our inability
to grow in this business area may adversely affect our business, our future
financial performance, our stockholders' equity and the price of our equity
shares and our ADSs

Our business is very competitive and our growth strategy depends on our
ability to compete effectively.

Interest rate deregulation and other liberalization measures affecting the
financial sector have increased our exposure to competition. The liberalization
process has led to increased access for our customers to alternative sources of
funds, such as domestic and foreign commercial banks and the domestic and
international capital markets. Our corporate banking business will continue to
face competition from Indian and foreign commercial banks. We will also face
competition from Indian and foreign commercial banks and non-banking finance
companies in the development of our retail business. In addition, as we
increasingly raise our funds from market sources, we will face increasing
competition for such funds. The Indian financial sector may experience further
consolidation, resulting in fewer financial institutions, some of which may
have greater resources than us. Our future success will depend upon our ability
to compete effectively. Due to competitive pressures, we may be unable to
successfully execute our growth strategy and offer products and services at
reasonable returns and this may adversely impact our business, our future
financial performance, our stockholders' equity and the price of our equity
shares and our ADSs.

If we are not able to manage our rapid growth, our business could be
disrupted and the price of our equity shares and our ADSs could go down.

Our asset growth rate has been significantly higher than the Indian GDP
growth rate over the last five fiscal years. Our average assets grew 32.0% in
fiscal 1999, 23.0% in fiscal 2000 and 18.4% (on a pro-forma basis including
ICICI Bank) in fiscal 2001 compared to real GDP growth of 6.6% in fiscal 1999,
6.4% in fiscal 2000 and 5.2% in fiscal 2001. Our growth is expected to place
significant demands on our management and other resources and will require us
to continue to develop and

improve our operational, credit, financial and other internal risk controls.
Our inability to manage our growth effectively could have a material adverse
effect on our business, our future financial performance, our stockholders'
equity and the price of our equity shares and our ADSs.

If we are not able to integrate our recent acquisitions or any future
acquisitions, our business could be disrupted and the price of our equity
shares and our ADSs could go down.

In the last four years, we acquired two non-bank finance companies, ITC
Classic Finance Limited and Anagram Finance Limited. In fiscal 2001, we
acquired the following software development and services companies based in the
United States: Ivory International Inc., Objects Xperts Inc. and Command
Systems Inc. We also acquired Ajax Software Solutions Limited, a software
development company based in India. Our commercial banking affiliate, ICICI
Bank, acquired Bank of Madura, an old private sector bank in India in fiscal
2001.

As part of its efforts to transform itself into a universal bank, ICICI is
considering various corporate structuring alternatives including the
possibility of a merger between ICICI and ICICI Bank

and the re-organization of its holdings in its subsidiary companies. In this
respect, ICICI has initiated a dialogue with the government of India and
regulatory agencies, including the Reserve Bank of India. As of the date of
this annual report, no firm proposal for any such action has been approved by
the board of directors or the shareholders of either ICICI or ICICI Bank.

We have no understanding, commitment or agreement with respect to any
material future acquisition or investment, though we may seek opportunities for
growth through future acquisitions. Any future acquisitions may involve a
number of risks, including deterioration of asset quality, diversion of our
management's attention required to integrate the acquired business and the
failure to retain key acquired personnel and clients, some or all of which
could have an adverse effect on our business, our future financial performance,
our stockholders' equity and the price of our equity shares and our ADSs.

Our recent divestment of a partial stake in ICICI Bank and any future
dilution of ownership interest in ICICI Bank could cause our business to
suffer and the price of our equity shares and our ADSs to go down.

Effective March 10, 2001, ICICI Bank acquired Bank of Madura Limited, an
old private sector bank, in an all stock merger and as a result, the ownership
interest of ICICI was reduced from 62.2% to 55.6%. In addition, during March
2001, ICICI reduced its interest in ICICI Bank to 46.4% through sales of equity
shares in the Indian secondary markets to institutional investors. As a result
of the foregoing, ICICI Bank ceased to be a subsidiary of ICICI as of March 22,
2001 and was accounted for under the equity method of accounting from April 1,
2000, the beginning of the fiscal year in which our majority ownership in ICICI
Bank was deemed to be temporary. Further, during the first five months (April
to August) of fiscal 2002, ICICI sold another 0.4% equity interest in ICICI
Bank in the Indian secondary markets to institutional investors. At August 31,
2001, ICICI held a 46.0% interest in ICICI Bank.

We are involved in a legal proceeding concerning one of our borrowers,
which if adversely determined, may have an adverse effect on the results
of our operations, financial condition, liquidity and the price of our
equity shares and our ADSs.

In January 2001, the Bank of Nova Scotia Asia Limited and Commerzbank AG
filed a claim against ICICI before the English courts in London challenging
certain transactions between ICICI and Arvind Mills, a borrower to whom both
ICICI and the plaintiffs are lenders. These transactions relate to certain
lease, brand-financing and investment agreements between ICICI and Arvind Mills
Limited. Such transactions aggregate approximately Rs. 5.7 billion (US$ 122
million). The litigation is in its early stages and as the claims are
unparticularized, no estimate of the interest, damages and costs claimed can be
quantified currently. ICICI has denied all claims of the plaintiffs and is
contesting the jurisdiction of the English courts to hear the matter. The same
transaction is also the subject matter of a criminal complaint filed by
Commerzbank AG against ICICI and its executive directors (including the former
deputy managing director) before the Indian courts. The Indian courts have
granted an ad-interim stay of the complaint and the matter has been posted for
further hearing.

Management believes, based on consultation with counsel, that the ultimate
resolution of these legal proceedings will not have a material adverse effect
on our results of operations, financial condition, or liquidity. However, the
final outcome of these legal proceedings cannot be predicted with certainty and
we cannot guarantee that the ultimate resolution of these legal proceedings
will not have a material adverse impact on our results of operations, financial
condition or liquidity, our stockholders' equity and the price of our equity
shares and our ADSs.

Material changes in the regulations which govern us could cause our
business to suffer and the price of our equity shares and our ADSs to go
down.

Financial institutions and banks in India operate in a highly regulated
environment. The Reserve Bank of India extensively supervises and regulates
financial institutions and banks. In addition, these institutions are subject
generally to changes in Indian law, as well as to changes in regulation and
government policies, income tax laws and accounting principles. The laws and
regulations governing the financial institutions and banking sector could
change in the future and any such changes could adversely affect our business,
our future financial performance and the price of our equity shares and our
ADSs.

Significant security breaches could adversely impact our business.

We seek to protect our computer systems and network infrastructure from
physical break-ins as well as security breaches and other disruptive problems
caused by our increased use of the Internet. Computer break-ins and power
disruptions could affect the security of information stored in and transmitted
through these computer systems and network infrastructure. We employ security
systems, including firewalls and password encryption, designed to minimize the
risk of security breaches. Though we intend to continue to implement security
technology and establish operational procedures to prevent break-ins, damage
and failures, there can be no assurance that these security measures will

be successful. A significant failure in security measures could have a material
adverse effect on our business, our future financial performance and the price
of our equity shares and our ADSs.

Risks Relating to the ADSs and Equity Shares

You will not be able to vote your ADSs.

ADS holders have no voting rights unlike holders of the equity shares who
have voting rights. The depositary will exercise its right to vote on the
equity shares represented by the ADSs as directed by ICICI's board of
directors. If you wish, you may withdraw the equity shares underlying the ADSs
and seek to vote the equity shares you obtain from the withdrawal. However, for
foreign investors, this withdrawal process may be subject to delays. For a
discussion of the legal restrictions triggered by a withdrawal of the equity
shares from the depositary facility upon surrender of ADSs, see "Restriction on
Foreign Ownership of Indian Securities".

US investors will be subject to special tax and interest charges if ICICI
is considered to be a passive foreign investment company.

It is likely that ICICI will be a "passive foreign investment company" for
US federal income tax purposes. See "Taxation--United States Tax--Passive
Foreign Investment Company Rules". Assuming that ICICI is a passive foreign
investment company and you are a US investor in our ADSs, you will be subject
to special federal income tax rules that may have negative tax consequences and
will require annual reporting. See "Taxation--United States Tax".

Your ability to withdraw equity shares from the depositary facility is
uncertain and may be subject to delays.

India's restrictions on foreign ownership of Indian companies limit the
number of shares that may be owned by foreign investors and generally require
government approval for foreign ownership. Investors who withdraw equity shares
from the depositary facility will be subject to Indian regulatory restrictions
on foreign ownership upon withdrawal. It is possible that this withdrawal
process may be subject to delays. For a discussion of the legal restrictions
triggered by a withdrawal of equity shares from the depositary facility upon
surrender of ADSs, see "Restriction on Foreign Ownership of Indian Securities".

Your ability to sell in India any equity shares withdrawn from the
depositary facility may be subject to delays if specific government
approval is required.

ADS holders seeking to sell in India any equity shares withdrawn upon
surrender of an ADS will require Reserve Bank of India approval for each such
transaction unless the sale of such equity shares is made on a stock exchange
or in connection with an offer made under the regulations regarding takeovers.
We cannot guarantee that any approval will be obtained in a timely manner or at
all. Because of possible delays in obtaining requisite approvals, investors in
equity shares may be prevented from realizing gains during periods of price
increases or limiting losses during periods of price declines.

Restrictions on withdrawal of ADSs from the depositary facility and
redeposit of equity shares in the depositary facility could adversely
affect the price of the ADSs.

An ADS holder who surrenders an ADS and withdraws equity shares may be
able to redeposit those equity shares in the depositary facility in exchange
for ADSs. In addition, an investor who has purchased equity shares in the
Indian market may be able to deposit them in the ADS program. However, in
either case, the deposit or redeposit of equity shares may be limited by
securities law restrictions and will be restricted so that the cumulative
aggregate number of equity shares that can be deposited or redeposited as of
any time cannot exceed the cumulative aggregate number represented

by ADSs converted into underlying equity shares as of such time. An investor
who has purchased equity shares in the Indian market could therefore face
restrictions in depositing them in the ADS program. This increases the risk
that the market price of the ADSs will be below that of the equity shares. For
a discussion of the legal restrictions triggered by withdrawal of ADSs from the
depositary facility and redeposit of equity shares in the depositary facility,
see "Restriction on Foreign Ownership of Indian Securities".

Certain shareholders own a large percentage of ICICI's equity shares.
Their actions could adversely affect the price of the equity shares and
the ADSs.

ICICI's principal shareholders are the Life Insurance Corporation of
India, the General Insurance Corporation of India and its subsidiaries and the
Unit Trust of India, each of which is controlled by the Indian government. In
addition to a government-nominated director, ICICI has traditionally invited a
representative of the Ministry of Industry to be one of its directors.
Following the resignation of Mr. Piyush Mankad in June 2001, there is no
representative of the Ministry of Industry on ICICI board at present. ICICI
also has a director representing the Life Insurance Corporation of India and
another director representing the General Insurance Corporation of India. At
year-end fiscal 2001, government-controlled entities owned approximately 33.6%
of ICICI's outstanding equity shares. As a result of such share ownership, the
Indian government will continue to have the ability to exercise influence over
most matters requiring approval of ICICI's shareholders, including the election
and removal of directors and significant corporate actions. At year-end fiscal
2001, the Unit Trust of India held 6.6% of ICICI's outstanding equity shares.
The Unit Trust of India is currently facing problems due to a significant
decline in the market value of its securities portfolio. Any substantial sale
of our equity shares by the Unit Trust of India could adversely affect the
price of our equity shares and our ADSs.

Conditions in the Indian securities market may affect the price or
liquidity of the equity shares and the ADSs.

The Indian securities markets are smaller and more volatile than
securities markets in developed economies. The Indian stock exchanges have in
the past experienced substantial fluctuations in the prices of listed
securities.

Indian stock exchanges have also experienced problems that have affected
the market price and liquidity of the securities of Indian companies. These
problems have included temporary exchange closures, broker defaults, settlement
delays and strikes by brokers. The Stock Exchange, Mumbai, formerly known as
the Bombay Stock Exchange or the BSE, was closed for three days in March 1995
following a default by a broker. In March 2001, the BSE dropped 667 points, or
15.6%. ICICI's stock price on the BSE dropped 15.4% from Rs.104.00 (US$ 2.22)
per equity share on March 1, 2001 to Rs. 87.95 (US$ 1.88) per equity share on
March 30, 2001. On September 21, 2001, ICICI's stock price on the BSE was Rs.
48.10 (US$ 1.03) per equity share. In March 2001, there were also rumors of
insider trading in the BSE leading to the resignation of the BSE president and
several other members of the governing board. In the same month, the Calcutta
Stock Exchange suffered a payment crisis when several brokers defaulted and the
exchange invoked guarantees provided by various Indian banks. In addition, the
governing bodies of the Indian stock exchanges have from time to time imposed
restrictions on trading in certain securities, limitations on price movements
and margin requirements. Further, from time to time, disputes have occurred
between listed companies and stock exchanges and other regulatory bodies, which
in some cases may have had a negative effect on market sentiment. Similar
problems could happen in the future and, if they did, they could affect the
market price and liquidity of our equity shares and our ADSs.

Settlement of trades of equity shares on Indian stock exchanges may be
subject to delays.

The equity shares represented by the ADSs are listed on the Bangalore,
Calcutta, Delhi, Madras, Mangalore and Vadodara Stock Exchanges, the BSE and
the National Stock Exchange of India.

Settlement on those stock exchanges may be subject to delays and an investor in
equity shares withdrawn from the depositary facility upon surrender of ADSs may
not be able to settle trades on such stock exchanges in a timely manner.

As a result of Indian government regulation of foreign ownership, the
price of our ADSs could go down.

Foreign ownership of Indian securities is heavily regulated and is
generally restricted. ADSs issued by companies in certain emerging markets,
including India, may trade at a discount or premium to the underlying equity
shares, in part because of the restrictions on foreign ownership of the
underlying equity shares. One of the conditions set by the Ministry of Finance
in its approval to ICICI's ADS offering in September 1999 was that the total
foreign equity shareholding in ICICI, by all possible routes, should not exceed
49.0% including existing foreign direct investors, non-resident Indian and
overseas corporate body investors, the existing GDR investors, the existing
investors in the foreign currency corporate borrowings of ICICI, foreign
institutional investors and the holders of the ADSs issued in the offering. As
a result of Indian government regulation of foreign ownership, the price of our
ADSs could go down.

Your holdings may be diluted by additional issuances of equity and any
dilution may adversely affect the market price of our ADSs.

Up to 5.0% of ICICI's issued equity shares may be issued in accordance
with ICICI's employee stock option scheme to eligible employees of ICICI and
its subsidiaries. Accordingly, ICICI had granted 8,531,250 share options at
August 31, 2001. During fiscal 2001, 32,500 share options were exercised and
120,400 share options were forfeited. At year-end fiscal 2001, 462,350 vested
share options were exercisable which increased to 1,748,175 share options at
August 31, 2001. These issuances, and any future issuance of equity shares,
will dilute the positions of investors in the ADSs and could adversely affect
the market price of our ADSs.

You may be unable to exercise preemptive rights available to other
shareholders.

A company incorporated in India must offer its holders of equity shares
preemptive rights to subscribe and pay for a proportionate number of shares to
maintain their existing ownership percentages prior to the issuance of any new
equity shares, unless these rights have been waived by at least 75.0% of the
company's shareholders present and voting at a shareholders' general meeting.
US investors in ADSs may be unable to exercise preemptive rights for equity
shares underlying ADSs unless a registration statement under the Securities Act
is effective with respect to such rights or an exemption from the registration
requirements of the Securities Act is available. Our decision to file a
registration statement will depend on the costs and potential liabilities
associated with any such registration statement as well as the perceived
benefits of enabling US investors in ADSs to exercise their preemptive rights
and any other factors we consider appropriate at the time. We do not commit
that we would file a registration statement under these circumstances. If ICICI
issues any such securities in the future, such securities may be issued to the
depositary, which may sell such securities in the securities markets in India
for the benefit of the investors in the ADSs. There can be no assurance as to
the value, if any, the depositary would receive upon the sale of these
securities. To the extent that investors in ADSs are unable to exercise
preemptive rights, their proportional interests in ICICI would be reduced.

Because the equity shares underlying the ADSs are quoted in rupees in
India, you may be subject to potential losses arising out of exchange rate
risk on the Indian rupee and risks associated with the conversion of rupee
proceeds into foreign currency.

Investors that purchase ADSs are required to pay for the ADSs in US
dollars. Investors are subject to currency fluctuation risk and convertibility
risks since the equity shares are quoted in rupees on the Indian stock
exchanges on which they are listed. Dividends on the equity shares will also be

paid in rupees, and then converted into US dollars for distribution to ADS
investors. Investors that seek to convert the rupee proceeds of a sale of
equity shares withdrawn upon surrender of ADSs into foreign currency and export
the foreign currency will need to obtain the approval of the Reserve Bank of
India for each such transaction. In addition, investors that seek to sell
equity shares withdrawn from the depositary facility will have to obtain
approval from the Reserve Bank of India, unless the sale is made on a stock
exchange or in connection with an offer made under the regulations regarding
takeovers. Holders of rupees in India may also generally not purchase foreign
currency without general or special approval from the Reserve Bank of India.
However, dividends received by the depositary in rupees and, subject to
approval by the Reserve Bank of India, rupee proceeds arising from the sale on
an Indian stock exchange of equity shares which have been withdrawn from the
depositary facility, may be converted into US dollars at the market rate.

On an average annual basis, the rupee has declined against the US dollar
since 1980. As measured by the Reserve Bank of India's reference rate, the
rupee lost approximately 30.8% of its value against the US dollar in the last
four years, depreciating from Rs. 36.46 per US$ 1.00 on September 15, 1997 to
Rs. 47.70 per US$ 1.00 on September 14, 2001. In addition, in the past, the
Indian economy has experienced severe foreign exchange shortages. India's
foreign exchange reserves have since increased to US$ 45.4 billion at August
31, 2001.

You may be subject to Indian taxes arising out of capital gains.

Generally, capital gains, whether short-term or long-term, arising on the
sale of the underlying equity shares in India are subject to Indian capital
gains tax. For the purpose of computing the amount of capital gains subject to
tax, Indian law specifies that the cost of acquisition of the equity shares
will be deemed to be the share price prevailing on the BSE or the National
Stock Exchange on the date the depositary advises the custodian to redeem
receipts in exchange for underlying equity shares. The period of holding of
such equity shares, for determining whether the gain is long-term or
short-term, commences on the date of the giving of such notice by the
depositary to the custodian. Investors are advised to consult their own tax
advisers and to consider carefully the potential tax consequences of an
investment in the ADSs.

There may be less company information available in Indian securities
markets than securities markets in developed countries.

There is a difference between the level of regulation and monitoring of
the Indian securities markets and the activities of investors, brokers and
other participants and that of markets in the United States and other developed
economies. The Securities and Exchange Board of India is responsible for
improving disclosure and other regulatory standards for the Indian securities
markets. The Securities and Exchange Board of India has issued regulations and
guidelines on disclosure requirements, insider trading and other matters. There
may, however, be less publicly available information about Indian companies
than is regularly made available by public companies in developed economies.

BUSINESS

Overview

We are a diversified financial services group organized under the laws of
India. We offer a wide range of products and services to corporate and retail
customers in India through a number of business operations, subsidiaries and
affiliates. At year-end fiscal 2001, we had assets of Rs. 740.4 billion (US$
15.8 billion) and stockholders' equity of Rs. 75.9 billion (US$ 1.6 billion).
Our net income for fiscal 2001 was Rs. 6.6 billion (US$ 142 million).

Most of our activities are carried out through ICICI, which accounted for
substantially all of our net income and 97.4% of our consolidated assets at
year-end fiscal 2001. ICICI is one of the largest of all Indian financial
institutions, banks and finance companies in terms of assets. ICICI has:

o a track record of continuous profitability and dividend payments since
fiscal 1956; o relationships with a client base of over 2,500 Indian
corporations, including some of the 150 largest corporations in India, and
a retail base of about 3.5 million bondholders;

o long-standing relationships with the government of India and a number of
multilateral and bilateral development agencies;

o an independent board consisting of the senior management personnel of
leading Indian and international commercial enterprises and highly
qualified professionals; and

o a strong management team with a demonstrated track record of managing
growth and capitalizing on new business opportunities over the last few
years.

The ICICI group provides a wide range of products and services aimed at
fulfilling the banking and financial needs of India's corporate and retail
sectors. Our business today consists primarily of corporate banking activities,
including project finance, corporate finance and working capital finance. In
the last six years, we have been offering retail banking services, including
taking retail deposits through our commercial banking affiliate, ICICI Bank. In
addition to offering retail bonds over the years, we started offering retail
credit products in fiscal 1999 and now offer retail credit products such as
automobile loans, home loans and other consumer finance products and services.
We also engage in a number of advisory, investment and other financial
activities and have now entered life insurance and non-life insurance
businesses.

We have consistently used technology to differentiate our products and
services from those of our competitors. Our technology-driven products include
electronic commerce-based business-to-business and business-to-consumer banking
solutions and web broking. Our commercial banking affiliate, ICICI Bank, was
the first bank in India to offer Internet banking. ICICI Bank also provides
cash management services and mobile phone banking services. To support these
technology initiatives, we have set up online real time transaction processing
systems. We remain focused on changes in customer needs and technological
advances and seek to remain at the forefront of electronic banking in India.

Our legal name is ICICI Limited but we are known commercially as ICICI.
ICICI was incorporated in 1955 under the laws of India as a limited liability
corporation. Our principal corporate office is located at ICICI Towers,
Bandra-Kurla Complex, Mumbai - 400051, Maharashtra, India and our telephone
number is +91 22 6531414. Our agent for service of process in the United States
is CT Corporation System and their address is 111 Eighth Avenue, 13th Floor,
New York, New York- 10011.

History

ICICI was formed in 1955 at the initiative of the World Bank, the
government of India and representatives of Indian industry. The principal
objective was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Until the
late 1980s, ICICI primarily focused its activities on project finance,
providing long-term funds to a variety of industrial projects. ICICI typically
obtained funds for these activities through a variety of government-sponsored
and government-assisted programs designed to facilitate industrial development
in India.

With the liberalization of the financial sector in India in the 1990s, we
transformed our business from a development financial institution offering only
project finance to a diversified financial services group offering a wide
variety of products and services. As India's economy became more
market-oriented and integrated with the world economy, we capitalized on the
new opportunities to provide a wider range of financial products and services
to a broader spectrum of clients. We set up independent operations through the
incorporation of subsidiaries and affiliates in the areas of venture capital
funding (1988), asset management (1993), investment banking (1993), commercial
banking (1994), Internet stock trading (1999), home finance (1999) and
insurance (2000). Simultaneously, we began diversifying our funding plans away
from complete reliance on government-assisted programs to more market-oriented
sources.

In 1996, ICICI merged into it SCICI Limited, a diversified project finance
and shipping finance lender, of which ICICI owned 19.9% (including the
conversion of partly-convertible notes of SCICI into equity shares on December
15, 1996), to eliminate overlapping business activities and to create
operational efficiencies. In 1997, ICICI acquired ITC Classic Finance Limited,
a non-bank finance company focused on retail deposit taking and corporate
finance with Rs. 14.0 billion (US$ 299 million) in assets, to create a deposit
distribution network, primarily in the eastern part of India. In 1998, ICICI
acquired Anagram Finance Limited, a non-bank finance company primarily in the
automobile financing sector, which had an asset base of Rs. 9.6 billion (US$
205 million). This was done to support our entry into the retail asset
financing market.

In May 1994, when ICICI obtained its commercial banking license to
establish ICICI Bank, the Reserve Bank of India imposed a condition that ICICI
reduce its ownership interest in ICICI Bank in stages, first to not more than
75.0% and ultimately to no more than 40.0%. In fiscal 1998, ICICI reduced its
ownership interest to just below 75.0% as required, through a public offering
in India. In March 2000, ICICI Bank completed an equity offering in the form of
ADSs listed on the New York Stock Exchange for an amount of US$ 175 million.
After this offering, ICICI's ownership interest in ICICI Bank was approximately
62.2%. Effective March 10, 2001, ICICI Bank acquired Bank of Madura, an old
private sector Indian bank, in an all stock merger, and our ownership interest
in ICICI Bank reduced to approximately 55.6% after the merger. ICICI has been
in discussions with the Reserve Bank of India to determine whether and to what
extent it may still be required to sell or reduce its interest in ICICI Bank.
During fiscal 2001, the Reserve Bank of India reiterated its requirement of a
reduction of ICICI's holding in ICICI Bank and advised ICICI to draw up a firm
plan for dilution of its stake. In line with Reserve Bank of India's directive,
ICICI reduced its interest in ICICI Bank to approximately 46.4% through sales
of equity shares of ICICI Bank in the Indian secondary markets to institutional
investors in March 2001. As a result of the foregoing, ICICI Bank ceased to be
a subsidiary of ICICI as of March 22, 2001 and was accounted for under the
equity method of accounting from April 1, 2000, the beginning of the fiscal
year in which our majority ownership in ICICI Bank was deemed to be temporary.
Further, during the first five months (April to August) of fiscal 2002, ICICI
sold another 0.4% equity interest in ICICI Bank in the Indian secondary markets
to institutional investors. At August 31, 2001, ICICI held a 46.0% interest in
ICICI Bank.

a dialogue with the government of India and regulatory agencies, including the
Reserve Bank of India. As of the date of this annual report, no firm proposal
for any such action has been approved by the board of directors or the
shareholders of either ICICI or ICICI Bank. In the event we are unable to
convert into a universal bank due to regulatory or other reasons, we would be
required to dilute our stake in ICICI Bank to 40.0%. In such an event, we
expect that there would be no change in the ICICI group's long-term strategy of
operating as a virtual universal bank offering a comprehensive range of
financial products and services to wholesale and retail segments.

At March 31, 2001, we operated principally through ICICI, 31 subsidiaries
and five affiliates including our investment banking subsidiary, ICICI
Securities and Finance Company Limited, and our commercial banking affiliate,
ICICI Bank. In addition, four venture capital funds were set up in fiscal 2001
and our consolidated financial statements for fiscal 2001 include the
operations of these venture capital funds. Together with our subsidiaries and
affiliates, we operate as a virtual "universal" bank offering a wide range of
products and services to corporate and retail customers in India.

Under the Indian Companies Act, 1956, ICICI is designated as a public
financial institution. This status allows us certain funding advantages, such
as greater incentives for commercial banks and non-government provident,
superannuation and gratuity funds to invest in certain securities issued by
public financial institutions. See "Supervision and Regulation--Public
Financial Institution Status".

Shareholding Structure and Relationship with the Government of India

We have always operated as an autonomous and independent commercial
enterprise, making decisions and pursuing strategies that are designed to
maximize shareholder value, and the Indian government has never directly held
any shares in ICICI. However, reflecting the dominant role of the Indian
government in the Indian economy and ICICI's status as a public financial
institution, ICICI's principal shareholders are government-controlled. They
include the Life Insurance Corporation of India, the General Insurance
Corporation of India and its subsidiaries and the Unit Trust of India. There is
no shareholders agreement or voting trust relating to the ownership of the
shares owned by the government-controlled shareholders.

The following table sets forth, at year-end fiscal 2001, certain
information regarding the ownership of ICICI's equity shares.

----------------------------------------
Percentage of total Number of equity
equity shares shares held
outstanding
----------------------------------------

Government-controlled shareholders:
Life Insurance Corporation of India.............................. 12.3% 96,314,841
General Insurance Corporation of India and its subsidiaries...... 11.2 88,035,471
Unit Trust of India.............................................. 6.6 52,101,059
Other government-controlled institutions......................... 3.5 27,856,170
----------------------------------------
Total government-controlled shareholders........................... 33.6 264,307,541
----------------------------------------

Other Indian investors:
Individual domestic investors (1)................................ 10.2 80,188,063
Bajaj Auto Limited .............................................. 5.5 43,139,760
Indian corporates and others (excluding Bajaj Auto Limited)...... 2.0 15,592,375
Mutual funds and banks........................................... 0.8 6,288,439
----------------------------------------
Total other Indian investors....................................... 18.5 145,208,637
----------------------------------------
Total Indian investors............................................. 52.1 409,516,178
----------------------------------------

Foreign investors:
Deutsche Bank, as depositary(2).................................. 32.7 256,414,285
Foreign institutional investors, foreign banks, overseas
corporate bodies and non-resident Indians..................... 15.1 118,644,213
----------------------------------------
Total foreign investors............................................ 47.8 375,058,498
----------------------------------------
Shares in transit (depositary pool account) (3).................... 0.1 769,772
========================================
100.0% 785,344,448
========================================
-------------

(1) Executive officers and directors as a group held less than 0.1% of the
equity shares as of this date.
(2) Deutsche Bank holds the shares as depositary on behalf of investors of all
51.28 million ADSs outstanding which are listed on the New York Stock
Exchange. In September 1999, 32.14 million ADSs were offered in a
SEC-registered public offering and 19.14 million ADSs were issued
following the exchange offer of ICICI's GDRs for its SEC-registered ADSs
on a one-for-one basis.
(3) Comprises equity shares which are in the process of being credited to the
transferee's account at year-end fiscal 2001.

The composition of ICICI's board of directors at August 31, 2001 reflects
the principal shareholdings held by the government-controlled institutions, the
terms of the Indian government's credit and guarantee facilities and the wide
public ownership in India. Under the terms of the loan and guarantee facilities
provided to ICICI, the government of India is entitled to appoint and has
appointed one representative to ICICI's board. In addition to the
government-nominated director, ICICI has traditionally invited a representative
of the Ministry of Industry to be one of its directors. Following the
resignation of Mr. Piyush Mankad in June 2001, there is no representative of
the Ministry of Industry on ICICI board at present. The government-controlled
insurance companies that are ICICI's largest shareholders, General Insurance
Corporation of India and its subsidiaries and Life Insurance Corporation of
India, also each have a representative on ICICI's board. Of the remaining 13
directors, the Chairman is the former executive chairman of ICICI, four are
executive directors, five independent directors are from a broad range of
industrial companies, one is a consultant and two independent directors are
professors. See "Management--Directors and Executive Officers".

ICICI raised US$ 315 million through an offering of 32.14 million ADSs in
September 1999. ICICI, like some other Indian companies, had obtained the
Ministry of Finance's approval to raise equity in the international markets. It
was a condition of the Ministry of Finance's approval for the ADS offering in
September 1999 that the total foreign equity shareholding in ICICI, by all
possible routes, may not exceed 49.0%, that control must rest with Indian
shareholders, that investors in the ADSs may not be granted voting rights and
that all of the ADSs will be voted by the depositary in accordance with the
direction of the board of directors. In accordance with the conditions
stipulated by the Ministry of Finance in its approval of ICICI's offering of
ADSs, the depositary has the right to vote on the equity shares represented by
the ADSs as directed by ICICI's board of directors so as to keep management
control of ICICI in the hands of Indian shareholders. ICICI does not have any

agreement with its government-controlled shareholders regarding management
control, voting rights, anti-dilution or any other matter.

To prevent dilution of the ownership of the principal
government-controlled shareholders and in light of the government's desire that
control must rest with Indian shareholders, ICICI offered 68.5 million equity
shares to its principal government-controlled shareholders, the Life Insurance
Corporation of India, General Insurance Corporation of India and its
subsidiaries and Unit Trust of India, in a private placement on September 9,
1999 and also offered 41.5 million equity shares in a public offering in India
from September 9-14, 1999. Both of these offerings were carried out at a price
of Rs. 73.00 per equity share, approximately the market price on August 19,
1999, the date the board of directors approved the private placement and the
domestic public offering.

The holding of foreign investors in ICICI increased to 47.8% at year-end
fiscal 2001 from 36.6% at year-end fiscal 1998 primarily due to the offering of
ADSs in September 1999. The holding of government-controlled shareholders
declined to 33.6% at year-end fiscal 2001 from 38.2% at year-end fiscal 1998
and the holding of other Indian investors declined to 18.5% at year-end fiscal
2001 from 23.8% at year-end fiscal 1998.

Our Strategy

The liberalization and rapid growth of the Indian economy has provided us
with significant opportunities to provide superior financial products and
services to Indian companies and the retail sector. Our objective is to enhance
our position as India's premier provider of financial services.

The key elements of our business strategy are to:

o focus on quality growth opportunities by:
- maintaining and enhancing our strengths in corporate banking; and

- building a strong retail franchise;

o emphasize conservative risk management practices and enhance asset
quality;

o use technology for competitive advantages; and

o attract and retain talented professionals.

Focus on Quality Growth Opportunities by:

Maintaining and Enhancing our Strengths in Corporate Banking

We have a track record of more than 40 years of providing financial
products and services to Indian companies. We enjoy a strong market position in
a number of profitable business segments, including the infrastructure and the
oil, gas and petrochemicals sectors. We have also established a significant
presence in the business of providing non-project finance to leading corporates
in India, classified as corporate finance by us. Our focus has been on
structured finance including securitization and customized financing structures
based on capturing the cash flows generated from the borrower's business. We
believe this strategy will help us create a diverse asset base, achieve stable
revenues and lower the risk to shareholder returns. We continue to develop our
expertise in providing value-added advisory services, such as project
structuring, loan and equity syndication, and merger and acquisition services.
Our goal is to provide a comprehensive and integrated service to corporate
treasurers through our relationship managers. We aim to increase the
cross-selling of our products and services and maximize the value of our
corporate relationships. With our strong corporate franchise, in-depth
knowledge of Indian industry and talented workforce, we believe that we are
uniquely positioned to take advantage of this opportunity.

Building a Strong Retail Franchise

Retail business forms an integral part of our portfolio diversification
strategy. Our business strategy in the retail business has been to build a
strong financial services brand, offer a comprehensive range of innovative
products and services across the country, using multiple distribution channels
and provide efficient customer service. We believe that these initiatives have
provided us a distinct competitive advantage in our retail business.

During fiscal 2001, we continued to consolidate the position of our
"ICICI" brand in the Indian financial sector. A strong corporate and product
advertisement strategy has created a strong retail identity. Studies by
independent market research agencies have shown that the ICICI brand is the
number two financial services brand in India in terms of spontaneous
advertising recall.

Our innovations in products and distribution methods, such as the Internet
and doorstep service through a wide network of direct marketing agents, have
been well-received by the market. We aim to create a customer-centric
organization aimed at providing better levels of customer service.

During fiscal 2001, we made significant investments in setting up a strong
retail business architecture, including hiring more skilled employees and
direct marketing agents. We believe that these investments have yielded desired
results, providing a strong impetus to our growth. During fiscal 2001, we
believe that we emerged as a significant player with a nation-wide presence in
the retail credit businesses.

Emphasize Conservative Risk Management Practices and Enhance Asset Quality

We believe that conservative risk management policies, processes and
controls are critical for long-term sustainable competitive advantages in our
business. ICICI's Risk Management Group is an independent, centralized group
responsible for establishing and implementing company-wide risk management
policies, with an increasing focus on enhancing asset quality. We will continue
to build on our credit risk management procedures, credit evaluation and rating
methodology, credit risk pricing models, proprietary analytics and monitoring
and control mechanisms. We expect to enter new product markets only after
conducting detailed risk analysis and pilot testing programs.

To reduce risk, we are in the process of diversifying our loan portfolio
towards shorter-term loans to highly-rated corporate customers, structured
project finance and retail lending. In addition, we seek to lower the credit
risk profile of the loan portfolio through the increased use of financing
structures based on a security interest in the cash flows generated from the
business of the borrower and increased collateral, including additional
security in the form of liquid assets, such as investment securities and
readily marketable real property. We also try to mitigate project risk through
the allocation of risk to various project counterparties, such as construction
contractors, operations and maintenance contractors and raw material and fuel
suppliers, by entering into rigorous project contracts with those
counterparties. We intend to continue to seek to obtain conservative collateral
positions on productive assets, such as property, plant and equipment, over
which we would typically secure first lien status.

Management has placed great emphasis on asset quality and this focus has
been institutionalized across the organization, with asset quality parameters
being a key factor in employee performance evaluation. We believe that our
adoption of US GAAP, including its associated provisioning requirements,
embodies a more conservative approach to quantifying loan losses. We believe we
are the market drivers in India in achieving early settlements with troubled
borrowers, thus maximizing our cash flows from these loans. Our Special Asset
Management Group has the responsibility of taking care of large impaired loans
and accounts under watch.

Use Technology for Competitive Advantages

We continue to be at the forefront of usage of technology in the financial
services sector. Information technology is a strategic tool for our business
operations to gain competitive advantage and to improve overall productivity
and efficiency of the organization. In addition, we developed our e-commerce
strategy to exploit opportunities in the Internet and technology domain by
leveraging our core competencies. All our technology initiatives are aimed at
enhancing value, offering customer convenience and improved service while
optimizing costs.

We expect to continue with our policy of making substantial investments in
technology to achieve a significant competitive advantage. Our subsidiary,
ICICI Infotech, currently manages substantially all of our key technology
projects.

Our key objectives behind our information technology strategy continue to
be:

o building a cost-efficient distribution network to accelerate the
development of our retail franchise;

o widening and deepening our retail franchise by offering our clients
business-to-consumer solutions;

o enhancing cross-selling and client segmenting capability by using
analytical tools and efficient data storage and retrieval systems;

o strengthening our corporate franchise by offering our clients
business-to-business solutions;

o improving credit risk and market risk management; and

o improving product, client and business unit profitability analysis to
enable optimal capital allocation.

Attract and Retain Talented Professionals

We believe a key to our success will be our ability to continue to
maintain and grow a pool of strong and experienced professionals. We have been
successful in building a team of talented professionals with relevant
experience, including experts in credit evaluation, risk management, retail
consumer products, technology and marketing. Recruitment is a key management
activity led by the Managing Director and Chief Executive Officer of ICICI and
we continue to attract graduates from the premier Indian business schools,
having recruited 73 such business graduates in fiscal 2001.

Our management team is committed to enhancing shareholder value and all
our performance targets seek to meet this primary objective. We believe we have
created the right balance of performance bonus, stock option and other economic
incentives for our employees so that they will be challenged to aggressively
develop business, achieve profitability and asset quality targets and control
risk. In the last two years, we have conducted a comprehensive review of our
organizational structure and procedures, working with internationally
recognized consulting firms. We intend to continue to re-engineer our
management and organizational structure to allow us to respond effectively to
changes in the business environment and enhance our overall profitability.

Overview of Our Products and Services

The following chart sets forth the existing products and services offered
by us, together with our affiliates.

|---------------|
|The ICICI Group|
|---------------|
|
|-----------------------------------------------------------------|
| |
V V
|-----------------| |-----------------|
|Corporate Banking| | Retail Banking |
|-----------------| |-----------------|
| |
---------------------------------------------------- -------------------------------------------------
| | | | | | | | | |
V V V V V V V V V V
|---------| |---------| |---------| |-----------| |------------| |---------| |---------| |---------| |---------| |---------|
| Project | |Corporate| | Working | | Investment| | Other | | Web | | Savings | |Consumer | |Insurance| |Insurance|
| Finance | | Finance | | Capital | | Banking | | Activities | | Broking | | | | Credit | | Credit | | |
| | | | | Finance | | | | | | (1) | | | | | | | | |
|---------| |---------| |---------| |-----------| |- ----------| |---------| |---|-----| |--------|| |---------| |---------|
| | |
--|-----------|----------------| |------------|-------------|-----------| |
V V V V V V V |
|-------------| |--------------| |--------------| |------------| |---------| |---------| |---------| |
|Infrastucture| | Oil, Gas and | |Manufacturing | | Asset | | Bonds | |Deposits | |Checking | |
| Finance | |Petrochemicals| |Sector Finance| | Management | | | | | | Accounts| |
| | | | | | | | | | | | | | |
|-------------| |--------------| |--------------| |------------| |---------| |---------| |---------| |
|------------|-----------|------------|------------|------------|
| | | | | |
V V V V V V
|----------| |----------| |----------| |----------| |----------| |----------|
| Credit | | Personal | |Automobile| | Home | |Commercial| | Consumer |
| Cards | | Loans | | Loans | | Loans | | Vehicle | | Durable |
| | | | | | | | | Loans | | Loans |
|----------| |----------| |----------| |----------| |----------| |----------|

---------
(1) Including the provision of depositary share accounts.

Corporate Banking Activities

Our corporate banking operations provide a range of products and services
to India's leading corporations and growth-oriented, middle market commercial
enterprises. This includes project finance in the infrastructure, oil, gas and
petrochemicals, and manufacturing sectors, corporate and working capital
finance and investment banking services. In addition, we also provide venture
capital funding and a range of fee and commission based services, including
advisory services, loan syndication, letters of credit, custodial services and
corporate risk management services. Our affiliate, ICICI Bank, provides
short-term working capital finance and also offers cash management services.

Consistent with our strategy of diversification, project loans to the
manufacturing sector, which are typically more dependent on world economic
cycles in various commodities, decreased to 35.1% of ICICI's total loan
portfolio at year-end fiscal 2001 from 73.1% at year-end fiscal 1997.
Correspondingly, corporate financing, including structured solutions for
highly-rated Indian corporate clients, have increased over the same period.

ICICI's loan portfolio includes not only loans but also financing provided
to ICICI's clients through debentures issued by borrowers. In the past few
years, an increasing proportion of ICICI's financing has been provided in the
form of debentures as we can sell debentures in the Indian secondary markets.
We believe that as the secondary debt markets in India become more active,
lenders will be able to more easily sell debentures, thereby allowing for
better management of mismatches in the maturities of assets and liabilities and
providing additional liquidity. The terms and conditions for debentures are
generally the same as those for loans.

The following table sets forth, for the periods indicated, ICICI's gross
portfolio by sector and as a percentage of ICICI's total gross portfolio based
on the unconsolidated financial statements of ICICI prepared in accordance with
Indian GAAP, which is the only basis available. Management believes that these
unconsolidated figures provide useful information about trends in the
portfolio.

At March 31,
--------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
--------------------------------------------------------------------------------------------------
% of % of % of % of % of
Amount total Amount total Amount total Amount total Amount Amount total
--------------------------------------------------------------------------------------------------
(Indian GAAP)

(in millions, except percentages)

Infrastructure project
finance.............. Rs.25,468 8.6% Rs.51,868 13.8% Rs.62,639 13.3% Rs.74,168 13.6% Rs. 86,534 US$1,847 13.5%
Oil, gas and
petrochemicals
project finance....... 27,287 9.2 32,997 8.8 61,842 13.1 68,816 12.6 53,194 1,135 8.3
Manufacturing sector
project finance....... 217,745 73.1 219,816 58.3 231,614 49.1 222,455 40.8 223,757 4,776 35.1

Corporate finance........ 27,331 9.1 72,292 19.1 114,791 24.4 175,683 32.2 253,989 5,421 39.9

Personal finance......... -- -- -- -- 602 0.1 4,537 0.8 20,395 435 3.2
--------------------------------------------------------------------------------------------------
Total ICICI gross
portfolio............Rs.297,831 100.0% Rs.376,973 100.0% Rs.471,488 100.0% Rs.545,659 100.0% Rs.637,869 US$13,615 100.0%
==================================================================================================

The following table sets forth, for the periods indicated, ICICI's
approvals by sector and as a percentage of ICICI's total approvals. "Approvals"
are the aggregate of all financial assistance, which have been approved under
ICICI's internal credit approval policies. Approvals include funded assistance
such as loans, lease financing, debentures and equity investments and
non-funded assistance such as guarantees.

Year ended March 31,
---------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
---------------------------------------------------------------------------------------------------------
% of % of % of % of % of
Amount total Amount total Amount total Amount total Amount Amount total
---------------------------------------------------------------------------------------------------------
(Indian GAAP)

(in millions, except percentages)

Infrastructure project
finance................. Rs.21,767 15.5% Rs.59,721 24.2% Rs.71,160 22.0% Rs.60,132 13.8% Rs.118,755 US$ 2,535 21.2%
Oil, gas and
petrochemicals
project finance....... 14,554 10.3 25,846 10.5 17,444 5.4 37,372 8.6 10,150 217 1.8
Manufacturing sector
project Finance........... 84,982 60.3 63,705 25.8 61,198 18.9 63,579 14.6 67,602 1,443 12.0

Corporate finance......... 19,535 13.9 97,903 39.5 169,702 52.4 264,779 60.8 322,813 6,890 57.6

Personal finance (1).... -- -- -- -- 4,202 1.3 9,366 2.2 41,600 888 7.4
----------------------------------------------------------------------------------------------------------
Total ICICI approvals... Rs.140,838 100.0% Rs.247,175 100.0% Rs.323,706 100.0% Rs.35,228 100.0% 560,920 US$11,973 100.0%
==========================================================================================================

----------------
(1) Includes operations of ICICI Home Finance Company, a wholly-owned
subsidiary of ICICI.

Disbursements are typically made only after all necessary contractual
arrangements have been put in place and the borrower has complied with all
conditions precedent to disbursement or such conditions have been waived. In
project finance, disbursements lag approvals for long periods because they are
made in tranches throughout the implementation period of a project.
Disbursements include only funded assistance such as loans, lease financing,
debentures and, to a lesser extent, equity investments.

The following table sets forth, for the periods indicated, ICICI's
disbursements by sector and as a percentage of total disbursements.

(in millions, except percentages)

Infrastructure project
finance................. Rs.11,805 10.5% Rs.27,565 17.4% Rs.14,622 7.6% Rs.16,059 6.2% Rs.26,802 US$ 572 8.4%
Oil, gas and
petrochemicals
project finance....... 7,451 6.7 21,327 13.5 11,851 6.2 16,618 6.4 2,359 50 0.7
Manufacturing sector
project Finance........... 74,933 67.0 52,278 33.1 47,778 24.9 37,353 14.5 34,540 737 10.8

Corporate finance......... 17,620 15.8 56,899 36.0 113,798 59.1 181,243 70.2 221,307 4,724 69.3

Personal finance (1).... -- -- -- -- 4,202 2.2 7,084 2.7 34,637 739 10.8
---------------------------------------------------------------------------------------------------------
Total ICICI approvals... Rs.111,809 100.0% Rs.158,069 100.0% Rs.192,251 100.0% Rs.258,357 100.0% Rs.319,645 US$6,823 100.0%
=========================================================================================================

----------------
(1) Includes operations of ICICI Home Finance Company, a wholly-owned
subsidiary of ICICI.

Disbursements to the manufacturing sector have decreased over the past
five years, as we have consciously increased our exposure to the corporate
finance business. This shift in focus is consistent with our goal of
diversifying our portfolio.

Project Finance

We believe that we are the premier providers of project financing products
and services in India. For over 40 years, we have financed a vast majority of
the country's largest projects in the private sector. Our project finance
activities include medium-term and long-term lending to the manufacturing
sector and structured finance to the infrastructure and oil, gas and
petrochemicals sectors. Our project finance business consists principally of
extending rupee loans to our clients although we do provide financing in
foreign currencies. We also provide guarantees to foreign lenders and export
credit agencies, on behalf of our clients, typically for large projects in the
infrastructure sector. As part of our project finance activities, we have also
provided lease financing for a wide range of imported and locally manufactured
equipment. Such asset-based financial assistance is usually provided up to
100.0% of the asset's value. We retain ownership rights to the equipment and
claim capital allowances on it. As a result of recent regulatory and taxation
changes, we may not increase our exposure in the lease financing business.

ICICI's project finance activities are described below.

Manufacturing Sector Finance

Our manufacturing sector financing includes project-based lending to
companies in traditional manufacturing sectors, including iron, steel and metal
products, textiles, machinery and capital goods, cement and paper. As a result
of structural changes to the Indian economy, trade liberalization and the
downturn in prices of several major market commodities, many of these industry
segments have gone through a period of stress over the last few years. Given
our emphasis on improving asset quality in view of the prevailing environment,
we have restricted approvals for new projects in the manufacturing sector.

We are now focusing our lending operations in this sector on those
companies that are controlled by entities that have the ability to commit
required financial resources, possess the technology and scale necessary to
compete globally and demonstrate financial viability through profitability
assessments and well-defined business plans. We are also implementing tighter
security measures such as security interests in project contracts and escrow
accounts to capture cash flows.

Oil, Gas and Petrochemicals Finance

In 1996, we created a specialized oil, gas and petrochemicals group to
capitalize on the growth in financing opportunities afforded by ongoing
deregulation and privatization in these sectors. We believe that our
significant in-house expertise in project financing in the areas of oil
exploration and production, refineries, pipelines, liquefied natural gas,
petrochemicals and fertilizers has enabled us to attain a pre-eminent position
in financing this sector. This has been acknowledged by the government of India
and the business community and has resulted in our playing a significant role
in policy formulation. We believe we are a market leader in financing large
private sector projects in the oil production, refining and petrochemicals
industries. We have also carried out several advisory mandates in these sectors
and have worked out preliminary financing plans and modes of implementation for
the proposed refinery projects of leading oil companies in the public sector.
With the deregulation in the refinery sector almost complete, we expect new
business opportunities in the development of infrastructure for distribution
and marketing of petroleum products.

Infrastructure Finance

The liberalization and growth of the Indian economy in the 1990s has
sharply increased the demand for basic infrastructure services such as power,
telecommunications, urban infrastructure and transportation. The absence of
adequate basic infrastructure is seen as a major bottleneck to growth in the
economy, and future investments required in this sector are expected to be
significant. We believe we are well-positioned to finance this anticipated
growth due to our in-depth knowledge of the infrastructure sector, our
expertise in structuring project finance transactions, our strong relationships
with most of the country's leading project sponsors and our ability to commit
substantial domestic resources.

As part of our infrastructure financing strategy, in 1996, we established
a specialized group with the objective of capitalizing on the growing business
opportunities in the sector. We believe this group is a market leader in terms
of the number of infrastructure project finance mandates awarded among those
projects that meet our credit risk criteria. We have been appointed lead
arranger and project advisor or facilitator in a majority of our mandates and
have been actively involved in developing financing structures and techniques.
This approach enables us to participate in attractive fee-based business, such
as loan syndication, underwriting and advisory services, and also enables us to
influence the project development and final project structure to meet our
credit risk standards.

We have structured and lead-managed several innovative and "first time"
transactions in the Indian market. These include the first tax-free bond
offering by an infrastructure project, credit enhanced by ICICI's guarantee, in
fiscal 1999 and the first two major acquisitions in the power sector in fiscal
1999 and 2000. Given the large amount of investment required in the
infrastructure sector, the government of India issued policy guidelines over
the past few years aimed at encouraging the involvement of the private sector,
including the foreign private sector. However, fiscal 2001 saw a limited
response to the government of India's efforts to attract private investments in
the infrastructure sector. Systemic issues have dissuaded the private sector
from investing in the infrastructure sector, particularly in the power sector.

Significant achievements during fiscal 2001 included the syndication of
the debt of, and extensive involvement in the successful completion of, an
initial public offering for the first private basic services project in the
telecommunications sector. We also achieved successful financial closure of two
projects in the private sector (independent power producers) as lead arranger.
Our approvals in the infrastructure segment during fiscal 2001 totaled Rs.
118.8 billion (US$ 2.5 billion) and formed 21.2% of our aggregate approvals.
Our disbursements in the infrastructure segment during fiscal 2001 totaled Rs.
26.8 billion (US$ 572 million) and formed 8.4% of our aggregate disbursements.
We were appointed lead arranger and project advisor in the vast majority of our
mandates.

As a result of our expertise and our leading position in the
infrastructure financing market, senior members of our management team have
been invited to serve on high-level public policy committees. ICICI's Managing
Director and Chief Executive Officer was a member of two sub-groups set up by
the Group on Telecom and IT Convergence appointed by the government. One of the
sub-groups worked on the resolution of subsisting problems in the
telecommunications sector with a view to ensuring expeditious implementation of
the New Telecom Policy, 1999. Given the imminent convergence of
telecommunications, media and information technology, ICICI, as part of the
other sub-group, worked on developing a legislative framework for the
Communication Convergence Bill, 2000.

From May 2001, the activities of oil, gas and petrochemicals finance and
infrastructure finance are handled by the Projects Division.

Corporate Finance and Working Capital Finance

In line with our strategy to offer our clients a broader range of products
and services, since 1996, we have increasingly offered non-project loans and
structured finance products to our higher-rated corporate clients. We have
expanded our product mix to include a variety of products that are designed to
allow our clients to effectively manage their balance sheets and cash flows,
mitigate risks and enhance the credit rating of certain of their debt
issuances. ICICI has also commenced providing working capital finance to
corporate clients. During fiscal 2001, we executed a number of innovative
financial transactions including lending against intellectual property rights,
brand financing and forward rate agreements for corporate loans. In 1997, we
established a dedicated structured products group to offer our clients
customized products which can allow them to raise funds at more attractive
rates and utilize off-balance sheet funding.

Our structured products group has focused specifically on the application
of securitization techniques to credit enhance our traditional lending
products. We believe securitization will be a growth area in India. The
securitization market in India is emerging and we are playing a leading role in
its growth and development. We have developed expertise in structuring
transactions across a variety of asset classes. During fiscal 2001, we applied
the process of securitization to several new asset classes including student
fee receivables, road toll receivables, employee loans and license fee
receivables. We also structured and executed the first two deals in India
involving the securitization of oil receivables in fiscal 1999. Our structured
products group is also focusing on selling down of our corporate loans to
better manage mismatches in the maturities of our assets and liabilities and to
provide additional liquidity.

In a bid to widen our borrower base beyond our traditional clients, we
introduced channel financing as a product that allows us to capture lending
opportunities in the distribution channel of highly-rated corporate clients.
Channel financing involves loans to dealers or suppliers in the distribution
channels of our major corporate clients with varying types of credit
enhancement from these clients, which minimizes credit risk. We believe this is
a profitable business opportunity and being short-term in nature, lowers the
risk profile of our portfolio. During fiscal 2001, we broadened channel
financing significantly to tap the vendor segment as well.

As a complement to our corporate finance business, our affiliate, ICICI
Bank, provides short-term working capital financing. ICICI Bank's working
capital product offerings include cash credit, demand loans, export finance,
bills discounting, letters of credit, foreign exchange management services and
guarantees. ICICI Bank also offers cash management services to corporate and
institutional clients, allowing them to reduce the time period between
collections and remittances and thus streamline their cash flows. We believe
our existing corporate relationships will enable ICICI Bank to provide working
capital products to high growth middle market customers and large companies and
also to generate fee-based income. We are therefore focusing our marketing
efforts on increasing ICICI Bank's market share in this segment.

Investment Banking

We offer investment banking services to Indian corporate customers
principally through ICICI Securities, our subsidiary. ICICI Securities provides
investment banking services through three main business lines - corporate
advisory, fixed income and equities. The clients of ICICI Securities include a
range of Indian and foreign corporations and institutional investors. ICICI
Securities is a non-bank finance company. For a description of non-bank finance
companies, see "Overview of the Indian Financial Sector - Non-Bank Finance
Companies".

Corporate Advisory

ICICI Securities provides a variety of advisory services, including advice
on financing and strategic transactions. ICICI Securities was one of the first
Indian investment banks to form a dedicated mergers and acquisitions group to
provide a range of services to large and mid-market Indian corporate clients
including business valuations, pricing and structuring of transactions, and
financial and corporate restructuring. In addition, ICICI Securities provides
specialized services such as private equity syndication and privatization
advisory services for public sector companies.

Fixed Income

ICICI Securities is one of the market leaders in the Indian debt market.
In fiscal 2001, ICICI Securities assisted public sector entities, financial
institutions and corporates to raise over Rs. 164.0 billion (US$ 3.5 billion)
of debt. ICICI Securities is a primary dealer appointed and authorized by the
Reserve Bank of India to trade in government securities. As a primary dealer,
ICICI Securities is permitted to underwrite the issuance of government
securities and treasury bills and act as a market maker in these instruments.
ICICI Securities was the first primary dealer to commence activity in interest
rate derivative products such as interest rate swaps and forward rate
agreements following their introduction by the Reserve Bank of India in July
1999. ICICI Securities is also a leading player in the non-government debt
market in India. This activity primarily involves running a proprietary book in
various money market instruments.

Equities

ICICI Securities is one of the leading arrangers of equity securities in
the Indian capital markets. In equities, ICICI Securities offers a range of
products including underwriting of equity offerings, public and private
placement of corporate equity and assistance in buyback programs. Indian law
prohibits ICICI Securities from holding or trading ICICI equity shares.

Other Corporate Banking Activities

We provide a variety of other specialized corporate banking services to
our clients, including the following services.

Venture Capital Funding

We provide venture capital funding to start-up companies through ICICI
Venture Funds Management Company Limited. At year-end fiscal 2001, ICICI
Venture managed or advised funds of Rs. 10.3 billion (US$ 220 million). The
company focuses on the information technology and healthcare sectors. We
believe that ICICI Venture is the leading private equity investor in India,
having invested in the maximum number of private equity deals completed in the
country to date and having established a track record of successfully exiting
from several investments.

Loan Syndication

The increasing large size of projects in Indian markets, particularly in
the infrastructure sector, has created the need for syndication of loans. We
have, over a period, developed an expertise in project appraisal, which is
well-recognized by both domestic and international financial institutions. We
expect that loan syndication will be an important source of fee income for us.
Our syndication capabilities have helped us maintain our market share in
arranging finance for large companies.

Custodial Services

We have a significant market share as a custodian of overseas depositary
banks for depositary receipt issues of Indian companies in the international
markets. The total assets held in custody on behalf of our clients, mainly
foreign institutional investors, offshore funds, overseas corporate bodies and
depositary banks for GDR investors, increased from Rs. 54.1 billion (US$ 1.2
billion) at year-end fiscal 1996 to Rs. 282.8 billion (US$ 6.0 billion) at
year-end fiscal 2000. In fiscal 2001, due to depressed market conditions, the
value of these assets have declined to Rs. 219.9 billion (US$ 4.7 billion). In
addition, ICICI is registered as a depositary participant of National
Securities Depositary Limited and Central Depositary Services (India) Limited,
the only two securities depositaries operating in India, and provides
electronic depositary facilities to investors including retail investors. To
facilitate settlement services, we have become the clearing member of clearing
agencies of the leading stock exchanges.

Non-Life Insurance

Following the deregulation of the insurance sector, private sector
companies have been allowed to enter the insurance business. In the non-life
insurance sector, we have entered into a joint venture partnership with Lombard
Canada Limited. We have a 74.0% interest in this joint venture. Lombard Canada
Limited, which is the subsidiary of Fairfax Financial Holdings Limited, is the
holding company of the Lombard insurance group of companies. The joint venture
company, ICICI Lombard General Insurance Company Limited, obtained the license
to conduct general insurance business in August 2001 and since then has
commenced operations. The company had no operations at year-end fiscal 2001.

International business

We have recently set up an international business division which will be
responsible for our international businesses in the retail, corporate and
technology areas and for the international alliances required for our domestic
businesses. This division seeks to leverage on our home country links and
technology competencies in financial services. In view of its importance, the
board of ICICI appointed one of its executive directors to manage this
business. Accordingly, Ms. Lalita D. Gupte has assumed responsibility for our
international business as Joint Managing Director and Chief Operating
Officer--International Business.

Corporate Risk Management Services

We offer risk management products to our corporate clients both through
ICICI and ICICI Bank. Our risk management products are currently limited to
foreign currency forward transactions and currency and interest rate swaps for
selected approved clients. We believe, however, that the demand for risk
management products will grow, and we are building the capabilities to grow
this business. We are focusing particularly on setting up the sophisticated
infrastructure and internal control procedures which are critical to this
business.

Advisory Services

We provide additional advisory services to clients to complement our
financing services. Although we have been awarded mandates in various sectors,
we have focused particularly on advisory services in the energy sector,
particularly in connection with the restructuring and reform programs of
electricity boards in Indian states.

Retail Banking Activities

Historically, we have been a project finance lender with a large base of
corporate customers. We have, in the recent past, made efforts to diversify
from our strong corporate orientation. We believe that the Indian retail
financial services market is likely to experience significant growth in the
future.

We began our retail banking activities by raising deposits from retail
customers through ICICI Bank which was created in 1994. ICICI also offers a
variety of unsecured redeemable bonds and has built a customer base of about
3.5 million bondholders through the public issue of bonds. In addition, ICICI's
affiliate Prudential ICICI Asset Management Company, a joint venture between
Prudential Corporation plc of the United Kingdom and ICICI, offers a variety of
mutual fund products targeted at this market.

In recent years, we have taken a number of steps to establish a stronger
retail orientation. We offer a wide variety of products through various
distribution channels, including physical centers and dedicated franchisees.
Over the past three years, we have launched several consumer credit products
such as automobile loans, home loans, two-wheeler loans, loans for commercial
vehicles and personal loans.

Our target market includes wage earners, professionals, business persons,
self-employed persons and other members of the Indian middle and upper class.
We have adopted a focused approach by targeting a selected sub-segment of
middle and upper class households based on a variety of parameters including
monthly income and residence in selected urban areas. We believe that this
sub-segment is currently experiencing an increasing need for financial products
and services, which are not readily available to them, and therefore represents
an extremely attractive business opportunity for us. Further, we expect our
target market to experience continued growth in line with the growth of the
Indian economy.

All of our retail products are marketed under the ICICI brand, which our
research indicates is becoming a well-recognized financial services brand. To
enhance our brand equity, we have launched a comprehensive brand-building
campaign with advertisements in print and television, which resulted in our
achieving the second highest spontaneous advertising recall among Indian
financial sector brands.

Retail Savings Products

Bond Issues

As part of our strategy to diversify our liability portfolio, we are
increasingly targeting the retail investor. ICICI offers a variety of unsecured
redeemable bonds to the Indian public. These bonds, which are not insured by
any Indian authority, are designed to address various investor needs, such as
the need for regular income, liquidity and tax saving. ICICI has built a
customer base of about 3.5 million bondholders through regular public issues of
unsecured redeemable medium-term and long-term bonds marketed under the brand
name of "ICICI Safety Bonds". During fiscal 2001, ICICI completed seven retail
bond issues raising approximately Rs. 29.0 billion (US$ 619 million).

The key initiatives to strengthen our position in this market are:

o Product innovation. ICICI's bond offerings are designed to reflect
current market opportunities and investor needs. In each bond issue,
ICICI typically offers a range of bonds with varying maturities and
cash flow characteristics. In addition, ICICI offers certain bonds
that offer special tax benefits to the investor.

o Investor servicing. ICICI Infotech is the sole servicing agency for
all of ICICI's bondholders. Through its integrated document imaging
and management system, ICICI Infotech is equipped to handle a large
volume of bondholders' correspondence and transactions. We believe
that ICICI Infotech provides us a competitive advantage in respect of
investor servicing. See "--Technology--ICICI Infotech".

Deposit-taking and Checking Accounts

Since 1994, ICICI Bank has been accepting demand and time deposits.
Effective March 10, 2001, ICICI Bank acquired Bank of Madura, in an all stock
merger. The merger has given ICICI Bank a larger balance sheet size, extensive
geographic reach and over 1.2 million new customer accounts. At year-end fiscal
2001, ICICI Bank had retail deposits of Rs. 100.5 billion (US$ 2.1 billion)
compared to Rs. 30.6 billion (US$ 653 million) at year-end fiscal 2000. These
retail deposits equaled approximately 61.2% of ICICI Bank's total deposits at
year-end fiscal 2001. ICICI Bank currently has over three million customer
accounts who are serviced through its network of 389 bank branches and
extension counters. All deposits are unsecured liabilities and pay market rates
of interest. In India, Indian authorities insure deposits only up to a maximum
limit of Rs. 100,000 (US$ 2,134).

Retail Lending Activities

In fiscal 1999, we commenced our retail lending activities by offering a
select group of consumer loan products in the Indian retail markets--automobile
loans, home loans and loans for consumer durable products. We have put together
a team dedicated to retail lending activities and currently offer a range of
retail asset products, including automobile loans, home loans, personal loans,
dealer funding, commercial vehicle loans and loans for consumer durable
products. During fiscal 2001, our retail approvals increased 343% to Rs. 41.6
billion (US$ 888 million), from Rs. 9.4 billion (US$ 201 million) in fiscal
2000, while retail disbursements increased 387% to Rs. 34.6 billion (US$ 739
million) from Rs. 7.1 billion (US$ 151 million) in fiscal 2000. Our retail
portfolio increased to Rs. 27.1 billion (US$ 579 million) at year-end fiscal
2001 from Rs. 6.7 billion (US$ 143 million) at year-end fiscal 2000. Retail
lending activities represented 3.2% of ICICI's gross loans at year-end fiscal
2001 compared to less than 1.0% at year-end fiscal 2000.

Automobile Finance

Automobile finance generally involves the provision of retail consumer
credit for an average maturity of three to five years to acquire specified new
and used automobiles. Automobile loans are secured by lien on the purchased
automobile. Within a short span, we have achieved leadership position in the
automobile finance segment in terms of incremental business. We have emerged as
the financier of choice for as many as 10 car manufacturers in India and have
the "preferred financier" status with them. We have a strong external
distribution network and a strong in-house team to manage the distribution
network which has been instrumental in achieving this leadership position. The
total amount of automobile loans disbursed in fiscal 2001 was Rs. 14.6 billion
(US$ 312 million) compared to Rs. 2.8 billion (US$ 59 million) in fiscal 2000.

Home Finance

Our home finance business involves giving long-term secured housing loans
to individuals, and corporations and construction finance to builders. ICICI
has formed a 100% subsidiary called ICICI Home Finance Company Limited for this
purpose. Currently, these loans are being given to

resident and non-resident Indians for the purchase, construction and extension
of residential premises and to self-employed professionals for office premises.
During fiscal 2001, we obtained the National Housing Bank's approval for
refinancing. The total amount of home loans disbursed in fiscal 2001 was Rs.
7.0 billion (US$ 150 million) compared to Rs. 1.7 billion (US$ 37 million) in
fiscal 2000.

Personal Loans

Personal loans are unsecured loans provided to customers for personal
purposes such as higher education, medical expenses, social events and
holidays. Several products, including personal loans for doctors, chartered
accountants and company executives, were launched during fiscal 2001 for
financing the investment requirements of self employed persons. The total
amount of personal loans disbursed in fiscal 2001 increased to Rs. 1.2 billion
(US$ 25 million) from Rs. 30 million (US$ 1 million) in fiscal 2000.

Dealer Funding

We currently fund dealers who sell automobiles, two wheelers, consumer
durables and commercial vehicles. The total amount of disbursements for dealer
funding in fiscal 2001 was Rs. 8.5 billion (US$ 181 million) compared to Rs.
1.9 billion (US$ 41 million) in fiscal 2000.

Commercial Vehicle Finance

ICICI launched commercial vehicle financing during fiscal 2001. Under this
business, ICICI funds commercial vehicles and utility vehicles sold through
manufacturer-authorized dealers. The finance is for a maximum term of five
years through loans, hire purchase agreements or a lease. The total amount of
disbursements for commercial vehicles financing in fiscal 2001 was Rs. 2.0
billion (US $ 42 million).

Consumer Durable Finance

Our consumer durable finance business involves the financing of home
products, such as refrigerators, televisions, washing machines, air
conditioners, two-wheeler vehicles and audio equipment. The total amount of
disbursements for consumer durable finance in fiscal 2001 was Rs. 701 million
(US$ 15 million).

Credit Cards

In January 2000, ICICI Bank launched its credit card operations. ICICI
Bank is one among a few Indian banks to provide credit card account information
through the Internet. As the Indian economy develops, we expect that the retail
market will seek short-term credit for personal uses, and ICICI Bank's offering
of credit cards will facilitate further extension of our retail credit
business. We also expect that as credit usage increases, we will be able to
leverage our customer relationships to cross-sell additional retail and
consumer-oriented products and services. At year-end fiscal 2001, ICICI Bank
had issued 217,023 credit cards.

Insurance

We have entered into a joint venture partnership with Prudential plc of
the UK for the life insurance business. We have a 74.0% interest in this joint
venture. This joint venture company, ICICI Prudential Life Insurance Company
Limited, obtained the license to conduct life insurance business in November
2000 and commenced business operations in December 2000. At year-end fiscal
2001, we had a presence in five cities, Chennai, Delhi, Kolkata, Mumbai and
Pune, and had approximately 2,100 agents. ICICI Prudential Life Insurance
launched five products and sold over 6,350 policies including one group policy
in fiscal 2001. The sum assured for the business written during fiscal 2001 was
Rs. 1.0 billion (US$ 21 million) with a net premium of Rs. 60 million (US$ 1
million). We have

also recently obtained the license to enter the non-life insurance business.
See "-Overview of our Products and Services - Corporate Banking
Activities--Other Corporate Banking Activities - Non-Life Insurance".

General

To build each of the retail lending businesses, we first undertook
detailed analysis of the size and potential profitability of these growing
markets, and sought the advice of external consultants. After being satisfied
with the results of our analysis, we created a back office infrastructure by
making use of the capabilities of ICICI Infotech, our information technology
subsidiary, which has an established track record in transaction processing.
ICICI's acquisition of Anagram Finance has been extremely useful in helping us
to establish a strong debt collection mechanism. In each of these businesses,
we first established a pilot program in one or two small locations, which
allowed us to learn from our first experiences before rolling out our products
in major centers. We have also augmented our management teams by hiring
experienced personnel, including credit personnel from other leading consumer
finance companies. These persons have brought with them significant experience
in the consumer finance business and in particular running start-up products in
consumer credit operations.

We believe the demand for consumer credit in India is growing rapidly and,
as a result, our retail banking revenue from this sector will increase and help
to diversify our loan portfolio. The ICICI brand has begun to achieve strong
consumer recognition and together with our intent to expand distribution driven
by technology, we expect to build a significant market presence. We believe
that our credit appraisal and collection processes will help us minimize risks
and that ICICI Infotech's centralized transaction processing capabilities will
allow us to provide superior client service.

Client Coverage

In fiscal 1999, in an effort to improve our client service and improve our
profitability, we reorganized our corporate structure and created three client
relationship groups--the Major Clients Group, the Growth Clients Group and the
Personal Financial Services Group. These relationship groups have been
successful in building strong client relationships and creating an effective
interface for the entire ICICI group with the Indian corporates, enabling us to
generate enhanced business with these clients.

Our customer-centric focus is now expected to be further sharpened with
our creation of a team of dedicated client bankers in May 2001, who can act as
a source of superior value in helping clients meet all strategic objectives and
thereby build lasting relationships. These client bankers-- called the Client
Relationship Group--will work together with credit teams--called the Credit
Operations Group--built to capitalize on our strong framework for credit
appraisal and execution of fund-based transactions. We believe this framework,
as practiced by our Credit Operations Group, creates optimal risk
identification, allocation and mitigation and has been successful in minimizing
residual risk in our business operations. To tap the business opportunities in
public sector units, government and quasi-government agencies including
municipal corporations, we formed a dedicated Government and Institutional
Group in May 2001. This new client coverage structure, created in May 2001,
replaces two client relationship groups formed in fiscal 1999 (i.e., the Major
Clients Group and the Growth Clients Group).

Over the last few years, with liberalization and growth of the Indian
economy, there has been an increasing demand for infrastructure services.
Accordingly, specialized industry groups have been formed to create
sector-specific knowledge and develop expertise in designing limited-recourse
project finance transactions and syndication of large funding requirements. We
believe that growth in our project finance business will be driven by the
increasing demand for structured finance for large projects. As a result, we
created the Projects Division in May 2001. Our existing Structured Products
Group has played a significant role in our successful entry as a solutions
provider for highly-rated customers.

We have integrated the Structured Products Group within the Projects Division
in order to combine the expertise of this group with the skills of the Projects
Division.

We established the Personal Financial Services Group in fiscal 1999 to
focus on our recent retail banking initiative. This group works in close
coordination with ICICI Bank and all group distribution companies. To aid our
retail business efforts, we have assembled a team including lateral recruits
with significant credit, operations, marketing and sales experience from some
of the leading consumer finance companies in India. We are also engaged in a
variety of initiatives, including developing the information technology to
enhance value, offer customer convenience and improved service while optimizing
costs.

Distribution Network

We, along with our affiliates, deliver our products and services through a
variety of distribution outlets ranging from traditional bank branches to
automatic teller machines (ATMs) and the Internet. We believe that India's vast
geography necessitates a variety of distribution channels to best service our
customers' needs. The key components of our distribution network are described
below.

The following table sets forth the principal domestic outlets of the ICICI
group and its affiliates.

At March 31,
-------------------------
1999 2000 2001
-------------------------
Regional offices............................... 4 4 4
Zonal offices ................................. 5 5 5
ICICI Bank branches and extension counters..... 64 97 389
ATMs........................................... 70 175 510
ICICI Centers ................................. -- 75 92
ICICI Personal Financial Services and
ICICI Home Finance offices.................. 33 33 34
ICICI Prudential Life Insurance offices........ -- -- 5

In addition to the above outlets, we use an agent network of about 16,000
agents and a vast franchisee network covering all major cities in India.

ICICI Regional and Zonal Offices

ICICI has four regional offices in the metropolitan cities of Chennai,
Delhi, Kolkata and Mumbai and five zonal offices in Ahmedabad, Bangalore,
Coimbatore, Hyderabad and Pune. We also have a small development office in
Guwahati. Each of our regional and zonal offices is staffed primarily by
representatives of our Credit Operations Group, with representatives of the
Personal Financial Services Group in each location. Representatives of the
Client Relationship Group, which are headquartered at Mumbai, are also located
at Chennai, Delhi and Kolkata. These Client Relationship Group personnel have
electronic access to information concerning products, pricing and funding
costs, credit and risk management and other relevant information.
Representatives of the Treasury, which are headquartered at Mumbai, are also
located at all the regional and zonal offices.

ICICI Bank's Branch Network

ICICI Bank had a branch network of 355 branches and 34 extension counters
across several Indian states at year-end fiscal 2001, an increase of 274
branches and 18 extension counters over last year. This was primarily due to
the addition of 264 branches pursuant to the merger of Bank of Madura with
ICICI Bank effective March 10, 2001. Out of the 355 branches at year-end fiscal
2001, 177 branches (153 branches of Bank of Madura) were present in semi-urban
or rural areas in India. Extension counters are small offices primarily within
office buildings or on factory premises that provide commercial banking
services. ICICI Bank believes that it has achieved the basic geographical

spread of its branch network and now proposes to concentrate on consolidating
the branch network in the top eight metropolitan cities of India. Prior to
opening a branch, ICICI Bank conducts a study in which it assesses the lending
potential as well as market demand for deposits. Based on the data on
dispersion of households falling within ICICI Bank's target segment, it
believes that the eight metropolitan cities of India offer maximum potential
for retail banking. Branch locations are largely leased rather than owned.

ICICI Bank ATMs

ICICI Bank has the largest network of ATMs in India. ICICI Bank had 510
ATMs at year-end fiscal 2001 and currently has 589 ATMs. Of its 589 ATMs, 166
were located at bank branches and extension counters. The remaining 423 were
located at the offices of select corporate clients, large residential
developments, airports and major roads in metropolitan cities.

ICICI Centers

Given the breadth of India and its geographic diversity, we have decided
to augment our branch network with "ICICI Centers". These locations are
low-cost, technology driven, stand-alone offices with three or more employees,
which act as marketing and service centers. We believe that these centers
provide us an efficient and cost-effective distribution network. We believe
that the role of these centers is particularly critical in India, because
smaller cities, where establishment of a large branch may prove to be
uneconomical, account for a significant share of household savings in India.

The centers are relatively small in size, fully networked, and provide
sales, distribution and customer service for a wide range of products from the
ICICI group including ICICI bonds, ICICI's treasury products, fixed deposits of
ICICI Home Finance and online share trading. In addition, these centers offer
other third party investment products like mutual funds, government securities
and initial public offerings. Prior to opening an ICICI Center, we conduct a
review of the deposit market and the demand for ICICI group's products. With
the expansion in our retail credit business, these centers have also become a
point of contact for all personal finance products offered by ICICI, though the
actual sale of these products is conducted through an agent or broker network.
At year-end fiscal 2001, we had 92 ICICI Centers.

ICICI Bank's Internet Access

We believe that Internet access and information is key to satisfying the
needs of certain customer segments. As a result, we maintain a website at
www.icici.com offering generalized information on our products and services.
ICICI Bank was the first bank in India to introduce Internet banking through
its product "Infinity". "Infinity" allows customers to access all
account-related information, perform on-line fund transfers to other ICICI Bank
accounts and give account instructions 24 hours a day, seven days a week
through ICICI Bank's website. ICICI Bank has also extended its Internet banking
channel to allow transactions and bill payment facilities. The number of
Internet banking customers increased significantly to about 550,000 at year-end
fiscal 2001 from 110,000 at year-end fiscal 2000. We intend to continue to be
at the forefront of providing web-based products to our corporate and retail
customers.

ICICI Agent Network

ICICI sells bonds through a network of about 14,000 agents located
throughout India. This network is particularly critical for us in the smaller
cities and locations where it is not economical for us to have a physical
presence. Our life insurance subsidiary had about 2,100 agents at year-end
fiscal 2001.

ICICI Franchisees

We have a vast franchisee network spread over all major cities in India.
The franchisees deliver our retail credit products. In addition to the ICICI
Center network, these agencies help us achieve deeper penetration by offering
door-step service to the customer. These agencies market our products on an
exclusive basis. All credit and risk management decisions pertaining to any
customer are made by us and no agency can extend credit to any customer without
our approval. These agencies receive a fee based on the volume of business
generated by them.

ICICI Call Centers

At year-end fiscal 2001, we had nine physical call centers and eight
virtual call centers. The call centers function 24 hours a day and seven days a
week and offer a self service option to customers for automated phone banking.
In addition, well-trained customer service officers offer personalized services
for banking, dematerialized securities, online share trading customers, credit
card holders and bondholders. The call centers are also used in product
specific marketing campaigns to generate leads which are assigned to the
franchisees for fulfillment.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance, our life insurance subsidiary, had a
presence in five cities, Chennai, Delhi, Kolkata, Mumbai and Pune, at year-end
fiscal 2001.

Investments

Our investment securities portfolio consists of long-term debt and equity
securities denominated in rupees.

We also hold securities not included as part of the investment securities
portfolio. They are:

o Investments in securities as part of our trading portfolio.
Government of India securities and corporate debt securities are a
principal component of our trading portfolio. The trading portfolio
is discussed in detail in the section "--Risk
Management--Quantitative and Qualitative Disclosures About Market
Risk "; and

o Investments in debentures as part of our normal financing activities.
These securities are on identical terms and conditions as our loans
and are treated as part of our loan book for the purpose of asset
classification as well as calculating loan concentrations. This
portfolio is discussed in detail in the section "--Loan Portfolio".

Corporate Debt Securities

As part of our overall policy of acquiring a well-diversified portfolio,
we acquire corporate debt securities. Our portfolio of these securities at
year-end fiscal 2001 consisted primarily of debentures or bonds issued by
Indian corporates and entities owned or controlled by the government of India.
Total corporate debt securities in our investment securities portfolio
decreased to Rs. 907 million (US$ 19 million) at year-end fiscal 2001 from Rs.
2.7 billion (US$ 57 million) at year-end fiscal 2000 primarily due to the
deconsolidation of ICICI Bank in fiscal 2001. Corporate debt securities
excluding those of ICICI Bank at year-end fiscal 2000 were Rs. 102 million (US$
2 million). At year-end fiscal 2001, corporate debt securities were
approximately 0.1% of our total assets and 4.5% of our investment securities
portfolio.

Equity Securities

From time to time, we acquire and hold equity securities. These
securities, which typically consist of ordinary shares, are acquired in
multiple ways: direct subscriptions, rights issues and by conversion of our
performing and to a smaller extent impaired loans into equity. We have also
acquired equity securities in connection with underwritings conducted by ICICI
and ICICI Securities. A significant portion of these equity positions were
acquired at the time of the initial project finance assistance. The decision to
invest in equity securities along with project financing activities is an
independent business decision to participate in the equity of the company with
the intention of realizing capital gains arising out of expected increases in
market prices. This decision is taken strictly on a case-by-case basis and
there is no correlation between the basis for the lending decision and the
reasons for making the equity investment. All of our equity investments, other
than in our subsidiaries and affiliates, are made with the intent of holding
them for medium-term to long-term periods strictly as portfolio investments.

Equity securities, forming part of our investment securities portfolio,
are considered as publicly traded if they have been traded on a securities
exchange within six months of the balance sheet. The last quoted price of such
securities is taken and recorded as their fair value. Non-readily marketable
equity securities for which there is no readily determinable fair value are
recorded at cost and a provision is made for other than temporary diminution.
Securities acquired through conversion of loans in a troubled debt
restructuring are recorded at the fair value on the date of conversion and
subsequently accounted for as if acquired for cash. Venture capital investments
are carried at fair value. However, they are generally carried at cost during
the first year, unless a significant event occurs that effects the long-term
value of the investment. Substantially all venture capital investments were
acquired during fiscal 2001.

Equity securities were 2.3% of our total assets at year-end fiscal 2001,
1.9% at year-end fiscal 2000 and 1.7% at year-end fiscal 1999. Equity
securities were 85.1% of our total investment securities portfolio at year-end
fiscal 2001 compared to 77.5% at year-end fiscal 2000 and 74.3% at year-end
fiscal 1999. As our equity investments are primarily in the nature of long-term
investments in start-up projects, returns on such investments generally accrue
well after commencement of operations by the projects. A detailed discussion on
the valuation of this portfolio is provided in the section on "-Risk
Management-Quantitative and Qualitative Disclosures About Market Risk". An
Investment Committee of ICICI's board of directors sets the overall policy for
divestment of ICICI's equity securities. The Investment Committee has delegated
powers to ICICI's executive directors to execute divestments within the overall
policy laid down by the Investment Committee. In general, ICICI pursues a
strategy of active management of ICICI's long-term equity portfolio to maximize
return on investment.

Securities Holdings

The following tables set forth, for the periods indicated, the gross
unrealized gains and losses within our investment securities portfolio and the
amortized cost and fair value of the portfolio by type of investment security.

At March 31, 1999
---------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gain loss value
---------------------------------------------
(in millions)
Available for sale:
Government of India securities..Rs. -- Rs. -- Rs. -- Rs. --
Corporate debt securities ...... 3,851 12 -- 3,863
Equity securities (1) .......... 14,555 1,178 (9,227) 6,506
---------------------------------------------
Total available for sale........... 18,406 1,190 (9,227) 10,369
---------------------------------------------
Held to maturity:
Government of India securities.. -- -- -- --
Other debt securities........... 1 -- -- 1
---------------------------------------------
Total held to maturity............. 1 -- -- 1
---------------------------------------------
Non-readily marketable equity
securities (2)................... 4,522 -- -- N.A.
-------------
N.A: Not applicable
(1) Excludes venture capital investments of Rs. 149 million (US$ 3 million).
(2) Non-readily marketable equity securities represent securities acquired as
a part of project financing activities or conversion of loans in debt
restructuring and are carried at cost, less any provision for other than
temporary diminution.

At March 31, 2000
--------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gain loss value
--------------------------------------------
(in millions)
Available for sale:
Government of India securities.. Rs. 914 Rs. 89 Rs. -- Rs. 1,003
Corporate debt securities....... 2,558 34 -- 2,592
Equity securities(1)............ 11,326 1,203 7,553
(4,976)
--------------------------------------------
Total available for sale........... 14,798 1,326 (4,976) 11,148
--------------------------------------------
Held to maturity:
Government of India securities.. 560 54 --
614
Corporate debt securities...... 84 -- -- 84
Other debt securities........... 1 -- -- 1
--------------------------------------------
Total held to maturity............. 645 54 -- 699
--------------------------------------------
Non-readily marketable
equity securities (2)............ 6,542 -- -- N.A.
-------------------
N.A: Not applicable
(1) Excludes venture capital investments of Rs. 536 million (US$ 11 million)
(2) Non-readily marketable equity securities represent securities acquired as
a part of project financing activities or conversion of loans in debt
restructuring and are carried at cost, less any provision for other than
temporary diminution.

At March 31, 2001
--------------------------------------------------------
Gross Gross
Amortized unrealized unrealized
cost gain loss Fair value
--------------------------------------------------------

Available for sale: (in millions)
Government of India securities.. Rs. 975 Rs. 35 Rs. -- Rs. 1,010 US$ 22
Corporate debt securities....... 485 4 -- 489 10
Equity securities(1)............ 11,821 482 (6,156) 6,147 131
--------------------------------------------------------
Total available for sale........... 13,281 521 (6,156) 7,646 163
--------------------------------------------------------
Held to maturity:
Government of India securities.. 1,088 58 -- 1,146 24
Corporate debt securities....... 418 -- (1) 417 9
Other debt securities .......... -- -- -- -- --
-------------------------------------------------------
Total held to maturity............. 1,506 58 (1) 1,563 33
-------------------------------------------------------
Non-readily marketable
equity securities (2).......... 6,394 -- -- N.A. N.A.

----------------
N.A: Not applicable
(1) Excludes venture capital investments of Rs. 4.6 billion (US$ 98 million).
(2) Non-readily marketable equity securities represent securities acquired as
a part of project financing activities or conversion of loans in debt
restructuring and are carried at cost, less any provision for other than
temporary diminution.

The following table sets forth, for the period indicated, an analysis of
the carrying cost of our investments in corporate debt securities,
maturity-wise, and the yields thereon.

At March 31, 2001
--------------------------------------------------------------------------
After 1 year and After 5 years and
Within 1 year within 5 years within 10 years After 10 years
--------------------------------------------------------------------------
Amount Yield Amount Yield Amount Yield Amount Yield
--------------------------------------------------------------------------
(in millions, except percentages)

Corporate debt securities........... Rs. 453 12.1% Rs. 310 7.0% Rs. 111 11.1% Rs. 33 11.1%
Other debt securities............... -- -- -- -- -- -- -- --
--------- ---------- ---------- --------
Total interest-earning securities... Rs. 453 12.1 Rs. 310 7.0 Rs. 111 11.1 Rs. 33 11.1
========== =========== =========== =========
Total amortized cost................ Rs. 453 -- Rs. 309 -- Rs. 109 -- Rs. 32 --

Total market value.................. 452 -- 310 -- 111 -- 33 --

Technology

We believe information technology is a strategic tool for our business
operations to gain competitive advantage and to improve overall productivity
and efficiency of the organization. Information technology also assumes a
critical role in enhancing our ability to monitor and control credit and market
risk. We have made substantial investments in technology over the past few
years. We believe we are a leader in technology in the Indian financial
services, particularly in the delivery of banking products, treasury operations
and risk management functions. We have based our information technology focus
on:

o building our technology infrastructure to capitalize on advances in
telecommunications and data processing; and

o applying Internet-related technologies to existing product offerings and
to create new business opportunities through the Internet.

Building Our Technology Infrastructure

We were one of the first financial institutions in the country to put in
place a nation-wide data communications network connecting all our offices.
During fiscal 2000, we implemented an upgraded network across all our
locations. By implementing a shared network, which can be used by both
corporate and retail businesses, we believe that we can better utilize our
network infrastructure at a

lower cost. We have a sophisticated data center in Mumbai designed to operate
on a 365 day a year, 24 hours a day basis. We have also implemented a series of
product specific systems for our retail operations that have allowed us to
expedite the processing of our retail products.

During fiscal 2001, we also set up five physical call centers and eight
virtual call centers across the country for effective servicing of all our
retail clients. At year-end fiscal 2001, we had nine physical call centers and
eight virtual call centers. These centers are equipped with sophisticated
telecommunications equipment, including a voice switch, an interactive voice
response unit, computer telephony interface, automated call dispatch and
state-of-the-art phones and headsets.

ICICI Infotech

ICICI Infotech, an ISO 9001 certified company, is our information
technology solutions arm and has evolved from being a transaction processing
house to an information technology solutions provider with expertise in key
technologies like workflow management tools, web technologies and software
development.

During fiscal 2000, the staff of the IT departments of all our group
companies were transferred to ICICI Infotech. ICICI Infotech meets IT
requirements for the entire ICICI group. This has helped ICICI Infotech in
achieving critical mass and enhanced utilization of domain and technical
expertise in key areas. It has also resulted in shared networks, common
business solutions, the development of common IT policies and procedures and
shared expertise on specific projects.

The three main areas of business for ICICI Infotech are:

o software consultancy and development services;

o IT enabled services like business process outsourcing and call
centers; and

o IT infrastructure and facilities management services.

ICICI Infotech focuses on software development relating to the financial
sector, web-based technology and real-time software. The services of ICICI
Infotech include on-site projects and combined on-site/off-shore delivery
mechanisms.

In April 2000, ICICI Infotech commenced operations in the US through its
wholly-owned subsidiary, ICICI Infotech Inc. During fiscal 2001, ICICI Infotech
formed ICICI Infotech Pte. Limited, a wholly-owned subsidiary in Singapore,
with a view to tap the regional markets for various on-site and off-shore
software development and services. The US subsidiary, ICICI Infotech Inc.,
enhanced its operations in US through the acquisition of Ivory International
Inc., Object Xperts Inc., and Command Systems Inc., software development and
services companies in the US. With a view to provide expertise in the area of
financial services, ICICI Infotech acquired an Indian software product company,
Ajax Software Solutions Limited, which was subsequently merged with ICICI
Infotech. The above companies were acquired for a total purchase price of Rs.
2.5 billion (US$ 54 million). ICICI Infotech also entered into a joint venture
agreement with the Emirates Financial Group, United Arab Emirates to form
Tricolor Infotech International Inc., a software development and consultancy
and IT infrastructure and facilities management company in Mauritius, to serve
the Gulf and North African markets.

With a view to strengthen the existing relationship with Emirates Bank of
United Arab Emirates, ICICI sold approximately 8.0% of its stake in ICICI
Infotech to Emirates Bank in fiscal 2001. The sale was made for a consideration
of Rs. 576 million (US$ 12 million) realizing capital gains of Rs. 511 million
(US$ 11 million).

ICICI Infotech has applied technology in its business processes to achieve
the best operating parameters. It has in place an integrated document imaging
and management system for handling

investor correspondence and has leveraged technological skills to enable the
handling of a large volume of transactions. ICICI Infotech handles all
processing requirements arising from our retail business. ICICI Infotech has
also leveraged its understanding of information and process management and has
built the requisite capabilities to offer information-related services as well
as software solutions for transaction processing.

Applying Internet-related Technologies

We believe that the Internet has created significant opportunities for
financial services providers to lower costs, enhance accessibility and improve
overall customer service, convenience and satisfaction. By web-enabling our
products, we have ensured multi-location, low-cost access to our services on a
24-hour basis, achieved increased customer acquisition and customer retention,
improved customer service and achieved significant cost savings. We believe
that the increasing number of Internet users in India, the demographic
characteristics of these users and the relative flexibility and convenience
offered by the Internet provides a unique opportunity to create value for our
customers and us. It also provides us an opportunity to cross-sell the group's
products and services. We intend to continue to use Internet as an important
delivery channel for the distribution of our products and services.

Retail finance portal. Over the past few years, we have built a strong
base of retail customers, including ICICI bondholders, ICICI Bank
accountholders and retail credit customers. We intend to focus on improving
individual customer profitability through cross-selling our comprehensive range
of retail products and services to existing customers. With this in mind, we
implemented a retail data-warehouse solution and launched "ICICIconnect.com" to
offer retail customers access to all their accounts across the ICICI Group.

Internet banking services - Retail. We believe that Internet banking will
provide us with a wide range of potential benefits, including increased
revenue, wider market reach, entry into new market opportunities, decreased
costs and improved customer retention. ICICI Bank was the first bank to offer
Internet-based banking services in India. The number of Internet banking
customers increased to over 550,000 at year-end fiscal 2001 from 110,000 at
year-end fiscal 2000.

Corporate finance portal. In November 2000, we launched "ICICImarkets.com"
-- a platform for offering corporate products of the entire ICICI group to our
clients through a common interface. The offering aims to create a medium for
business managers to undertake online transactions through robust and
user-friendly transaction engines. Besides providing a complete end-to-end
solution to the customer, ICICImarkets provides analytical tools to enable a
user to make informed and calculated decisions. We expect ICICImarkets to be a
key driver in further deepening our relationship with corporate and banking
clients.

Internet banking services -- Corporate. In August 1999, ICICI Bank
launched an Internet banking service, "Corporate Infinity" to deliver a full
range of high quality financial services to corporate customers at their
offices. This integrated client interface product allows the corporate
customers to have a single point of contact for their entire relationship with
ICICI Bank.

Web broking. We launched web broking services through our wholly owned
subsidiary, ICICI Web Trade Limited, in April 2000. This service involves
online integration of the customer's depositary share account and securities
brokerage account with us and the bank account with ICICI Bank. We expect our
web broking service to be a key driver in customer acquisition and retention.

Payment services -- closed-user group. In fiscal 2000, ICICI Bank launched
online electronic payment facilities for ICICI group's corporate customers and
their suppliers and dealers as a closed group, where the entire group is
required to maintain bank accounts with ICICI Bank. ICICI Bank uses the
Internet as the delivery platform for this business-to-business electronic
commerce product, which is called "i-payments". Under this service, payments
from corporate customers to their

suppliers and payments from the dealers to corporate customers are made
electronically. This service offers a high level of convenience since no
physical instruments are required, all transactions are done online and the
information may be viewed on the Internet. This product can be customized to
meet specific requirements of individual customers, and has permitted the group
to build new relationships with leading corporates of India.

Open payment gateway. In fiscal 2001, we set up a payment gateway,
"Payseal", to enable customers to execute financial transactions securely on
the Internet using credit cards. The payment gateway has been implemented by
Compaq, India and QSI, Australia. We are currently working on extending secure
transaction capability to enable business-to-business transactions.

We formed ICICI Eco-Net Limited to channel our e-commerce and
Internet-related initiatives. In order to synergize our venture capital
finance, incubation and e-commerce investment activities, the management of
ICICI Eco-Net Internet & Technology Fund, ICICI's start-up incubation and
e-commerce fund, was merged with ICICI Venture, our venture capital subsidiary.
With this realignment, all venture capital activities, namely, the raising and
deployment of venture capital resources, are done under ICICI Venture. We
believe that the track record built by ICICI Venture and the exemplary
incubation and e-commerce capabilities of Eco-Net can be aligned to form a
dominant venture capital firm in India.

Competition

We face strong competition in all our principal areas of business from
other long-term lending institutions, Indian and foreign commercial banks,
investment banks and other non-bank financial institutions. We believe that our
principal competitive advantage over our competitors arises from our
long-standing customer relationships, our use of technology, our innovative
products and services and our highly motivated and skilled employees. Because
of these factors, we believe that we have a strong competitive position in the
Indian financial services market. We evaluate our competitive position based on
our principal lines of business, project finance, corporate and working capital
finance, retail business and investment banking.

Project Finance

In project finance, our primary competitors are established long-term
lending institutions. In recent years, Indian and foreign commercial banks have
sought to expand their presence in this market.

We believe we have a competitive advantage due to our strong market
reputation and expertise in risk evaluation and mitigation and our ability to
raise fixed rate long-term funding in the domestic market at competitive rates.
We believe that our in-depth sector specific knowledge has allowed us to gain
credibility with project sponsors, overseas lenders and policy makers. Our
capabilities in understanding risks, policy related issues in the
infrastructure and oil, gas and petrochemicals sectors as well as our advisory,
structuring and syndication capabilities have been instrumental in making us
the preferred lead financier in these areas. According to publicly available
data, ICICI's share of total approvals by long-term lending institutions,
investment institutions and specialized financial institutions increased from
43.0% in fiscal 2000 to 47.6% in fiscal 2001 and ICICI's share of total
disbursements increased from 38.2% in fiscal 2000 to 44.3% in fiscal 2001.

Corporate Finance and Working Capital Finance

In corporate finance and working capital finance, we face strong
competition from other long-term lending institutions, public sector banks,
foreign banks and other new private sector banks. Our principal competition in
corporate lending and working capital lending comes from public sector banks,
which have built extensive branch networks that have enabled them to raise
low-cost deposits and, as a result, price their loans very competitively.
Traditionally, foreign banks have been active in

providing trade finance and other short-term financing products to the top tier
of Indian corporations. Although we are a relatively new entrant to this
business, we believe we have a competitive advantage due to our strong
corporate relationships, our ability to offer value-added structured products,
our ability to use technology to provide innovative products and services and
our efficient services and prompt turnaround times.

Retail Business

The retail credit business in India is in a relatively early stage of
development. As per-capita income levels grow, we expect strong growth in
retail lending, particularly in urban centers. In the retail markets,
competition is primarily from non-bank finance companies, foreign and Indian
commercial banks and housing finance companies. Foreign banks have the product
and delivery capabilities but are likely to focus on the upper income segments.
By using low-cost multiple channels for product delivery, superior technology,
hiring experienced professionals to develop and market products and leveraging
on existing retail investors and infrastructure, we expect to gain a
significant share in this emerging market.

Indian commercial banks attract the majority of retail bank deposits,
historically the preferred retail savings product in India. ICICI has sought to
offset these advantages by using a highly successful marketing campaign which
prominently features the ICICI brand name, offering bonds at any time and
employing agents to increase investor awareness. ICICI has increasingly
benefited from stronger demand from the retail market for its bonds, as a
result of these strategies combined with its reputation as a well-managed
institution. ICICI will continue to actively use technology to offer new
products and win new accounts by offering superior service. ICICI Bank, like
other commercial banks, raises retail banking deposits. ICICI Bank has
capitalized on ICICI's corporate relationships to gain individual customer
accounts through payroll management products such as Power Pay and will
continue to pursue a multi-channel distribution strategy utilizing physical
branches, ATMs, telephone banking call centers and the Internet to reach
customers.

Investment Banking

In investment banking, our principal competition comes from other domestic
investment banks and investment banking divisions of foreign banks and foreign
investment banks, which may or may not have a local presence. We believe that
our well-established corporate relationships, our product structuring and
advisory skills and in-depth understanding of the local markets and local
investor base provide us with a competitive edge.

Other Activities

Developmental Activities

We have played a pivotal role in the development of the Indian financial
system. Since the 1970s, ICICI has promoted various entities, which have gone
on to play leading roles in the Indian financial system. These entities include
the Credit Rating Information Services of India Limited, which pioneered the
concept of credit rating in India and is today India's leading credit rating
agency; Housing Development Finance Corporation Limited, which is India's
largest housing finance company; and The OTC Exchange of India, which is
India's first screen-based trading system specializing in smaller companies.
ICICI currently holds an equity interest of 11.0% in the Credit Rating
Information Services of India Limited and 20.0% in The OTC Exchange of India.

Technology Funding

In recognition of the critical role of technology in industrial
development, we have become one of the largest arrangers of technology
financing in India, managing USAID and World Bank

funds for their various technology financing programs. We do not invest our own
funds in these projects, but earn advisory fees and gain expertise in emerging
technologies and business areas.

Social Initiatives

As a corporate citizen, ICICI has endeavored to improve the lives of its
fellow citizens and strengthen its bonds with society. ICICI provides financial
and technical support to various charitable, educational and social welfare
organizations. During fiscal 2001, we consistently supported a diverse range of
projects in the focus areas of primary education, infant health at birth and
micro financial services. We also rendered our expertise in technology and
e-commerce to the social sector by launching "icicicommunities.org". The portal
provides access to services in areas such as accounting, computerization,
marketing and donor management. In recognition of our strong commitment to
social development, we received the "Rio Tinto Award for long-term commitment"
from the Secretary of Commonwealth, as part of the "Worldaware Business Awards,
2000". In pursuit of our goals in social development, we will continue to
identify and support cost-effective initiatives, capable of large-scale
replication, to encourage the progress of the relatively underprivileged
sections of society.

Management Education

We have also played an important role in setting up and supporting various
programs imparting management and technical education. We have also offered our
expertise to development financial institutions in developing countries such as
Bhutan, Ghana, Nepal, Sri Lanka and Uganda.

With the objective of establishing a world class business school in India,
we joined an initiative of leading Indian corporations and international firms
to set-up the Indian School of Business at Hyderabad, India. This business
school is affiliated with Northwestern University's J.L. Kellogg Graduate
School of Management and the University of Pennsylvania's Wharton School.

Subsidiaries and Affiliates

We operate through a number of subsidiaries and affiliated companies,
including ICICI Securities, our investment banking subsidiary and ICICI Bank,
our banking affiliate. At year-end fiscal 2001, all of these subsidiaries and
affiliated companies were incorporated or organized in India, except the
following 13 companies:

o ICICI Securities Holdings Inc., incorporated in the US;

o ICICI Securities Inc., incorporated in the US;

o ICICI Infotech Inc., incorporated in the US;

o ICICI Infotech Pte Limited, incorporated in Singapore;

o Ivory International Inc., incorporated in the US, which is now merged
with ICICI Infotech Inc.;

o Nova Technology Inc., incorporated in the US, which is now merged
with ICICI Infotech Inc.;

o Command Systems Inc., incorporated in the US, which is now merged
with ICICI Infotech Inc.;

o Command Delaware holdings, LLC, incorporated in the US, which is now
merged with ICICI Infotech Inc.;

o Command International Holdings LLC, incorporated in Mauritius;

o ICICI International Limited, incorporated in Mauritius;

o Global Opportunities Fund LLC, incorporated in Mauritius;

o Tricolor Infotech International Inc., incorporated in Mauritius; and

o TCW/ICICI Investment Partners LLC, incorporated in Mauritius.

The following table sets forth, for the periods indicated, certain
information relating to ICICI's direct subsidiaries and affiliates at year-end
fiscal 2001 and includes the four venture capital funds consolidated under US
GAAP.

--------------------------------------------------------------------------------------------------------------------
Direct or Total Net worth Assets at
indirect revenue in at March March 31,
Date of shareholding Fiscal 2001(1) 31, 2001(1) 2001(1)(2)
Name formation Activities by ICICI
--------------------------------------------------------------------------------------------------------------------
(in millions, except percentages)

ICICI Venture Funds January Venture capital 100.0% Rs. 364 Rs. 261 Rs. 339
Management 1988 management
Company Limited

ICICI Securities and February Investment banking 99.9 2,984 2,823 17,619
Finance Company 1993 activities
Limited

ICICI Infotech October Software consultancy 92.3 1,680 767 4,159
Services Limited 1993 and development
services; IT enabled
services including,
transaction processing;
IT infrastructure and
facilities management.

(footnotes on Page 53)

--------------------------------------------------------------------------------------------------------------------
Direct or Total Net worth Assets at
indirect revenue in at March March 31,
Date of shareholding fiscal 2001(1) 31, 2001(1) 2001(1)(2)
Name formation Activities by ICICI
--------------------------------------------------------------------------------------------------------------------
(in millions, except percentages)

ICICI Capital September Placing and 100.0% Rs. 507 Rs. 109 Rs. 215
Services Limited 1994 distribution of
liability
products
ICICI West Bengal December Developing 76.0 7 13 15
Infrastructure 1995 infrastructure projects
Development in the state of West
Corporation Limited Bengal

ICICI International January Offshore financing 100.0 53 21 29
Limited 1996 opportunities

ICICI KINFRA January Developing 76.0 9 16 21
Limited 1996 infrastructure projects
in the state of Kerala

ICICI Personal March 100.0 352 594 649
Financial 1997 Distribution and
Services Limited servicing of retail
asset
products

ICICI July Providing modern 100.0 21 -- 327
Knowledge Park(3) 1998 technology
infrastructure to
domestic and overseas
corporations

ICICI Properties January Property 100.0 11 4 291
Limited(4) 1999(5) holding/property
management arm for
real estate owned by
ICICI group

ICICI Realty January Property 100.0 11 4 291
Limited(4) 1999(5) holding/property
management arm for
real estate owned by
ICICI group

ICICI Real Estate January Property 100.0 30 6 339
Company Limited(4)1999(5) holding/property
management arm for
real estate owned by
ICICI group

ICICI April Trustees for bonds and 100.0 -- -- --
Trusteeship 1999 to devise schemes for
Services Limited raising funds

ICICI Home May Home and property 100.0 578 965 7,359
Finance 1999 financing
Company Limited

ICICI Web Trade December Internet-based broking 100.0 149 198 645
Limited 1999 services

ICICI Investment March Investment manager 100.0 11 106 111
Management 2000 for mutual funds
Company

ICICI Prudential Life July 2000 Life insurance business 74.0 127 1,296 1,661
Insurance
Company Limited

(footnotes on Page 53)

--------------------------------------------------------------------------------------------------------------------
Direct or Total Net worth Assets at
indirect revenue in at March March 31,
Date of shareholding fiscal 2001(1)31, 2001(1) 2001(1)(2)
Name formation Activities by ICICI
--------------------------------------------------------------------------------------------------------------------
(in millions, except percentages)

ICICI Eco-Net Limited September E-commerce and Internet 100.0% Rs. 8 Rs. 91 Rs. 134
2000 related activities

ICICI Lombard October General insurance 100.0 -- (13) 17
General Insurance 2000 business
Company Limited

ICICI Global December Investment company 100.0 7 1,007 1,007
Opportunities Fund 2000(5) engaged in high growth
LLC knowledge based sectors

Prudential ICICI August Trustee company for 45.0 4 5 11
Trust Limited 1993 mutual funds

Prudential ICICI September Investment manager 45.0 496 668 781
Asset Management 1993 for mutual funds
Company Limited

ICICI Bank Limited January Commercial banking 46.4 14,160 16,307 220,008
1994 activities

TCW/ICICI April 1995 Asset and fund 50.0 48 28 37
Investment Partners management
LLC

ICICI Information February Investment in equity or 96.2 15 1,289 1,290
Technology Fund 2000 equity-related
securities of early
stage and medium sized
Indian IT companies.

ICICI Equity Fund March 2000 Investment 100.0 24 1,355 1,359
predominantly in equity
and equity linked
securities of mid sized
Indian companies.

ICICI Technology August 2000Investment in equity or 100.0 2 42 42
Incubator Fund equity-related
securities issued by
small, start-up and
early stage unlisted
Indian companies

ICICI Eco-Net Internet December Investment in equity or 100.0 1 993 994
& Technology Fund 2000 equity-related
securities of early
stage, unlisted
internet and technology
companies.

------------------
(1) All financial information in respect of significant subsidiaries and
affiliates, ICICI Securities, ICICI Infotech and ICICI Bank, is in
accordance with US GAAP. In respect of companies incorporated outside
India, all financial information has been prepared in accordance with the
applicable accounting standards in their countries of incorporation. US
dollar amounts for fiscal 2001 have been translated into Rupees using the
noon buying rate in effect on March 30, 2001 of US$ 1.00 = Rs. 46.85. All
financial information for other subsidiaries and affiliates is in
accordance with Indian GAAP.
(2) Current liabilities and the debit balance in the income statement, if
applicable, have been added to assets.
(3) Not-for-profit entity.
(4) At June 30, 2001, ICICI group's interest in the equity shares of ICICI
Properties Limited, ICICI Realty Limited and ICICI Real Estate Company
Limited was transferred to ICICI Properties Trust.
(5) Date of acquisition.

Risk Management

As a financial services group, we are exposed to specific risks that are
particular to our lending and trading businesses and the environment within
which we operate. Our goal in risk management is to ensure that we understand,
measure and monitor the various risks that arise and that our organization
adheres strictly to the policies and procedures which are established to
address these risks. As a financial services group, we are primarily exposed to
credit risk, market risk, liquidity risk, operational risk and legal risk.

In early 1997, ICICI established a central Risk Management Group with a
mandate to identify, assess, monitor and manage all our principal risks in
accordance with well-defined policies and procedures. The Head of the Risk
Management Group reports directly to the Managing Director and Chief Executive
Officer. The Risk Management Group coordinates with representatives of our
business units to implement our risk methodologies. The Risk Management Group
is completely independent of all business operations and is accountable to the
Audit Committee of ICICI's board of directors. For a discussion of the Audit
Committee, see "Management".

As shown in the following chart, the Risk Management Group is organized
into five sub-groups: Credit Risk Management, Market Risk Management,
Analytics, Audit and Retail Risk Management. The Analytics Unit develops
proprietary quantitative techniques and models for risk measurement.

|-------------------| | ------------------|
| Managing Director | | Audit Committee |
| & CEO | | of the Board |
|--------|----------| | ---------|--------|
|----------------|----------------|
V
|----------------------------|
| Head of the Risk Management|
| Group |
|-------------|---------------|
|
|---------------|----------------|----------------|---------------|
| | | | - |
V V V V V
|-----------| |-----------| |-----------| |-----------| |-----------|
|Credit Risk| |Market Risk| |Analytics | |Audit | |Retail Risk|
|Management | |Management | |Unit | |Department | |Department |
|Department | |Department | | | | | | |
|-----------| |-----------| |-----------| |-----------| |-----------|

o Formulating o Developing and o Development of o Comprehensive o Approval of
firm-wide implementing proprietary coverage of retail
credit risk market risk models for operational policies and
policies and measurement risk risk inherent procedures
operational methodologies measurement in all areas of o Impact of
guidelines o Approval of business macro
o Sectoral all new o Initiation of economic
analysis and products systems audit in changes on
review o Monitoring information the retail
o Credit portfolio market risk technology- portfolio
analysis exposures intensive areas o Monitoring
and review
of retail
portfolio

We are increasingly integrating risk management, performance measurement
and capital allocation in a comprehensive integrated framework to allow for
better understanding of these areas and efficient allocation of economic
capital.

Credit Risk

In our lending operations, we are principally exposed to credit risk.
Credit risk is the risk of loss that may occur from the failure of any party to
abide by the terms and conditions of any financial contract with us,
principally the failure to make required payments on loans due to us. We
currently measure, monitor and manage credit risk for each borrower and also at
the portfolio level. We have a

structured and standardized credit approval process, which includes a
well-established procedure of comprehensive credit appraisal.

ICICI's Credit Risk Management Department formulates company-wide risk
policies and operational guidelines for the functioning and control of business
units. This department has been instrumental in re-engineering our credit
processes, specifically our risk evaluation methodologies and our control
systems. The department has also implemented an automated Credit Risk
Information System that enables sharing of information regarding the borrower
between the business units and the Credit Risk Management Department. This
system also assists in the analysis of information provided by our business
units and external sources.

Credit Approval Authority

ICICI has established three levels of credit approval authorities for its
corporate banking activities, the Credit Committee of the board of directors,
the Management Committee and the Executive Committee. In corporate banking
activities, all corporate credit proposals must be approved by one of these
committees, and no individual officer has the authority to approve a loan. The
Credit Committee has the power to approve all financial assistance. ICICI's
board of directors has delegated the authority to the Management Committee,
consisting of ICICI's executive directors, and to the Executive Committee,
consisting of ICICI's Senior General Managers, to approve financial assistance
to any company within certain individual and group exposure limits set by the
board of directors.

The following table sets forth the composition and the approval authority
of these committees.

Committee Members Approval Authority
--------------------------------------------------------------------------------------------------------------------
Credit Committee of the Chaired by an independent director o All approvals to companies with rating
board of directors and consisting of a majority of below BBB- the investment grade as per
independent directors. ICICI's internal credit rating policy.
o All approvals (in practice, generally
above the prescribed authority of the
Management Committee).
o Approvals to a company in which any
of ICICI's directors has an interest.

Management Committee Chaired by the Managing All approvals above the prescribed authority of
Director and Chief Executive the Executive Committee generally subject to the
Officer and consisting of all following limits:
executive directors. o Up to 15.0% of ICICI's capital funds(1)
to a single entity; and
o Up to 30.0% of ICICI's capital funds(1)
to a single group of companies.

Executive Committee Consisting of Senior General Approvals to existing companies subject to the
Managers. following limits:
o Up to Rs. 750 million (US$ 16 million)
for each company with an internal credit
rating of AA and above;
o Up to Rs. 500 million (US$ 11 million)
for each company with an internal credit
rating of A; and
o Up to Rs. 250 million (US$ 5 million) for a
company with an internal rating of A- or a
new project with an internal rating of A- and
above. In all cases, subject to adherence to
limits on ICICI's capital funds(1) imposed on the
Management Committee as mentioned above.

--------------
(1) Capital funds consist of stockholders' equity and preferred stock of a
maturity of at least 20 years under Indian GAAP.

The following table sets forth the composition of the committees, approval
authority of the committees and the authorized officers of ICICI Bank, our
commercial banking affiliate.

Authorized executives
and committees Members Approval authority
------------------------------------ ---------------------------------------- ---------------------------------------
Board of directors.................. All the members on the board of All approvals (in practice, generally
directors above the prescribed authority of the
Committee of directors).

Committee of directors.............. Managing Director and Chief Executive All approvals to companies up to Rs.
Officer and six other directors 400 million (US$ 8.5 million).

Investment Committee................ Executive Director-Wholesale Banking, All approvals for subscribing to
heads of Corporate Banking, Risk debentures, preferred stock, bonds
Management, Treasury and the Chief and commercial paper.
Financial Officer

Management Committee ............... Managing Director and Chief Executive All approvals up to Rs. 300 million
Officer, Executive Director-Corporate (US$ 6.4 million).
Banking, Executive Director-Retail
Banking and heads of Corporate Banking
and Risk Management

Executive Committee................. Heads of Corporate Banking, All approvals for borrowers rated
Operations, Risk Management and Retail 'BBB' and above up to Rs. 150 million
Banking (US$ 3.2 million).
Head of corporate banking........... All ad hoc or additional approvals in
existing accounts, with a credit
rating of 'BBB' and above, up to 10%
of the existing sanctioned limits,
subject to a maximum of Rs. 20
million (US$ 426,900).
Head of operations.................. All ad hoc or additional approvals in
existing accounts, handled by the
Special Asset Management Group, up to
10% of the existing sanctioned
limits, subject to a maximum of Rs.
10 million (US$ 213,450).

Credit Risk Assessment Procedures

In order to assess the credit risk associated with any financing proposal,
we assess a variety of risks relating to the proposed borrower and risks
relating to the project and the relevant industry. Borrower risk is evaluated
by considering:

o the financial position of the borrower by analyzing its financial
condition including profitability, cash flow and balance sheet;

o the borrower's relative competitive position within its industry;

o the borrower's historical payment record to lenders;

o the financial resources of the sponsors; and

o the quality of management.

To facilitate our risk assessment, we maintain detailed information on our
clients and their industries. We have developed a proprietary database of
approximately 3,000 Indian companies,

which contains current and historical financial and operating information on
borrowers to whom we have provided financial assistance.

After conducting an analysis of a specific borrower's risk and based on
our analysis and outlook of the industry, we assign a credit rating for the
borrower. We have eleven ratings ranging from AAA to D. Credit rating is a
critical input for the credit approval process. We conduct studies on the
historical default patterns of loans in order to predict defaults in the Indian
context. We determine the desired credit risk spread over our cost of funds by
considering the borrower's credit rating and the default pattern corresponding
to the credit rating. The credit rating for every borrower is reviewed at least
annually and is typically reviewed on a quarterly basis for higher risk credits
and large exposures. We also review the ratings of all borrowers in a
particular industry upon the occurrence of any significant event impacting the
industry.

The Credit Risk Management Department is divided into various specialized
industry sub-groups. They monitor all major sectors of the economy and
specifically follow industries in which we have credit exposure. We respond to
any stress in an industrial segment by restricting new credits, attempting
where possible to delay, deter or cancel existing commitments to that segment
and in all cases monitoring the performance of our borrowers in that segment
and taking remedial action as considered necessary. The Reserve Bank of India
has stipulated guidelines for exposures to individual borrowers and sponsor
groups. See "Supervision and Regulation" for a description of these guidelines.

The prospects and outlook for various sectors and individual borrowers are
analyzed and discussed extensively by a Credit Risk Committee, which is chaired
by the head of the Risk Management Group and includes senior members of ICICI's
management team. This committee reviews the credit ratings of borrowers and
serves as the forum for developing the sectoral outlook, which is an important
input in the portfolio planning process. Every proposal for a financing
facility is prepared by the relevant business unit and reviewed by the
appropriate industry specialists in the Credit Risk Management Department
before being submitted for approval to the appropriate approval authority. The
approval process for guarantees is similar to that for fund-based facilities.

Project Finance Procedures

We have a strong framework for the appraisal and execution of project
finance transactions. We believe that this framework creates optimal risk
identification, allocation and mitigation, and helps minimize residual risk.

The project finance approval process begins with a detailed evaluation of
technical, commercial, financial, marketing and management factors and the
sponsor's financial strength and experience. Once this review is completed, an
appraisal memorandum is prepared for credit approval purposes. As part of the
appraisal process, we generate a risk matrix, which identifies each of the
project risks, mitigating factors and residual risks associated with the
project. The appraisal memorandum analyzes the risk matrix and establishes the
viability of the project. Typical key risk mitigating factors include the
commitment of stand-by funds from the sponsors to meet any cost overruns and a
conservative collateral position. After credit approval, a letter of intent is
issued to the borrower, which outlines the principal financial terms of the
proposed facility, sponsor obligations, conditions precedent to disbursement,
undertakings from and covenants on the borrower. After completion of all
formalities by the borrower, a loan agreement is entered into with the
borrower.

In addition to the above, in the case of structured project finance in
areas such as infrastructure and oil, gas and petrochemicals, as a part of the
due diligence process, we appoint consultants, wherever considered necessary,
to advise the lenders, including technical advisors, business analysts, legal
counsel and insurance consultants. These consultants are typically
internationally recognized and experienced in their respective fields. Risk
mitigating factors in these financings generally also include creation of debt
service reserves and channeling project revenues through a trust and retention
account.

Our project finance credits are generally fully secured and have full
recourse to the borrower. In most cases, we have a security interest and first
lien on all the fixed assets and a second lien on all the current assets of the
borrower. Security interests typically include property, plant and equipment as
well as other tangible assets of the borrower, both present and future.
Typically, it is our practice to lend between 60.0% and 80.0% of the appraised
value of this type of collateral securities. It may take several months to
complete the registration of these security interests in India. Our borrowers
are required to maintain comprehensive insurance on their assets where we are
recognized as payee in the event of loss. In some cases, we also take
additional collateral in the form of the corporate or personal guarantees from
one or more sponsors of the project and a pledge of the sponsors' equity
holding in the project company. In certain industry segments, we also take
security interest in relevant project contracts such as concession agreements,
off-take agreements and construction contracts as part of the security package.
In limited cases, loans are also guaranteed by commercial banks and, in the
past, have also been guaranteed by Indian state governments or the government
of India.

Our current practice is to disburse funds after the entire project funding
is committed and all necessary contractual arrangements have been entered into.
Funds are disbursed in tranches to pay for approved project costs as the
project progresses. When we appoint technical and market consultants, they are
required to monitor the project's progress and certify all disbursements. We
also require the borrower to submit periodic reports on project implementation,
including orders for machinery and equipment as well as expenses incurred.
Project completion is contingent upon satisfactory operation of the project for
a certain minimum period and, in certain cases, the establishment of debt
service reserves. We continue to monitor the credit exposure until our loans
are fully repaid.

Corporate Finance Procedures

Our corporate finance activities are usually restricted to clients with a
high investment grade credit rating. As part of the corporate loan approval
procedures, we carry out a detailed analysis of funding requirements, including
normal capital expenses, long-term working capital requirements and temporary
imbalances in liquidity. Our funding of long-term core working capital
requirements is assessed on the basis, among other things, of the borrower's
present and proposed level of inventory and receivables. In case of corporate
loans for other funding requirements, we undertake a detailed review of those
requirements and an analysis of cash flows. A substantial portion of our
corporate finance loans are secured by appropriate assets of the borrower.

The focus of our structured corporate finance products is on cash flow
based financings. We have developed a set of distinct approval procedures to
evaluate and mitigate the risks associated with such products. These procedures
include:

o carrying out a detailed analysis of cash flows to accurately forecast the
amounts that will be paid and the timing of the payments based on an
exhaustive analysis of historical data;

o conducting due diligence on the underlying business systems, including a
detailed evaluation of the servicing and collection procedures and the
underlying contractual arrangements; and

o paying particular attention to the legal, accounting and tax issues that
may impact any structure.

Our analysis enables us to identify risks in these transactions. To
mitigate risks, we use various credit enhancement techniques, such as
over-collateralization, cash collateralization, creation of escrow accounts and
debt service reserves and performance guarantees. The residual risk is
typically managed by complete or partial recourse to the borrowing company
whose credit risk is evaluated as described above. We have also established a
strong monitoring framework to enable continuous review of the performance of
such transactions.

Working Capital Finance Procedures of ICICI Bank

ICICI Bank provides working capital finance to clients across India. As
part of the working capital finance approval process, it carries out a detailed
analysis of its borrowers' working capital requirements. Credit limits are
approved either by authorized executive officers or by a committee of ICICI
Bank's board of directors or by the board of directors depending on the amount
of the loan. Once credit limits are approved, ICICI Bank calculates the amounts
that can be lent on the basis of monthly statements provided by the borrower
and the margins stipulated. Quarterly information statements are also obtained
from borrowers to monitor the performance on a regular basis. Monthly cash flow
statements are obtained wherever considered necessary. Any irregularity in the
conduct of the account is reported to the appropriate authority on a monthly
basis. Credit limits are reviewed on an annual basis.

Working capital facilities are primarily secured by inventories and
receivables. Additionally, in certain cases, these credit facilities are
secured by personal guarantees of directors, or subordinated security interests
in the tangible assets of the borrower including plant and machinery.

Investment Banking Procedures

ICICI Securities provides investment banking services, including corporate
advisory, fixed income and equity services, to Indian corporate customers. All
investment banking mandates, including underwriting commitments, are approved
by ICICI Securities' Commitments Committee. This committee consists of the
Managing Director, the Chief Operating Officer and the Senior Vice-President of
ICICI Securities.

ICICI Securities is registered with the Securities and Exchange Board of
India as a merchant bank. In that capacity, ICICI Securities has decided not to
engage in any lending and leasing activities and conducts only activities
related to the securities markets.

Retail Loan Procedures

Our retail credit products presently include automobile loans, home loans,
loans for consumer durable products, commercial vehicles, two wheelers and
personal loans. In addition, ICICI Bank offers credit cards, loans against time
deposits and loans against shares for subscriptions to initial public offerings
of Indian companies.

The following chart sets forth the organizational structure of our retail
lending business other than home loans. Each of the divisions has separate
teams for each of our retail lending products.

|---------------|
|General Manager|
| (Retail Loans)|
|-------|-------|
|-----------------------------|------------------------------|
| | |
V V V
|-----------------| |--------------| |-----------------|
| Business | |Business Heads| |Retail Operations|
|Intelligence Head| | | | Head |
|-----------------| |-------|------| |-----------------|
|--------------|--------------|
V V
|--------------| |--------------|
| Sales & | | Credit |
| Marketing | | Operations |
|--------------| |--------------|

The following chart sets forth the organizational structure of our home
loan business.

|-----------------|
| General Manager |
| Home Loans |
|--------|--------|
|------------------------------------|
V V
|-------------------------| |---------------|
|Assistant General Manager| | Functional |
| | | Heads |
|------------|------------| |-------|-------|
| V
V |-------------------|
|-----------------| V V
| Business Head | |---------------| |---------------|
| | | Operations | | Finance and |
|--------|--------| | | | Securitization|
|-----------------|----------------| |---------------| |---------------|
V V V
|--------------| |--------------| |--------------|
| New Product | | Business | | Regional |
| Development | | Intelligence | |Business Heads|
| | | Head | | |
|--------------| |--------------| |------|-------|
|
V
|---------------|
| Area |
| Business Heads|
|-------|-------|
V
|-------------------|
V V
|---------------| |---------------|
| Sales and | | Credit |
| Marketing | | Operations |
|---------------| |---------------|

Our borrowers are typically middle and high-income, salaried or
self-employed individuals, and, in some cases, partnerships and corporations.
Except for personal loans and credit cards, we require a contribution from the
borrower, typically up to 15.0% of the value of the assets purchased, and our
loans are secured by the asset financed.

We have an established process for evaluating and selecting our dealers
and franchisees and there is a clear segregation between the group responsible
for originating loans and the group that approves the loans. A centralized set
of risk assessment criteria has been created for retail lending operations
after approval by the Risk Management Group. These criteria vary across product
segments but typically include factors such as borrower's income, the
loan-to-value ratio and certain stability factors. The loan approval authority
is delegated to credit officers, subject to loan amount limits, which vary
across different loan products. Credit officers approve loans in compliance
with the risk assessment criteria. External agencies are used to facilitate a
comprehensive due diligence process including visits to office or home in the
case of loans to individual borrowers. Before disbursements are made, the
credit officer conducts a centralized check and review of the borrower's
profile.

In order to limit the scope of individual discretion in the loan
assessment and approval process, ICICI Bank has implemented a credit-scoring
program for credit cards. We have also implemented a credit-scoring program for
certain variants within the consumer durables business. The credit-scoring
program is an automated credit approval system for evaluating loan applications
by assigning a credit score to each applicant based on certain demographic
attributes like earnings stability, educational background and age. The credit
score then forms the basis of loan evaluation. Though a formal credit bureau
does not operate in India, we avail the services of some private agencies
operating in India to check our applications before disbursement.

We have a separate credit policy team, which undertakes review and audit
of credit quality across each credit approval team. We have established
centralized operations to manage operating risk in the various back office
processes of our retail loan business except for a few operations which are
decentralized to improve turnaround time for our customers. The Risk Management
Group conducts an independent audit of processes and documents at periodic
intervals. As with our other retail loan business, we stress conservative
credit standards, including credit scoring and strict monitoring of repayment
patterns, to optimize risks associated with the credit cards business.

We have an independent collections unit to manage delinquency levels. The
collections unit operates under the guidelines of a standardized recovery
process. We also make use of external collection agents to aid us in our
collection efforts, including collateral repossession in accounts that are
overdue for more than 90 days.

Quantitative and Qualitative Disclosures About Market Risk

General

Market risk is the risk of loss to future earnings, to fair values, or to
future cash flows that may result from changes in the price of a financial
instrument. The value of a financial instrument may change as a result of
changes in interest rates, foreign currency exchange rates, commodity prices,
equity prices and other market changes that affect market risk sensitive
instruments. Market risk is attributed to all market risk sensitive financial
instruments, including securities, loans, deposits, borrowings and derivative
instruments. Our exposure to market risk is a function of our asset and
liability management activities, our trading activities for our own account,
and our role as a financial intermediary in customer-related transactions. The
objective of market risk management is to avoid excessive exposure of our
earnings and equity to loss and to reduce the volatility inherent in financial
instruments. The operations of ICICI, our subsidiary, ICICI Securities and our
affiliate, ICICI Bank, contribute most of the exposure to market risk.

Market Risk Management Procedures

ICICI. The Resources & Treasury Committee has been reconstituted as the
Resources, Treasury & Asset Liability Management Committee consisting of four
executive directors of ICICI who approve funding programs (including interest
rates and maturity profile), new products and various market exposure limits,
and review any limit breaches. This committee has been further delegated with
powers for asset-liability management by the board of directors. Its role
encompasses stipulating liquidity and interest rate risk limits, monitoring
market risk levels by adherence to set limits, articulating the organization's
interest rate view and determining business strategy, as deemed fit, in the
light of the current and expected business environment.

The minutes of each of these committee meetings are reported periodically
to the board of directors. ICICI's Market Risk Management Group exercises
independent control over the entire process of market risk management in the
company, and recommends changes in processes and methodologies for quantifying
and assessing market risk, that it feels are necessary. All new products and
market risk policies are submitted for consideration to this group and only
thereafter presented to the Resources, Treasury & Asset Liability Management
Committee for approval.

ICICI also has a middle office, which independently monitors treasury
activities. The middle office reports to the Chief Financial Officer from
August 2001. The middle office is responsible for monitoring various exposure
and dealing limits, verifying the appropriateness and accuracy of various
transactions, processing these transactions, tracking the daily funds position
and being responsible for all treasury-related management and regulatory
reporting. Through its activities, the middle office mitigates to a large
extent, the operational risk inherent in treasury operations. In addition,
periodic reviews by ICICI's internal audit department, regulators and
independent accountants provide further evaluation of the controls over the
market risk management process.

The following chart sets forth the organizational structure of the groups
responsible for the market risk exposure that ICICI assumes, together with a
brief description of their functions.

|-----------------| |-----------------| |------------------------|
| Head of Treasury| | Head of Risk | | Chief Financial Officer|
|--------|--------| |--------|--------| |------------|-----------|
| | V
| | |---------------------|
|--------------------|--------------------| | V V
V V V V |-------------| |-----------------------|
|------------------| |------------------| |------------------| |-----------| |Head of Mid- | |Head of Asset-Liability|
|Funding and Asset-| | Sales and | | Deriviates and | |Market Risk| |Office Group | | Management Support |
| Liability | | Trade Group | | Economic | |Management | | | | Group |
| Management | | | | Research Group | | Group | |-----|-------| |------------|----------|
| Group | | | | | |-----------| V V
|------------------| |------------------| |------------------| |--------------| |------------------|
|Middle Office,| | Asset-Liaiblity |
| Settlements | | Management |
| Group | | Support Group |
|--------------| |------------------|

o Liquidity o Management o Development o Developing and o Ensure compliance o Analysis, Monitoring
o Market of ICICI's of new product implementing with market risk limits and reporting of
borrowings trading proposals market risk and policies on a asset-liability
o Transfer portfolio o Development measurement day-to-day basis positions
pricing of market risk methodologies o Periodic reporting to
o Implementing management o Approval the Resources,
hedging strategies policies and of all new Treasury & Asset
for the loan models products Liability Management
portfolio o Performing o Stipulation of Committee
macro-economic counterparty o Confirmation and
analysis for exposure limits settlement of all
development of o Monitoring deals
views on market risk o Custodial functions
movements on key exposures
economic o Approval
parameters of market risk
management
methodologies
and policies
o Stipulation of
risk tolerance
levels and
policies

ICICI Securities. For ICICI Securities, the Corporate Risk Management
Group formulates all policies relating to market risk management, including
setting of limits. The middle office of ICICI Securities monitors risks and
limits on a day-to-day basis in a manner similar to the middle office of ICICI.
Both the Corporate Risk Management Group and ICICI Securities middle office
report to the Managing Director of ICICI Securities.

ICICI Bank. The board of directors of ICICI Bank reviews and approves the
policies for the management of market risks and has delegated the
responsibility for market risk management to the Asset-Liability Management
Committee. The Managing Director and Chief Executive Officer chairs the
Asset-Liability Management Committee and the Chief Financial Officer,
executives of various business units and the Risk Management Department are the
members of the committee. The committee generally meets on a monthly basis and
reviews the interest rate and liquidity gap position, formulates a view on
interest rates, sets deposit and benchmark lending rates and reviews the
business profile and its impact on asset-liability management. Emergency
meetings of the committee are convened to respond to developments in the
markets and economy. The committee also sets market risk limits for trading
activities. The committee reports to the Audit and Risk Committee of the board
of directors on a quarterly basis.

ICICI Bank has established a mid-office independent of treasury, which
monitors the risks in the treasury operations and ensures adherence to various
risk control limits on a daily basis. The mid-office, at regular intervals,
submits reports to the head of the Risk Management Department and the Managing
Director and Chief Executive Officer on the extent of the market risk exposure.

Our exposures to market risk arise principally from interest rate risk,
liquidity risk, equity risk and exchange rate risk. Each of these sources of
risk and its management is discussed in the following paragraphs.

Interest Rate Risk

Since our balance sheet consists predominantly of rupee assets and
liabilities, movements in rupee interest rates are the main source of interest
rate risk. We have separate methods for managing the interest rate risk
associated with our trading activities and our asset and liability management
activities, as described below. Based on our asset- liability position at
year-end fiscal 2001, both our portfolio of traded debt securities and our loan
portfolio are negatively impacted by an increase in interest rates. Based on
our asset liability position at year-end fiscal 2000, our loan portfolio
benefited from a rise in interest rates. This change in the sensitivity of our
loan portfolio is on account of the asset-liability management strategy
followed during fiscal 2001. The strategy resulted in a liability sensitive
position, with interest-bearing liabilities maturing, on an average, earlier
than our interest-earning assets. This results in a benefit if the interest
rates decline, which was our outlook on the interest rates in fiscal 2001.

Our primary means of measuring our exposure to fluctuations in interest
rates is gap analysis, which provides a static view of the maturity and
re-pricing characteristics of balance sheet positions. An interest rate gap
report is prepared by scheduling all assets and liabilities according to stated
or anticipated re-pricing date, or maturity date. To the extent that there is a
difference in the amount of assets and liabilities maturing or being re-priced
in a particular period, we are exposed to the risk that the margins on new or
re-priced assets and liabilities may change.

ICICI prepares interest rate sensitivity reports on a regular basis. The
interest rate risk limits are approved by the Resources, Treasury & Asset
Liability Management Committee. ICICI Bank also prepares and submits interest
rate sensitivity reports on a regular basis.

We are also exploring the feasibility of implementing more advanced
statistical methods (including using a Monte Carlo scenario generation process
for net interest revenue simulations and computation of the value at risk
embedded in our traded security positions) in the Indian environment. If found
feasible, these methods would allow us to more accurately assess the impact of
complex changes in interest rates on our interest income and the market value
of traded securities. These methods would also allow us to assign higher
weights to the more likely fluctuations while quantifying our exposure to
interest rate risk.

Interest Rate Risk (Loan Portfolio). Our business activities involve
lending and borrowing in rupees as well as foreign currencies. These activities
expose us to interest rate risk. As the rupee market is significantly different
from the international currency markets, our gap positions in these markets
differ significantly.

In the rupee market, most of ICICI's borrowing and lending takes place at
fixed rates of interest. ICICI usually borrows for a fixed period with a
one-time repayment on maturity, with some borrowings having call or put options
at pre-determined dates. However, ICICI's loans generally are repaid more
gradually, with principal repayments being made over the life of the loan. We
have established systems to monitor and minimize our asset and liability
mismatches.

In contrast to ICICI's rupee loans, a large proportion of ICICI's foreign
currency loans are floating rate loans. These loans are generally funded with
floating rate foreign currency funds. In addition, ICICI's fixed rate foreign
currency loans are generally funded with fixed rate foreign currency funds.
ICICI generally converts all its foreign currency borrowings into floating rate
dollar liabilities through the use of interest rate and currency swaps with
leading international banks. As a consequence of all these steps, the foreign
currency gaps are generally significantly lower than rupee gaps, representing a
considerably lower exposure to fluctuations in foreign currency interest rates.

ICICI continues to follow a three-tier prime rate structure, namely, a
short-term prime rate for one-year loans or loans that re-price at the end of
one year, a medium-term prime rate for one to three year loans and a long-term
prime rate for loans with maturities greater than three years. Interest rate
risk on undisbursed commitments is sought to be eliminated by fixing interest
rates on rupee loans at the time of loan disbursement.

The rupee interest rate derivatives market in India is at a nascent stage.
We intend to use these derivatives to the extent feasible to actively manage
the asset and liability positions on our balance sheet. ICICI, ICICI Securities
and our affiliate, ICICI Bank are active participants in the Indian interest
rate swap market. However, since these markets are currently able to support
only very small-sized transactions and limited maturities, we are constrained
to follow a strategy of cash flow matching on a portfolio basis in order to
contain our asset-liability mismatches. We attempt to do this through the
management of the maturity structure of our incremental assets and liabilities.
However, even using this route, given the highly illiquid nature of the
domestic debt market with liquidity concentrated around certain maturities, it
is not always possible for us to achieve a perfect hedge. Therefore, we are
left with residual risk, which we seek to monitor through the interest rate gap
analysis and sensitivity analysis given below.

The following table sets forth, for the period indicated, our
asset-liability gap position.

At March 31, 2001 (1)-(6)
-----------------------------------------------------
Less than Greater than Greater
or equal to one year and than Total
one year up to five five years
years
-----------------------------------------------------
(in millions)

Loans, net..................................... Rs. 189,331 Rs. 293,907 Rs. 118,785 Rs. 602,023
Securities..................................... 550 948 26,516 28,014
Fixed assets................................... -- -- 12,039 12,039
Other assets(6)................................ 67,679 3,683 27,007 98,369
-----------------------------------------------------
Total assets................................... 257,560 298,538 184,347 740,445
Stockholders' equity........................... -- -- 75,922 75,922
Debt(6)........................................ 173,223 276,653 61,919 511,795
Other liabilities(6)........................... 138,341 1,326 13,061 152,728
-----------------------------------------------------
Total liabilities.............................. 311,564 277,979 150,902 740,445
Total gap before risk management positions..... (54,004) 20,559 33,445 --
Risk management positions...................... (18,249) 8,384 10,046 181
-----------------------------------------------------
Total gap after risk management positions...... Rs. (72,253) Rs. 28,943 Rs. 43,491 Rs. 181

=====================================================

----------------

(1) Assets and liabilities are classified into the applicable categories,
based on residual maturity or re-pricing date whichever is earlier.

(2) Items that neither re-price nor mature are included in the "greater than
five years" category. This includes issued equity share capital, as well
as all equity investments other than those held as part of the trading
portfolio.

(3) Impaired loans of residual maturity less than three years are classified
in the "greater than one year and up to five years" category and impaired
loans of residual maturity between three to five years are classified in
the "greater than five years" category.

(4) Loan funds dedicated to the trading portfolio have been classified as
assets in the "less than or equal to one year" category.

(5) The risk management positions comprise foreign currency and rupee swaps.
The risk management position has been adjusted for a sum of Rs. 380
million on account of revaluation of swaps.

(6) The categorization for these items is different from that reported in the
financial statements.

The following table sets forth, for the period indicated, the amount
of loans with maturities greater than one year that had fixed and
floating/adjustable interest rates.

At March 31, 2001
----------------------------------------------
Fixed rate Floating/adjustable Total
loans rate loans
----------------------------------------------
(in millions)
Loans.....................Rs. 277,768 Rs. 145,977 Rs. 423,745

The following tables set forth, for the periods indicated, the impact
of changes in interest rates on net interest revenue for fiscal 2002 and fiscal
2001 from our loan portfolio, assuming a parallel shift in yield curve, given
our asset and liability position at year-end fiscal 2001 and 2000 respectively.

At March 31, 2001
---------------------------------------
Changes in interest rates
(in basis points)
---------------------------------------
(100) (50) 50 100
---------------------------------------
(in millions)
Rupee portfolio............. Rs. 404 Rs. 202 Rs. (202) Rs. (404)
Foreign currency portfolio.. Rs. (6) Rs. (3) Rs. 3 Rs. 6
---------------------------------------
Total....................... Rs. 398 Rs. 199 Rs. (199) Rs. (398)
=======================================

At March 31, 2000
---------------------------------------
Changes in interest rates
(in basis points)
---------------------------------------
(100) (50) 50 100
---------------------------------------
(in millions)
Rupee portfolio.............Rs. (289) Rs. (145) Rs. 145 Rs. 289
Foreign currency portfolio.. (19) (9) 9 19
---------------------------------------
Total.......................Rs. (308) Rs. (154) Rs. 154 Rs. 308
=======================================

Given our asset and liability position at year-end fiscal 2001, if
interest rates decreased by 100 basis points, we expect that net interest
revenue for fiscal 2002 from our loan portfolio would increase by Rs. 398
million (US$ 9 million). If interest rates increased by 100 basis points, our
net interest revenue for fiscal 2002 would fall by Rs. 398 million (US$ 9
million). The amount of Rs. 398 million constitutes 6.0% of our net income for
fiscal 2001. The difference in sensitivity of net interest revenue for fiscal
2002 from our loan portfolio to movement in interest rates compared to fiscal
2001, is due, in large part, to the asset-liability management strategy
followed during fiscal 2001, whereby we created a liability-sensitive profile
aligned with our interest rate view. This sensitivity analysis is for risk
management purposes and assumes that we make no other changes in our portfolio.
Actual changes in net interest revenue will vary from the model.

The following table sets forth, for the period indicated, the impact of
changes in interest rates on net interest revenue of our affiliate, ICICI Bank,
for fiscal 2002, assuming a parallel shift in yield curve, given the
asset-liability position of ICICI Bank at year-end fiscal 2001.

--------------------------------------
At March 31, 2001
--------------------------------------
--------------------------------------
Change in interest rates
(in basis points)
--------------------------------------
-------- --------- --------- ---------
(100) (50) 50 100
-------- --------- --------- ---------
(in millions)
Rupee portfolio...................Rs. 31 Rs. 15 Rs. (15) Rs. (31)
Foreign currency portfolio........ (26) (13) 13 26
-------- --------- --------- ---------
Total.............................Rs. 5 Rs. 2 Rs. (2) Rs. (5)
======== ========= ========= =========

Based on ICICI Bank's asset and liability position at March 31, 2001, the
sensitivity model shows that net interest revenue from ICICI Bank's loan
portfolio for fiscal 2002 would fall by Rs. 5 million (US$ 107,000) if interest
rates increased by 100 basis points during fiscal 2002. Conversely,

the sensitivity model shows that if interest rates decreased by 100 basis
points, net interest revenue for fiscal 2002 would rise by Rs. 5 million (US$
107,000). The amount of Rs. 5 million constituted 0.4% of ICICI Bank's net
income for fiscal 2001. This sensitivity analysis is for risk management
purposes and assumes that the bank makes no other changes in its portfolio.
Actual changes in net interest revenue will vary from the model.

It must be noted that the interest rate sensitivities shown above are for
exposures in different markets where interest rate movements may not be
perfectly correlated. Thus, the individual sensitivity figures need to be
viewed in isolation and not as a net figure.

Interest Rate Risk (Trading Portfolio). Trading activities are undertaken
primarily to enhance our earnings through profitable trading for our own
account. ICICI Securities is a primary dealer in government of India
securities, and a significant proportion of its portfolio consists of
government of India securities. Our affiliate, ICICI Bank, is required by law
to invest 25.0% of its demand and time liabilities in specified securities,
including government of India securities.

We revalue the securities held as a part of our trading book on a daily
basis and recognize aggregate revaluation losses and gains on our profit and
loss account. We use sensitivity analysis to measure the interest rate risk of
our trading positions. We measure the change in the market value of the
portfolio for a 100 basis points change in interest rates across all
maturities.

At year-end fiscal 2001, the total value of our rupee fixed income trading
portfolio was Rs. 16.2 billion (US$ 345 million). As set forth in the table
below, if interest rates rose by 100 basis points, the value of this portfolio
would fall by Rs. 560 million (US$ 12 million), and if interest rates fell by
100 basis points, the value of this portfolio would rise by Rs. 574 million
(US$ 12 million). The decrease in potential loss or gain between year-end
fiscal 2000 and year-end fiscal 2001 is primarily due to the decrease in the
size of the portfolio between these two dates. This decrease in sensitivity can
be largely attributed to the exclusion of ICICI Bank's substantial government
of India securities portfolio at year-end fiscal 2001. This sensitivity
analysis is for risk management purposes and assumes that we make no other
changes in our portfolio. Actual changes in the value of this portfolio will
vary from the model.

The following tables set forth, for the periods indicated, the impact of
changes in interest rates on the value of our rupee fixed income trading
portfolio, assuming a parallel shift in the yield curve at year-end fiscal 2001
and 2000. .....

At March 31, 2001
-------------------------------------------------------
Change in interest rates
(in basis points)
-------------------------------------------------------
Portfolio Size (100) (50) 50 100
-------------------------------------------------------
(in millions)

Government of India securities (1)..Rs. 8,889 Rs. 345 Rs. 172 Rs.(171) Rs. (340)
Corporate debt securities........... 7,289 229 114 (112) (220)
-------------------------------------------------------
Total...............................Rs. 16,178 Rs. 574 Rs. 286 Rs.(283) Rs. (560)
=======================================================

At March 31, 2000
-------------------------------------------------------
Change in interest rates
(in basis points)
-------------------------------------------------------
Portfolio Size (100) (50) 50 100
-------------------------------------------------------
(in millions)
Government of India securities (1).Rs. 46,281 Rs. 1,725 Rs. 850 Rs. (823) Rs. (1,619)
Corporate debt securities.......... 9,239 297 146 (161) (261)
-------------------------------------------------------
Total..............................Rs. 55,520 Rs. 2,022 Rs. 996 Rs. (984) Rs. (1,880)
=======================================================

---------
(1) For the purpose of analysis, certain quasi-government corporate securities
are included as government of India securities.

The following table sets forth, for the period indicated, the impact of
changes in interest rates on the value of ICICI Bank's rupee fixed income
trading portfolio as a percentage of net income, assuming a parallel shift in
yield curve at year-end fiscal 2001.

-------------------------------------------------------
At March 31, 2001
-------------------------------------------------------
-------------------------------------------------------
Change in interest rates
(in basis points)
-------------------------------------------------------
------------ --------- ---------- ---------- ----------
Portfolio (100) (50) 50 100
Size
-------------------------------------------------------
(in millions)

Government of India securities(1). Rs. 14,055 Rs. 534 Rs. 262 Rs. (252) Rs. (494)
Corporate debt securities......... 4,543 161 81 (71) (144)
------------ --------- ---------- ---------- ----------
Total............................. Rs. 18,598 Rs. 695 Rs. 343 Rs. (323) Rs. (638)
============ ========= ========== ========== ==========

---------
(1)......For the purpose of analysis, certain quasi-government corporate
securities are included as government of India securities.

At March 31, 2001, the total value of ICICI Bank's rupee fixed income
portfolio was Rs. 18.6 billion (US$ 397 million). Based on ICICI Bank's asset
and liability position at March 31, 2001, the sensitivity model shows that if
interest rates increase by 100 basis points, the value of the trading portfolio
would fall by Rs. 638 million (US$ 14 million). Conversely, if interest rates
fell by 100 basis points, under the model, the value of this portfolio would
rise by Rs. 695 million (US$ 15 million). The sensitivity of the value of the
trading portfolio to changes in interest rates is largely due to the government
of India securities, ICICI Bank is required to hold under the Reserve Bank of
India's statutory liquidity ratio requirement. Moreover, any decrease in the
value of the trading portfolio will be reflected in ICICI Bank's income
statement. This sensitivity analysis is for risk management purposes and
assumes that the bank makes no other changes in its portfolio. Actual changes
in net interest revenue will vary from the model.

Our total interest rate risk is a combination of our non-trading risk and
our trading risk. When interest rates decrease, our trading portfolio increases
in value and our non-trading income increases due to the increase in net
interest revenue.

As may be seen from the table below, while the interest rate sensitivity
of the trading portfolio of ICICI Securities is high relative to the size of
its net income, on a combined basis it forms a much smaller proportion of our
combined net income.

The following table sets forth, for the period indicated, the impact of
changes in interest rates on the value of our rupee fixed income trading
portfolio as a percentage of net income for fiscal 2001.

Year ended March 31, 2001
-------------------------------------
ICICI ICICI Total
Securities
-------------------------------------
( in millions, except percentages)
Loss due to a 100 basis point
upward move in interest rates......... Rs. (203) Rs. (357) Rs. (560)
Net income.............................. 6,928 506 7,424
Loss as a percentage of net income...... 2.9% 70.6% 7.5%

Equity Risk

We assume equity risk both as a part of our investment book and our
trading book. On our investment book, investments in equity shares, preference
shares and mutual fund units are essentially long-term in nature. Nearly all
the equity investment securities are driven by our project financing
activities. The decision to invest in equity shares during project financing
activities is a conscious decision to participate in the equity of the company
with the intention of realizing capital gains arising from expected increases
in market prices, and is separate from the lending decision.

Trading account equity securities are recorded at market value. For the
purpose of valuation of our equity investment securities, we assess whether a
decline in the fair value below the amortized cost of our equity investments is
other than temporary. If a decline in fair value below the amortized cost is
other than temporary, we provide for the decline in the income statement. A
temporary decline in value is excluded from the income statement, and charged
directly against stockholders' equity. To assess whether a decline in value is
other than temporary, we consider factors like the quantum of decline in fair
value, the duration for which the decline has existed, specific industry and
company conditions, financial conditions of the company and dividend record.
Non-readily marketable securities for which there is no readily determinable
fair value are recorded at cost. Venture capital investments are carried at
fair value. However, they are generally carried at cost during the first year,
unless a significant event occurs that effects the long-term value of the
investment. Substantially, all venture capital investments were acquired during
fiscal 2001.

At year-end fiscal 2001, the fair value of our trading account equity
securities was Rs. 2.7 billion (US$ 57 million). The fair value of our equity
securities investment portfolio, including non-readily marketable securities of
Rs. 6.4 billion (US$ 136 million), was Rs. 17.1 billion (US$ 365 million). At
year-end fiscal 2000, the fair value of our trading account equity securities
was Rs. 1.6 billion (US$ 33 million). The fair value of our equity securities
investment portfolio, including non-readily marketable securities of Rs. 6.5
billion (US$ 140 million), was Rs. 14.6 billion (US$ 312 million).

Exchange Rate Risk

We seek to minimize our exposure to fluctuations in exchange rates in
respect of our foreign currency loan business. We make foreign currency loans
on terms that are similar to our foreign currency borrowings, thereby
transferring the foreign exchange risk to the borrower. In the case of certain
of our foreign currency borrowings that are on-lent in rupees, the government
of India bears foreign exchange risk on these borrowings subject to certain
agreements between ICICI and the government of India. Our foreign currency cash
balances are generally maintained abroad in currencies matching with the
underlying borrowings. We also actively use cross-currency swaps and forwards
to match the currencies of our assets and liabilities and thereby hedge
ourselves against exchange rate risk.

Liquidity Risk

Liquidity risk arises in the funding of lending, trading and investment
activities and in the management of trading positions. It includes both the
risk of unexpected increases in the cost of funding our asset portfolio at
appropriate maturities and the risk of being unable to liquidate a position in
a timely manner at a reasonable price. The goal of liquidity management is for
us to be able, even under adverse conditions, to meet all our liability
repayments on time and fund all investment opportunities.

At year-end fiscal 2001, we had a negative liquidity gap in the less than
or equal to one year maturity category with our liabilities maturing earlier
than our assets in this period. The negative liquidity gap was a result of our
asset-liability management strategy followed during fiscal 2001 based on our
outlook of declining interest rates.

Most of ICICI's liabilities are fixed maturity liabilities where the
investors do not have the option of early withdrawal. However, a certain
portion of ICICI's liabilities has call or put options at pre-determined dates.
Therefore, ICICI does not face significant liquidity risk on account of
unforeseen withdrawals. ICICI Bank's demand and time liabilities are generally
withdrawable on demand. However, ICICI Bank is required to maintain a certain
percentage of its demand and time liabilities, excluding specified liabilities,
in cash reserves with the Reserve Bank of India, 7.5% currently, and as
investments in government of India securities, 25.0% currently, which provide
it with a satisfactory reserve against most unforeseen withdrawals. ICICI Bank
and ICICI Securities, in

their capacity as primary dealers, have recourse to the liquidity adjustment
facility and refinance window, which are short-term funding arrangements,
provided by the Reserve Bank of India. See "Supervision and Regulation". In
order to contain the liquidity risk relating to requirements of funds for our
lending operations, we seek to establish a continuous information flow and an
active dialogue between the funding and borrowing divisions of our
organization. For a further discussion, see also -"Funding".

Liquidity may also be provided by the sale of liquid assets. ICICI
maintains liquid assets such as government of India securities and
short-maturity corporate paper. To ensure that sufficient liquid funds are
available to meet all the available investment needs, ICICI also maintains
liquid balances in the form of overnight and term bank deposits both in rupees
as well as in various foreign currencies. ICICI is also focusing on selling
down its debentures and corporate loans to better manage mismatches in the
maturities of its assets and liabilities and to provide additional liquidity.
Unlike ICICI, ICICI Bank and ICICI Securities rely, for a certain proportion of
their funding, on the inter-bank market for overnight money. While generally
this market provides an adequate amount of liquidity, the interest rates at
which funds are made available can sometimes be volatile.

ICICI prepares liquidity gap analysis reports on a regular basis. ICICI's
liquidity gap (if negative), pursuant to the Reserve Bank of India regulations
on asset liability management, must not exceed 10.0% of outflows in the 1-14
day time category and must not exceed 15.0% of outflows in the 14-28 day time
category. In addition to these regulatory liquidity risk limits, the Resources,
Treasury & Asset Liability Management Committee has further approved gap limits
and cumulative gap limits for other time categories. ICICI Bank also prepares
and submits liquidity gap analysis on a regular basis to the Reserve Bank of
India. ICICI Bank's liquidity gap (if negative) must not exceed 20.0% of
outflows in the 0-28 day time category.

Operational Risk

As a financial institution, we are exposed to many types of operational
risk. Operational risk can result from a variety of factors, including failure
to obtain proper internal authorizations, improperly documented transactions,
failure of operational and information security procedures, computer systems,
software or equipment, fraud, inadequate training and employee errors.

The Audit Department, which is a part of the Risk Management Group, is
dedicated to mitigating and managing operational risks in accordance with a
risk-based audit plan. This plan allocates audit resources based on their
assessment of the operational risks in the various businesses. The Audit
Department conceptualizes and implements improved systems of internal controls
to minimize operational risk.

Legal Risk

The uncertainty of the enforceability of the obligations of our customers
and counter-parties, including the foreclosure on collateral, creates legal
risk. Changes in law and regulation could adversely affect us. Legal risk is
higher in new areas of business where the law is often untested by the courts.
We seek to minimize legal risk by using stringent legal documentation,
employing procedures designed to ensure that transactions are properly
authorized and consulting internal and external legal advisors.

Derivative Instruments Risk

We engage in limited trading of derivative instruments on our own account
and generally enter into interest rate and currency derivative transactions
primarily for the purpose of hedging interest rate and foreign exchange
mismatches. We provide limited derivative services to selected major corporate
customers and other domestic and international financial institutions,
including foreign currency forward transactions and foreign currency and
interest rate swaps. Our derivative

transactions are subject to counter-party risk to the extent particular
obligors are unable to make payment on contracts when due.

Loan Portfolio

Our gross loan portfolio, which includes loans structured as debentures
and preference shares, at year-end fiscal 2001 was Rs. 635.1 billion (US$ 13.6
billion), an increase of 6.6% from Rs. 595.5 billion (US$ 12.7 billion), at
March 31, 2000. If we exclude the gross loan portfolio of ICICI Bank, the gross
loan portfolio was Rs. 547.8 billion (US$ 11.7 billion) at year-end fiscal
2000. Approximately 86.5% of our total loans were rupee loans at year-end
fiscal 2001. All of our loans are to Indian borrowers, and we have no loans
outstanding to entities outside India. In accordance with our diversification
strategy, growth in the portfolio primarily reflects an increase in corporate
finance loans and structured project finance loans to the infrastructure and
oil, gas and petrochemicals sectors, which we believe have lower risk than
loans to other sectors.

Loan Concentration

We follow a policy of portfolio diversification and evaluate our total
financing exposure in a particular industry in light of our forecasts of growth
and profitability for that industry. We limit our loan portfolio to any
particular industry to 15.0%.

The following table sets forth, for the periods indicated, our gross loans
outstanding, including loans structured as debentures and preference shares, by
the borrower's industry or economic activity.

At March 31,
---------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
---------------------------------------------------------------------------------------------
(in millions, except percentages)

Services................Rs.24,294 7.8% Rs. 28,047 7.0% Rs.40,500 8.0% Rs.62,997 10.6% Rs.74,425 US$1,589 11.7%
Iron and steel.......... 30,071 9.7 34,469 8.6 48,908 9.7 59,246 9.9 70,547 1,506 11.1
Power................... 19,460 6.3 34,079 8.5 40,154 8.0 56,162 9.4 66,368 1,417 10.5
Crude petroleum and
petroleum refining... 5,535 1.8 22,158 5.5 44,492 8.8 51,338 8.6 54,822 1,170 8.6
Textiles................ 37,162 12.0 32,587 8.2 35,979 7.1 42,019 7.1 47,052 1,004 7.4
Cement.................. 12,983 4.2 17,592 4.4 17,069 3.4 19,559 3.3 25,709 549 4.0
Telecom................. 4,011 1.3 8,235 2.2 9,867 2.0 15,903 2.7 20,244 432 3.2
Transport equipment..... 12,568 4.1 17,692 4.4 18,226 3.6 23,020 3.9 19,613 419 3.1
Fertilizers and
pesticides.............. 10,844 3.5 16,798 4.2 18,493 3.7 21,001 3.5 17,801 380 2.8
Machinery............... 12,109 3.9 15,355 3.8 19,562 3.9 19,089 3.2 16,973 362 2.7
Paper and paper products 7,020 2.3 11,397 2.9 12,655 2.5 16,934 2.8 16,205 346 2.6
Transportation.......... 2,416 0.8 11,260 2.8 17,795 3.5 18,982 3.2 15,568 332 2.5
Basic chemicals......... 13,080 4.2 15,589 3.9 18,864 3.7 22,058 3.7 15,825 338 2.5
Electronics............. 7,431 2.4 9,461 2.4 11,275 2.2 12,597 2.1 15,032 321 2.4
Electrical equipment.... 9,525 3.1 10,707 2.7 12,738 2.5 18,526 3.1 14,068 300 2.2
Petrochemicals.......... 5,924 1.9 5,311 1.3 8,128 1.6 7,396 1.2 11,471 245 1.8
Plastics................ 6,758 2.2 8,185 2.1 9,022 1.8 10,988 1.8 11,213 239 1.8
Man-made fibers......... 11,908 3.9 11,261 2.8 11,832 2.3 11,505 1.9 11,061 236 1.7
Drugs................... 4,446 1.4 5,677 1.4 6,616 1.3 6,936 1.2 9,950 212 1.6
Sugar................... 6,368 2.1 7,788 2.0 7,872 1.6 9,464 1.6 9,718 207 1.5
Food products........... 7,950 2.6 7,793 1.9 6,293 1.2 7,736 1.3 8,755 187 1.4
Metal products.......... 6,595 2.1 7,621 1.9 7,847 1.6 9,783 1.6 7,924 169 1.2
Mining.................. 380 0.1 2,566 0.6 7,918 1.6 8,330 1.4 6,503 139 1.0
Non-ferrous metals...... 2,689 0.9 3,362 0.8 5,453 1.1 5,376 0.9 4,473 95 0.7
Rubber and rubber
products............. 3,514 1.1 3,036 0.8 3,321 0.7 4,086 0.7 3,431 73 0.5
Other chemicals......... 833 0.3 311 0.1 774 0.2 332 0.1 335 7 0.1
Other(1)................ 43,155 14.0 51,304 12.8 61,977 12.4 54,170 9.2 59,972 1,280 9.4
--------------- ----------------------------- ------------------------ ------------------------
Gross loans............Rs.309,029 100.0% Rs.399,641 100.0% Rs.503,630 100.0% Rs.595,533 100.0% Rs.635,058 US$13,555 100.0%
===== ===== ===== ===== =====

Allowance for loan
losses................... (17,689) (22,457) (28,524) (34,085) (33,035) (705)
---------- ---------- ----------- ---------- --------------------
Net loans...............Rs. 291,340 Rs. 377,184 Rs. 475,106 Rs. 561,448 Rs. 602,023 US$ 12,850
========== ========== =========== ========== ====================

--------------
(1) Other principally includes shipping, printing, mineral products, glass and
glass products, watches, healthcare, leather and wood products industries
and retail finance assets.

Over the last few years, there has been an increase in assets in the crude
petroleum and petroleum refining, power and services sectors while there has
been a decrease in the proportion of assets in the man-made fibers, basic
chemicals and textiles sectors.

At year-end fiscal 2001, our 20 largest borrowers accounted for
approximately 27.6% of our net loan portfolio, with the largest borrower
accounting for approximately 4.2% of our net loan portfolio. The largest group
of companies under the same management control accounted for approximately 3.9%
of our net loan portfolio.

In the past few years, an increasing proportion of our long-term lending
particularly in infrastructure financing has been provided in the form of
debentures since we expect that in the future these debentures can be sold in
secondary debt markets in India. This structure is intended to facilitate a
transfer of the assets and provide flexibility in managing the exposure and
liquidity of the balance sheet.

Geographic Diversity

Except as described below, our portfolio is geographically diversified
throughout India, primarily reflecting the location of our corporate borrowers.
The states of Maharashtra and Gujarat, the two most industrialized states in
India, account for the largest proportion of the total gross loan outstanding,
with Maharashtra accounting for about 22.0% and Gujarat accounting for about
14.7% at year-end fiscal 2001.

Loan Portfolio by Categories

The following table sets forth, for the periods indicated, our gross rupee
and foreign currency loans by business category.

At March 31,
--------------------------------------------------------------------
1997 1998 1999 2000 2001
--------------------------------------------------------------------
(in millions)

Wholesale banking(1)
Rupee.................................. Rs.190,492 Rs.256,991 Rs.335,306 Rs.371,257 Rs.428,782 US$9,152
Foreign currency....................... 79,058 92,054 88,298 88,581 82,530 1,762
Working capital finance
Rupee.................................. 7,018 10,203 22,203 72,317 42,592 909
Foreign currency....................... 248 505 494 3,289 1,850 39
Leasing and related activities (2)
Rupee.................................. 17,688 30,303 49,942 33,787 38,258 817
Foreign currency ...................... 500 349 1,530 1,467 1,483 32
Other(3)
Rupee ................................. 14,025 9,236 5,862 24,835 39,563 844
Foreign currency ...................... -- -- -- -- -- --
Gross loans
Rupee ................................ 229,223 306,733 413,308 502,196 549,195 11,722
Foreign currency ...................... 79,806 92,908 90,322 93,337 85,863 1,833
--------------------------------------------------------------------
Total gross loans ....................... 309,029 399,641 503,630 595,533 635,058 13,555
Allowance for loan losses................ (17,689) (22,457) (28,524) (34,085) (33,035) ( 705)
--------------------------------------------------------------------
Net loans ............................... Rs.291,340 Rs.377,184 Rs.475,106 Rs.561,448 Rs.602,023 US$2,850
====================================================================

-----------

(1) Wholesale banking includes project finance, corporate finance and
receivable financing but excludes leasing and related activities.
(2) Leasing and related activities includes leasing and hire purchase.
(3) Other includes bills discounted, inter-corporate deposits and retail
finance assets.

The proportion of foreign currency loans to our total gross loans has
decreased steadily from 25.8% at year-end fiscal 1997 to 13.5% at year-end
fiscal 2001 due to a decrease in demand for these loans.

Impaired Loans

The following discussion of troubled debt restructurings and other
impaired loans (collectively referred to as impaired loans) is based on US
GAAP. For classification of impaired loans under Indian regulatory
requirements, see "Supervision and Regulation".

Impact of Economic Environment on the Industrial Sector

The Indian economy has been impacted by the negative trends in the global
marketplace, particularly in the commodities markets, which impaired the
operating environment of the industrial sector, particularly in fiscal 1999.
The manufacturing sector has also been adversely impacted by several other
factors, including increased competition arising from economic liberalization
in India, a slowdown in industrial growth, a sharp decline in commodity prices
which reduced profitability for certain of our borrowers and the restructuring
of certain Indian companies in sectors such as textiles, iron and steel and
man-made fibers. Certain Indian corporations are gradually coming to terms with
this new competitive reality through a process of restructuring and
repositioning. This restructuring process is taking place in several industries
such as iron and steel, man-made fibers and textiles. This has led to stress on
the operating performance of Indian corporations and the impairment of some
loan assets in the financial system, including some of our assets.

Recognition of Impaired Loans

ICICI identifies commercial loans as impaired and places them on a
non-accrual basis when it is probable that ICICI will be unable to collect
scheduled payments of principal and interest due under the contractual terms of
the loan agreement. A commercial loan is also considered to be impaired and
placed on a non-accrual basis, if interest is greater than 180 days overdue or
principal is greater than 360 days overdue. Retail loans are generally
identified as impaired not later than a pre-determined number of days overdue
on a contractual basis.

ICICI identifies loans as troubled debt restructurings (restructured
loans) where ICICI has made concessionary modifications, that it would not
otherwise consider, to the contractual terms of the loan to a borrower
experiencing financial difficulties. Restructured loans, which are considered
troubled debts, are placed on a non-accrual basis once ICICI has doubt as to
timely collection of principal or interest under the rescheduled terms.

When a loan is placed on a non-accrual basis, any interest accrued (and
not received) is reversed from income. Interest is thereafter included in
income only to the extent actually received in cash. When borrowers demonstrate
over an extended period, the ability to repay a loan in accordance with the
contractual terms of the loan, the loan classified as non-accrual, is returned
to accrual basis. With respect to restructured loans, performance prior to the
restructuring or significant events that coincide with the restructuring are
evaluated in assessing whether the borrower can meet the rescheduled terms and
may result in the loan being returned to accrual basis at the time of
restructuring or after a performance period.

The following table sets forth, for the periods indicated, our gross
restructured rupee and foreign currency loan portfolio by business category.

At March 31,
---------------------------------------------------------------------
---------------------------------------------------------------------
1997 1998 1999 2000 2001
---------------------------------------------------------------------
(in millions, except percentages)

Wholesale banking(1).................. Rs.5,916 Rs.9,556 Rs.13,171 Rs.18,513 Rs.37,726 US$ 805
Rupee................................. 4,420 7,139 8,549 11,896 25,190 538
Foreign currency...................... 1,496 2,417 4,622 6,617 12,536 268
Working capital finance................. -- -- -- 33 818 17
Rupee................................. -- -- -- 33 818 17
Foreign currency...................... -- -- -- -- -- --
Leasing and related activities(2)....... -- -- -- -- 5,137 110
Rupee................................. -- -- -- -- 5,137 110
Foreign currency...................... -- -- -- -- -- --
Other(3)................................ -- -- -- -- -- --
Rupee................................. -- -- -- -- -- --
Foreign currency...................... -- -- -- -- -- --
Total restructured loans
Rupee................................. 4,420 7,139 8,549 11,929 31,145 665
Foreign currency...................... 1,496 2,417 4,622 6,617 12,536 268
---------------------------------------------------------------------
Gross restructured loans................ 5,916 9,556 13,171 18,546 43,681 932
Allowance for loan losses............... (2,481) (4,346) (6,422) (7,751) (11,372) (243)
---------------------------------------------------------------------
Net restructured loans................ Rs. 3,435 Rs.5,210 Rs.6,749 Rs.10,795 Rs.32,309 US$ 690
=====================================================================
Gross loan assets.....................Rs.309,029 Rs.399,641 Rs.503,630 Rs.595,533 Rs.635,058 US$13,555
Net loan assets....................... 291,340 377,184 475,106 561,448 602,023 12,850
Gross restructured loans as a
Percentage of gross loan assets....... 1.91% 2.39% 2.62% 3.11% 6.88%
Net restructured loans as a
Percentage of net loan assets......... 1.18% 1.38% 1.42% 1.92% 5.37%

-------------------
(1) Includes project finance, corporate finance and receivables financing,
excluding leasing and related activities.
(2) Includes leasing and hire purchase.
(3) Includes bills discounted, inter-corporate deposits and retail finance assets.

The following table sets forth, for the periods indicated, our gross other
impaired rupee and foreign currency loan portfolio by business category.

At March 31,
---------------------------------------------------------------------
1997 1998 1999 2000 2001
---------------------------------------------------------------------
(in millions, except percentages)
US$

Wholesale banking(1)...................Rs.22,473 Rs.31,742 Rs.41,611 Rs.45,616 Rs.39,430 US$ 842
Rupee................................... 16,835 20,579 27,634 29,714 23,514 502
Foreign currency...................... 5,638 11,163 13,977 15,902 15,916 340
Working capital finance................. 187 604 1,158 1,420 1,234 26
Rupee................................. 187 604 1,158 1,420 1,234 26
Foreign currency...................... -- -- -- -- -- --
Leasing and related activities(2)....... 97 1,855 2,360 2,965 899 19
Rupee................................. 97 1,855 2,360 2,965 899 19
Foreign currency...................... -- -- -- -- -- --
Other(3)................................ 98 1,366 187 573 181 4
Rupee................................. 98 1,366 187 573 181 4
Foreign currency...................... -- -- -- -- -- --
Total other impaired loans
Rupee................................. 17,217 24,404 31,339 34,672 25,828 551
Foreign currency...................... 5,638 11,163 13,977 15,902 15,916 340
---------------------------------------------------------------------
Gross other impaired loans.............. 22,855 35,567 45,316 50,574 41,744 891
Allowance for loan losses............... (15,208) (18,111) (22,102) (26,334) (21,663) (462)
---------------------------------------------------------------------
Net other impaired loans.............. Rs.7,647 Rs.17,456 Rs.23,214 Rs.24,240 Rs.20,081 US$ 429
=====================================================================
Gross loan assets.....................Rs.309,029 Rs.399,641 Rs.503,630 Rs.595,533 Rs.635,058 US$13,555
Net loan
assets.......................... 291,340 377,184 475,106 561,448 602,023 12,850

Gross other impaired loans as a
percentage of gross loan assets....... 7.40% 8.90% 9.00% 8.49% 6.57%
Net other impaired loans as a
percentage of net loan assets......... 2.62% 4.63% 4.89% 4.32% 3.34%

--------
(1) Includes project finance, corporate finance and receivables financing,
excluding leasing and related activities.
(2) Includes leasing and hire purchase.
(3) Includes bills discounted, inter-corporate deposits and retail finance
assets.

Gross restructured loans increased 135.5% during fiscal 2001 to Rs. 43.7
billion (US$ 932 million) at year-end fiscal 2001, primarily due to an increase
in restructuring of loans to companies in the textiles and iron and steel
industries. Also, other impaired loans of Rs. 6.6 billion (US$ 140 million)
were re-classified as restructured loans at year-end fiscal 2001 after
restructuring of these impaired loans in fiscal 2001. Gross other impaired
loans decreased 17.5% to Rs. 41.7 billion (US$ 891 million) in fiscal 2001 over
the previous year levels primarily due to the re-classification of 6.6 billion
(US$ 140 million) of other impaired loans to restructured loans as described
above. As a percentage of net loans, net restructured loans were 5.4% at
year-end fiscal 2001 compared to 1.9% at year-end fiscal 2000 and net other
impaired loans were 3.3% at year-end fiscal 2001 compared to 4.3% at year-end
fiscal 2000.

Sectoral Analysis of Impaired Loans

The following table sets forth, for the periods indicated, our gross
restructured loans by borrowers' industry or economic activity and as a
percentage of our gross restructured loans.

At March 31,
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
-------------------------------------------------------------------------------------
(in millions, except percentages)

Textiles ....................Rs.221 3.7% Rs.1,447 15.1% Rs.1,611 12.2% Rs.2,276 12.3% Rs.12,437 US$265 28.5%
Iron and steel .............. 269 4.5 730 7.6 909 6.9 1,461 7.9 7,270 155 16.6
Man-made fibers ............. 1,750 29.6 2,452 25.7 2,616 19.9 3,456 18.6 4,561 97 10.4
Plastics .................... 166 2.8 173 1.8 2,447 18.6 2,525 13.6 2,586 55 5.9
Paper and paper products .... 37 0.6 130 1.4 137 1.0 338 1.8 2,211 47 5.1
Services .................... 323 5.5 589 6.2 688 5.2 1,098 5.9 1,605 34 3.7
Basic chemicals ............. 506 8.6 723 7.6 703 5.2 1,527 8.2 1,306 28 3.0
Electrical equipment ........ 38 0.6 107 1.1 121 0.9 235 1.3 1,035 22 2.4
Petrochemicals .............. 579 9.8 512 5.4 546 4.1 710 3.8 937 20 2.1
Machinery ................... 77 1.3 222 2.3 209 1.6 283 1.5 902 19 2.1
Cement ...................... 309 5.2 286 3.0 286 2.2 300 1.6 888 19 2.0
Electronics ................. 459 7.8 837 8.8 868 6.6 933 5.0 854 18 2.0
Metal products .............. 345 5.8 93 1.0 86 0.7 171 0.9 761 16 1.7
Food products ............... 129 2.2 365 3.8 588 4.5 655 3.5 707 15 1.6
Sugar ....................... 177 3.0 148 1.5 209 1.6 570 3.1 446 10 1.0
Transport equipment ......... 56 0.9 14 0.1 13 0.1 13 0.1 418 9 1.0
Rubber and rubber
products .................... -- -- 7 0.1 150 1.1 143 0.8 169 4 0.4
Non-ferrous metals .......... 2 -- 98 1.0 160 1.2 214 1.2 180 4 0.4
Fertilizers and
pesticides .................. 7 0.1 51 0.5 99 0.8 76 0.4 141 3 0.3
Drugs ....................... 26 0.5 60 0.6 -- -- -- -- 27 1 0.1
Other chemicals ............. -- -- 46 0.5 -- -- -- -- -- -- --
Other(1) .................... 440 7.5 466 4.9 725 5.6 1,562 8.5 4,240 90 9.7
-----------------------------------------------------------------------------------------------
Gross restructured loans...Rs.5,916 100.0% Rs.9,556 100.0% Rs.13,171 100.0% Rs.18,546 100.0% Rs.43,681 US$932 100.0%
====== ======= ====== ====== =======
Aggregate allowance for (2,481) (4,346) (6,422) (7,751) (11,372) (243)
loan losses..............--------- -------- --------- --------- ------------------
Net restructured loans ....Rs.3,435 Rs.5,210 Rs. 6,749 Rs.10,795 Rs.32,309 US$690
========= ======== ========= ========= ==================

--------------
(1) Other principally includes shipping, renewable sources of energy,
lubricants, printing, mineral products, glass and glass products, watches,
healthcare, leather and wood products industries and retail finance
assets.

The following table sets forth, for the periods indicated, our gross other
impaired loans by borrowers' industry or economic activity and as a percentage
of our gross other impaired loans.

At March 31,
-----------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
-----------------------------------------------------------------------------------------------
(in millions, except percentages)

Textiles ..................Rs.1,661 7.3% Rs.2,843 8.0% Rs.3,764 8.3% Rs.5,978 11.8% Rs.6,041 US$ 129 14.5%
Iron and steel ...............2,422 10.6 3,650 10.3 5,058 11.2 4,942 9.8 5,894 126 14.1
Metal products .................592 2.6 789 2.2 2,872 6.3 3,284 6.5 2,970 63 7.1
Paper and paper products .......795 3.5 831 2.3 1,125 2.5 3,147 6.2 2,456 52 5.9
Food products ................2,158 9.4 2,577 7.2 2,523 5.6 2,663 5.3 2,415 52 5.8
Drugs ..........................279 1.2 2,151 6.0 2,448 5.4 2,481 4.9 2,401 51 5.7
Man-made fibers ..............1,762 7.7 3,991 11.2 3,993 8.8 4,092 8.1 2,129 45 5.1
Basic chemicals ................953 4.2 1,266 3.6 3,101 6.9 2,879 5.7 2,075 44 5.0
Cement .......................1,351 5.9 1,784 5.0 1,728 3.8 1,371 2.7 1,972 42 4.7
Electrical equipment ...........718 3.1 1,007 2.8 1,333 2.9 1,653 3.3 1,652 35 4.0
Sugar ..........................417 1.8 554 1.6 291 0.7 951 1.9 1,461 31 3.5
Electronics ..................1,683 7.4 2,820 7.9 2,829 6.2 2,537 5.0 1,456 31 3.5
Services .....................1,002 4.4 1,153 3.2 1,768 3.9 2,015 4.0 1,324 28 3.2
Plastics .......................806 3.5 1,058 3.0 1,268 2.8 1,312 2.6 1,280 27 3.1
Machinery ......................576 2.5 1,094 3.1 1,696 3.7 1,802 3.6 919 20 2.2
Transport equipment ............398 1.7 848 2.4 856 1.9 852 1.7 761 16 1.8
Non-ferrous metals .............470 2.1 530 1.5 597 1.3 639 1.3 503 11 1.2
Rubber and rubber
products .......................372 1.6 484 1.4 462 1.0 485 1.0 335 7 0.8
Fertilizers and
pesticides .....................493 2.2 501 1.4 450 1.0 442 0.9 193 4 0.5
Petrochemicals .................197 0.9 279 0.8 157 0.3 169 0.3 86 2 0.2
Other chemicals .................31 0.1 6 -- 6 -- 48 0.1 45 1 0.1
Other(1) .....................3,719 16.3 5,351 15.1 6,991 15.5 6,832 13.5 3,376 72 8.0
----------------------------------------------------------------------------------------------
Gross other impaired
loans ....................Rs.22,855 100.0% Rs.35,567 100.0% Rs.45,316 100.0% Rs.50,574 100.0% Rs.41,744 US$ 891 100.0%
====== ======= ====== ======= =======
Aggregate allowance for
loan losses............. (15,208) (18,111) (22,102) (26,334) (21,663) (462)
--------- --------- --------- --------- --------- ----
Net other impaired loans ..Rs.7,647 Rs.17,456 Rs.23,214 Rs.24,240 Rs.20,081 US$ 429
========= ========= ========= ========= ========= ====

The largest proportion of our impaired loans is to the textiles, iron and
steel and man-made fibers sectors. There is a risk that impaired loans in each
of these sectors and in other sectors including basic chemicals, plastics,
paper and paper products and metal products sectors could increase if Indian
economic conditions deteriorate or there is a negative trend in global
commodity prices.

Textiles. The textile industry was affected adversely by the south-east
Asian economic crisis. This resulted in Indian textile exports being less
competitive. While textile exports have increased in fiscal 2000 and 2001, the
rate of growth has been adversely impacted due to the imposition of
anti-dumping duties by the European Union. The industry is expected to benefit
from the successful bilateral resolution of issues between the government of
India and the European Union. The majority of our loans to small entities in
these sectors have been classified as impaired, and the balance of our exposure
is primarily to large economically-sized plants with established raw material
procurement systems and extensive distribution networks. At year-end fiscal
2001, we had classified 26.4% of total loans to the textiles sector as
restructured loans and 12.8% as other impaired loans.

Iron and Steel. Over the last few years, a persistent downward trend in
international steel prices to historic lows has had a significant impact on the
companies in this sector. In addition, a significant reduction in import
tariffs led to price competition from certain countries, significantly reducing
domestic prices. Our outlook for the medium to long-term for this sector is
positive owing to the

anticipated increase in prices and an increase in domestic consumption. In the
last two years, the increase in assets in this sector has been primarily due to
phased disbursements to projects that were approved earlier. While most of
these projects have now been completed, a part of these loans is to projects
still under implementation, which we expect to become fully operational within
the next year. The majority of our loans to fragmented capacities and small
steel plants have already been classified as impaired loans, and the balance of
loans in this sector is primarily to economically sized plants with advanced
technology. At year-end fiscal 2001, we had classified 10.3% of our assets in
this sector as restructured loans and 8.3% as other impaired loans.

Man-Made Fibers. Between 1994 and 1997, the Indian man-made fibers
industry faced a situation of over-supply and a decrease in import duties. This
has been corrected to a certain extent because of healthy demand growth and a
slowdown in fresh capacity creation. The main challenge to the industry is the
fragmented, uneconomically-sized plants. The medium-term outlook for the
domestic industry is improving with restructuring and consolidation occurring
in the form of mergers and acquisitions. Further, world-wide demand is expected
to improve with postponement of capacity additions in south-east Asia. Almost
all of our loans to companies with uneconomically-sized plants have already
been classified as impaired loans, and the balance of loans to this sector is
primarily to large economically sized plants. At year-end fiscal 2001, we had
classified 41.2% of our loans to the man-made fibers industry as restructured
loans and 19.2% as other impaired loans. We have added no significant exposure
in this sector during the past four years, and consequently the proportion of
our man-made fibers portfolio to our total loan portfolio has reduced from 3.9%
at year-end fiscal 1997 to 1.7% at year-end fiscal 2001.

Top Ten Impaired Loans

At year-end fiscal 2001, our 10 largest impaired loans accounted for 26.3%
of our gross impaired loan portfolio and 34.0% of our net impaired loan
portfolio.

The following table sets forth, for the period indicated, certain
information regarding our 10 largest impaired loans.

At March 31, 2001
------------------------------------------------------------------------------------------
Principal
outstanding,
Gross net of allowance Collateral
principal for loan dependent
Industry outstanding losses(1) Status Collateral(2) companies(3)
------------------------------------------------------------------------------------------
(in millions)

Borrower A........Textiles.......... Rs.5,162 Rs.4,870 Restructured Rs.7,433 N.A.
Borrower B........Iron & Steel...... 2,992 2,347 Restructured 5,443 N.A.
Borrower C........Power............. 2,256 2,256 Restructured 2,828 N.A.
Borrower D........Plastics.......... 2,245 1,268 Restructured 2,561 N.A.
Borrower E........Iron & Steel...... 1,766 1,560 Restructured 2,435 N.A.
Other
Borrower F........Drugs............. 1,747 906 impaired 2,730 Rs.906
Other
Borrower G........Iron & Steel...... 1,701 1,701 impaired 4,348 N.A.
Borrower H........Textiles.......... 1,680 1,238 Restructured 716 N.A.
Borrower I........Paper............. 1,660 1,061 Restructured 1,195 N.A.
Other
Borrower J........Basic Chemicals... 1,237 584 impaired 2,103 584
------------------------------------------------------------------------
Total............................... Rs.22,446 Rs.17,791 Rs.31,792
========================================================================

------------
N.A.: Not applicable.
(1) The net realizable value of these loans on a present value basis is
determined by discounting the estimated cash flow over the expected period
of repayment by the rate implicit in the loan. Under US GAAP, the net
present value of an impaired loan includes the net present value, to the
extent realizable, of the underlying collateral, if any.
(2) Collateral value is that reflected on the borrower's books, net of
depreciation, or that determined by third party appraisers to be
realizable.
(3) Out of the above 10 cases, collection in the cases of borrower "F" and "J"
are collateral dependent. In all other cases, ICICI is primarily dependent
on recovery through cash flows, collateral being of secondary importance.

Interest Foregone

Interest foregone is the interest due on impaired loans that has not been
accrued in our books of accounts. Interest foregone for loans that were on
non-accrual basis at year-end fiscal 2001 was 14.3 billion (US$ 305 million) in
fiscal 2001, for loans that were on non-accrual basis at year-end fiscal 2000,
was Rs. 12.4 billion in fiscal 2000, for loans that were on non-accrual basis
at year-end fiscal 1999, was Rs. 10.4 billion in fiscal 1999, for loans that
were on non-accrual basis at year-end fiscal 1998, was Rs. 8.7 billion in
fiscal 1998 and for loans that were on non-accrual basis at year-end fiscal
1997, was Rs. 5.7 billion in fiscal 1997.

Impaired Loans Strategy

In fiscal 1999, we established the Special Asset Management Group to find
early solutions for large and complex impaired loans. This group works closely
with other banks and financial institutions and uses outside experts and
specialized agencies for due diligence, valuation and legal advice to expedite
early resolution. The group also seeks to leverage our corporate relationships
to facilitate quicker resolution of impaired loans. It consists of
professionals with significant experience in credit management supported by a
team of dedicated legal professionals. The balance of impaired loans continues
to be handled by the respective business groups.

We place great emphasis on recovery and settlements of our stressed asset
portfolio and impaired loans, and this focus has been institutionalized across
our organization. Asset quality targets are a key parameter for employee
performance evaluation.

Methods for resolving impaired loans include:

o early enforcement of collateral through judicial means;

o encouraging the consolidation of troubled borrowers in fragmented
industries with stronger industry participants;

o encouraging the financial restructuring of troubled borrowers; and

o encouraging modernization of existing plants through technology upgrades.

Further, we have taken concrete measures to enhance the security
structures in accounts that may be under stress, including through:

o the pledge of sponsor's shareholding;

o the right to convert debt into equity at par so as to facilitate
transfer of control to us;

o ensuring majority control in the board of directors of these
companies;

o continuous monitoring of the physical performance of the
company's operations through independent technical consultants;
and

o escrow mechanisms to capture cash flows.

Allowance for Loan losses

The following table sets forth, for the periods indicated, movements in
our allowance for loan losses.

Year ended March 31,
-------------------------------------------------------------
1997 1998 1999 2000 2001 2001
-------------------------------------------------------------
(in millions)

Aggregate allowance for loan losses

at the beginning of the year................Rs.13,423 Rs.17,689 Rs.22,457 Rs.28,524 Rs.34,085 US$ 728
Less: Effect of deconsolidation of subsidiary
on allowance for loan losses................ -- -- -- -- (747) (16)
Add: Provisions for loan losses
Wholesale banking(1)......................... 3,590 3,497 5,129 5,571 9,097 194
Working capital finance...................... 222 152 419 518 479 10
Leasing and related activities (2)........... 151 813 434 279 249 5
Others (3)................................... 303 306 85 (5) 67 1
-------------------------------------------------------------
Total provisions for loan losses................Rs.4,266 4,768 6,067 6,363 9,892 US$ 211
Write offs...................................... -- -- -- (802) (10,195)(4) (218)
Aggregate allowance for loan losses
--------------------------------------------------------------
at the end of the year.......................Rs.17,689 Rs.22,457 Rs.28,524 Rs.34,085 Rs.33,035 US$ 705
==============================================================

------------
(1) Includes project finance, corporate finance and receivables financing,
excluding leasing and related activities.
(2) Includes leasing and hire purchase .
(3) Includes bills discounted, inter-corporate deposits and retail finance
assets.
(4) Until year-end fiscal 2000, ICICI followed a policy whereby loan balances
were not charged-off against the allowance for loan losses. This policy
was in response to the regulatory environment governing debt recovery
proceedings in India. During fiscal 2001, changes in the tax laws
necessitated that loan balances deemed unrecoverable be charged-off
against the allowance for credit losses. Accordingly, ICICI charged-off
significant loan balances deemed unrecoverable in fiscal 2001.

We conduct an analysis of our loan portfolio on a periodic basis. The
analysis considers both qualitative and quantitative criteria including the
account conduct, future prospects, repayment history, financial performance
amongst others. In estimating the allowance, we consider the net realizable
value on a present value basis by discounting the future cash flows over the
expected period of recovery. Further, we also consider our past history of loan
losses and value of underlying collateral. For further discussion of our
allowance for loan losses, see "Operating and Financial Review and
Prospects--Results of Operations--Provisions for Loan losses".

Under our US GAAP analysis of the provisions for impaired loans, we have
taken account of the time delay in our ability to foreclose upon and sell
collateral. The net present value of an impaired loan includes the net present
value of the underlying collateral, if any. We have assumed delays of between
five and eight years in assessing the net present value of our collateral. As a
result, even though we are over-collateralized, allowances are required under
US GAAP that would not be required under Reserve Bank of India regulations or
the regulations of many other countries because Indian GAAP does not take into
account the time value of money.

When we have an equity investment for which the corresponding loan asset
is impaired, an adjustment is made to record an impairment of the related
equity security.

For impaired loans in excess of Rs. 100 million, which were 74.0% of the
gross impaired loan portfolio at year-end fiscal 2001, we follow a detailed
process for each account to determine the allowance for loan losses to be
provided. For the balance of smaller loans in the impaired loan portfolio, we
follow the classification detailed below for determining the allowance for loan
losses.

Settlement Cases

Settlement cases include cases in which we are in the process of entering
into a "one-time settlement" because we believe that the potential to recover
the entire amount due (the gross principal plus outstanding interest, including
penalty interest) in these cases is limited. Based on our experience, we expect
to recover almost 100.0% of gross principal outstanding over a period of time
and about 85.0% on a present value basis, as a result of negotiated
settlements.

Enforcement Cases

Enforcement cases are those cases (excluding cases referred to the Board
for Industrial and Financial Reconstruction or BIFR) in which we have commenced
litigation. We expect that only the secured portion of these loans is
recoverable, after a specified number of years from the date the loan is
recalled. The realizable value of these loans on a present value basis is
determined by discounting the estimated cash flow at the end of the specified
number of years from the date of the recall by the average interest implicit in
these loans.

Non-Enforcement BIFR Cases

Non-enforcement BIFR cases include cases which have been referred to the
Board for Industrial and Financial Reconstruction, which are further
categorized into accounts where the plant is under operation and accounts where
the plant is closed. We expect that in accounts where the plant is operational,
the secured portion of the loan is recoverable over specified annual payments.
In respect of those accounts where the plant is closed, we expect that the
secured portion of the loan will be recoverable at the end of a specified
number of years based upon historical experience.

Non-Enforcement Non-BIFR Cases

Non-enforcement non-BIFR cases include cases, which are neither under
litigation nor referred to the Board for Industrial and Financial
Reconstruction. This category is also divided into accounts where the plant is
under operation and accounts where the plant is closed. We expect that in those
accounts where the plant is operational, the secured portion of the loan is
recoverable over specified annual payments together with a recovery in interest
due at a specified rate. In respect of those loans where the plant is closed,
we expect that the secured portion of the loan will be recoverable over
specified annual payments.

The following table sets forth, for the period indicated, the results of
our impaired loan classification scheme.

At March 31, 2001
-----------------------------------------------------
Percentage
expected to be Impaired
Gross impaired realized on a net loans, net of
loans present value allowance for
basis loan losses
-----------------------------------------------------
(in millions, except percentages)

Gross principal greater than 100 million............ Rs.63,178 64.4% Rs.40,671
Settlement cases..................................... 1,541 92.4 1,423
Enforcement cases.................................... 8,228 57.8 4,759
Non-enforcement BIFR cases........................... 3,836 44.0 1,688
Non-enforcement non-BIFR cases....................... 2,341 81.9 1,918
Other loans.......................................... 6,301 30.6 1,931
--------- --------------
Total................................................ Rs.85,425 61.3% Rs.52,390
========= ==============

Funding

General

For regulatory reasons, each legal entity within the ICICI group has a
separate group to manage its funding operations. The objective of each group is
to ensure the stability of the funding base of its respective legal entity and
to effectively manage its liquidity. These groups access funds from a wide
range of financing sources, manage cash surpluses, set interest rates and hedge
exposures to market risks.

We meet our financing requirements primarily through:

o internally generated funds from loan repayments and interest payments;

o borrowings and deposits; and

o debt, equity, equity-linked and preferred capital offerings in the
domestic and international markets.

We adjust our funding strategy with a view to minimizing funding costs,
matching currencies and maturities with our lending portfolio and developing a
broader investor base.

Under the regulations of the Reserve Bank of India, of all our group
companies and affiliates, only ICICI Bank can accept demand deposits. ICICI can
accept only term deposits and has no access to demand deposits. Pursuant to a
1998 Reserve Bank of India regulation, ICICI Securities can accept public
deposits; however, in order to receive certain exemptions from other Reserve
Bank of India regulations regarding reporting requirements and liquidity, the
board of directors of ICICI Securities passed a resolution at its meeting held
on April 21, 1999 not to accept any public deposits during fiscal 2000. The
board of directors of ICICI Securities also passed a resolution on March 31,
2000 not to accept any public deposits in fiscal 2001. Therefore, ICICI
Securities does not hold any public deposits. From July 2001, ICICI Home
Finance has commenced accepting term deposits. All the other entities must
necessarily obtain funds from other sources.

Rupee Funds

At year-end fiscal 2001, 86.5% of our gross loan assets were denominated
in rupees. In recent years, our rupee fund raising activities have grown in
line with the rapid growth in our lending operations. Until fiscal 1992, ICICI
raised funds by issuing bonds guaranteed by the government of India known as
statutory liquidity ratio (SLR) bonds. These bonds qualified as permitted
investments for commercial banks to meet statutory reserve requirements and
carried a lower rate of interest than the market rates prevailing at the time
of their issue. These SLR bonds were 56.7% of ICICI's total outstanding rupee
debt at year-end fiscal 1992. Due to changes in regulations, we ceased issuing
SLR bonds after fiscal 1992, and SLR bonds were only 4.3% of ICICI's total
outstanding rupee debt at year-end fiscal 2001.

The following table sets forth, for the periods indicated, our average
outstanding rupee borrowings based on quarterly balance sheets and by category
of borrowing and the percentage composition by category of borrowing. The
average cost (interest expense divided by average of quarterly balances) for
each category of borrowings is provided in the footnotes.

Year ended March 31,(1)
------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------------------------------------------------------------------------------------------
Amount % to Amount % to Amount % to Amount % to Amount Amount % to
total total total total total
------------------------------------------------------------------------------------------------
(in millions, except percentages)

SLR bonds(2)...........Rs. 29,151 15.8% Rs. 29,949 12.4% Rs. 27,936 8.4% Rs. 26,507 6.5% Rs. 23,405 US$ 500 4.9%
Borrowings from
Indian
government(3)........ 9,461 5.1 10,431 4.3 9,995 3.0 9,194 2.2 8,049 172 1.7
Convertible
debentures(4)............ 518 0.3 518 0.2 518 0.2 130 0.1 -- -- --
Other borrowings(5)(6)... 145,376 78.8 200,960 83.1 293,312 88.4 373,256 91.2 442,718 9,450 93.4
------------------------------------------------------------------------------------------------------------
Total(6)...............Rs.184,506 100.0% Rs.241,858 100.0% Rs.331,761 100.0% Rs.409,087 100.0% Rs.474,172 US$10,121 100.0%
=============================================================================================================

------------------
(1) Average of quarterly balances at the end of March of the previous
fiscal year, June, September, December and March of that fiscal year for
each of fiscal 1997, 1998, 1999 and 2000 and average of quarterly balances
at the end of June, September, December and March for fiscal 2001.
(2) With an average cost of 10.09% in fiscal 1997, 10.29% in fiscal 1998,
10.39% in fiscal 1999, 10.33% in fiscal 2000 and 10.62% in fiscal 2001.
(3) With an average cost of 10.79% in fiscal 1997, 10.94% in fiscal 1998,
11.11% in fiscal 1999, 10.85% in fiscal 2000 and 10.70% in fiscal 2001.
(4) With an average cost of 12.50% in fiscal 1997, 1998 and 1999 and 14.38% in
fiscal 2000. The convertible debentures were redeemed on July 17, 1999.
(5) With an average cost of 15.75% in fiscal 1997, 15.06% in fiscal 1998,
14.53% in fiscal 1999, 13.67% in fiscal 2000 and 13.06% in fiscal 2001.
(6) Includes publicly and privately placed bonds, borrowings from institutions
and wholesale deposits such as inter-corporate deposits and certificate of
deposits.

***
Our funding strategy is to diversify our sources of funds to cover a
broader spectrum of investors. The rapid growth in our lending portfolio and
related disbursements has required us to greatly expand our investor base and
reduce our dependence on any particular sector. As a result, we raise funds
from a range of investors, including:

o banks;
o insurance companies;
o mutual funds;
o public sector units;
o pension funds (including employee trusts);
o charitable trusts and quasi-governmental bodies; and
o retail investors.

We have built a large investor base on account of our ability to
access a wide variety of institutional investors, as well as our strong and
growing franchise with retail investors.

The following table sets forth, for the periods indicated, our
outstanding rupee borrowings by type of investor and as a percentage of our
total rupee borrowings.

At March 31,
---------------------------------------------------------------------------------------------
1998 1999 2000 2001
---------------------------------------------------------------------------------------------
% to % to % to % to
Amount total Amount total Amount total Amount Amount total
---------------------------------------------------------------------------------------------
(in millions, except percentages)

Banks..................Rs. 53,740 19.3% Rs. 81,205 20.9% Rs. 80,614 18.7% Rs. 83,994 US$ 1,793 16.7%
Retail investors....... 37,568 13.5 59,352 15.3 69,756 16.2 76,985 1,643 15.3
Pension funds and
employee trusts...... 46,446 16.7 76,248 19.6 81,579 18.9 113,895 2,431 22.6
Investment institutions 44,959 16.2 47,073 12.1 62,483 14.5 66,521 1,420 13.2
SLR bonds.............. 29,170 10.5 26,625 6.8 24,072 5.6 21,653 462 4.3
Indian government...... 10,385 3.7 9,715 2.5 8,569 2.0 8,272 177 1.6
Others................. 56,042 20.1 88,595 22.8 97,072 22.6 132,187 2,821 26.2
Application money
pending allotment (1). -- -- -- -- 6,429 1.5 505 11 0.1
---------------------------------------------------------------------------------------------
Total..................Rs.278,310 100.0% Rs.388,813 100.0% Rs.430,574 100.0% Rs.504,012 US$ 10,758 100.0%
==============================================================================================

-------------
(1) Represents application money received pending allotment of bonds issued in
March 2000 for fiscal 2000 and in March 2001 for fiscal 2001.

Banks and investment institutions, such as state-owned insurance
companies and mutual funds, have traditionally been our largest providers of
funds. Over the past few years, we have increasingly diversified away from
these wholesale sources of funding. As the table above indicates, while banks
and investment institutions as a group continue to be our single largest source
of funds, their share as a percentage of the total funding over the last few
years has declined. Pension funds, employee trusts, co-operative banks,
non-profit societies and educational institutions are our semi-wholesale
sources of funds. We began to access these funding sources starting in fiscal
1996, and today they constitute a significant and stable share of our
resources.

Since 1993, ICICI has regularly issued unsecured redeemable medium-term
and long-term bonds marketed under the brand name "ICICI Safety Bonds" in
India's domestic capital markets. Currently, there are about 3.5 million
individual holders of these bonds, principally retail investors. We believe
that it is imperative to retain a presence in this market and hence have
shifted to a strategy of smaller and more frequent public issues of these
bonds. Aggregate funds raised through the issuance of these bonds has grown
from Rs. 17.4 billion (US$ 370 million) during fiscal 1998 to Rs. 29.0 billion
(US$ 619 million) during fiscal 2001.

The following table sets forth, for the periods indicated, certain
information related to our short-term rupee borrowings, which consist of
certificates of deposits, inter-corporate deposits and borrowings from
government-owned companies, known commonly as public sector units.

At March 31, (1)
-----------------------------------------------------------------
1997 1998 1999 2000 2001
---------- ---------- ---------- ---------- ---------------------
(in millions, except percentages)

Year-end balance...........................Rs.28,822 Rs.32,306 Rs.50,585 Rs.87,758 Rs. 99,995 US$ 2,134
Average balance during the year (2) ....... 19,879 27,410 51,098 68,626 100,569 2,147
Maximum quarter-end balance................ 31,643 39,501 68,858 90,442 104,412 2,229
Average interest rate during the year (3).. 10.79% 10.00% 10.42% 12.38% 10.17%
Average interest rate at year-end (4)...... 14.80 12.40 12.10 10.82 11.01

----------------
(1) Short-term borrowings include trading liabilities, such as borrowings in
the call market and repurchase agreements.

(2) Average of quarterly balances at the end of March of the previous fiscal
year, June, September, December and March of that fiscal year for each of
fiscal 1997, 1998, 1999 and 2000 and average of quarterly balances at the
end of June, September, December and March for fiscal 2001.

(3) Represents the ratio of interest expense on short-term borrowings to the
average of quarterly balances of short-term borrowings.

(4) Represents the average of the document rate of the short-term borrowings
outstanding at fiscal year-end.

Foreign Currency Borrowings

We attempt to minimize the total effective cost of our foreign
currency borrowings by diversifying our sources of funds from abroad. We have
raised foreign currency resources from a variety of multilateral institutions,
bilateral sources (including export credits) and from commercial sources. We
have correspondent banking relationships with over 20 banks principally in the
United States, Europe and Japan.

Traditionally, our major foreign currency borrowings have been from
multilateral institutions and guaranteed by the government of India. We have
lines of credit from the World Bank and the Asian Development Bank directly or
through the government of India with maturities ranging from 10 to 20 years.
Under our principal bilateral borrowings, we have lines of credit from
Kreditanstalt fur Wiederaufbau, Japan Bank for International Cooperation,
Commonwealth Development Corporation of the United Kingdom, several export
credit agencies and Overseas Development Administration of the United Kingdom
through the government of India. The funds raised from multilateral and
bilateral sources typically have requirements as to the use of funds raised
such as infrastructure funding, pollution prevention and other uses. These
sources enable us to raise fairly long maturity funds at competitive costs,
which supplement the funds available from commercial sources by widening the
maturity spectrum of liabilities.

We first began commercial foreign currency borrowings in 1973 with the
establishment of a syndicated loan facility. Since then, we have borrowed funds
in the international commercial markets in the form of Euro credits and loans,
fixed and floating rate bond issues, private placements and a Euro-commercial
paper program backed by a note issuance facility. To allow a more rapid access
to funds we established a global medium-term note program, under which we have
issued two series of bonds totaling US$ 250 million, one of which was a
subordinated bond issue. In fiscal 2001, we concluded a US$ 100 million
commercial borrowing from a syndicate of banks.

The following table sets forth, for the periods indicated, our average
outstanding volume of foreign currency borrowings based on quarterly balance
sheets by source and the percentage composition by source. The average cost
(interest expense divided by average of quarterly balances) for each source of
borrowings is provided in the footnotes.

At March 31, (1)
----------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
----------------------------------------------------------------------------------------------------
% of % of % of % of % of
Amount total Amount total Amount total Amount total Amount Amount total
----------------------------------------------------------------------------------------------------
(in millions, except percentages)

Commercial borrowings (2)...Rs. 66,183 76.3% Rs. 77,437 79.7% Rs. 81,140 79.1% Rs. 74,509 77.4% Rs. 74,745 US$1,595 77.6%
Multilateral borrowings(3).. 20,570 23.7 19,716 20.3 21,483 20.9 21,748 22.6 21,554 460 22.4
---------------------------------------------------------------------------------------------------------
Total.......................Rs. 86,753 100.0% Rs. 97,153 100.0% Rs.102,623 100.0% Rs. 96,257 100.0% Rs. 96,299 US$2,055 100.0%
=========================================================================================================

-----------------
(1) Average of quarterly balances at the end of March of the previous fiscal
year, June, September, December and March of that fiscal year for each of
fiscal 1997, 1998, 1999 and 2000 and average of quarterly balances at the
end of June, September, December and March for fiscal 2001.
(2) With an average cost of 6.14% in fiscal 1997, 6.60% in fiscal 1998, 6.15%
in fiscal 1999, 5.72% in fiscal 2000 and 6.52% in fiscal 2001.
(3) With an average cost of 6.02% in fiscal 1997, 5.71% in fiscal 1998, 5.79%
in fiscal 1999, 5.53% in fiscal 2000 and 4.39% in fiscal 2001.

We have diversified our commercial borrowings by borrowing in various
markets in US Dollars, Deutsche Marks, Swiss Francs, Japanese Yen, Pounds
Sterling and Euros. We review developments in the international markets with a
view to raising funds in the most cost-efficient manner.

Deposits

ICICI is allowed to raise deposits from the public only with a
maturity greater than one year. Due to this limitation, ICICI's time deposits
made up only a negligible proportion of our total deposits. Deposits at ICICI
are not subject to reserve requirements, although the Reserve Bank of India
may, in its discretion, impose reserve requirements in the future. ICICI Bank
can raise demand and time deposits. The maturity period of corporate time
deposits is predominantly between 15 days to one year. Deposits at ICICI Bank
are subject to reserve requirements applicable to all Indian banks. Reserve
requirements are discussed in detail in the section on "Supervision and
Regulation".

Deposit Types and Costs

The following table sets forth, for the periods indicated, the average
volume and average cost of our deposits by type of deposit.

Year ended March 31,(1)
------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001
------------------------------------------------------------------------------------------------------
Amount Cost(2) Amount Cost(2) Amount Cost(2) Amount Cost(2) Amount Amount Cost(2)
------------------------------------------------------------------------------------------------------
(in millions, except percentages)

Interest-bearing deposits:
Savings deposits.......... Rs. 317 3.15% Rs. 832 3.37% Rs. 1,633 3.25% Rs. 3,530 3.34% Rs. -- US$ -- --
Time deposits............. 6,920 12.95 15,335 9.65 40,636 10.60 64,309 9.31 3,682 79 13.31%
Non-interest-bearing deposits:
Demand deposits........... 1,448 -- 4,203 -- 4,430 -- 7,443 -- -- -- --
-----------------------------------------------------------------------------------------------------
Total deposits................ Rs. 8,685 10.43% Rs.20,370 7.40% Rs.46,699 9.34% Rs.75,282 8.11% Rs. 3,682 US$ 79 13.31%
=====================================================================================================

_________________
(1) Average of quarterly balances at the end of March of the previous fiscal
year, June, September, December and March of that fiscal year for each of
fiscal 1997, 1998, 1999 and 2000 and average of quarterly balances at the
end of June, September, December and March for fiscal 2001.

(2) Represents interest expense divided by the average of quarterly balances.

The average volume of deposits at year-end fiscal 2001 is not
comparable with fiscal 2000 due to the deconsolidation of ICICI Bank effective
April 1, 2000.

Maturity Profile of Deposits

The following table sets forth, for the period indicated, the maturity
profile of our deposits by type of deposit.

At March 31, 2001
----------------------------------------------------------------------------------
After one
month After six After one
and within months year
Within one six and within and within After three
month months 12 months three years years Total
----------------------------------------------------------------------------------
(in millions)

Interest-bearing deposits:
Savings deposits ........ Rs. -- Rs. -- Rs. -- Rs. -- Rs. -- Rs. --
Time deposits............ 148 489 2,976 1,785 674 6,072
Non-interest-bearing deposits:
Demand deposits.......... -- -- -- -- -- --
----------------------------------------------------------------------------------
Total deposits.............. Rs. 148 Rs. 489 Rs. 2,976 Rs. 1,785 Rs. 674 Rs. 6,072
=================================================================================

Properties

ICICI's registered office and corporate headquarters are located at
ICICI Towers, Bandra-Kurla Complex, Mumbai 400 051, Maharashtra, India. The
office building has an area of approximately 650,000 square feet and the
construction was completed by ICICI in 1999.

ICICI's principal office network consists of 25 facilities, which are
situated in Ahmedabad, Bangalore, Chennai, Coimbatore, Hyderabad, Kolkata,
Mumbai, New Delhi, Pune and Vadodra. 17 of these facilities are located on
properties owned by ICICI and eight are located on leased properties. These
facilities are located throughout India. ICICI has set up 92 ICICI centers
located in cities across India. All these facilities are located on leased
properties primarily in cities where we do not have our own office premises.

ICICI Infotech, ICICI Venture and ICICI Securities own properties
totaling approximately 118,470 square feet and also have 11 properties on
lease. The other group companies operate primarily from facilities owned by
ICICI. We also provide residential and holiday home facilities to our employees
at subsidized rates.

The net book value of property and equipment at March 31, 2001 was
Rs. 12.0 billion (US$ 257 million).

Legal and Regulatory Proceedings

We are involved in a number of legal proceedings in the ordinary
course of our business. Excluding the legal proceedings discussed below, we
believe that ICICI and its subsidiaries are not a party to any proceedings and
no proceedings are known by any of ICICI or its subsidiaries to be contemplated
by governmental authorities or third parties, which, if adversely determined,
may have a material adverse effect on our consolidated financial condition or
results of operations.

We have been assessed an aggregate of Rs. 8.5 billion (US$ 181
million) in income tax, interest tax and sales tax demands by the government of
India's tax authorities for past years. We have appealed each of these tax
demands. Management believes that the tax authorities are not likely to be able
to substantiate their income tax and sales tax assessment for the following
reasons.

o We received favorable decisions from the appellate authorities with
respect to Rs. 633 million (US$ 14 million) of the current income tax
assessment. The income tax authorities have appealed these decisions
to higher appellate authorities and we are awaiting the decisions.

o We received a favorable decision of the Supreme Court of India in
respect of writ petitions filed by us relating to the sales tax
issues that are currently being appealed by us with respect to Rs.
316 million (US$ 7 million) of the current sales tax assessment.

o We received favorable appellate decisions in earlier years related to
the income tax issues currently being appealed by us with respect to
Rs. 245 million (US$ 5 million) of the current income tax assessment,
and other Indian companies received favorable appellate decisions in
earlier years related to other income tax issues that are currently
being appealed by us with respect to Rs. 7.3 billion (US$ 155
million) of the current income tax and interest tax assessment.

Of the Rs. 8.5 billion (US$ 181 million) aggregate tax assessments,
4.7 billion (US$ 100 million) represents income or sales tax demands
relating to lease agreements between various lessees and us, under which we may
recover any taxes payable by us from the lessee. Based on these favorable
precedents and the recoverability of the substantial majority of this
assessment from lessees of ICICI, we have not provided for contingent
liabilities related to these proceedings.

The plaintiffs allege that such specified transactions breach the Security
Agent and Trust Agreement between ICICI and the plaintiffs, whereby ICICI was
appointed as a trustee for the plaintiffs.

The plaintiffs have sought:

o a declaration that the specified transactions are void;

o damages and /or compensation equal to the sum of money sufficient to
compensate each of the plaintiffs for loss of security;

o interest in equity computed in quarterly rests and/or pursuant to the
provisions of the UK Supreme Court Act of 1981; and

o costs of litigation.

The litigation is in its early stages and as the claims are
unparticularized, no estimate of the interest, damages and costs claimed can be
quantified currently. ICICI has denied all claims of the plaintiffs and is
contesting the jurisdiction of the English courts to hear the matter. Given the
preliminary stage of the proceedings, management is unable to make a reasonable
assessment of the final outcome of the litigation and accordingly has not
recorded any liability associated with this contingency.

The same transaction is also the subject matter of a criminal
complaint filed by Commerzbank AG against ICICI and its executive directors
(including the former deputy managing director) before the Indian courts. The
Indian courts have granted an ad-interim stay of the complaint and the matter
has been posted for further hearing.

Management believes, based on consultation with counsel, that the
ultimate resolution of these legal proceedings will not have a material adverse
effect on the company's results of operations, financial condition or
liquidity. However, the final outcome of these legal proceedings cannot be
predicted with certainty, and accordingly, no assurance can be given that the
ultimate resolution of these legal proceedings will not have a material impact
on our results of operations, financial condition or liquidity.

Employees

The following table set forth, for the periods indicated, the
approximate number of employees in the ICICI group.

At March 31,
----------------------------- -----------------------------
2000 2001
----------------------------- -----------------------------
Number % to total Number % to total
-------------- -------------- ------------- ---------------

ICICI...................................... 1,009 28.8% 1,065 28.1%
ICICI Infotech............................. 444 12.7 1,050 27.8
ICICI Personal Financial Services ......... 314 9.0 651 17.2
ICICI Capital Services..................... 182 5.2 325 8.6
ICICI Prudential Life Insurance............ -- -- 294 7.8
ICICI Securities........................... 118 3.4 125 3.3
ICICI Home Finance......................... 49 1.4 96 2.5
Other subsidiaries of ICICI................ 43 1.2 178 4.7
ICICI Bank................................. 1,344 38.3 -- (1) -- (1)
-------------- -------------- ------------- ---------------
Total number of employees.................. 3,503 100.0% 3,784 100.0%
============== ============== ============= ===============

----------
(1) ICICI Bank ceased to be a subsidiary of ICICI in fiscal 2001.

At year-end fiscal 2001, we had approximately 3,784 employees, an
increase from 2,159 employees (excluding 1,344 employees of ICICI Bank) at
year-end fiscal 2000 and from 1,604 employees (excluding 891 employees of ICICI
Bank) at year-end fiscal 1999. Of these, 1,065 at year-

end fiscal 2001, 1,009 at year-end fiscal 2000 and 1,265 at year-end fiscal
1999 were employed by ICICI. Of the 1,065 employees of ICICI, 631 are
professionals, holding degrees in management, accountancy, engineering, law,
computer science and economics. The increase in number of employees in fiscal
2001 was primarily in our subsidiaries ICICI Infotech, ICICI Personal Financial
Services and ICICI Home Finance which have been rapidly growing their business
and distribution infrastructure and in ICICI Prudential Life Insurance which
commenced operations in December 2000.

We consider our relations with our employees to be good. We have
distinct personnel policies for each of our group companies, which are designed
specifically to address the needs of the individual business.

We structure compensation packages and provide incentives to
individuals to better their performance. For example, the compensation
structure of ICICI Capital Services, which is in the business of retail
distribution of financial products, is significantly different from that of our
other businesses, with a significant part of the salary package comprising
performance incentives. Similarly, ICICI Venture's compensation scheme links an
employee's compensation to the performance of the venture fund the employee
manages.

Effective fiscal 1994, ICICI established a performance-based bonus
scheme under which permanent employees can significantly increase their pay.
The compensation structures are based on clear performance criteria. In line
with the performance-driven culture, ICICI recently moved into a goal-based
performance management system which is a system of management by results. To
encourage commitment to results and productivity, we have also instituted an
employee stock option scheme. For the details of the stock option scheme, see
"Management--Compensation and Benefits to Directors and Officers--Employee
Stock Option Scheme".

In addition to basic compensation, employees of some companies of the
group are eligible to receive loans from us at subsidized rates and to
participate in our provident fund and other employee welfare plans. The
provident fund, to which both we and our employees contribute defined amounts,
is a savings scheme, required by government regulation, under which we must pay
to employees a minimum 9.5% annual return. If such return is not generated
internally by the fund, we are liable for the difference. Our provident fund
has always generated sufficient funds internally to meet the minimum annual
return requirement. We have also set up a superannuation fund to which we
contribute defined amounts. In addition, we also contribute defined amounts to
a gratuity fund set up pursuant to Indian statutory requirements.

We have a training center at Pune, near Mumbai, which conducts a
series of training programs designed to meet the changing skill requirements of
our employees. These training programs include orientation sessions for new
employees and management development programs for mid-level and senior
executives.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The selected financial and other data for and at year-end fiscal 1997,
1998, 1999, 2000 and 2001 have been derived from our consolidated financial
statements, prepared in accordance with US GAAP. Our consolidated financial
statements have been audited by KPMG, India, independent auditors. Capital
adequacy ratios have been calculated both from the unconsolidated financial
statements prepared in accordance with Indian GAAP and the consolidated
financial statements prepared in accordance with US GAAP.

Our consolidated subsidiaries at and for the year ended fiscal 2001 did
not include ICICI Bank. Effective March 10, 2001, ICICI Bank acquired Bank of
Madura, an old private sector bank in India, in an all stock merger and, as a
result, the ownership interest of ICICI was reduced from 62.2% to 55.6%. In
addition, during March 2001, we reduced our interest in ICICI Bank to 46.4%
through sales of equity shares in the Indian secondary markets to institutional
investors. As a result of the foregoing, ICICI Bank ceased to be one of our
subsidiaries as of March 22, 2001 and was accounted for under the equity method
of accounting from April 1, 2000, the beginning of the fiscal year in which our
majority ownership interest in ICICI Bank was deemed to be temporary. ICICI
Bank continues to be reported on a consolidated basis for the years ended March
31, 1997, 1998, 1999 and 2000. As a result, financial statements of fiscal 2001
and fiscal 2000 are not strictly comparable.

You should read the following data with the more detailed information
contained in "Operating and Financial Review and Prospects" and our
consolidated financial statements. Historical results do not necessarily
predict the results in the future.

Year ended March 31,
--------------------------------------------------------------------
1997 1998 1999 2000 2001 2001(1)
--------------------------------------------------------------------
(in millions, except per common share data)

Selected income statement data:
Interest revenue.................................. Rs. 41,564 Rs. 54,387 Rs. 70,293 Rs. 79,296 Rs. 81,080 US$ 1,731
Interest expense.................................. (33,238) (42,431) (58,043) (67,492) (67,961) (1,451)
--------------------------------------------------------------------
Net interest revenue.............................. 8,326 11,956 12,250 11,804 13,119 280
Dividends......................................... 800 553 676 1,502 406 9
--------------------------------------------------------------------
Net interest revenue, including dividends......... 9,126 12,509 12,926 13,306 13,525 289
Provisions for loan losses........................ (4,266) (4,768) (6,067) (6,363) (9,892) (211)
--------------------------------------------------------------------
Net interest revenue, including dividends, after
Provisions for loan losses..................... 4,860 7,741 6,859 6,943 3,633 78
Non-interest revenue, net......................... 2,515 5,325 5,560 9,815 8,034 171
--------------------------------------------------------------------
Net revenue...................................... 7,375 13,066 12,419 16,758 11,667 249
--------------------------------------------------------------------
Non-interest expense.............................. (2,019) (2,686) (3,795) (5,302) (5,808) (124)
Equity in earnings of affiliate................... -- (9) (34) 20 856 18
Minority interest................................. 135 (135) (170) (361) 34 1
--------------------------------------------------------------------
Income before taxes............................... 5,491 10,236 8,420 11,115 6,749 144
Income tax expense................................ (994) (1,446) (1,194) (2,033) (119) (2)
--------------------------------------------------------------------
Net income (before extraordinary items and
cumulative effect of change in accounting
principle, net of tax)......................... 4,497 8,790 7,226 9,082 6,630 142
Extraordinary items, net of tax(2)................ -- -- 292 -- -- --
Cumulative effect of change in accounting
principle, net
of tax (3)..................................... -- -- -- 249 -- --
--------------------------------------------------------------------
Net income/net income from continuing operations.. Rs. 4,497 Rs. 8,790 Rs. 7,518 Rs. 9,331 Rs. 6,630 US$ 142
====================================================================
Operating revenue (4) ............................ Rs. 44,626 Rs.59,770 Rs.76,276 Rs. 90,360 Rs. 89,267 US$ 1,905
====================================================================
Net operating income (5).......................... Rs. 4,109 Rs. 8,430 Rs. 7,330 Rs. 9,377 Rs. 6,602 US$ 141
====================================================================
Per common share:
Net income/net income from continuing operations--
basic(6)...................................... Rs. 10.34 Rs. 18.39 Rs. 15.66 Rs. 14.45 Rs. 8.44 US$ 0.18
Net income/net income from continuing operations--
Diluted(7).................................... 8.85 15.74 13.52 13.77 8.41 0.18
Net operating income--basic........................ 9.45 17.64 15.27 14.52 8.41 0.18
Net operating income--diluted...................... 8.12 15.11 13.18 13.85 8.38 0.18
Dividends(8)...................................... 4.50 5.50 5.50 5.50 5.50 0.12
Book value........................................ 56.28 68.78 76.06 90.29 96.67 2.06
Common shares outstanding at end of period
(in millions of common shares)................. 476 478 480 785 785
Weighted average common shares outstanding
--basic (in millions of common shares).......... 435 478 480 646 785
Weighted average common shares outstanding
--diluted (in millions of common shares)........ 532 575 577 687 785

------------------
(1) Rupee amounts for fiscal 2001 have been translated into US dollars using
the noon buying rate in effect on March 30, 2001 of Rs. 46.85 = US$ 1.00.
(2) Represents gains from extinguishment of debt, net of tax. In fiscal 1999,
we realized a post-tax gain of Rs. 292 million (US$ 6 million) through
repurchase of certain of our outstanding foreign currency bonds which
resulted in extinguishment of debt.
(3) Effective April 1, 1999, ICICI changed the method of providing
depreciation on property and equipment from the written down value method
to the straight line method. The cumulative effect of the change
aggregating Rs. 405 million (US$ 9 million), net of the related income tax
effect of Rs. 156 million (US$ 3 million) has been included in the
statement of income for fiscal 2000. See note 12 to our consolidated
financial statements.
(4) Represents interest revenue, dividends and non-interest revenue, excluding
effect of business combination on non-interest revenue of Rs. 253 million
(US$ 5 million) for each of fiscal 1997, 1999, 2000 and 2001 and Rs. 495
million (US$ 11 million) for fiscal 1998.
(5) Represents net income (before extraordinary items and cumulative effect of
change in accounting principle, net of tax), minority interest, effect of
business combination on non-interest revenue of Rs. 253 million (US$ 5
million) for each of fiscal 1997, 1999, 2000 and 2001 and Rs. 495 million
(US$ 11 million) for fiscal 1998 and effect of business combinations

on non-interest expense of Rs. 187 million (US$ 4 million) for each of
fiscal 1999 and 2000 and Rs. 259 million (US$ 6 million) for fiscal 2001.
(6) Represents net income before dilutive impact.
(7) Represents net income adjusted for full dilution. All convertible
instruments are assumed to be converted to common shares at the beginning
of the year, at prices that are most advantageous to the holders of
instruments. All series of convertible instruments are dilutive. See Note
22 to our consolidated financial statements.
(8) In US dollars, dividends were US$ 0.10 per equity share in fiscal 1997 and
US$ 0.12 per equity share in each of fiscal 1998, 1999, 2000 and 2001.

The following table sets forth, for the periods indicated, selected income
statement data expressed as a percentage of our average total assets for the
respective period.

Year ended March 31,
--------------------------------------------------
1997 1998 1999 2000 2001
--------------------------------------------------

Selected income statement data:
Interest revenue.............................................. 12.10% 12.51% 12.24% 11.23% 11.47%
Interest expense.............................................. (9.67) (9.76) (10.11) (9.56) (9.62)
--------------------------------------------------
Net interest revenue.......................................... 2.43 2.75 2.13 1.67 1.85
Dividends..................................................... 0.23 0.13 0.12 0.21 0.06
--------------------------------------------------
Net interest revenue, including dividends..................... 2.66 2.88 2.25 1.88 1.91
Provisions for loan losses.................................... (1.24) (1.10) (1.06) (0.90) (1.40)
--------------------------------------------------
Net interest revenue, including dividends, after provisions
for loan losses............................................ 1.42 1.78 1.19 0.98 0.51
Non-interest revenue, net..................................... 0.73 1.22 0.97 1.39 1.14
--------------------------------------------------
Net revenue................................................... 2.15 3.00 2.16 2.37 1.65
Non-interest expense.......................................... (0.59) (0.62) (0.66) (0.75) (0.82)
Equity in earnings of affiliate............................... -- -- (0.01) -- 0.12
Minority interest............................................. 0.04 (0.03) (0.03) (0.05) --
--------------------------------------------------
Income before taxes........................................... 1.60 2.35 1.46 1.57 0.95
Income tax expense............................................ (0.29) (0.33) (0.21) (0.29) (0.02)
--------------------------------------------------
Net income (before extraordinary items and cumulative effect
of change in accounting principle, net of tax)............. 1.31 2.02 1.25 1.28 0.93
Extraordinary items and cumulative effect of change in
accounting principle, net of tax.......................... -- -- 0.05 0.04 --
--------------------------------------------------
Net income/net income from continuing operations.............. 1.31% 2.02% 1.30% 1.32% 0.93%
==================================================
Operating revenue ............................................ 12.99 13.74 13.28 12.80 12.63
Net operating income.......................................... 1.20% 1.94% 1.28% 1.33% 0.93%

At March 31,
-------------------------------------------------------------------------
1997 1998 1999 2000 2001 2001(1)
-------------------------------------------------------------------------
(in millions, except percentages)

Selected balance sheet data:
Total assets........................... Rs. 380,200 Rs. 489,799 Rs. 646,945 Rs. 774,279 Rs. 740,445 US$ 15,805
Securities............................. 17,118 14,582 15,041 18,871 20,115 429
Loans, net(2).......................... 291,340 377,184 475,106 561,448 602,023 12,850
Troubled debt restructuring
(restructured loans), net........... 3,435 5,210 6,749 10,795 32,309 690
Other impaired loans, net.............. 7,647 17,456 23,214 24,240 20,081 429
Total liabilities...................... 352,595 455,476 609,661 699,073 664,027 14,173
Long-term debt......................... 274,015 347,956 435,521 436,320 505,025 10,780
Deposits............................... 10,740 29,295 60,605 96,682 6,072 130
Redeemable preferred stock(3).......... 750 3,366 10,897 10,207 698 15
Stockholders' equity................... 26,787 32,876 36,494 70,908 75,922 1,621
Common stock .......................... 4,755 4,781 4,801 7,832 7,848 168
Period average(4):
Total assets........................... 343,635 434,870 574,198 706,066 706,582 15,082
Interest-earning assets................ 274,481 367,646 500,966 612,452 615,867 13,146
Loans, net(2).......................... 249,473 334,465 430,830 513,421 570,989 12,188
Total liabilities(5)................... 318,119 403,168 538,213 650,794 631,563 13,480
Interest-bearing liabilities........... 279,366 356,489 483,636 583,609 576,474 12,305
Long-term debt......................... 251,380 311,601 383,286 436,718 469,902 10,030
Stockholders' equity................... Rs. 25,516 Rs. 31,702 Rs. 35,985 Rs. 55,272 Rs. 75,019 US$ 1,601
Profitability:
Net income as a percentage of:
Average total assets................ 1.31% 2.02% 1.30% 1.32% 0.93%
Average stockholders' equity........ 17.62 27.73 20.89 16.88 8.84
Average stockholders' equity
(including redeemable preferred
stock) (6).......................... 17.47 27.06 19.26 15.95 8.89
Dividend payout ratio(7)............... 47.92 33.33 38.99 42.44 71.79
Spread(8).............................. 3.24 2.89 2.03 1.39 1.38
Net interest margin(9)................. 3.03 3.25 2.44 1.93 2.13
Cost-to-income ratio(10)............... 17.73 15.49 19.79 22.37 26.04
Cost-to-average assets ratio(11)....... 0.59 0.62 0.63 0.72 0.79
Capital:
Total capital adequacy ratio
for ICICI(12)...................... 13.28 13.02 12.46 17.27 14.66
Tier 1 capital adequacy ratio
for ICICI(12)....................... 10.51 8.78 8.25 11.52 9.65
Tier 2 capital adequacy ratio
for ICICI(12)....................... 2.77 4.24 4.21 5.75 5.01
Average stockholders' equity as a
percentage of average total assets.. 7.43 7.29 6.27 7.83 10.62
Average stockholders' equity
(including redeemable preferred
stock) as a percentage of average
total assets........................ 7.68 7.59 7.48 9.30 10.95

At or for the year ended March 31,
---------------------------------------------
1997 1998 1999 2000 2001
---------------------------------------------
(in percentages)

Asset quality:
Net restructured loans as a percentage of net loans.................. 1.18% 1.38% 1.42% 1.92% 5.37%
Net other impaired loans as a percentage of net loans................ 2.62 4.63 4.89 4.32 3.34
Allowance for loan losses on restructured loans as a percentage of
gross restructured loans ......................................... 41.94 45.48 48.76 41.79 26.03
Allowance for loan losses on other impaired loans as a percentage of
gross other impaired loans........................................ 66.54 50.92 48.77 52.07 51.89
Allowance for loan losses on restructured and other impaired loans as
a percentage of gross loans....................................... 5.72% 5.62% 5.66% 5.72% 5.20%

---------------
(1) Rupee amounts for fiscal 2001 have been translated into US dollars using
the noon buying rate in effect on March 30, 2001 of Rs. 46.85 = US$ 1.00.
(2) Net of allowance for loan losses in respect of restructured and other
impaired loans.
(3) In line with the existing regulatory requirements in India, preferred
stock issued by us needs to be compulsorily redeemed within a specified
time period.
(4) For fiscal 1997, 1998, 1999 and 2000 the average balances are the average
of quarterly balances outstanding at the end of March of the previous
fiscal year, June, September, December and March of that fiscal year and
for fiscal 2001, the average balances are the average of quarterly
balances outstanding at the end of June, September, December and March of
that fiscal year.
(5) Represents the average of the quarterly balance of total liabilities and
minority interest.
(6) Represents the ratio of net income plus dividend on redeemable preferred
stock to the sum of average stockholders' equity and average redeemable
preferred stock. Under Indian tax laws, dividend on preferred stock is not
tax deductible.
(7) Represents the ratio of total dividends paid on common stock, including
the dividend distribution tax, as a percentage of net income.
(8) Represents the difference between yield on average interest-earning assets
and cost of average interest-bearing liabilities. Yield on average
interest-earning assets is the ratio of interest revenue to average
interest-earning assets. Cost of average interest-bearing liabilities is
the ratio of interest expense to average interest-bearing liabilities.
(9) Represents the ratio of net interest revenue to average interest-earning
assets. The difference in net interest margin and spread arises due to the
difference in the amount of average interest-earning assets and average
interest-bearing liabilities. If average interest-earning assets exceed
average interest-bearing liabilities, net interest margin is greater than
spread, and if average interest-bearing liabilities exceed average
interest-earning assets, net interest margin is less than spread.
(10) Represents the ratio of non-interest expense, excluding amortization of
intangible assets, to the sum of net interest revenue, dividends and
non-interest revenue, excluding the effect of business combination.
(11) Represents the ratio of non-interest expense, excluding amortization of
intangible assets, to average total assets.
(12) ICICI's capital adequacy is computed in accordance with the Reserve Bank
of India guidelines. The computation is based on ICICI's unconsolidated
financial statements prepared in accordance with Indian GAAP. Our total
capital adequacy ratio computed under the applicable Reserve Bank of India
guidelines and based on our consolidated financial statements prepared in
accordance with US GAAP was 14.03% at year-end fiscal 2001. Using the same
basis of computation, our Tier 1 capital adequacy ratio was 9.35% and our
Tier 2 capital adequacy ratio was 4.68% at year-end fiscal 2001. See
"Operating and Financial Review and Prospects--Financial
Condition--Capital".

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial
condition and results of operations together with our consolidated financial
statements. The following discussion is based on our audited financial
statements and accompanying notes, which have been prepared in accordance with
US GAAP and begin on F-1.

Introduction

Several factors relating to the macroeconomic environment and developments
in the Indian financial sector had an impact on our results of operations and
financial condition for fiscal 1999, 2000 and 2001. In addition, for a
meaningful comparison of our results of operations for these years, we believe
it is necessary to analyze the dilution of our equity interest in ICICI Bank
and the effect of acquisitions. For ease of understanding of the discussion of
our results of operations that follows, you should consider the introductory
discussion of these macroeconomic factors.

Indian Economy

Our loan portfolio, financial condition and results of operations have
been, and in the future are expected to be, influenced by economic conditions
in India and certain global developments, particularly those relating to
specific commodity prices.

GDP growth in fiscal 2001 was 5.2% compared to 6.4% in fiscal 2000. The
lower GDP growth rate in fiscal 2001 was primarily due to low growth in the
agricultural sector and the industrial sector, particularly in manufacturing
and electricity. The agricultural and allied sectors grew by 0.2% in fiscal
2001 compared to 0.7% in fiscal 2000, while growth in industrial production
slowed down to 5.1% compared to 6.7% in fiscal 2000. The indicators of a
slowdown in global economic growth were witnessed in fiscal 2001.India's
exports registered a strong growth rate of 20.4% in fiscal 2001 compared to
10.8% in fiscal 2000.

In fiscal 2000, the Indian economy registered a GDP growth of 6.4%
compared to 6.6% in fiscal 1999. The GDP growth in fiscal 2000 was lower
compared to fiscal 1999 due to a slowdown in the agricultural sector. However,
growth in industrial production, which had slowed to 4.1% in fiscal 1999 from
6.6% in fiscal 1998, recovered to 6.7% in fiscal 2000. In fiscal 2000, the
global economy recovered from the slowdown it experienced between 1997 and 1999
stemming from the economic crisis in Asia, Russia and elsewhere.

Average inflation, as measured by the wholesale price index, remained
below 7.0% in each of fiscal 1998, 1999 and 2000. However, the rate of
inflation increased to 7.2% in fiscal 2001, mainly due to higher fuel prices as
a result of the increase in global crude oil prices. After the Asian crisis,
unlike certain south-east Asian currencies, the rupee did not experience a
precipitous fall due to a cautious approach towards opening the capital account
and effective exchange rate management by the Reserve Bank of India.

The balance of payments position was relatively comfortable at year-end
fiscal 2001. During fiscal 2001, the State Bank of India concluded the India
Millennium Deposits Scheme for non-resident Indians and overseas corporate
bodies, which resulted in foreign exchange inflows of US$ 5.5 billion. Foreign
exchange reserves were US$ 42.3 billion at March 30, 2001 and rose to US$ 45.4
billion at August 31, 2001.

Industrial growth in April-May 2001 was 2.6% compared to 6.2% in April-May
2000. A lower overall growth in industry during fiscal 2002 will impact the
performance of the banking and financial sector as it will affect the level of
credit disbursed by banks and financial institutions. If industrial growth does
not pick up, it could affect the overall growth prospects of our business,
including our ability to grow, the quality of our assets and our ability to
implement our strategy.

Given the large amount of investment required in the infrastructure
sector, the government of India has issued policy guidelines, over the past few
years aimed at encouraging the involvement of the private sector, including the
foreign private sector. However, fiscal 2001 saw a limited response to the
government of India's efforts to attract private investments in the
infrastructure sector. Systemic issues have dissuaded the private sector from
investing in the infrastructure sector, particularly in the power sector.

The rapid reduction in trade barriers and integration with global markets,
and the downtrend in global commodity markets since fiscal 1999, has caused
difficulty in the Indian economy for those commercial enterprises with cost
inefficiencies, poor technology and fragmented capacities. As a result, while
the Indian economy has continued to grow, although at a slower rate than in
past periods, certain corporate and commercial enterprises have had to
restructure their operations to deal with the financial stress they have
encountered. In certain cases, while continuing to generate revenue and net
profits, some of our borrowers made significant changes in their operations,
selling unproductive assets, merging with other market participants, reducing
costs and refocusing their business objectives. This has resulted in the need
to restructure and renegotiate credit and related facilities with financial
institutions including, in some cases, us. This restructuring process across
industry sectors has resulted in a decline in asset quality across the Indian
financial system over the past few years.

Regional Hostilities and Tensions

Deconsolidation of ICICI Bank

Our consolidated subsidiaries at and for the year ended March 31, 2001 did
not include ICICI Bank. Effective March 10, 2001, ICICI Bank acquired Bank of
Madura, an old private sector bank in India, in an all stock merger and, as a
result, the ownership interest of ICICI was reduced from 62.2% to 55.6%. In
addition, during March 2001, we reduced our interest in ICICI Bank to 46.4%
through sales of equity shares in the Indian secondary markets to institutional
investors. The sale of shares was made for a consideration of Rs. 3.5 billion
(US$ 75 million) and the gain on sale was Rs. 2.0 billion (US$ 43 million)
which is included in the statement of income. This was in line with the Reserve
Bank of India's directive that ICICI reduce its interest in ICICI Bank to not
more than 40.0% over a period of time. As a result of the foregoing, ICICI Bank
ceased to be one of our subsidiaries as of March 22, 2001 and was accounted for
under the equity method of accounting from April 1, 2000, the beginning of the
fiscal year in which our majority ownership interest in ICICI Bank was deemed
to be temporary. ICICI Bank continues to be

reported on a consolidated basis for the years ended March 31, 2000 and 1999.
As a result, financial statements of fiscal 2001 and fiscal 2000 are not
strictly comparable.

During the first five months (April to August) of fiscal 2002, ICICI sold
another 0.4% equity interest in ICICI Bank in the Indian secondary markets to
institutional investors. At August 31, 2001, ICICI held a 46.0% interest in
ICICI Bank.

Universal Bank conversion

The issue of universal banking, which in the Indian context means
combining commercial banks and long-term development financial institutions,
has been discussed at length over the past few years. In the mid-term monetary
and credit policy for fiscal 2000 and universal banking guidelines issued on
April 28, 2001, the Reserve Bank of India announced that it would consider
proposals from development financial institutions, like ICICI, who wish to
transform themselves into banks on a case-by-case basis. As part of our efforts
to transform ourselves into a universal bank, we are considering various
corporate structuring alternatives including the possibility of a merger
between ICICI Bank and us and the re-organization of our holdings in our
subsidiary companies. In this respect, we have initiated a dialogue with the
government of India and regulatory agencies, including the Reserve Bank of
India. As of the date of this annual report, no firm proposal for any such
action has been approved by the board of directors or the shareholders of
either ICICI or ICICI Bank. Any corporate action resulting from these
discussions would be subject to the approval of the board of directors and
shareholders of ICICI and ICICI Bank and necessary statutory and regulatory
approvals including from the Reserve Bank of India and the government of India.
At this stage, there can be no certainty that any definitive agreement will be
reached or that such agreement will be approved by the relevant regulatory
agencies.

In the event that ICICI Bank and ICICI were to merge, the businesses
currently being conducted by ICICI would become subject for the first time to a
number of banking regulations under Indian law, including directed lending,
maintenance of statutory reserve ratios and higher effective income tax rates.
These regulatory changes will impact the profitability of the combined
businesses in any new universal bank. The combined universal bank will have a
different mix of assets and funding sources than the two separate companies.
The impact of the statutory reserve ratios, which requires that a significant
portion of an Indian bank's liabilities be held in Indian government
securities, may increase market risk in a combined universal bank. The income,
profitability and market risk profile of any merged universal bank may
therefore be adversely affected by the impact of these regulatory requirements.
This may result in lower income in the initial years after conversion.
Any combined universal bank may not be able to maintain the business, growth
and financial performance of the two separate companies and any failure to do
so could adversely affect the price of our equity shares and our ADS.

Effect of Acquisitions

During fiscal 2001, we acquired the following software development and
services companies based in the United States: Ivory International Inc.,
Objects Xperts Inc. and Command Systems Inc. We also acquired Ajax Software
Solutions, a software development company based in India. The business
combinations were accounted for under the purchase method and the revenues and
total assets of the acquired companies are immaterial to our consolidated
results of operations and financial position for fiscal 2001. The business
combinations resulted in goodwill of Rs. 1.4 billion (US$ 30 million) which is
amortized over a period of five years. This resulted in an expense of Rs. 52
million (US$ 1 million) for fiscal 2001. In addition, the workforce and
customer relationships of Objects Xperts Inc. valued at Rs. 135 million (US$ 3
million) are amortized over a period of five years. This resulted in an expense
of Rs. 20 million (US$ 426,890) for fiscal 2001.

Effective April 1, 1998, ICICI acquired Anagram Finance Limited, a
non-bank finance company, principally to support its entry into the retail
asset financing market. The assets of Anagram Finance amounted to Rs. 9.6
billion (US$ 205 million), approximately 2.0% of our total assets at year-end
fiscal 1998. The business combination was accounted for by the purchase method
and accordingly the consolidated financial statements since fiscal 1999 include
the results of operations of Anagram Finance. The business combination resulted
in a goodwill of Rs. 934 million (US$ 20 million), which is being amortized
over a period of five years. This resulted in an expense of Rs. 187 million
(US$ 4 million) due to amortization of goodwill in fiscal 1999, 2000 and 2001.
This acquisition also resulted in an increase in employee and administration
expenses in fiscal 1999 because we were required to record various non-interest
expenses and costs of Anagram Finance from the effective date of acquisition.

Effective April 1, 1997, ICICI acquired ITC Classic Finance Limited, a
non-bank finance company, principally to support its efforts in diversifying
its retail funding base. The assets of ITC Classic Finance amounted to Rs. 14.0
billion (US$ 300 million), approximately 3.7% of our total assets at year-end
fiscal 1997. The business combination was accounted for by the purchase method
and accordingly the consolidated financial statements since fiscal 1998 include
the results of operations of ITC Classic Finance. The business combination
resulted in negative goodwill of Rs. 10 million (US$ 213,447) as the purchase
price was less than the fair value of the net assets acquired. The negative
goodwill was set-off against certain non-current, non-monetary assets. The
acquisition also resulted in an increase in employee and administration
expenses in fiscal 1998 because we were required to record various non-interest
expenses and costs of ITC Classic Finance from the effective date of
acquisition.

Effective April 1, 1996, ICICI acquired SCICI Limited, a diversified
financial institution in which ICICI had an existing 19.9% equity interest.
ICICI acquired SCICI principally to benefit from the scale efficiencies of
being a larger entity. The assets of SCICI amounted to Rs. 50.4 billion (US$
1.1 billion), approximately 16.8% of our total assets at year-end fiscal 1996.
The business combination was accounted for by the purchase method and
accordingly the consolidated financial statements since fiscal 1997 include the
results of operations of SCICI. The business combination resulted in negative
goodwill of Rs. 3.1 billion (US$ 66 million) as the purchase price was less
than the fair value of the net assets acquired. Of this amount, Rs. 0.6 billion
(US$ 13 million) was set-off against certain property and equipment and an
amount of Rs. 253 million (US$ 5 million) was accrued to income in each of the
years since fiscal 1997. In addition, in fiscal 1998, income of Rs. 242 million
(US$ 5 million) was accrued from the sale of SCICI's headquarters building in
Mumbai. For a discussion of the recently issued statements of financial
accounting standards by Financial Accounting Standards Board, Statement No.
141, "Business Combinations", and Statement No. 142, "Goodwill and Other
Intangible Assets", see "--Future Impact of Recently Issued Accounting
Standards"

Results of Operations

Summary Fiscal 2001 to Fiscal 2000

ICICI Bank ceased to be one of our subsidiaries as of March 22, 2001 and
was accounted for under the equity method of accounting from April 1, 2000.
ICICI Bank continues to be reported on a consolidated basis for the years ended
March 31, 2000 and 1999. As a result, financial statements of fiscal 2001 and
fiscal 2000 are not strictly comparable. See "--Introduction--Deconsolidation
of ICICI Bank".

Net income (before extraordinary items and cumulative effect of change in
accounting policies, net of tax) declined to Rs. 6.6 billion (US$ 142 million)
in fiscal 2001 compared to Rs. 9.1 billion (US$ 194 million) in fiscal 2000
primarily due to higher provisioning for loan losses, lower non-interest income
and higher non-interest expense. As a result, the return on average assets for
fiscal 2001 was 0.93%

compared to 1.32% in fiscal 2000 and the return on average stockholders' equity
declined to 8.84% in fiscal 2001 compared to 16.88% in fiscal 2000.

o Net interest revenue increased 11.1% to Rs. 13.1 billion (US$ 280
million) in fiscal 2001 from Rs. 11.8 billion (US$ 252 million) in
fiscal 2000 reflecting mainly the following factors:

- an increase of Rs. 26.6 billion (US$ 567 million) or 5.4% in the
average volume of interest-earning rupee assets;

- a decrease of Rs. 23.1 billion (US$ 494 million) or 20.0% in the
average volume of interest-earning foreign currency assets;

- a decrease in our rupee spread to 1.00% in fiscal 2001 from 1.43%
in fiscal 2000; and

- an increase in our foreign currency spread to 2.76% in fiscal 2001
from 1.91% in fiscal 2000.

o The spread declined marginally by 1 basis point to 1.38% in fiscal 2001
from 1.39% in fiscal 2000 and net interest margin increased to 2.13% in
fiscal 2001 from 1.93% in fiscal 2000.

o Gross restructured loans increased by 135.5% to Rs. 43.7 billion (US$
932 million) at year-end fiscal 2001 from Rs. 18.5 billion (US$ 396
million) at year-end fiscal 2000, primarily due to an increase in
restructuring of loans to companies in the textiles and iron and steel
industries. Loans previously categorized as other impaired loans
amounting to Rs. 6.6 billion (US$ 140 million) were restructured during
fiscal 2001 and were re-classified as restructured loans at year-end
fiscal 2001. As a result, gross other impaired loans decreased 17.5% to
Rs. 41.7 billion (US$ 891 million) at year-end fiscal 2001 from Rs.
50.6 billion (US$ 1.1 billion) at year-end fiscal 2000. As a percentage
of net loans, net restructured loans were 5.4% at year-end fiscal 2001
compared to 1.9% at year-end fiscal 2000 and net other impaired loans
were 3.3% at year-end fiscal 2001 compared to 4.3% in year-end fiscal
2000.

o Non-interest revenue declined 18.1% in fiscal 2001 to Rs. 8.0 billion
(US$ 171 million), from Rs. 9.8 billion (US$ 209 million) in fiscal
2000 primarily due to the deconsolidation of ICICI Bank. If we exclude
the non-interest revenue of ICICI Bank for fiscal 2000, non-interest
revenue declined marginally to Rs. 8.0 billion (US$ 171 million) in
fiscal 2001 from Rs. 8.1 billion (US$ 173 million) in fiscal 2000. This
decline was primarily due to a decline in trading account revenue,
income from securities transactions and foreign exchange transactions
offset, in part, by an increase in income from fees, commissions and
brokerage and a gain on sale of stock in subsidiaries and affiliates.

o Non-interest expense increased 9.5% in fiscal 2001 to Rs. 5.8 billion
(US$ 124 million) from Rs. 5.3 billion (US$ 113 million) in fiscal 2000
primarily due to an increase in employee expense and premises and
equipment expense. If we exclude the non-interest expense of ICICI Bank
for fiscal 2000, non-interest expense increased 46.2% to Rs. 5.8
billion (US$ 124 million) in fiscal 2001 from Rs. 4.0 billion (US$ 85
million) in fiscal 2000.

o The provisions for loan losses on restructured and other impaired loans
(collectively referred to as impaired loans) increased 55.5 % to Rs.
9.9 billion (US$ 211 million) during fiscal 2001 from Rs. 6.4 billion
(US$ 136 million) in fiscal 2000 primarily due to an increase in gross
restructured loans during fiscal 2001.

o Total assets decreased 4.4% to Rs. 740.4 billion (US$ 15.8 billion) at
year-end fiscal 2001 from Rs. 774.3 billion (US$ 16.5 billion) at
year-end fiscal 2000. However, if we exclude the total assets of ICICI
Bank at year-end fiscal 2000, total assets increased 15.2% to Rs. 740.4
billion (US$ 15.8 billion) at year-end fiscal 2001 compared to Rs.
642.9 billion (US$ 13.7 billion) at year-end fiscal 2000.

o ICICI's total capital adequacy ratio, computed in accordance with the
Reserve Bank of India guidelines and based on ICICI's unconsolidated
financial statements prepared in accordance with Indian GAAP, was
14.66% at year-end fiscal 2001. The Tier 1 capital adequacy ratio was
9.65% and the Tier 2 capital adequacy ratio was 5.01% at year-end
fiscal 2001. Our total capital adequacy ratio, computed under the
applicable Reserve Bank of India guidelines and based on our
consolidated financial statements prepared in accordance with US GAAP,
was 14.03% at year-end fiscal 2001. Using the same basis for
calculation, the Tier 1 capital adequacy ratio was 9.35% and the Tier 2
capital adequacy ratio was 4.68% at year-end fiscal 2001.

Summary Fiscal 2000 to Fiscal 1999

Net income (before extraordinary items and cumulative effect of change in
accounting policies, net of tax) was Rs. 9.1 billion (US$ 194 million) in
fiscal 2000, representing an increase of 25.7% from Rs. 7.2 billion (US$ 154
million) in fiscal 1999. The return on average assets for fiscal 2000 was 1.32%
compared to 1.30% in fiscal 1999. The return on average stockholders' equity
declined to 16.88% in fiscal 2000 compared to 20.89% in fiscal 1999, primarily
due to new capital being raised during the year which was available only for a
part of the year and hence could not be fully leveraged.

o Net interest revenue decreased 3.6% to Rs. 11.8 billion (US$ 252
million) in fiscal 2000 from Rs. 12.3 billion (US$ 261 million) in
fiscal 1999 reflecting mainly the following factors:

- an increase of Rs. 112.4 billion (US$ 2.4 billion) or 29.2% in the
average volume of interest-earning rupee assets;

- a decrease of Rs. 0.9 billion (US$ 20 million) or 0.8% in the
average volume of interest-earning foreign currency assets;

- a decrease in our rupee spread to 1.43% in fiscal 2000 from 2.03%
in fiscal 1999; and

- a decrease in our foreign currency spread to 1.91% in fiscal 2000
from 2.56% in fiscal 1999.

o The spread decreased 64 basis points to 1.39% in fiscal 2000 from 2.03%
in fiscal 1999 and net interest margin decreased to 1.93% in fiscal
2000 from 2.44% in fiscal 1999. This was primarily due to our continued
focus on lower risk loans to highly-rated clients that resulted in
lower credit spreads, and an increase in cash and cash equivalent
balances which earn lower yields. Further, an increase in impaired
loans also lowered our spread.

o During fiscal 2000, gross restructured loans increased by 40.8% to Rs.
18.5 billion (US$ 396 million) and gross other impaired loans increased
11.6% to Rs. 50.6 billion (US$ 1.08 billion), primarily due to an
increase in impaired loans to companies in the textiles, paper and
paper products, sugar and man-made fibers industries. As a percentage
of net loans, net restructured loans were 1.9% at year-end fiscal 2000
compared to 1.4% at year-end fiscal 1999 and net other impaired loans
were 4.3% at year-end fiscal 2000 compared to 4.9% at year-end fiscal
1999.

o Non-interest revenue increased by 76.5% in fiscal 2000 to Rs. 9.8
billion (US$ 209 million) from Rs. 5.6 billion (US$ 119 million) in
fiscal 1999 primarily due to an increase in trading account revenue,
income from securities transactions and income from fees, commission
and brokerage offset, in part, by a decline in income from foreign
exchange transactions.

o As a result of the increase in impaired loans, the provisions for loan
losses during fiscal 2000 increased 4.9% to Rs. 6.4 billion (US$ 136
million) from Rs. 6.1 billion (US$ 129 million) in fiscal 1999.

o Total assets increased 19.7% to Rs. 774.3 billion (US$ 16.5 billion) at
year-end fiscal 2000 from Rs. 646.9 billion (US$ 13.8 billion) at
year-end fiscal 1999.

100

total capital adequacy ratio, computed under the applicable Reserve
Bank of India guidelines and based on our consolidated financial
statements prepared in accordance with US GAAP, was 15.80% at year-end
fiscal 2000. Using the same basis for calculation, the Tier 1 capital
adequacy ratio was 10.53% and the Tier 2 capital adequacy ratio was
5.27% at year-end fiscal 2000.

Average Balance Sheet

For fiscal 1999 and 2000 the average balances are the average of quarterly
balances outstanding at the end of March of the previous fiscal year, June,
September, December and March of that fiscal year and for fiscal 2001, the
average balances are the average of quarterly balances outstanding at the end
of June, September, December and March of that fiscal year. The amortized
portion of loan origination fees (net of loan origination costs) is included in
interest revenue on loans, representing an adjustment to the yield. The average
yield on average interest-earning assets is the ratio of interest revenue to
average interest-earning assets. The average cost on average interest-bearing
liabilities is the ratio of interest expense to average interest-bearing
liabilities. The average balances of loans include impaired loans and are net
of allowance for loan losses that have been allocated on a pro-rata basis to
rupee loans and foreign currency loans, based on the proportion of impaired
rupee loans and impaired foreign currency loans. We have not recalculated
tax-exempt income on a tax-equivalent basis because we believe that the effect
of doing so would not be significant. Total interest revenue also includes
other interest revenue which is primarily interest on refund of income tax.

101

The following table sets forth, for the periods indicated, the average
balances of our assets and liabilities outstanding, which are major components
of interest revenue, interest expense and net interest revenue. The average
balances of loans include impaired loans and are net of allowance for loan
losses.

Year ended March 31,
-----------------------------------------------------------------------------------------------------
1999 2000 2001
-----------------------------------------------------------------------------------------------------
Interest Average Interest Average Interest Average
Average revenue/ yield/ Average revenue/ yield/ Average revenue/ yield/
balance expense cost balance expense cost balance expense cost
-----------------------------------------------------------------------------------------------------
(in millions, except percentages)

Assets:
Cash, cash equivalents and
trading assets:
Rupee...................... Rs. 37,063 Rs. 4,997 13.48% Rs. 61,375 Rs. 7,962 12.97% Rs. 30,082 Rs. 3,261 10.84%
Foreign currency........... 30,505 1,635 5.36 33,361 1,418 4.25 13,136 567 4.32
---------------------- ---------------------- ----------------------
Total cash, cash equivalents
and trading assets......... 67,568 6,632 9.82 94,736 9,380 9.90 43,218 3,828 8.86
Securities--debt:
Rupee...................... 2,568 245 9.54 4,295 420 9.78 1,660 154 9.30
Foreign currency........... -- -- -- -- -- -- -- -- --
---------------------- ---------------------- ----------------------
Total securities--debt........ 2,568 245 9.54 4,295 420 9.78 1,660 154 9.30
Loans, net:
Rupee...................... 344,921 54,680 15.85 431,313 62,016 14.38 491,792 68,816 13.99
Foreign currency........... 85,909 8,408 9.79 82,108 7,322 8.92 79,197 7,778 9.82
---------------------- ---------------------- ----------------------
Total loans, net............. 430,830 63,088 14.64 513,421 69,338 13.51 570,989 76,594 13.41
Other interest income........ -- 328 -- -- 158 -- -- 504 --
Interest-earning assets:
Rupee...................... 384,552 60,250 15.67 496,983 70,556 14.20 523,534 72,735 13.89
Foreign currency........... 116,414 10,043 8.63 115,469 8,740 7.57 92,333 8,345 9.04
---------------------- ---------------------- ----------------------
Total interest-earning
assets..................... 500,966 70,293 14.03 612,452 79,296 12.95 615,867 81,080 13.17
Securities--equity:
Rupee...................... 12,491 676 5.41 14,419 1,502 10.42 24,722 406 1.64
Foreign currency........... -- -- -- -- -- -- -- -- --
---------------------- ---------------------- ----------------------
Total securities--equity...... 12,491 676 5.41 14,419 1,502 10.42 24,722 406 1.64
Earning assets:
Rupee...................... 397,043 60,926 15.34 511,402 72,058 14.09 548,256 73,141 13.34
Foreign currency........... 116,414 10,043 8.63 115,469 8,740 7.57 92,333 8,345 9.04
---------------------- ---------------------- ----------------------
Total earning assets......... 513.457 70,969 13.82 626,871 80,798 12.89 640,589 81,486 12.72
Cash and cash equivalents.... 8,712 16,653 3,914
Acceptances.................. 6,715 11,224 4,048
Property and equipment....... 7,267 9,352 11,787
Other assets................. 38,047 41,966 46,244
------------ ------------ ------------
Total non-earning assets..... 60,741 79,195 65,993
---------------------- ---------------------- ----------------------
Total assets................. Rs.574,198 Rs.70,969 Rs. 706,066 Rs.80,798 Rs. 706,582 Rs.81,486
====================== ====================== ======================

102

Liabilities:
Savings account deposits:
Rupee................... Rs. 1,633 Rs. 53 3.26% Rs. 3,530 Rs. 118 3.34% Rs. -- Rs. -- --%
Foreign currency........ -- -- -- -- -- -- -- -- --
---------------------- ---------------------- ----------------------
Total savings account
deposits................ 1,633 53 3.26 3,530 118 3.34
Time deposits:
Rupee................... 38,442 4,179 10.87 61,252 5,828 9.51 3,682 490 13.31
Foreign currency........ 2,194 130 5.93 3,056 158 5.15 -- -- --
---------------------- ---------------------- ----------------------
Total time deposits....... 40,636 4,309 10.60 64,308 5,986 9.31 3,682 490 13.31
Long-term debt:
Rupee................... 280,663 41,362 14.74 340,461 46,277 13.59 373,603 50,954 13.64
Foreign currency........ 102,623 6,236 6.08 96,257 5,467 5.68 96,299 6,043 6.28
---------------------- ---------------------- ----------------------
Total long-term debt...... 383,286 47,598 12.42 436,718 51,744 11.85 469,902 56,997 12.13
Redeemable preferred
stock................... 6,983 757 10.84 10,427 1,149 11.02 2,321 244 10.51
Trading account and other
liabilities:
Rupee................... 51,098 5,326 10.42 68,626 8,495 12.38 100,569 10,230 10.17
Foreign currency........ -- -- -- -- -- -- -- -- --
---------------------- ---------------------- ----------------------
Total trading account and
other liabilities....... 51,098 5,326 10.42 68,626 8,495 12.38 100,569 10,230 10.17
Interest-bearing
liabilities:
Rupee................... 378,819 51,677 13.64 484,296 61,867 12.77 480,175 61,918 12.89
Foreign currency........ 104,817 6,366 6.07 99,313 5,625 5.66 96,299 6,043 6.28
---------------------- ---------------------- ----------------------
Total interest-bearing
liabilities............. 483,636 58,043 12.00 583,609 67,492 11.56 576,474 67,961 11.79
Non-interest-bearing
deposits:
Rupee................... 4,287 7,180 --
Foreign currency........ 143 263 --
----------- ----------- ----------
Total non-interest-bearing
deposits................ 4,430 7,443 --
Other liabilities......... 50,147 59,742 55,089
----------- ----------- ----------
Total non-interest-bearing
liabilities............. 54,577 67,185 55,089
----------- ----------- ----------
Total liabilities......... Rs. 538,213 Rs.58,043 Rs. 650,794 Rs.67,492 Rs.631,563 Rs. 67,961
====================== ====================== =======================
Stockholders' equity...... Rs. 35,985 Rs. 55,272 Rs. 75,019
----------- ----------- ----------
Total liabilities and
stockholders' equity.... Rs. 574,198 Rs. 706,066 Rs.706,582
=========== =========== ==========

103

Analysis of Changes in Interest Revenue and Interest Expense Volume
and Rate Analysis

The following table sets forth, for the periods indicated, the changes in
the components of our net interest revenue. The changes in net interest revenue
between periods have been reflected as attributed either to volume or rate
changes. For the purpose of this table, changes which are due to both volume
and rate have been allocated solely to volume.

Fiscal 2000 vs. Fiscal 1999 Fiscal 2001 vs. Fiscal 2000
---------------------------------------------------------------------
Increase (decrease) due to Increase (decrease) due to
---------------------------------------------------------------------
Net change Change in Change in Net change Change in Change in
average average average average
volume rate volume rate
---------------------------------------------------------------------
(in millions)

Interest revenue:
Cash, cash equivalents and trading
assets:
Rupee............................... Rs. 2,965 Rs. 3,154 Rs. (189) Rs. (4,701) Rs.(3,392) Rs.(1,309)
Foreign currency.................... (217) 121 (338) (851) (873) 22
---------------------------------------------------------------------
Total cash, cash equivalents and trading
assets 2,748 3,275 (527) (5,552) (4,265) (1,287)
Securities:
Rupee............................... 175 169 6 (266) (245) (21)
Foreign currency.................... -- -- -- -- -- --
---------------------------------------------------------------------
Total securities........................ 175 169 6 (266) (245) (21)
Loans:
Rupee............................... 7,336 12,422 (5,086) 6,800 8,463 (1,663)
Foreign currency.................... (1,086) (338) (748) 456 (286) 742
---------------------------------------------------------------------
Total loans............................. 6,250 12,084 (5,834) 7,256 8,177 (921)
Other interest revenue.................. (170) -- -- 346 -- --
---------------------------------------------------------------------
Total interest revenue:
Rupee............................... 10,306 15,575 (5,269) 2,179 5,172 (2,993)
Foreign currency.................... (1,303) (217) (1,086) (395) (1,159) 764
---------------------------------------------------------------------
Total interest revenue.................. Rs. 9,003 Rs.15,358 Rs.(6,355) Rs. 1,784 Rs. 4,013 Rs.(2,229)
=====================================================================
Interest expense:
Savings account deposits:
Rupee............................... Rs. 65 Rs. 63 Rs. 2 Rs. (118) Rs. (118) Rs. --
Foreign currency.................... -- -- -- -- -- --
---------------------------------------------------------------------
Total savings account deposits.......... 65 63 2 (118) (118) --
Time deposits:
Rupee............................... 1,649 2,170 (521) (5,338) (7,661) 2,323
Foreign currency.................... 27 44 (17) (158) (158) --
---------------------------------------------------------------------
Total time deposits..................... 1,676 2,214 (538) (5,496) (7,819) 2,323
Long-term debt:
Rupee............................... 4,916 8,128 (3,212) 4,677 4,520 157
Foreign currency.................... (768) (362) (406) 576 3 573
---------------------------------------------------------------------
Total long-term debt.................... 4,148 7,766 (3,618) 5,253 4,523 730
Redeemable preferred stock(1)........... 392 380 12 (905) (852) (53)
Trading account and other liabilities:
Rupee............................... 3,169 2,170 999 1,735 3,249 (1,514)
Foreign currency.................... -- -- -- -- -- --
---------------------------------------------------------------------
Total trading account and other
liabilities............................. 3,169 2,170 999 1,735 3,249 (1,514)
Total interest expense:
Rupee............................... 10,191 12,911 (2,720) 51 (862) 913
Foreign currency.................... (741) (318) (423) 418 (155) 573
---------------------------------------------------------------------
Total interest expense.................. Rs. 9,450 Rs.12,593 Rs.(3,143) Rs. 469 Rs.(1,017) Rs. 1,486
=====================================================================
Net interest revenue:
Rupee............................... 115 2,664 (2,549) 2,128 6,034 (3,906)
Foreign currency.................... (562) 101 (663) (813) (1,004) 191
=====================================================================
Total net interest revenue.............. Rs. (447) Rs. 2,765 Rs.(3,212) Rs. 1,315 Rs. 5,030 Rs.(3,715)
=====================================================================

----------------------
(1) In line with the existing regulatory requirements in India, preferred
stock issued by us needs to be compulsorily redeemed within a specified
time period. Accordingly, all series of preferred stock issued by us are
redeemable in accordance with the terms of the issue.

104

Yields, Spreads and Margins

The following table sets forth, for the periods indicated, the yields,
spreads and net interest margins on our interest-earning assets.

Year ended March 31,
-----------------------------------------------------------
1997 1998 1999 2000 2001
-----------------------------------------------------------
(in millions, except percentages)

Interest revenue.................................... Rs. 41,564 Rs. 54,387 Rs. 70,293 Rs. 79,296 Rs. 81,080
Average interest-earning assets..................... 274,481 367,646 500,966 612,452 615,867
Interest expense.................................... 33,238 42,431 58,043 67,492 67,961
Average interest-bearing liabilities................ 279,366 356,489 483,636 583,609 576,474
Average total assets................................ 343,635 434,870 574,198 706,066 706,582
Average interest-earning assets as a percentage of
average total assets............................. 79.88% 84.54% 87.25% 86.74% 87.16%
Average interest-bearing liabilities as a percentage
of average total assets......................... 81.30 81.98 84.23 82.66 81.59
Average interest-earning assets as a percentage of
average interest-bearing liabilities............. 98.25 103.13 103.58 104.94 106.83
Yield............................................... 15.14 14.79 14.03 12.95 13.17
Rupee............................................ 17.57 16.74 15.67 14.20 13.89
Foreign currency................................. 9.06 9.23 8.63 7.57 9.04
Cost of funds....................................... 11.90 11.90 12.00 11.56 11.79
Rupee............................................ 14.52 13.98 13.64 12.77 12.89
Foreign currency................................. 6.11 6.42 6.07 5.66 6.28
Spread(1)........................................... 3.24 2.89 2.03 1.39 1.38
Rupee............................................ 3.05 2.76 2.03 1.43 1.00
Foreign currency................................. 2.95 2.81 2.56 1.91 2.76
Net interest margin(2).............................. 3.03 3.25 2.44 1.93 2.13
Rupee............................................ 3.34 3.46 2.23 1.75 2.07
Foreign currency................................. 2.27 2.65 3.16 2.70 2.49

-------------------
(1) Spread is the difference between yield on average interest-earning assets
and cost of average interest-bearing liabilities. Yield on average
interest-earning assets is the ratio of interest revenue to average
interest-earning assets. Cost of average interest-bearing liabilities is
the ratio of interest expense to average interest-bearing liabilities.
(2) Net interest margin is the ratio of net interest revenue to average
interest-earning assets. The difference in net interest margin and spread
arises due to the difference in amount of average interest-earning assets
and average interest-bearing liabilities. If average interest-earning
assets exceed average interest-bearing liabilities, net interest margin is
greater than the spread and if average interest-bearing liabilities exceed
average interest-earning assets, net interest margin is less than the
spread.

Net Interest Revenue

The following table sets forth, for the periods indicated, the principal
components of our net interest revenue, excluding income from dividends.

Year ended March 31,
-------------------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
-------------------------------------------------------------------------
(in millions, except percentages)

Interest revenue...................Rs. 70,293 Rs. 79,296 12.8% Rs. 81,080 US$ 1,731 2.2%
Interest expense................... (58,043) (67,492) 16.3 (67,961) 1,451 0.7
------------------------- ------------------------
Net interest revenue...............Rs. 12,250 Rs. 11,804 (3.6) Rs. 13,119 US$ 280 11.1
========================= ========================

Fiscal 2001 compared to Fiscal 2000

Net interest revenue increased 11.1% in fiscal 2001 compared to fiscal
2000 reflecting mainly the following:

105

o an increase of Rs. 26.6 billion (US$ 567 million) or 5.4% in the
average volume of interest-earning rupee assets;

o a decrease of Rs. 23.1 billion (US$ 494 million) or 20.0% in the
average volume of interest-earning foreign currency assets;

o a decrease in our rupee spread to 1.00% in fiscal 2001 from 1.43% in
fiscal 2000; and

o an increase in our foreign currency spread to 2.76% in fiscal 2001 from
1.91% in fiscal 2000.

The average volume of rupee loans increased by Rs. 60.5 billion (US$ 1.3
billion) or 14.0% to Rs. 491.8 billion (US$ 10.5 billion) in fiscal 2001 from
Rs. 431.3 billion (US$ 9.2 billion) in fiscal 2000. ICICI's average rupee loans
increased significantly in fiscal 2001 over fiscal 2000 thereby off-setting the
decline in average rupee loans due to the deconsolidation of ICICI Bank as of
April 1, 2000. This increase in average loans was principally due to increased
disbursements of corporate finance loans in fiscal 2001, through our increased
offerings of customized products and personal finance products to our clients.
ICICI's disbursements of corporate finance increased to Rs. 221.3 billion (US$
4.7 billion) in fiscal 2001 from Rs. 181.2 billion (US$ 3.9 billion) in fiscal
2000. Personal finance disbursements increased 388.9% to Rs. 34.6 billion (US$
739 million) in fiscal 2001 from Rs. 7.1 billion (US$ 151 million) in fiscal
2000. The decrease in the average volume of foreign currency loans to Rs. 79.2
billion (US$ 1.7 billion) in fiscal 2001 from Rs. 82.1 billion (US$ 1.8
billion) in fiscal 2000 was primarily due to reduced demand from our customers.

The average volume of cash, cash equivalents and trading assets declined
54.3% in fiscal 2001 to Rs. 43.2 billion (US$ 922 million) compared to fiscal
2000 primarily due to the deconsolidation of ICICI Bank as of April 1, 2000.
ICICI Bank is statutorily required to maintain a specified percentage of its
demand and time liabilities, excluding specified liabilities, by way of a cash
reserve with the Reserve Bank of India. If we exclude the average cash, cash
equivalents and trading assets of ICICI Bank in fiscal 2000, the average volume
of cash, cash equivalents and trading assets decreased by 31.3% to Rs. 43.2
billion (US$ 922 million) in fiscal 2001 from Rs. 62.9 billion (US$ 1.3
billion) in fiscal 2000. Further, we maintained a low level of trading assets
was maintained due to limited capital market opportunities in fiscal 2001.

The spread declined marginally by 1 basis point to 1.38% in fiscal 2001
from 1.39% in fiscal 2000 as our rupee spread decreased by 43 basis points and
our foreign currency spread increased by 85 basis points. Net interest margin
increased by 20 basis points to 2.13% in fiscal 2001 from 1.93% in fiscal 2000.
This was primarily due to the increase in the average interest-earning assets
as a percentage of average interest-bearing liabilities to 106.8% in fiscal
2001 from 104.9% in fiscal 2000.

The yield on interest-earning rupee assets decreased 31 basis points to
13.89% in fiscal 2001 from 14.20% in fiscal 2000 principally due to our
continued focus on lower risk corporate finance loans to highly-rated clients
resulting in lower credit spreads, an increase in impaired rupee loans, a
decline in yield on cash, cash equivalents and trading assets and a general
decline in the interest rates during fiscal 2001. The increase in impaired
loans lowers our yield because interest on these loans does not continue to
accrue. The decline in yield in fiscal 2001 was partially offset by the
deconsolidation of ICICI Bank. ICICI Bank earns lower yields on
interest-earning assets than ICICI. The average cost of our rupee liabilities
increased 12 basis points to 12.89% in fiscal 2001 from 12.77% in fiscal 2000
primarily due to the deconsolidation of ICICI Bank, whose average cost of
interest-bearing liabilities is substantially lower than that of ICICI. As a
commercial bank, ICICI Bank can raise low-cost demand deposits, unlike ICICI.
While the average cost of long-term rupee debt increased marginally, the
average cost of short-term rupee borrowings declined to 10.17% in fiscal 2001
from 12.38% in fiscal 2000. As a result of the foregoing, the rupee spread
decreased 43 basis points to 1.00% in fiscal 2001 from 1.43% in fiscal 2000.

106

Our foreign currency loans are primarily floating rate US dollar
LIBOR-linked loans. Yield on our interest-earning foreign currency assets
increased 147 basis points to 9.04% in fiscal 2001 from 7.57% in fiscal 2000
principally due to an increase in LIBOR during fiscal 2001 and a 60.6% decline
in the average balance of foreign currency cash and cash equivalents which earn
a lower yield. The average cost of our foreign currency liabilities increased
62 basis points to 6.28% in fiscal 2001 from 5.66% in fiscal 2000 primarily due
to an increase in LIBOR during fiscal 2001. As a result of the foregoing, the
foreign currency spread increased 85 basis points to 2.76% in fiscal 2001 from
1.91% in fiscal 2000.

Our net interest revenue continues to be primarily attributable to our
project financing activities. Investment banking represents a very small
proportion of total revenue. See note 25 to the consolidated financial
statements. As a result, investment banking does not have a material impact on
spreads and we do not expect this situation to change in the near term.

Fiscal 2000 compared to Fiscal 1999

Net interest revenue decreased 3.6% in fiscal 2000 compared to fiscal 1999
reflecting mainly the following:

o an increase of Rs. 112.4 billion (US$ 2.4 billion) or 29.2% in the
average volume of interest-earning rupee assets;

o a decrease of Rs. 0.9 billion (US$ 20 million) or 0.8% in the average
volume of interest-earning foreign currency assets;

o a decrease in our rupee spread to 1.43% in fiscal 2000 from 2.03% in
fiscal 1999; and

o a decrease in our foreign currency spread to 1.91% in fiscal 2000
from 2.56% in fiscal 1999.

The average volume of rupee loans increased by Rs. 86.4 billion (US$ 1.8
billion) or 25.0% to Rs. 431.3 billion (US$ 9.2 billion) in fiscal 2000 from
Rs. 344.9 billion (US$ 7.4 billion) in fiscal 1999. This was principally due to
increased disbursements of corporate finance loans and loans to the oil, gas
and petrochemicals sector in fiscal 2000. During fiscal 2000, we increased our
corporate finance loans through our increased offerings of customized products
to our clients. Disbursements of corporate finance increased as a percentage of
total disbursements to 70.2% in fiscal 2000 from 59.1% in fiscal 1999.
Disbursements of project loans to the manufacturing sector decreased as a
percentage of total disbursements to 14.5% in fiscal 2000 from 24.9% in fiscal
1999. The decrease in the average volume of foreign currency loans to Rs. 82.1
billion (US$ 1.8 billion) in fiscal 2000 from Rs. 85.9 billion (US$ 1.8
billion) in fiscal 1999 was primarily due to reduced demand from our customers.

The average volume of cash, cash equivalents and trading assets increased
40.2% in fiscal 2000 to Rs. 94.7 billion (US$ 2.0 billion) compared to fiscal
1999 primarily due to the 19.7% increase in our balance sheet size, higher cash
balances at ICICI Bank to meet reserve requirements resulting from a 59.5%
increase in deposits during fiscal 2000 and a higher level of trading assets
maintained to capitalize on the attractive market opportunities in fiscal 2000
on account of the decline in interest rates.

The spread decreased by 64 basis points to 1.39% in fiscal 2000 from 2.03%
in fiscal 1999 as our rupee spread decreased by 60 basis points and foreign
currency spread decreased by 65 basis points. Net interest margin declined less
sharply by 51 basis points to 1.93% in fiscal 2000 from 2.44% in fiscal 1999.
This was primarily due to the increase in the average interest-earning assets
as a percentage of average interest bearing liabilities to 104.9% in fiscal
2000 from 103.6% in fiscal 1999.

The yield on interest-earning rupee assets decreased 147 basis points to
14.20% in fiscal 2000 from 15.67% in fiscal 1999 principally due to our
continued focus on lower risk corporate finance loans to highly-rated clients
resulting in lower credit spreads, a decrease in the average cost of our

107

rupee liabilities, an increase in cash balances which earn lower yields and an
increase in our impaired rupee loans. The average cost of our rupee liabilities
decreased 87 basis points to 12.77% in fiscal 2000 from 13.64% in fiscal 1999,
primarily due to the lower interest rates prevalent during fiscal 2000 and the
increased proportion of lower cost deposits of ICICI Bank in total
interest-bearing rupee liabilities. The average deposits as a percentage of
average total liabilities and stockholders' equity increased to 9.6% in fiscal
2000 from 7.4% in fiscal 1999. As a result of the foregoing, the rupee spread
decreased 60 basis points to 1.43% in fiscal 2000 from 2.03% in fiscal 1999.

Our foreign currency loans are primarily floating rate US dollar
LIBOR-linked loans. Yield on our interest-earning foreign currency assets
decreased 106 basis points to 7.57% in fiscal 2000 from 8.63% in fiscal 1999
principally due to our continued focus on lending to highly rated clients
resulting in lower credit spreads, a decrease in the cost of foreign currency
borrowings and an increase in our impaired foreign currency loans. The average
cost of our foreign currency liabilities decreased 41 basis points to 5.66% in
fiscal 2000 from 6.07% in fiscal 1999 mainly due to a decrease in the cost of
certain multilateral and bilateral borrowings and the benefit of swapping
foreign currency liabilities. The foreign currency spread decreased 65 basis
points to 1.91% in fiscal 2000 from 2.56% in fiscal 1999.

Provisions for Loan losses

The following table sets forth, for the periods indicated, certain
information regarding our restructured and other impaired loans.

At March 31,
--------------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
--------------------------------------------------------------------
(in millions, except percentages)

Gross restructured loans.................................. Rs. 13,171 Rs. 18,546 40.8% Rs. 43,681 US$ 932 135.5%
Allowance for loan losses on restructured loans........... (6,422) (7,751) 20.7 (11,372) (243) 46.7
---------------------- ----------------------
Net restructured loans.................................... 6,749 10,795 59.9 32,309 690 199.3
---------------------- ----------------------
Gross other impaired loans................................ 45,316 50,574 11.6 41,744 891 (17.5)
Allowance for loan losses on other impaired loans......... (22,102) (26,334) 19.2 (21,663) (462) (17.7)
---------------------- ----------------------
Net other impaired loans.................................. 23,214 24,240 4.4 20,081 429 (17.2)
---------------------- ----------------------
Gross impaired loans...................................... 58,487 69,120 18.2 85,425 1,823 23.6
Allowance for loan losses................................. (28,524) (34,085) 19.5 (33,035) (705) (3.1)
---------------------- ----------------------
Net impaired loans........................................ 29,963 35,035 16.9 52,390 1,118 49.5
====================== ======================
Gross total loans......................................... 503,630 595,533 18.2 635,058 13,555 6.6
Net total loans........................................... 475,106 561,448 18.2 602,023 12,850 7.2

Gross restructured loans as a percentage of gross loans... 2.62% 3.11% 6.88%
Gross other impaired loans as a percentage of gross loans. 9.00 8.49 6.57
Net restructured loans as a percentage of net loans....... 1.42 1.92 5.37
Net other impaired loans as a percentage of net loans..... 4.89 4.32 3.34
Allowance for loan losses on restructured loans as a
percentage of gross restructured loans................. 48.76 41.79 26.03
Allowance for loan losses on other impaired loans as a
percentage of gross other impaired loans............... 48.77 52.07 51.89
Allowance for loan losses on impaired loan as a
percentage of gross loans.............................. 5.66 5.72 5.20

108

The following table sets forth, for the periods indicated, certain
information regarding our provisions for loan losses.

Year ended March 31,
----------------------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
----------------------------------------------------------------------------
(in millions, except percentages)

Provisions for loan losses....................... Rs. 6,067 Rs. 6,363 4.9% Rs. 9,892 US$ 211 55.5%
Provisions for loan losses as a percentage of
net loans..................................... 1.28% 1.13% 1.64%
Provisions for loan losses as a percentage of
average total assets.......................... 1.06 0.90 1.40

For information on changes in the allowance for loan losses, see
"Business--Impaired Loans--Allowance for Loan losses".

Changes in our provisions reflect trends in the key sector in which we
operate. The manufacturing sector has been adversely impacted by several
factors, including increased competition arising from economic liberalization
in India, a slowdown in industrial growth over the last few years, a sharp
decline in commodity prices which reduced profitability for certain of our
borrowers and the restructuring of certain Indian companies in sectors such as
textiles, iron and steel and man-made fibers. Certain Indian corporations are
gradually coming to terms with this new competitive reality through a process
of restructuring and repositioning. This restructuring process is taking place
in several industries such as iron and steel, man-made fibers and textiles.
This resulted in an increased level of our loans being restructured during
fiscal 2001 and as a result, our impaired loans increased at a higher rate in
fiscal 2001 compared to fiscal 2000. Against this backdrop, we continued to
follow an aggressive policy towards tackling impaired loans, including focused
recovery efforts and a proactive approach to problem cases.

Gross restructured loans increased 135.5% during fiscal 2001 to Rs. 43.7
billion (US$ 932 million) at year-end fiscal 2001, primarily due to an increase
in restructuring of loans to companies in the textiles and iron and steel
industries. Loans previously classified as other impaired loans amounting to
Rs. 6.6 billion (US$ 140 million) were restructured during fiscal 2001 and were
re-classified as restructured loans at year-end fiscal 2001. As a result, gross
other impaired loans decreased 17.5% to Rs. 41.7 billion (US$ 891 million) in
fiscal 2001 over the previous year levels. As a percentage of net loans, net
restructured loans were 5.4% at year-end fiscal 2001 compared to 1.9% at
year-end fiscal 2000 and net other impaired loans were 3.3% at year-end fiscal
2001 compared to 4.3% in year-end fiscal 2000. The provisions for loan losses
on restructured and other impaired loans increased 55.5 % to Rs. 9.9 billion
(US$ 211 million) during fiscal 2001 from Rs. 6.4 billion (US$ 136 million) in
fiscal 2000 primarily due to an increase in gross restructured loans during
fiscal 2001.

Until year-end fiscal 2000, ICICI followed a policy whereby loan balances
were not charged-off against the allowance for loan losses. This policy was in
response to the regulatory environment governing debt recovery proceedings in
India. During fiscal 2001, changes in the tax laws necessitated that loan
balances deemed unrecoverable be charged-off against the allowance for loan
losses. Accordingly, ICICI charged-off significant loan balances deemed
unrecoverable in fiscal 2001.

Management believes that several loans which became restructured loans in
fiscal 1999, 2000 and 2001 are essentially inherently viable projects and
consequently expects loan losses in these loans to be lower. As a result, the
coverage ratio on gross restructured loans decreased to 26.0% at year-end
fiscal 2001 from 48.8% at year-end fiscal 1999. However, the coverage ratio on
other impaired loans increased to 51.9% at year-end fiscal 2001 from 48.8% at
year-end fiscal 1999. The provisions for loan losses as a percentage of average
total assets increased to 1.4% in fiscal 2001 from 0.9% in fiscal 2000.

Commercial loans are identified as impaired and placed on a non-accrual
basis when it is probable that we will be unable to collect scheduled payments
of principal and interest due under the

109

contractual terms of the loan agreement. A commercial loan is also considered
to be impaired and placed on a non-accrual basis, if interest is greater than
180 days overdue or principal is greater than 360 days overdue. This time
period of 360 days overdue for principal repayments will be reduced to 180 days
effective fiscal 2002. Consumer loans are generally identified as impaired not
later than a pre-determined number of days overdue on a contractual basis.
Loans are classified as restructured loans where we have made concessionary
modifications, that we would not otherwise consider, to the contractual terms
of the loan to a borrower experiencing financial difficulties. Restructured
loans which are considered troubled debts, are placed on non-accrual status
when doubt as to timely collection of principal or interest as per the
rescheduled terms exists.

When a loan is placed on a non-accrual basis, any interest accrued (and
not received) on impaired loans is reversed from income. Interest is thereafter
included in earnings only to the extent actually received in cash. When
borrowers demonstrate over an extended period, the ability to repay a loan in
accordance with the contractual terms of the loan, the loan placed on a
non-accrual basis, is returned to accrual basis. With respect to restructured
loans, performance prior to the restructuring or significant events that
coincide with the restructuring are evaluated in assessing whether the borrower
can meet the rescheduled terms and may result in the loan being returned to
accrual status at the time of restructuring or after a performance period.

Allowance for loan losses on impaired loans is calculated by comparing the
net present value of the expected cash flows discounted at the effective
interest rate of the loan and the carrying value of the loan. See
"Business--Impaired Loans--Allowance for Loan Losses" for a description of our
analysis of our loan portfolio.

We conduct an analysis of our loan portfolio on a periodic basis. The
analysis considers both qualitative and quantitative criteria including the
account conduct, future prospects, repayment history, financial performance
amongst others. For impaired loans in excess of Rs. 100 million, which were
74.0% of the gross impaired loan portfolio at year-end fiscal 2001, we follow a
detailed process for each loan to determine the allowance for loan losses to be
provided. For the balance of smaller loans in the impaired loan portfolio, we
follow the classification detailed under "Business--Impaired Loans--Allowance
for Loan Losses" for determining the allowance for loan losses. Our loan
portfolio is composed largely of project finance loans where we have a security
interest and first lien on all the fixed assets and a second lien on all the
current assets of the borrower. We typically lend between 60.0% and 80.0% of
the appraised value of collateral. Hence, all our loans have historically been
sufficiently over-collateralized so that once collateral is realized, we
typically recover the full principal along with a small portion of interest
claims. However, the recoveries are subject to delays, that can be several
years, due to the long legal collection process in India. As a result, we make
an allowance for the loans based on the time value of money or the present
value of expected realizations of collateral, which takes into account the
delay we will experience before recovering our principal. The time to recovery,
expected future cash flows and realizable value for collateral value are
periodically reviewed in estimating the allowance.

We believe that the process for ascertaining allowance described above
adequately captures the expected losses on our entire loan portfolio and that
our current allowance for loan losses is sufficient to cover all currently
known loan losses in our existing portfolio. There can, however, be no
guarantee that impaired loans will not increase and that the current allowance
for loan losses will be sufficient.

We do not expect changes in our business to change the nature of our
allowance in the near term. In the medium-term, as retail lending becomes a
significant proportion of our business, we will probably change the way we
calculate our allowance to incorporate the statistical methods for loan
impairment that are used by banks in developed countries in their retail
portfolios, including credit scoring and other methods designed to evaluate
consumer credit risk.

110

Non-Interest Revenue

The following table sets forth, for the periods indicated, the principal
components of our non-interest revenue.

Year ended March 31,
----------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
----------------------------------------------------------------
(in millions, except percentages)

Fees, commission and brokerage............... Rs. 3,642 Rs. 4,258 16.9% Rs. 5,317 US$ 113 24.9%
Trading account revenue(1)................... 481 2,157 348.4 847 18 (60.7)
Securities transactions(2)................... 273 2,363 765.6 (1,709) (36) (172.3)
Foreign exchange transactions(3)............. 829 428 (48.4) (657) (14) (253.5)
Gain on the sale of
equity interest in ICICI Bank............. -- -- -- 1,996 43 --
Gain on sale of stock in other
Subsidiaries and affiliates............... -- -- -- 511 11 --
Software development and services............ -- 5 -- 701 15 --
Profit on the sale of certain premises....... -- 212 -- (31) (1) (114.6)
Effect of business combinations.............. 253 253 -- 253 5 0.0
Other revenue................................ 82 139 69.5 806 17 479.9
--------------------- -------------------
Total non-interest revenue................. Rs. 5,560 Rs. 9,815 76.5 Rs. 8,034 US$ 171 (18.1)
===================== ===================

-----------------
(1) Primarily reflects income from trading in government of India securities
and corporate debt securities.
(2) Primarily reflects capital gains realized on the sale of ICICI's long-term
equity securities and revenues from our investment banking subsidiary less
other than temporary diminution.
(3) Arises primarily from purchases and sales of foreign exchange on behalf
of our corporate clients, from hedging our foreign currency borrowings
used for lending in rupees and revaluation of our foreign currency assets
and liabilities and outstanding forward contracts.

Fiscal 2001 compared to Fiscal 2000

Non-interest revenue declined 18.1% in fiscal 2001 to Rs. 8.0 billion (US$
171 million), from Rs. 9.8 billion (US$ 209 million) in fiscal 2000 primarily
due to the deconsolidation of ICICI Bank. If we exclude the non-interest
revenue of ICICI Bank for fiscal 2000, non-interest revenue declined marginally
to Rs. 8.0 billion (US$ 171 million) in fiscal 2001 from Rs. 8.1 billion (US$
173 million) in fiscal 2000. This decline was primarily due to a decline in
trading account revenue, income from securities transactions and foreign
exchange transactions offset, in part, by an increase in income from fees,
commissions and brokerage and gain on sale of stock in subsidiaries and
affiliates.

The increase in fees, commission and brokerage income in fiscal 2001 was
primarily due to the increase in fees from loan processing, appraisal and
structuring activities. We continued to target new client segments and
businesses for generating additional fee income to offset the lower spreads on
high quality assets.

Trading account revenue primarily consists of income from trading in
government of India securities and corporate debt securities. Trading account
revenue declined 60.7% during fiscal 2001 primarily due to limited market
opportunities during fiscal 2001 and due to the deconsolidation of ICICI Bank.
If we exclude the trading account revenue of ICICI Bank for fiscal 2000,
trading account revenue declined 34.8% to Rs. 847 million (US$ 18 million) in
fiscal 2001 from Rs. 1.3 billion (US$ 28 million) in fiscal 2000.

Income from securities transactions primarily reflects capital gains
realized on the sale of ICICI's long-term equity securities and revenues from
our investment banking subsidiary less other than temporary diminution. The
income from securities transaction declined during fiscal 2001 primarily due to
limited market opportunities during fiscal 2001 and due to an increase in the
amount of other than temporary diminution in securities in fiscal 2001.

111

Income from foreign exchange transactions arises primarily from purchases
and sales of foreign exchange on behalf of our corporate clients, from hedging
our foreign currency borrowings used for lending in rupees and revaluation of
our foreign currency assets and liabilities and outstanding forward contracts.
The expense on foreign exchange transactions in fiscal 2001 primarily reflects
the premium paid on forward contracts booked on our foreign currency borrowings
used for lending in rupees and revaluation of our foreign currency assets and
liabilities and outstanding forward contracts.

During fiscal 2001, we reduced our interest in ICICI Bank to 46.4% through
sales of equity shares in the Indian secondary markets to institutional
investors. The sale of shares was made for a consideration of Rs. 3.5 billion
(US$ 75 million) and the gain on sale was Rs. 2.0 billion (US$ 43 million)
which is included in the statement of income.

With a view to strengthen the existing relationship with Emirates Bank of
the United Arab Emirates, we divested approximately 8.0% of our stake in ICICI
Infotech to the Emirates Bank in fiscal 2001. ICICI Infotech has a joint
venture with Emirates Bank, which is involved in marketing software products
and services in West Asia. The sale was made at a consideration of Rs. 576
million (US$ 12 million) and the gain on sale of Rs. 511 million (US$ 11
million) is included as a non-interest revenue item in fiscal 2001.

Income from software development and services increased to Rs. 701 million
(US$ 15 million) in fiscal 2001 from Rs. 5 million (US$ 106,720) primarily due
to income from our principal information technology subsidiaries, ICICI
Infotech and ICICI Infotech Inc., US. ICICI Infotech commenced its operations
in the US through its wholly owned subsidiary, ICICI Infotech Inc. in April
2000.

Non-interest income also includes a loss of Rs. 31 million (US$ 1 million)
on the sale of certain premises and equipment in fiscal 2001. Other income
primarily includes rental income and also includes revenue from our life
insurance subsidiary.

Fiscal 2000 compared to Fiscal 1999

Non-interest revenue increased 76.5% in fiscal 2000 to Rs. 9.8 billion
(US$ 209 million), primarily due to an increase in trading account revenue and
income from securities transactions.

The increase in fees, commission and brokerage income in fiscal 2000 was
primarily due to the increase in fees from loan syndication and fee income of
our commercial banking subsidiary and our investment banking subsidiary.
Increased marketing efforts through our Growth Clients Group and Major Clients
Group also helped us in increasing this income.

Trading account revenue in fiscal 2000 was significantly higher compared
to fiscal 1999 primarily due to the increased revenues resulting from
short-term market opportunities created by the decrease in interest rates
during fiscal 2000 together with a higher average volume of trading account
assets (primarily government of India securities and corporate debt
securities). These type of short-term market opportunities may not be available
every year.

Income from securities transactions increased significantly to Rs. 2.4
billion (US$ 50 million) in fiscal 2000 from Rs. 273 million (US$ 6 million) in
fiscal 1999. This was largely due to the buoyant capital market conditions in
fiscal 2000 compared to the depressed capital market in fiscal 1999. ICICI was
able to book significant capital gains on its private equity portfolio because
the market price of capital stock, including those of certain companies whose
project implementation was completed, increased substantially during fiscal
2000. ICICI also capitalized on the market opportunities to book capital gains
by investing in select initial public offerings of companies and mutual fund
units.

112

Income from foreign exchange transactions decreased in fiscal 2000
primarily as a result of an absence of gains of Rs. 488 million (US$ 10
million) that were realized in fiscal 1999 by swapping rupee funds into US
dollars. A change in the Reserve Bank of India's regulation prohibited these
swaps in fiscal 2000. Non-interest income in fiscal 2000 also includes Rs. 212
million (US$ 5 million) on the sale of certain premises and equipment.

Non-Interest Expense

The following table sets forth, for the periods indicated, the principal
components of our non-interest expense.

Year ended March 31,
--------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
--------------------------------------------------------------
(in millions, except percentages)

Employee expense:
Salaries................................. Rs. 796 Rs. 1,386 74.1% Rs. 1,606 US$ 34 15.9%
Employee benefits........................ 147 232 57.8 334 7 44.0
--------- --------- --------- -------
Total employee expense...................... 943 1,618 71.6 1,940 41 19.9
Premises and equipment expense.............. 777 1,055 35.8 1,514 32 43.5
Amortization of intangible assets........... 187 187 0.0 259 6 38.5
Administration and other expense............ 1,888 2,442 29.3 2,095 45 (14.2)
--------- --------- --------- -------
Total non-interest expense.................. Rs. 3,795 Rs. 5,302 39.7 Rs. 5,808 US$ 124 9.5
========= ========= ========= =======

Fiscal 2001 compared to Fiscal 2000

Non-interest expense increased 9.5% in fiscal 2001 to Rs. 5.8 billion (US$
124 million) from Rs. 5.3 billion (US$ 113 million) in fiscal 2000 primarily
due to an increase in employee expense and premises and equipment expense. If
we exclude the non-interest expense of ICICI Bank for fiscal 2000, non-interest
expense increased 46.2% to Rs. 5.8 billion (US$ 124 million) in fiscal 2001
from Rs. 4.0 billion (US$ 85 million) in fiscal 2000.

Employee expenses increased 19.9% to Rs. 1.9 billion (US$ 41 million) in
fiscal 2001 from Rs. 1.6 billion (US$ 35 million) in fiscal 2000. For
comparison purposes, if we exclude the employee expense of ICICI Bank for
fiscal 2000, employee expense increased 49.0% in fiscal 2001 compared to fiscal
2000. This increase of 49.0% was principally due to a 75.3% increase in the
number of our employees offset, in part, by the absence of the cost of employee
termination under the voluntary retirement scheme completed in fiscal 2000. The
number of employees increased to 3,784 employees at year-end fiscal 2001 from
2,159 employees, excluding ICICI Bank, at year-end fiscal 2000 primarily due to
an increase in the number of employees in our subsidiaries, ICICI Infotech,
ICICI Personal Financial Services and ICICI Home Finance, which have been
rapidly growing their business and distribution infrastructure.

Premises and equipment expense increased 43.5% in fiscal 2001 compared to
fiscal 2000, primarily due to increased technology expenses and maintenance and
depreciation expenses for ICICI centers and computer and computer software
offset, in part, by the deconsolidation of ICICI Bank in fiscal 2001. If we
exclude the premises and equipment expense of ICICI Bank for fiscal 2000,
premises and equipment expense increased 111.7% to Rs. 1.5 billion (US$ 32
million) in fiscal 2001 from Rs. 715 million (US$ 15 million) in fiscal 2000.
Administrative and other expenses decreased 14.2% in fiscal 2001 compared to
fiscal 2000 primarily due to the deconsolidation of ICICI Bank in fiscal 2001
offset, in part, by an increase in the administration expense of our
information technology subsidiaries in the US and ICICI Prudential Life
Insurance which commenced their operations or were acquired in fiscal 2001. If
we exclude the administrative and other expenses of ICICI Bank for fiscal 2000,
administrative and other expenses increased 18.4% to Rs. 2.1 billion (US$ 45
million) in fiscal 2001 from Rs. 1.8 billion (US$ 38 million) in fiscal 2000.

113

Amortization of intangible assets increased 38.5% in fiscal 2001 compared
to fiscal 2000, primarily due to the acquisition of the software development
and services companies by ICICI Infotech in fiscal 2001. The business
combinations were accounted for under the purchase method which resulted in
goodwill of Rs. 1.4 billion (US$ 30 million). The goodwill is being amortized
over a period of five years. This resulted in an expense of Rs. 52 million (US$
1 million) for fiscal 2001. In addition, the workforce and customer
relationships of Objects Xperts Inc. valued at Rs. 135 million (US$ 3 million)
are being amortized over a period of five years. This resulted in an expense of
Rs. 20 million (US$ 426,890) for fiscal 2001.

Fiscal 2000 compared to Fiscal 1999

Non-interest expense increased 39.7% in fiscal 2000 to Rs. 5.3 billion
(US$ 113 million) from Rs. 3.8 billion (US$ 81 million) in fiscal 1999.
Employee expenses increased 71.6% in fiscal 2000 principally due to a 40.3%
increase in number of employees and the cost of employee termination under the
voluntary retirement scheme in fiscal 2000. The number of employees increased
40.4% from 2,495 employees at year-end fiscal 1999 to 3,503 employees at
year-end fiscal 2000 primarily due to our retail and technology initiatives
which made it vital for some of our subsidiaries to employ people with
requisite skills. ICICI successfully completed a voluntary retirement scheme in
fiscal 2000 which was availed by 223 employees. The cost of employee
termination under this scheme was Rs. 232 million (US$ 5 million).

Premises and equipment expense increased 35.8% in fiscal 2000 compared to
fiscal 1999, primarily due to increased depreciation expenses for ICICI centers
and computer and computer software, higher expenses of ICICI Bank as a result
of the expansion of its branch network and increased expenses associated with
the acquisition of equipment for technology systems for ICICI Bank and ICICI
Infotech.

Administrative and other expenses increased 29.3% in fiscal 2000 compared
to fiscal 1999 primarily due to additional expenses resulting from payments to
consultants for strategic advisory services, an increase in registrar and
transfer agency fees, an increase in communication and computer expenses and
additional advertising expenses associated with building the ICICI brand name
and marketing our retail bonds.

Income Tax Expense

Income tax expense decreased significantly in fiscal 2001 to Rs. 119
million (US$ 2 million) compared to Rs. 2.0 billion (US$ 43 million) in fiscal
2000 which in turn increased 70.3% from Rs. 1.2 billion (US$ 25 million) in
fiscal 1999. The effective tax rate was 1.76% in fiscal 2001 compared to 18.29%
in fiscal 2000 and 14.18% in fiscal 1999. The significant reduction in the
effective tax rate in fiscal 2001 was primarily due to an increase in
recognition of deferred tax assets on other than temporary diminution in
securities available for sale of earlier years. Our consolidated financial
statements for fiscal 2001 as of September 17, 2001 take into account the
effect of this change.

The statutory rate of tax increased to 39.55% in fiscal 2001 from 38.50%
in fiscal 2000 due to an additional 3.0% surcharge imposed on income tax in
fiscal 2001. Our effective tax rate was lower than the statutory tax rate due
to the special benefits granted to ICICI as a long-term lending institution
under the Indian Income-tax Act, 1961, the tax-free status of the income from
infrastructure financing and dividends, capital gains and losses on sale of
investments charged to tax at a rate lower than the statutory tax rate and
other than temporary diminution on securities available for sale. As a
long-term lending institution, ICICI is allowed a deduction of up to 40.0% of
its taxable income derived from the business of long-term financing. This
benefit is available on ICICI's income derived from loans of a maturity greater
than five years. We cannot be sure that these tax benefits will not be changed
in the future.

114

A retrospective change was effected in the local tax laws in India's
Budget for fiscal 2002, whereby provision for loan losses is not allowed as a
deduction from taxable income unless the corresponding loan is written off in
the accounts. As a result, a higher current tax liability was recognized
against provision for loan losses claimed in earlier years which was offset by
recognition of a deferred tax asset in respect of the same.

Financial Condition

Assets

The following table sets forth, for the periods indicated, the principal
components of our assets.

At March 31,
-----------------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
-----------------------------------------------------------------------
(in millions, except percentages)

Cash and cash equivalents............Rs. 62,123 Rs. 71,131 14.5% Rs. 30,987 US$ 661 (56.4)%
Trading account assets(1)............ 35,926 57,396 59.8 18,878 403 (67.1)
Securities excluding venture
capital investments(2)............ 14,892 18,335 23.1 15,546 332 (15.2)
Venture capital investments.......... 149 536 -- 4,569 98 --
Investments in affiliates............ 244 264 8.2 7,899 169 --
Loans, net:
Rupee............................. 413,308 502,196 21.5 549,195 11,722 9.4
Foreign currency.................. 90,322 93,337 3.3 85,863 1,833 (8.0)
Less: Allowances.................. (28,524) (34,085) 19.5 (33,035) (705) (3.1)
---------------------- ----------------------
Total loans, net..................... 475,106 561,448 18.2 602,023 12,850 7.2
Acceptances.......................... 8,773 12,333 40.6 2,715 58 (78.0)
Property and equipment............... 7,951 11,775 48.1 12,039 257 2.2
Other assets......................... 41,781 41,061 (1.7) 45,789 977 11.5
---------------------- -----------------------
Total assets.........................Rs.646,945 Rs.774,279 19.7 Rs.740,445 US$15,805 (4.4)
====================== ======================

-----------------
(1) Primarily includes government of India securities and corporate debt securities.
(2) Primarily includes equity securities.

Fiscal 2001 compared to Fiscal 2000

Our total assets decreased 4.4% to Rs. 740.4 billion (US$ 15.8 billion) at
year-end fiscal 2001 from Rs. 774.3 billion (US$ 16.5 billion) at year-end
fiscal 2000. This was primarily due to the deconsolidation of ICICI Bank as of
April 1, 2000. If we exclude ICICI Bank at year-end fiscal 2000, total assets
increased 15.2% to Rs. 740.4 billion (US$ 15.8 billion) at year-end fiscal 2001
compared to Rs. 642.9 billion (US$ 13.7 billion) at year-end fiscal 2000
primarily due to an increase in net loans at year-end fiscal 2001.

Net loans increased 7.2% in fiscal 2001 reflecting a 9.4% increase in
gross rupee loans and a 8.0% decrease in gross foreign currency loans. ICICI's
rupee loans increased significantly in fiscal 2001 over fiscal 2000 offsetting
the decline in rupee loans due to the deconsolidation of ICICI Bank as of April
1, 2000. The increase in rupee loans was principally due to increased
disbursements of corporate finance loans, loans to the infrastructure sector
and personal finance in fiscal 2001. ICICI's disbursements to the manufacturing
sector decreased as a percentage of our total disbursements to 10.8% in fiscal
2001 from 14.5% in fiscal 2000.

The decline in cash, cash equivalents and trading account assets from Rs.
128.5 billion (US$ 2.7 billion) in fiscal 2000 to Rs. 49.9 billion (US$ 1.1
billion) in fiscal 2001 was principally due to the deconsolidation of ICICI
Bank, which is subject to regulatory reserve requirements. ICICI Bank had cash,
cash equivalents and trading account assets of Rs. 64.6 billion (US$ 1.4
billion) at year-end fiscal 2000. Lower trading account assets were also
attributable to limited market opportunities

115

caused by depressed market conditions in fiscal 2001 compared to fiscal 2000.
Venture capital investments increased to Rs. 4.6 billion (US$ 98 million) at
year-end fiscal 2001 from Rs. 536 million (US$ 11 million) at year-end fiscal
2000 primarily due to investment in new venture funds established during fiscal
2001. Investment in affiliates increased to Rs. 7.9 billion (US$ 169 million)
at year-end fiscal 2001 from Rs. 264 million (US$ 6 million) primarily due to
the inclusion of our investment in ICICI Bank of Rs. 7.6 billion (US$ 161
million) under the equity method of accounting as of April 1, 2000. Acceptances
declined to Rs. 2.7 billion (US$ 58 million) at year-end fiscal 2001 from Rs.
12.3 billion (US$ 263 million) at year-end fiscal 2000 primarily due to the
deconsolidation of ICICI Bank in fiscal 2001. ICICI Bank had acceptances of Rs.
8.5 billion (US$ 181 million) at year-end fiscal 2000.

Fiscal 2000 compared to Fiscal 1999

Our assets increased 19.7% to Rs. 774.3 billion (US$ 16.5 billion) at
year-end fiscal 2000 from Rs. 646.9 billion (US$ 13.8 billion) at year-end
fiscal 1999. Net loans increased 18.2% in fiscal 2000 reflecting a 21.5%
increase in rupee loans and a 3.3% increase in foreign currency loans. The
increase in rupee loans was principally due to increased disbursements of
corporate finance loans, loans to the oil, gas and petrochemicals sector and
working capital finance in fiscal 2000. Disbursements to the manufacturing
sector remained high but decreased as a percentage of our total disbursements
to 14.5% in fiscal 2000 from 24.9% in fiscal 1999. The growth in cash, cash
equivalents and trading account assets was principally due to a 19.7% increase
in our balance sheet size, higher cash balances of ICICI Bank to meet increased
reserve requirements as a result of a 59.5% increase in deposits during fiscal
2000 and a higher level of trading account assets maintained to capitalize on
the attractive market opportunities resulting from a decrease in interest rates
in fiscal 2000.

Liabilities and Stockholders' Equity

The following table sets forth, for the periods indicated, the principal
components of our liabilities and stockholders' equity.

Deposits.................................Rs. 60,605 Rs. 96,682 59.5% Rs. 6,072 US$ 130 (93.7)%
Trading account liabilities.............. 14,791 19,263 30.2 12,483 266 (35.2)
Acceptances.............................. 8,773 12,333 40.6 2,715 58 (78.0)
Long-term debt:
Rupee................................. 335,309 342,816 2.2 404,017 8,624 17.9
Foreign currency...................... 100,212 93,504 (6.7) 101,008 2,156 8.0
----------------------- -----------------------
Total long-term debt..................... 435,521 436,320 0.2 505,025 10,780 15.7
Short-term borrowings.................... 35,794 68,495 91.4 87,512 1,868 27.8
Other liabilities........................ 33,292 43,023 29.2 39,024 833 (9.3)
Taxes and dividends payable.............. 9,988 12,750 27.7 10,498 224 (17.7)
Redeemable preferred stock(1)............ 10,897 10,207 (6.3) 698 15 (93.2)
----------------------- -----------------------
Total liabilities........................ 609,661 699,073 14.7 664,027 14,173 (5.0)
Minority interest........................ 773 4,298 -- 496 11 (88.5)
Stockholders' equity..................... 36,511 70,908 94.2 75,922 1,621 7.1
----------------------- -----------------------
Total liabilities and stockholders'
equity................................Rs. 646,945 Rs. 774,279 19.7 Rs.740,445 US$ 15,805 (4.4)
======================== =======================

------------------
(1) In line with the existing regulatory requirements in India, preferred
stock issued by us needs to be compulsorily redeemed within a specified
time period. Accordingly, all series of preferred stock issued by us are
redeemable in accordance with the terms of the issue.

116

Fiscal 2001 compared to Fiscal 2000

Our long-term debt increased 15.7% to Rs. 505.0 billion (US$ 10.8 billion)
at year-end fiscal 2001 from Rs. 436.3 billion (US$ 9.3 billion) at year-end
fiscal 2000, reflecting a 17.9% increase in long-term rupee debt and an
increase of 8.0% in long-term foreign currency debt. Deposits declined to Rs.
6.1 billion (US$ 130 million) at year-end fiscal 2001 from Rs. 96.7 billion
(US$ 2.1 billion) at year-end fiscal 2000 primarily due to the deconsolidation
of ICICI Bank as of April 1, 2000. Substantially all of deposits at year-end
fiscal 2000 represented deposits of ICICI Bank. As a commercial bank, ICICI
Bank can raise low-cost demand deposits, unlike ICICI. Trading account
liabilities declined 35.2% in fiscal 2001 due to limited market opportunities
caused by depressed capital markets during fiscal 2001 and a decline in trading
account assets. Our short-term borrowings increased 27.8% as we increased our
short-term borrowings in line with our view of declining interest rates.
Redeemable preferred stock decreased 93.2% during fiscal 2001 to Rs. 698
million (US$ 15 million) as we redeemed a substantial portion of preferred
stock during fiscal 2001 consequent to the increase in the dividend
distribution tax rate. Minority interest decreased 88.5% primarily due to the
deconsolidation of ICICI Bank as of April 1, 2000. Stockholders' equity
increased 7.1% at year-end fiscal 2001 to Rs. 75.9 billion (US$ 1.6 billion).

Fiscal 2000 compared to Fiscal 1999

Our long-term debt increased marginally by 0.2% to Rs. 436.3 billion (US$
9.3 billion) at year-end fiscal 2000 from Rs. 435.5 billion (US$ 9.3 billion)
at year-end fiscal 1999, reflecting a 2.2% increase in long-term rupee debt and
a decrease of 6.7% in long-term foreign currency debt. Deposits increased 59.5%
to Rs. 96.7 billion (US$ 2.1 billion) at year-end fiscal 2000 reflecting ICICI
Bank's success in raising funds through its expanded branch network. Deposits
as a percentage of our total liabilities increased to 13.8% at year-end fiscal
2000 from 9.9% at year-end fiscal 1999. Other liabilities increased 29.2%
during fiscal 2000 primarily due to a higher amount of interest accrued but not
due. Redeemable preferred stock decreased 6.3% during fiscal 2000 to Rs. 10.2
billion (US$ 218 million) as we redeemed some preferred stock during fiscal
2000. Stockholders' equity increased 94.2% during fiscal 2000 to Rs. 70.9
billion (US$ 1.5 billion) as we raised fresh equity capital from existing
Indian institutional shareholders, other Indian shareholders and overseas
investors through our ADS offering.

Contingent Liabilities

As a part of our financing activities, we issue guarantees to enhance the
credit standing of our customers. The guarantees are generally for a period not
exceeding 10 years. The credit risk associated with these products, as well as
the operating risks, are similar to those in other loan products. We have the
same appraisal process, pricing methodology and collateral requirement for
guarantees as that for any other loan product. Guarantees increased marginally
by 2.0% at year-end fiscal 2001 compared to year-end fiscal 2000, which in turn
increased 19.7% compared to year-end fiscal 1999.

The following table sets forth, for the periods indicated, our guarantees
outstanding.

Financial guarantees(1)................. Rs. 39,455 Rs. 46,253 17.2% Rs. 53,167 US$ 1,135 14.9%
Performance guarantees(2)............... 9,059 11,811 30.4 6,083 130 (48.5)
---------------------- ---------------------
Total guarantees........................ Rs. 48,514 Rs. 58,064 19.7 Rs. 59,250 US$ 1,265 2.0
======================== =====================

-----------------
(1) Consists of instruments guaranteeing the timely contractual payment of
loan obligations, primarily to foreign lenders on behalf of project
companies.
(2) Consists of instruments guaranteeing the performance by a company of an
obligation, such as exports.

117

Foreign Exchange and Derivative Contracts

We enter into foreign exchange forwards, options, swaps and other
derivative products, which enable customers to transfer, modify or reduce their
foreign exchange and interest rate risks. In addition, we use foreign exchange
contracts and other instruments as a part of our own balance sheet and risk
management. These instruments are used to manage foreign exchange and interest
rate risk relating to specific groups of on-balance sheet assets and
liabilities.

The following table sets forth, for the periods indicated, the notional
amount of our derivative contracts.

---------------------------------------------------------------------------------------
At March 31,
---------------------------------------------------------------------------------------
Notional principal amounts Balance sheet credit exposure(1)
---------------------------------------------------------------------------------------
1999 2000 2001 1999 2000 2001
---------------------------------------------------------------------------------------
(in millions)

Interest rate products:
Swap agreements.....................Rs. 28,731 Rs. 40,201 Rs. 50,430 US$ 1,076 Rs. -- Rs. -- Rs. (5) US$ --
Others.............................. -- -- -- -- -- -- -- --
---------------------------------------------------------------------------------------
Total interest rate products...........Rs. 28,731 Rs. 40,201 Rs. 50,430 US$ 1,076 Rs. -- Rs. -- Rs. (5) US$ --
=======================================================================================
Foreign exchange products:
Forward contracts...................Rs. 40,407 Rs.104,514 Rs. 630 US$ 13 Rs.425 Rs.309 Rs. 22 US$ --
Swap agreements..................... 17,494 30,552 23,429 500 -- -- -- --
---------------------------------------------------------------------------------------
Total foreign exchange products........Rs. 57,901 Rs.135,066 Rs. 24,059 US$ 514 Rs.425 Rs.309 Rs. 22 US$ --
=======================================================================================

-----------------
(1) Denotes the mark-to-market impact of the derivative and foreign exchange
products on the reporting date.

The decline in notional principal on forward contracts on foreign exchange
products in fiscal 2001 was primarily due to the deconsolidation of ICICI Bank
as of April 1, 2000. ICICI Bank had notional principal on forward contracts on
foreign exchange products of Rs. 62.9 billion (US$ 1.3 billion) at fiscal 2000.

Capital

ICICI is subject to the capital adequacy requirements of the Reserve Bank
of India, which are primarily based on the capital adequacy accord reached by
the Basle Committee of Banking Supervision, Bank of International Settlements
in 1988. For a detailed description of the Reserve Bank of India's capital
adequacy guidelines, see "Supervision and Regulation--Capital Adequacy
Requirements". ICICI is required to maintain a minimum ratio of total capital
to risk adjusted assets of 9.0%, at least half of which must be Tier 1 capital.
ICICI has capital at levels well above the minimum requirement.

The following table sets forth, for the periods indicated, ICICI's
risk-based capital, risk-weighted assets and risk-based capital adequacy ratios
computed in accordance with the applicable Reserve Bank of India guidelines and
based on ICICI's unconsolidated financial statements prepared in accordance
with Indian GAAP.

118

At March 31,
------------------------------------------------------------------------
2000/1999 2001/2000
1999 2000 % change 2001 % change
------------------------------------------------------------------------
(in millions, except percentages)

Tier 1 capital............................Rs. 47,000 Rs. 74,700 58.9% Rs. 72,212 US$ 1,541 (3.3)%
Tier 2 capital............................ 24,020 37,350 55.5 37,526 801 0.5
-------------------------- ------------------------
Total capital.............................Rs. 71,020 Rs. 112,050 57.8 Rs. 109,738 US$ 2,342 (2.1)
========================= ========================
On- balance sheet risk weighted assets....Rs. 515,970 Rs. 587,810 13.9 682,353 14,565 16.1
Off-balance sheet risk weighted assets.... 53,910 60,820 12.8 66,007 1,409 8.5
-------------------------- ------------------------
Total risk weighted assets................Rs. 569,880 Rs. 648,630 13.8 Rs. 748,360 US$ 15,974 15.4
========================= ========================
Tier 1 capital adequacy ratio(1).......... 8.25% 11.52% 9.65%
Tier 2 capital adequacy ratio(1).......... 4.21 5.75 5.01%
------------------------- ------------
Total capital adequacy ratio(1)........... 12.46% 17.27% 14.66%
========================= ============

-----------
(1) Our total capital adequacy ratio computed under the applicable Reserve
Bank of India guidelines and based on our consolidated financial
statements prepared in accordance with US GAAP was 14.03% at year-end
fiscal 2001. Using the same basis of computation, our Tier 1 capital
adequacy ratio was 9.35% and our Tier 2 capital adequacy ratio was 4.68%
at year-end fiscal 2001.

At March 31, 2001, ICICI's Tier 1 capital, computed based on the Indian
GAAP unconsolidated financial statements, included Rs. 2.4 billion (US$ 50
million) out of the face value of Rs. 3.5 billion (US$ 75 million) of 20-year
non-cumulative preferred stock issued to ITC Classic Finance group companies as
a part of the scheme of acquisition of ITC Classic Finance by ICICI. This
preferred stock carries a negligible non-cumulative dividend of 0.001% per
annum. The Reserve Bank of India has allowed the inclusion of such preferred
stock in Tier 1 capital from April 1999, subject to the creation of a corpus to
be invested in government of India securities of equivalent maturity. At
year-end fiscal 2001, this corpus amount was Rs 1.1 billion (US$ 24 million).

Capital Expenditure

The following tables set forth, for the period indicated, certain
information related to our capital expenditure by category of fixed assets.

Fiscal 1999
-----------------------------------------------------------------------------
Cost at
March 31, Additions/ Deletions/ Depreciation Net assets at March
1998 transfers transfers 31, 1999
-----------------------------------------------------------------------------
(in millions)

Land................................Rs. 372 Rs. 877 Rs. 3 Rs. -- Rs. 1,246 US$ 27
Buildings........................... 3,761 2,313 242 572 5,260 112
Equipment and furniture............. 1,187 607 254 804 736 16
Construction in progress............ 1,541 1,597 2,606 -- 532 11
Others.............................. 169 60 23 30 176 4
-----------------------------------------------------------------------------
Total...............................Rs. 7,030 Rs. 5,454 Rs. 3,128 Rs. 1,406 Rs. 7,950 US$ 170
=============================================================================

Fiscal 2000
-----------------------------------------------------------------------------
Cost at
March 31, Additions/ Deletions/ Depreciation Net assets at March
1999 transfers transfers 31, 2000
-----------------------------------------------------------------------------
(in millions)

Land................................Rs. 1,246 Rs. 208 Rs. -- Rs. 26 Rs. 1,428 US$ 30
Buildings........................... 5,013 683 126 366 5,204 111
Equipment and furniture............. 2,357 1,937 54 1,104 3,136 67
Construction in progress............ 531 1,442 107 -- 1,866 40
Others.............................. 209 55 102 21 141 3
----------------------------------------------------------------------------
Total...............................Rs. 9,356 Rs. 4,325 Rs. 389 Rs. 1,517 Rs.11,775 US$ 251
============================================================================

119

Fiscal 2001
-----------------------------------------------------------------------------
Cost at
March 31, Additions/ Deletions/ Depreciation Net assets at March
2000 transfers transfers 31, 2001
-----------------------------------------------------------------------------
(in millions)

Land................................Rs. 1,328 Rs. 196 Rs. 4 Rs. 77 Rs. 1,443 US$ 31
Buildings........................... 4,248 1,723 30 327 5,614 120
Equipment and furniture............. 3,053 1,512 235 1,011 3,319 71
Construction in progress............ 1,815 156 620 -- 1,351 29
Others.............................. 161 219 25 43 312 7
----------------------------------------------------------------------------
Total...............................Rs.10,605 Rs. 3,806 Rs. 914 Rs. 1,458 Rs.12,039 US$ 257
============================================================================

Our capital expenditure on property and equipment for fiscal 2001 was Rs.
3.8 billion (US$ 81 million), for fiscal 2000 was Rs. 4.3 billion (US$ 92
million) and for fiscal 1999 was Rs. 5.5 billion (US$ 116 million). The
expenditure on equipment and furniture for fiscal 2001 was primarily
attributable to significant upgrades to our computer and software systems.
During fiscal 1999 and 2000, we invested funds for the construction of our new
office premises and ICICI Bank branches, for substantial improvement of our
existing offices which we own or have taken on lease and for developing an
advanced data center.

Segment Revenues and Assets

The varied banking and finance activities of ICICI are carried out by a
number of legal entities. Thus, while the parent company focuses primarily on
medium-term and long-term project financing, other activities such as
commercial banking, investment banking, retail distribution, broking and
venture capital activities are conducted by fully or majority owned
subsidiaries or affiliates. Each subsidiary/affiliate focuses on specific
activities. Accordingly, management has identified each of these legal entities
as operating segments. Based on business volumes, revenues, income and assets
size, management considers project financing, commercial banking and investment
banking as reportable segments.

The results of ICICI Bank, which represents the commercial banking
segment, were reported under the equity method of accounting as of April 1,
2000. However, for management reporting, the entire results of ICICI Bank
continue to be reported as if the business were a consolidated entity. The
segment-wise information presented below is consistent with the management
reporting.

Project Financing Segment

Our project financing segment engages in providing medium-term and
long-term project finance, corporate finance and lease finance to Indian
businesses and largely represents the activities of ICICI, the parent company.

Fiscal 2001 compared to Fiscal 2000

Our project financing segment contributed 87.3% of the total net income,
including ICICI Bank, in fiscal 2001 compared to 76.3% in fiscal 2000. Net
income declined marginally by 2.6% to Rs. 6.9 billion (US$ 148 million) in
fiscal 2001 from Rs. 7.1 billion (US$ 152 million) in fiscal 2000 primarily on
account of increased provisioning requirements in fiscal 2001, offset, in part,
by an increase in net interest revenue, decrease in non-interest expense and
write-back of income-tax expense. Net income for fiscal 2000 includes an amount
of Rs. 249 million (US$ 5 million), net of tax, on account of the effect of a
change in the method of accounting for depreciation on property and equipment.

Net interest revenue, including dividends, increased 14.1% to Rs. 12.8
billion (US$ 274 million) in fiscal 2001 from Rs. 11.3 billion (US$ 240
million) in fiscal 2000. This increase was

120

possible, despite our continued focus on lower risk loans to highly-rated
clients that resulted in lower credit spreads and an increase in our impaired
loans, primarily due a significant increase in average rupee loans in fiscal
2001 compared to fiscal 2000.

Provision for loan losses increased 68.3% to Rs. 9.8 billion (US$ 210
million) in fiscal 2001 from Rs. 5.8 billion (US$ 125 million) in fiscal 2000
primarily due to an increase in restructured loans in fiscal 2001.

Non-interest revenue increased marginally by 5.9% to Rs. 6.8 billion (US$
144 million) in fiscal 2001 from Rs. 6.4 billion (US$ 136 million) in fiscal
2000 primarily due to a gain on sale of stock in subsidiaries and affiliates
offset, in part, by the decline in trading account revenue, income from
securities transactions and foreign exchange transactions due to limited market
opportunities on account of depressed capital markets in fiscal 2001.

Non-interest expense decreased 17.0% to Rs. 3.4 billion (US$ 72 million)
in fiscal 2001 from Rs. 4.0 billion (US$ 86 million) in fiscal 2000 primarily
due to the absence of the cost of employee termination under the voluntary
retirement scheme which resulted in an expense of Rs. 232 million (US$ 5
million) in fiscal 2000 and reduction in investment management fees paid to a
group company in fiscal 2001. The write-back of income-tax expense was
primarily due to an increase in recognition of deferred tax assets in respect
of provision for loan losses and other than temporary diminution in securities
available for sale offset, in part, by an increase in creation of deferred tax
liability in respect of property and equipment.

Total assets increased 11.2% to Rs. 700.5 billion (US$ 15.0 billion) at
year-end fiscal 2001 from Rs. 629.8 billion (US$ 13.4 billion) at year-end
fiscal 2000. Net loans increased by 12.1% to Rs. 575.2 billion (US$ 12.3
billion) at year-end fiscal 2001 from Rs. 513.1 billion (US$ 11.0 billion) at
year-end fiscal 2000. Cash and cash equivalent balances decreased 23.4% to Rs.
27.1 billion (US$ 578 million) in fiscal 2001 from Rs. 35.3 billion (US$ 754
million) in fiscal 2000. Trading assets decreased 42.6% to Rs. 8.5 billion (US$
182 million) in fiscal 2001 from Rs. 14.9 billion (US$ 317 million) in fiscal
2000 due to limited market opportunities caused by depressed capital markets
during the year.

Fiscal 2000 compared to Fiscal 1999

Our project financing segment contributed 76.3% of the total net income in
fiscal 2000 compared to 91.6% in fiscal 1999. The decline in contribution to
net income was due to the significant increase in net income of the commercial
banking and investment banking segments. Net income was Rs. 7.1 billion (US$
152 million) in fiscal 2000, representing a 3.3% increase from Rs. 6.9 billion
(US$ 147 million) in fiscal 1999. Net income for fiscal 1999 includes an
extraordinary gain of Rs. 292 million (US$ 6 million), net of tax, from the
extinguishment of debt arising from purchase of some of our outstanding foreign
currency bonds. Net income for fiscal 2000 includes Rs. 249 million (US$ 5
million), net of tax, on account of the effect of a change in the method of
accounting for depreciation on property and equipment. Excluding both these
items, net income would have increased 4.1% to Rs. 6.9 billion (US$ 146
million) in fiscal 2000 from Rs. 6.6 billion (US$ 141 million) in fiscal 1999.

Net interest revenue, including dividends, decreased 2.0% to Rs. 11.3
billion (US$ 240 million) in fiscal 2000 from Rs. 11.5 billion (US$ 245
million) in fiscal 1999. This was due to our continued focus on lower risk
loans to highly-rated clients that resulted in lower credit spreads. In
addition, an increase in impaired loans also lowered our spread.

Provision for loan losses increased 6.4% to Rs. 5.8 billion (US$ 125
million) in fiscal 2000 from Rs. 5.5 billion (US$ 117 million) in fiscal 1999
primarily due to the increase in impaired loans.

121

Non-interest revenue increased 54.5% to Rs. 6.4 billion (US$ 136 million)
in fiscal 2000 from Rs. 4.1 billion (US$ 88 million) in fiscal 1999 primarily
due to an increase in trading account revenue and income from securities
transaction as ICICI took advantage of the significant higher level of trading
opportunities available in fiscal 2000 and buoyant capital market conditions.

Non-interest expense increased 49.7% to Rs. 4.0 billion (US$ 86 million)
in fiscal 2000 from Rs. 2.7 billion (US$ 58 million) in fiscal 1999 primarily
due to an increase in employee expense as a result of the cost of employee
termination under the voluntary retirement scheme, and an increase in the
administrative cost largely on account of increased technology and brand
building expense.

Total assets increased 11.4% to Rs. 629.8 billion (US$ 13.4 billion) at
year-end fiscal 2000 from Rs. 565.2 billion (US$ 12.1 billion) at year-end
fiscal 1999. Total loans increased 14.6 % to Rs. 513.1 billion (US$ 11.0
billion) at year-end fiscal 2000 from Rs. 447.7 billion (US$ 9.6 billion) at
year-end fiscal 1999. Cash and cash equivalent balances decreased 19.9% to Rs.
35.3 billion (US$ 754 million) in fiscal 2000 from Rs. 44.1 billion (US$ 942
million) in fiscal 1999 as ICICI increased its trading assets to take advantage
of the higher level of trading opportunities in fiscal 2000. Trading assets
increased 25.8% to Rs.14.9 billion (US$ 317 million) in fiscal 2000 from Rs.
11.8 billion (US$ 252 million) in fiscal 1999.

Commercial Banking Segment

Our commercial banking segment engages in corporate banking, retail
banking and treasury operations and represents the activities of ICICI Bank,
our affiliate, wherein we currently hold 46.0% of the equity capital. ICICI
Bank completed an initial public offering of ADSs in March 2000, representing
approximately a 16.2% equity interest. ICICI Bank's ADSs are listed on the New
York Stock Exchange under the symbol IBN. Additional information about ICICI
Bank is available in its filings with the Securities and Exchange Commission.

Fiscal 2001 compared to Fiscal 2000

Net income was Rs. 1.3 billion (US$ 28 million) in fiscal 2001
representing a 6.7% decrease from Rs. 1.4 billion (US$ 30 million) in fiscal
2000 primarily due to a significant increase in non-interest expense, and an
increase in provision for loan losses offset, in part, by an increase in net
interest revenue.

Net interest revenue, including dividends, increased 124.9% to Rs. 4.0
billion (US$ 85 million) in fiscal 2001 from Rs. 1.8 billion (US$ 38 million)
in fiscal 2000, reflecting an increase in the average volume of
interest-earning assets, principally loans, and an increase in net interest
margins. The loan growth was due to an increase in the working capital loans
primarily to highly-rated large corporate clients acquired through the joint
marketing efforts of our commercial banking segment with ICICI. Net interest
margins increased primarily due to decline in the cost of interest-bearing
liabilities, partially offset by a decline in yield on interest-earning assets
on account of a shift towards loans to highly rated clients, which earn lower
yields due to the lower credit risk associated with these borrowers.

Provision for loan losses increased 153.4% to Rs. 1.1 billion (US$ 23
million) in fiscal 2001 from Rs. 427 million (US$ 9 million) in fiscal 2000 due
to an increase in impaired assets primarily due to the acquisition of impaired
loans of Bank of Madura.

Non-interest revenue declined marginally by 0.3% to Rs. 1.7 billion (US$
37 million) in fiscal 2001 compared to fiscal 2000. The increase in fees and
commissions and income from foreign exchange transactions was offset by a
decline in trading account revenue and losses on securities transactions. The
increase in fee income was principally on account of additional corporate
clients acquired by ICICI Bank during fiscal 2001. The income from foreign
exchange transactions increased

122

primarily due to the gain on remittance of ADS proceeds to India. Trading
account revenue decreased in fiscal 2001 primarily due to the mark to market
impact on trading account assets. Securities transactions, which primarily
reflect capital gain realized on the sale of available for sale securities,
showed a loss primarily due to realized loss on mutual fund units portfolio
which was caused by the extreme volatility in Indian stock markets in the
beginning of fiscal 2001.

Non-interest expense increased 133.6% to Rs. 3.1 billion (US$ 66 million)
in fiscal 2001 from Rs. 1.3 billion (US$ 28 million) in fiscal 2000 primarily
due to a significant increase in occupancy expenses, administration and other
expenses on account of aggressive retail and technology initiatives undertaken
by ICICI Bank during fiscal 2001. These initiatives included rapid expansion of
their ATM network, setting up of call centers, expansion of their credit card
business and consolidation of technology infrastructure including data centers.

Total assets increased 68.7% to Rs. 220.0 billion (US$ 4.7 billion) at
year-end fiscal 2001 from Rs. 131.4 billion (US$ 2.8 billion) at year-end
fiscal 2000 primarily due to the acquisition of Bank of Madura effective March
10, 2001. Net loans increased 98.0% to Rs. 93.0 billion (US$ 2.0 billion) at
year-end fiscal 2001 from Rs. 47.0 billion (US$ 1.0 billion) at year-end fiscal
2000 primarily due to additional loans to highly-rated clients as well as the
acquisition of Bank of Madura. Cash and cash equivalent balances, including
interest-bearing deposits with banks, increased by 30.8% during fiscal 2001 in
line with the increase in balance sheet size and trading assets decreased 33.7%
during fiscal 2001 due to the transfer of securities from "trading account
assets" to "securities available for sale" and to "securities,
held-to-maturity" in fiscal 2001. Total deposits increased by 66.5% to Rs.
164.2 billion (US$ 3.5 billion) in fiscal 2001 from Rs. 98.7 billion (US$ 2.1
billion) in fiscal 2000 primarily due to the acquisition of Bank of Madura and
the organic growth in ICICI Bank's retail deposits.

Fiscal 2000 compared to Fiscal 1999

Our commercial banking segment contributed 15.0% of total net income in
fiscal 2000 compared to 8.0% in fiscal 1999. Net income was Rs. 1.4 billion
(US$ 30 million) in fiscal 2000 representing a 131.7% increase from Rs. 0.6
billion (US$ 13 million) in fiscal 1999.

Net interest revenue, including dividends, increased 46.2% to Rs. 1.8
billion (US$ 38 million) in fiscal 2000 from Rs. 1.2 billion (US$ 26 million)
in fiscal 1999, reflecting an increase in the average volume of
interest-earning assets, principally loans, offset, in part, by a decline in
net interest margin and spreads. The loan growth was largely due to an increase
in the working capital loans primarily to more highly-rated corporate clients
acquired through the joint marketing efforts of our commercial banking segment
with ICICI, the parent company, through the Major Clients Group. Spreads
decreased primarily due to this shift towards loans to highly-rated clients,
which earn lower yields.

Provision for loan losses decreased 8.2% to Rs. 427 million (US$ 9
million) in fiscal 2000 from Rs. 465 million (US$ 10 million) in fiscal 1999
primarily due to a reduction in impaired assets.

Non-interest revenue increased 105.7% to Rs. 1.7 billion (US$ 37 million)
in fiscal 2000 from Rs. 0.8 billion (US$ 18 million) in fiscal 1999, primarily
due to an increase in trading account revenue due to the significantly higher
level of trading opportunities in fiscal 2000, and an increase in fees and
commissions.

Non-interest expense increased 66.1% to Rs. 1.3 billion (US$ 28 million)
in fiscal 2000 from Rs. 0.8 billion (US$ 17 million) in fiscal 1999 primarily
due to a significant increase in administrative and other expenses principally
due to a one-time expense from the issuance of ATM cards to all existing
customers, which enabled the customers to access their accounts online through
any of the ATMs in India, and an increase in employee expenses as a result of
an increase in the number of employees.

123

Total assets increased 75.3% to Rs. 131.4 billion (US$ 2.8 billion) at
year-end fiscal 2000 from Rs. 74.9 billion (US$ 1.6 billion) at year-end fiscal
1999. Net loans increased 88.0% to Rs. 47.0 billion (US$ 1.0 billion) at
year-end fiscal 2000 from Rs. 25.0 billion (US$ 534 million) at year-end fiscal
1999 primarily due to an increase in corporate lending driven by cross-selling
opportunities from ICICI. Cash and cash equivalent balances increased by 89.0%
during fiscal 2000 and trading assets increased 77.6% during fiscal 2000. Total
deposits increased by 62.5% to Rs. 98.7 billion (US$ 2.1 billion) in fiscal
2000 from Rs. 60.7 billion (US$ 1.3 billion) in fiscal 1999.

Investment Banking Segment

Our investment banking segment engages in corporate advisory, fixed income
and equities trading and represents the activities of ICICI Securities, our
99.9% owned investment banking subsidiary.

Fiscal 2001 compared to Fiscal 2000

Our investment banking segment contributed 6.4% of the total net income,
including ICICI Bank, in fiscal 2001 compared to 8.3% in fiscal 2000. Net
income was Rs. 506 million (US$ 11 million) in fiscal 2001 compared to Rs. 770
million (US$ 16 million) in fiscal 2000 primarily due to limited market
opportunities in the debt and equity markets.

Net interest revenue, including dividends, was Rs. 397 million (US$ 8
million) in fiscal 2001 compared to Rs. 890 million (US$ 19 million) in fiscal
2000 primarily due to a decrease in interest revenue and dividends on trading
assets. Provision for loan losses decreased 82.3% to Rs. 13 million (US$
277,481) in fiscal 2001 from Rs. 76 million (US$ 2 million) in fiscal 2000
primarily due to a reduction in impaired assets. Non-interest revenue increased
25.9% to Rs. 954 million (US$ 20 million) in fiscal 2001 from Rs. 758 million
(US$ 16 million) in fiscal 2000 primarily due to an increase in trading account
revenue. Non-interest expenses increased 15.2% to Rs. 462 million (US$ 10
million) in fiscal 2001 from Rs. 401 million (US$ 9 million) in fiscal 2000
primarily due to an increase in premises and equipment expense and employee
expense offset, in part, by a decrease in other administrative cost.

Total assets decreased 24.2% to Rs. 17.6 billion (US$ 376 million) at the
year-end fiscal 2001 from Rs. 23.3 billion (US$ 496 million) at year-end fiscal
2000. Cash and cash equivalent balances decreased 7.3% and trading assets
decreased 27.7% in fiscal 2001 compared to fiscal 2000.

Fiscal 2000 compared to Fiscal 1999

Our investment banking segment contributed 8.3% of the total net income in
fiscal 2000 compared to 2.6% in fiscal 1999. Net income was Rs. 770 million
(US$ 16 million) in fiscal 2000 representing a 288.9% increase from Rs. 198
million (US$ 4 million) in fiscal 1999.

Net interest revenue, including dividends, increased 120.3% to Rs. 890
million (US$ 19 million) in fiscal 2000 from Rs. 404 million (US$ 9 million) in
fiscal 1999 primarily due to an increase in interest revenue and dividends on
trading assets. Provision for loan losses decreased 28.3% to Rs. 76 million
(US$ 2 million) in fiscal 2000 from Rs. 106 million (US$ 2 million) in fiscal
1999 primarily due to a reduction in impaired assets. Non-interest revenue
increased 108.2% to Rs. 758 million (US$ 16 million) in fiscal 2000 from Rs.
364 million (US$ 8 million) in fiscal 1999 primarily due to an increase in fees
and commissions and an increase in trading account revenue. Trading account
revenue in fiscal 2000 was significantly higher compared to fiscal 1999
primarily due to the increased revenues resulting from short-term market
opportunities created by the decrease in interest rates during fiscal 2000.
Non-interest expenses increased 9.3% to Rs. 401 million (US$ 9 million) in
fiscal 2000 from Rs. 367 million (US$ 8 million) in fiscal 1999 primarily due
to an increase in administrative cost offset, in part, by a decrease in premise
and equipment expense.

124

Total assets increased 53.9% to Rs. 23.3 billion (US$ 496 million) at the
year-end fiscal 2000 from Rs. 15.1 billion (US$ 322 million) at year-end fiscal
1999. Cash and cash equivalent balances increased 75.6% during fiscal 2000 and
trading assets increased 66.6% during fiscal 2000.

Future Impact of Recently Issued Accounting Standards

Statement of Financial Accounting Standards 133, "Accounting for
Derivative Instruments and Hedging Activities", as amended by Statement 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities",
is effective for us from April 1, 2001. Statement 133 requires that an entity
recognize all derivatives as either assets or liabilities measured at fair
value. The accounting for changes in the fair value of a derivative depends on
the use of the derivative. Derivatives that are not designated as part of a
hedging relationship must be adjusted to fair value through income. If the
derivative is a hedge, depending on the nature of the hedge, the effective
portion of the hedge's change in fair value is either (1) offset against the
change in fair value of the hedged asset, liability or firm commitment through
income or (2) held in equity until the hedged item is recognized in income. The
ineffective portion of a hedge's change in fair value is immediately recognized
in income. A number of derivatives entered into by us will not qualify as
hedges under Statement 133 and accordingly will be recorded at fair value with
the changes accounted for in earnings. The initial transition adjustments
required to adopt Statement 133 will result in no income statement impact but
will result in the adjustment in the carrying values of assets and liabilities
to the extent of Rs. 706 million (US$ 15 million).

In September 2000, the Financial Accounting Standards Board issued
Statement 140, "Accounting for Transfer and Servicing of Financial Assets and
Extinguishments of Liabilities", a replacement of Statement 125. Provisions of
Statement 140 primarily relating to transfer of financial assets and
securitization that differ from provisions of Statement 125 are effective for
transfers taking place after March 31, 2001, Statement 140 also provides
revised guidance for an entity to be considered a qualifying special purpose
entity. The future impact of Statement 140 on the consolidated financial
statements of ICICI is not estimated to be material.

In July 2001, the Financial Accounting Standards Board issued Statement
141, "Business Combinations", and Statement 142, "Goodwill and Other Intangible
Assets". Statement 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001 as well as all
purchase method business combinations completed after June 30, 2001. Statement
141 also specifies the criteria that intangible assets acquired in a purchase
method business combination must meet to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an assembled workforce
may not be accounted for separately. Statement 142 will require that goodwill
and intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of Statement 142. Statement 142 will also require that intangible
assets with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment in
accordance with Statement 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of".

We are required to adopt the provisions of Statement 141 immediately,
except with regard to business combinations initiated prior to July 1, 2001. We
have opted to adopt the provisions of Statement 142 effective April 1, 2001.

Statement 141 requires that upon adoption of Statement 142, the company
evaluate its existing intangible assets and goodwill that were acquired in a
prior purchase business combination, and to make any necessary
re-classifications in order to conform with the new criteria in Statement 141
for recognition apart from goodwill. Upon adoption of Statement 142, the
company is required to reassess the useful lives and residual values of all
intangible assets acquired in purchase business combinations, and make any
necessary amortization period adjustments in the first interim period

125

after adoption. In addition, to the extent an intangible asset is identified as
having an indefinite useful life, the company is required to test the
intangible asset for impairment in accordance with the provisions of Statement
142 in the first interim period. Any impairment loss will be measured as of the
date of adoption and recognized as the cumulative effect of a change in
accounting principle in the first interim period. Upon adoption, we did not
have any reclassification adjustment, amortization period adjustment or
impairment loss on intangible assets.

In connection with the transitional goodwill impairment evaluation,
Statement 142 requires the company to perform an assessment of whether there is
an indication that goodwill is impaired as of the date of adoption. To
accomplish this, we have identified our reporting units and determined the
carrying value of each reporting unit by assigning the assets and liabilities,
including the existing goodwill and intangible assets, to those reporting units
as of the date of adoption. We have up to six months from the date of adoption
to determine the fair value of each reporting unit and compare it to the
reporting unit's carrying amount. To the extent a reporting unit's carrying
amount exceeds its fair value, an indication exists that the reporting unit's
goodwill may be impaired and the company must perform the second step of the
transitional impairment test. In the second step, the company must compare the
implied fair value of the reporting unit's goodwill, determined by allocating
the reporting unit's fair value to all its assets (recognized and unrecognized)
and liabilities in a manner similar to a purchase price allocation in
accordance with Statement 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the company's statement of
income. We are in the process of performing the first step of the transitional
impairment test.

Any unamortized negative goodwill existing at the date Statement 142 is
adopted must be written off as a cumulative effect of a change in accounting
principle. Upon adoption, we have written off unamortized negative goodwill of
Rs. 1.3 billion (US$ 27 million) as a cumulative effect of a change in
accounting principle in the first quarter of fiscal 2002.

126

MANAGEMENT

Directors and Executive Officers

ICICI's board of directors, which currently consists of 16 members, is
responsible for the management of ICICI's business. ICICI's organizational
documents provide for at least five and no more than 17 directors, excluding
the government director and debenture director (defined below), if any. ICICI
may, subject to the provisions of its organizational documents and the
Companies Act, change the minimum or maximum number of directors by a
resolution, which is passed at a general meeting by a majority of 75.0% of the
present and voting shareholders.

The composition of ICICI's board of directors reflects the principal
shareholdings held by the government-controlled institutions, the terms of the
Indian government's credit and guarantee facilities and the wide public
ownership in India. Under the terms of the loan and guarantee facilities
provided to ICICI, the government of India is entitled to appoint and has
appointed one representative to ICICI's board, currently Mr. S.K. Purkayastha.
In addition to the government-nominated director, ICICI has traditionally
invited a representative of the Ministry of Industry to be one of its
directors. Following the resignation of Mr. Piyush Mankad in June 2001, there
is no representative of the Ministry of Industry on ICICI's board at present.
The government-controlled insurance companies that are ICICI's largest
shareholders, the General Insurance Corporation of India and its subsidiaries
and the Life Insurance Corporation of India, also each have a representative on
ICICI's board, currently Mr. D. Sengupta and Mr. G.N. Bajpai, respectively. Of
the remaining 13 directors, the Chairman, Mr. N. Vaghul, is the former
executive chairman of ICICI, four are executive directors, five independent
directors are from a broad range of industrial companies, one is a consultant
and two independent directors are professors.

ICICI's organizational documents also provide that ICICI may execute trust
deeds securing its debentures under which the trustee or trustees may appoint a
director, known as a debenture director. This director is not subject to
retirement by rotation and may only be removed as provided in the relevant
trust deed. There is currently no debenture director.

ICICI's organizational documents further provide that the board of
directors may appoint members of the board as managing and other executive
directors for terms not exceeding five years. The board appointed Mr. K.V.
Kamath as Managing Director and Chief Executive Officer on May 1, 1996 and
re-appointed him on May 1, 2001. The other executive directors are Ms. Lalita
D. Gupte, Joint Managing Director and Chief Operating Officer-International
Business, who was appointed by the board on June 24, 1994 and then
re-appointed by the board on June 24, 1999, and Ms. Kalpana Morparia and Mr. S.
Mukherji, both executive directors, who were appointed by the board on May 1,
2001. The current terms of office of these executive directors will expire as
follows:

Expiration date
---------------------
Mr. K.V. Kamath........................................... April 30, 2006
Ms. Lalita D. Gupte....................................... June 23, 2004
Ms. Kalpana Morparia and Mr. S. Mukherji.................. April 30, 2006

At least two-thirds of ICICI's total number of directors, excluding the
government director and the debenture director, are subject to retirement by
rotation. One-third of these directors must retire from office at each annual
meeting of shareholders. A retiring director is eligible for re-election.
Managing and other executive directors may serve more than one term.

127

ICICI's board of directors at August 31, 2001 had the following members:

-------------------------------------- ----- ------------------- ------------------------------------------------------
Name, Designation Date of
and Profession Age Appointment Other Appointments
-------------------------------------- ----- ------------------- ------------------------------------------------------

Mr. Narayanan Vaghul 64 September 6, 1985 Chairman
Chairman of the ICICI Knowledge Park
board of directors Intercommercial Bank, West Indies
Mahindra Industrial Park Limited
Chairman: Business Strategy Nandi Infrastructure Corridor Enterprises Limited
Committee Director
Air India Limited
Profession: Development Banker Apollo Hospitals Enterprises Limited
Azim Premji Foundation
ICICI International Limited, Mauritius
ICICI West Bengal Infrastructure Development Corporation Limited
Ispat International N.V., Rotterdam, Netherlands
Ispat Mexicana, S.A. de C.V., Mexico
Mahindra & Mahindra Limited
Nicholas Piramal India Limited
Samcor Glass Limited
Samtel Color Limited
TCW/ICICI India Private Equity AMP Fund L.L.C., Mauritius
TCW/ICICI India Private Equity Fund L.L.C., Mauritius
TCW/ICICI Investment Partners L.L.C., Mauritius
Technology Network (India) Private Limited
Wipro Limited
Chairman of the Board of Governing Council
Indian Institute for Production Management, Kansbahal
Chairman of the Board of Governors
Institute for Financial Management and Research
Member of the Governing Body
National Institute of Public Finance and Policy
Trustee
GIVE Foundation
LNM Foundation
Pratham, Mumbai
Pratham, USA

Mr. Basant Kumar Jhawar 65 April 18, 1996 Chairman
Jhawar Social Medical Research Institute
Profession: Chairman Usha Beltron Limited
Usha Beltron Limited Usha Siam Steel Industries Limited
Director
Orient Paper & Industries Limited
Reliance Chemotex Industries Limited
Usha Martin Infrastructure Services Limited
Committee Member
Indian Institute of Production Management
Jhawar Institute of Medicine
Usha Scientific Research Institute
Trustee
Hindustan Charity Trust
Kamala Devi Charity Trust
Krishi Gram Vikas Kendra
Krishna Devi Philanthrophical Trust
Usha Martin Education Training & Research Foundation

128

Mr. Ramaswamy Seshasayee 52 May 6, 1997 Managing Director
Ashok Leyland Limited
Chairman: Audit Committee Director
AL Engines Private Limited
Profession: Managing Director Ashley Holdings Limited
Ashok Leyland Limited Ashley Investments Limited
Ashok Leyland Finance Limited
EID Parry (India) Limited
Ennore Foundries Limited
Irizar TVS Limited
Sundaram Newton Asset Management Company Limited

Dr. Rakesh Khurana 53 May 6, 1997 Chairman
Knowledge Network India Private Limited
Chairman: Share Transfer & Chairman - Academic Advisory Board
Shareholders'/Investors' Management Education and Research Institute
Grievance Committee Chairman - Academic Council
Guru Gobind Singh Educational and Charitable Trust
Profession: Chairman
Knowledge Network India Chairman - Academic Development Council
Academy of Management Studies, Dehradun
Director
Escort Investment Trust Company Limited
Fyne Foods Private Limited
ICICI Knowledge Park
Member - Advisory Council of the Faculty of Management Studies
Indian Institute of Rural Management, Jaipur
Member - Board of Governors
Bharathi Dasan Institute of Management
Member - Finance Committee
Guru Jambeshwar University, Hissar
Member - Technical Advisory Committee
Institute of Applied Manpower Research

Dr. Ashok S. Ganguly 65 May 6, 1997 Chairman
ICI India Limited
Chairman: Credit Committee ICICI West Bengal Infrastructure Development Corporation Limited
Profession: Chairman Technology Network (India) Private Limited
ICI India Limited Director
British Airways Plc.
ICICI Knowledge Park
Mahindra & Mahindra Limited
Reserve Bank of India (Central Board of Directors)
Sedgwick Parekh Health Management Private Limited
Wipro Limited

129

Mr. Debadatta Sengupta 58 August 1, 1998 Chairman
General Insurance Corporation of India
Profession : Chairman GIC Housing Finance Limited
General Insurance GIC AMC Limited
Corporation of India Loss Prevention Association of India Limited
Indian International Insurance Pte. Limited, Singapore
Director
Export Credit Guarantee Corporation of India Limited
Indian Register of Shipping
Kenindia Assurance Company Limited, Nairobi
Life Insurance Corporation of India
President
Insurance Institute of India
Member of the Governing Body
National Insurance Academy
Member
Asian Reinsurance Corporation, Bangkok, Thailand
Tariff Advisory Committee

Mr. N.R. Narayana Murthy 54 August 1, 1998 Chairman and CEO
Infosys Technologies Limited
Chairman: Board Governance & Chairman
Remuneration Committee Bangalore International Airport Limited
Director
Profession: Chairman and The India Growth Fund Inc.
Chief Executive Officer Reserve Bank of India (Central Board of Directors)
Infosys Technologies Videsh Sanchar Nigam Limited
Limited Member
Executive Council of NASSCOM
National Council of Confederation of Indian Industry
Standing Executive Board of Software Technology Park of India

Prof. Marti Gurunath Subrahmanyam 54 August 1, 1998 Director
DebtMark Inc.
Chairman: Investment Committee Deutsche Software (I) Limited
Infosys Technologies Limited
Profession: Professor, Stern School of Nexgen Financial Holdings Limited
Business, New York Nexgen Risk Management Limited
Nomura Asset Management (U.S.A.) Inc.
RMAS Limited
Speedmerchant.com Inc.
Usha Communications Inc.
Board of Advisors
SKG Inc.

130

Mr. Lakshmi Niwas Mittal 50 April 1, 1999 Director
Artha Limited
Profession : Chief Executive Officer Caribbean Ispat Limited
Ispat International N.V. Consorcio Minero Benito Juarez Pena Colorada S.A. De C.V.
Dunmurray Company Unlimited
Galmatias Limited
Grupo Ispat International S.A. de C.V.
Intercommercial Bank Limited
Irish Ispat Limited
Ispat Canada Inc.
Ispat Europe Group S.A.
Ispat Germany GmbH
Ispat Hamburger Stahlwerke GmbH
Ispat Inland Holdings Inc.
Ispat Inland Inc.
Ispat Inland L.P.
Ispat Inland S.A.
Ispat International Limited
Ispat International N.V.
Ispat Karmet Holdings B.V.
Ispat Karmet JSC
Ispat Mexicana S.A. de C.V.
Ispat Shipping Limited
Ispat Sidbec Inc.
Ispat Stahlwerk Ruhrort GmbH
Ispat Unimetal
Ispat US Holdings B.V.
Ispat (US) Holdings Inc.
Ispat US Investments B.V.
Kent Wire (Ispat) Limited
LNM Capital Limited
LNM Holdings N.V.
LNM Holdings S.L.
LNM International Ventures Limited
LNM Internet Ventures Limited
Lucre Limited
Metique.Inc
Metique.com Limited
Nestor Limited
Nuav Limited
Penna Colarada S.A. De C.V.
PT Ispat Indo
Tecvest Corporation N.V.
Tommyfield Limited
Trefileurope GmbH
Walker Wire (Ispat) Inc.
3019693 Nova Scotia ULC
9064-4816 Quebec Inc.

Mr. Ghyanendra Nath Bajpai 58 January 25, 2001 Chairman
Life Insurance Corporation of India
Profession: Chairman LIC Housing Finance Limited
Life Insurance Corporation LIC (International) E.C., Bahrain
of India Governing Body of Insurance Council
National Stock Exchange of India Limited

131

Mr. Ghyanendra Nath Bajpai (Continued) Director
Discount and Finance House of India Limited
General Insurance Corporation of India
National Housing Bank
Kenindia Assurance Company Limited, Nairobi
UTI Bank Limited
Trustee
Unit Trust of India
Member
National Insurance Academy

Mr. Anupam Pradip Puri 55 May 3, 2001 Director
Mahindra & Mahindra Limited
Profession: Management Consultant Godrej Consumer Products Limited
HCL Technologies Limited

Mr. Saibal Kumar Purkayastha 56 August 1, 2001 Director
Industrial Development Bank of India
Profession: Government service Infrastructure Development Finance Corporation Limited
Ministry of Finance Life Insurance Corporation of India
Government of India National Bank of Agriculture and Rural Development
State Bank of India

Mr. Kundapur Vaman Kamath 53 October 12, 1995 Chairman
Managing Director and Chief Executive ICICI Infotech Services Limited
Officer ICICI Lombard General Insurance Company Limited
ICICI Personal Financial Services Limited
Chairman: - Management Committee ICICI Prudential Life Insurance Company Limited
- Resources, Treasury & ICICI Securities and Finance Company Limited
Asset Liability ICICI Venture Funds Management Company Limited
Management Committee ICICI Web Trade Limited
Prudential ICICI Asset Management Company Limited
Profession: ICICI Executive Vice-Chairman
Indian School of Business
Director
Bangalore International Airport Limited
ICICI Bank Limited
Indian Institute of Management, Ahmedabad
National Development Bank, Sri Lanka
Visa International Asia-Pacific Regional Board, Singapore
Director - Board of Governance
Indian Institute of Information Technology, Bangalore
Member
Confederation of Indian Industry
Member - Advisory Board
NCR Financial Solutions Group Limited, London
Member - Board of Governors
Karnataka Regional Engineering College, Mangalore
Member - Board of Management
Manipal Academy of Higher Education
Member - Court of Governors
Administrative Staff College of India
Member - Governing Board
Enterpreneurship Development Institute of India
National Institute of Bank Management

132

Ms. Lalita Dileep Gupte 52 June 24, 1994 Chairperson
Joint Managing Director and ICICI Capital Services Limited
Chief Operating Officer - International ICICI Home Finance Company Limited
Business Director
ICICI Bank Limited
Profession : ICICI Executive ICICI Infotech Inc., U.S.A.
ICICI Infotech Services Limited
ICICI Lombard General Insurance Company Limited
ICICI Personal Financial Services Limited
ICICI Prudential Life Insurance Company Limited
ICICI Securities and Finance Company Limited
ICICI Venture Funds Management Company Limited
ICICI Web Trade Limited
National Stock Exchange of India Limited
Prudential ICICI Asset Management Company Limited
Member - Board of Governors
Indian Council for Research on International Economic Relations

Ms. Kalpana Morparia 52 May 1, 2001 Chairperson
Executive Director ICICI Investment Management Company Limited
Director
Profession: ICICI Executive ICICI Capital Services Limited
ICICI Home Finance Company Limited
ICICI Infotech Services Limited
ICICI Personal Financial Services Limited
ICICI Securities and Finance Company Limited
ICICI Web Trade Limited

Mr. Subrata Mukherji 48 May 1, 2001 Chairman
Executive Director ICICI Eco-Net Limited
Director
Profession: ICICI Executive ICICI Capital Services Limited
ICICI Home Finance Company Limited
ICICI Personal Financial Services Limited
ICICI Securities and Finance Company Limited
ICICI Venture Funds Management Company Limited
ICICI Web Trade Limited

133

The executive officers of ICICI at August 31, 2001 were as follows:

----------------------------------------------------------------------------------------------------------------------------------
Years of Total
work Remuneration Stock
Name Age Position experience in fiscal 2001(1) Shareholding(2) options(3)
----------------------------------------------------------------------------------------------------------------------------------

Mr. Kundapur Vaman Kamath.......53 Managing Director and 30 Rs. 8,251,224 35,000 360,000
Chief Executive Officer
Ms. Lalita Dileep Gupte.........52 Joint Managing 30 6,722,495 10,085 330,000
Director and Chief
Operating Officer -
International Business
Ms. Kalpana Morparia............52 Executive Director 25 5,398,583 30,383 180,000
Mr. Subrata Mukherji............48 Executive Director 23 5,410,915 3,009 180,000
Mr. Sanjiv Kerkar...............50 Senior General Manager 25 4,558,005 6,182 180,000
Mr. P.H. Ravikumar .............50 Senior General Manager 28 --(4) 140 12,000
Ms. Ramni Nirula ...............49 Senior General Manager 25 4,025,207 4,133 120,000
Mr. Devdatt Shah................46 Senior General Manager 22 4,738,989 -- 120,000
Ms. Shikha Sarma................42 Senior General Manager 21 5,445,718 1,833 180,000
Mr. Balaji Swaminathan..........36 Senior General Manager 13 --(4) -- 60,000
and Chief Financial
Officer
<FN>
--------
(1) Including bonuses and benefits in kind as described under--"Compensation and Benefits to Directors and
Officers-- Bonus".
(2) Executive officers as a group held less than 0.1% of the equity shares as of this date.
(3) See-- "Compensation and Benefits to Directors and Officers-Employee Stock Option Scheme" for a
description of the terms of these stock options.
(4) Joined ICICI in fiscal 2002.
</FN>

Mr. K.V. Kamath is a mechanical engineer and a post-graduate in business
management from the Indian Institute of Management, Ahmedabad. He joined ICICI
in 1971 and gained experience in project finance, leasing, resources and
corporate planning. In 1988, he left ICICI to join the Asian Development Bank,
where he worked for six years. In January 1995, he joined a major private
sector group in Indonesia as advisor to the Chairman. Mr. Kamath joined the
board of ICICI in October 1995. He was appointed Managing Director and Chief
Executive Officer of ICICI in May 1996 and was re-appointed in May 2001.

Ms. Lalita D. Gupte has a Bachelor of Arts degree and also holds a
Master's degree in Management Science from the Jamnalal Bajaj Institute of
Management Studies, University of Mumbai. She joined ICICI in 1971 and has been
with ICICI since then. She has worked in the areas of project finance, leasing,
resources and treasury, and credit operations. She joined the board of
directors of ICICI in June 1994 as an executive director and was designated as
the Deputy Managing Director in 1996. In April 1999, she was designated as the
Joint Managing Director and Chief Operating Officer of ICICI. From July 2001,
she has taken over the responsibility for ICICI group's international business
as Joint Managing Director and Chief Operating Officer - International
Business, in line with our strategy for growth in international business by
leveraging on home country relationships and technology competencies in
financial services.

Ms. Kalpana Morparia holds Bachelor's degrees in Science and Law. She
worked in the legal department of ICICI from 1975 to 1994. Since 1996, when she
was designated as General Manager, she was in charge of the legal, planning,
treasury and corporate communications departments. In 1998, she was designated
as a Senior General Manager of ICICI. She joined the board of directors of
ICICI in May 2001. She is currently in charge of treasury, legal, accounts,
taxation, planning and strategic support, secretarial, human resources
development and corporate communications department of ICICI.

134

Mr. S. Mukherji holds a management degree from the Jamnalal Bajaj
Institute of Management Studies, University of Mumbai and a master's degree
from the London School of Economics. Mr. Mukherji worked in the projects and
operations department of ICICI at Mumbai between 1978 and 1992 and at Kolkata
between 1992 and 1997. He was Zonal Manager of ICICI's Kolkata zonal office
between 1992 and 1997. During 1997, he headed the western regional office of
ICICI. He was designated as Senior General Manager of ICICI in 1998. He joined
the board of directors of ICICI in May 2001. He is currently in charge of the
client relationship group, the credit operations group, the projects division,
the special asset management group, retail assets and administration
department.

Mr. Sanjiv Kerkar is a chemical engineer and holds a management degree
from the Jamnalal Bajaj Institute of Management Studies, University of Mumbai.
He worked with ICICI from 1979 until 1993, when he joined Asian Finance and
Investment Company Limited (AFIC), an affiliate of the Asian Development Bank.
Mr. Kerkar worked with AFIC from 1993 to 1996. In 1996, he re-joined ICICI as a
General Manager and was in charge of the risk management department in ICICI.
In 1998 he was designated as a Senior General Manager of ICICI. Currently, Mr.
Kerkar has been deputed to ICICI Lombard General Insurance Company as Managing
Director and Chief Executive Officer.

Mr. P.H. Ravikumar is a graduate from Osmania University. Mr. Ravikumar
started his career with Bank of India in 1972. He joined ICICI Bank in
1994. He became Senior Executive Vice-President in 1998 and was in charge of
treasury, foreign exchange and credit. Mr. Ravikumar joined ICICI in April 2001
as Senior General Manager. Currently, he is in charge of the western regional
office and the southern regional office of ICICI.

Ms. Ramni Nirula is a post-graduate in management studies from a reputed
Indian University. She joined ICICI in 1975 and held various positions in the
northern regional office of ICICI. Ms. Nirula became General Manager in 1998
and was the Zonal Manager of the Delhi zonal office for the period 1998 to
2000. She was designated as Senior General Manager of ICICI in fiscal 2000.
Currently, she is in charge of the northern regional office, the eastern
regional office and the government and institutional group of ICICI.

Mr. Devdatt Shah is an electrical engineer from the Indian Institute of
Technology, Mumbai and holds a Master's degree in Business Administration from
the State University of New York. From 1979 to 1981, Mr. Shah was an associate
consultant in Policy Planning and Evaluation Inc. Mr. Shah joined J.P. Morgan &
Co. in 1981 and worked in various departments including equity research,
structured products and financial advisory services. He left J.P. Morgan in
1995 to join India Capital Advisors, Toronto. In 1996, Mr. Shah joined the
Canadian Imperial Bank of Commerce as Managing Director (India). Mr. Shah
joined ICICI in January 1999 and is currently working as Managing Director and
Chief Executive Officer of ICICI Securities.

Ms. Shikha Sharma is a graduate from the University of Delhi and a
post-graduate in management from the Indian Institute of Management, Ahmedabad.
Ms. Sharma joined ICICI in 1980 and worked at ICICI until 1995. Thereafter, she
worked at ICICI Securities and was deputed to J.P. Morgan & Co. After
re-joining ICICI in 1997, she served as General Manager in charge of the
strategic planning and development department until 1998 and set up the
structured products group. In 1998, she was designated as a Senior General
Manager and was in charge of the personal financial services group. Currently,
Ms. Sharma has been deputed to ICICI Prudential Life Insurance as Managing
Director.

135

Mr. Balaji Swaminathan is a graduate in commerce from Calcutta University,
a chartered accountant and a cost and works accountant. Mr. Balaji Swaminathan
started his career with KPMG International in 1989. He worked in KPMG India as
Partner/Director from 1994 to 2001. He joined ICICI in August 2001 as Chief
Financial Officer.

Retirements:

Mr. M.J. Subbaiah, Senior General Manager opted for early retirement from
the services of ICICI effective July 10, 2000.

Mr. S.H. Bhojani, Deputy Managing Director retired from the services of
ICICI effective April 23, 2001.

In accordance with ICICI's corporate policy, all its employees, other than
those who are executive directors, retire at the age of 58 years.

Corporate Governance

ICICI revised its corporate governance policies in 1997. To recognize the
accountability of the board and to make it transparent to all our
constituents, including employees, clients, investors and the government of
India, and to demonstrate that the shareholders are the ultimate beneficiaries
of our economic activities, we restructured ICICI's board of directors.

The series of steps taken by ICICI at the time included a clear
demarcation between the role of the board and that of the executive management,
ensuring that not less than 75.0% of the board would be non-executive directors
and setting up a series of board sub-committees for overseeing the functions of
the executive management. It was also decided that all important board
committees would be presided over by non-executive directors, and will consist
mainly of non-executive directors.

The board's role, functions, responsibility and accountability are clearly
defined at ICICI. In addition to its primary role of monitoring corporate
performance, the functions of ICICI's board include:

o approving our corporate philosophy and mission;

o participating in the formulation of strategic and business plans;

o reviewing and approving financial plans and budgets;

o monitoring corporate performance against strategic and business
plans, including overseeing operating results on a regular basis;

o ensuring ethical behavior and compliance with laws and regulations;

o selecting and evaluating senior executives;

o reviewing and approving borrowing limits; and

o formulating exposure limits.

To enable the board to discharge these responsibilities effectively,
ICICI's executive management gives the board detailed reports on ICICI's
performance on a quarterly basis.

136

The board functions either as a full board or through committees. The
following committees have been formed to focus on specific issues.

Board Governance & Remuneration Committee

The Board Governance & Remuneration Committee consists of four directors,
all of whom are independent directors and is chaired by an independent
director. The current members are Mr. N.R. Narayana Murthy, Dr. Ashok Ganguly,
Mr. G.N. Bajpai and Mr. D. Sengupta. The functions of this committee include
making recommendations for appointments to the board and appointments to senior
management positions and evaluating the performance of the executive directors,
the board of directors as a whole and individual directors on pre-determined
parameters. It also makes recommendations on the remuneration (including
performance bonus and perquisites) of executive directors, determines the total
amount payable as performance bonus to employees below the level of executive
directors and determines the eligibility of employees and executive directors
of ICICI and its subsidiaries for the grant of stock options under ICICI's
employee stock option scheme.

Audit Committee

The Audit Committee consists entirely of independent directors and is
chaired by an independent director. The current members are Mr. R. Seshasayee,
Dr. Ashok Ganguly and Mr. B.K. Jhawar. This committee provides direction to the
audit and risk management function in ICICI and monitors the quality of
internal audit and management audit. The responsibilities of the Audit
Committee include overseeing the financial reporting process to ensure proper
disclosure of financial statements, recommending the appointment or removal of
external auditors and fixing their remuneration, reviewing the annual financial
statements before submission to the board, reviewing adequacy of internal
control systems and adequacy, structuring and staffing of the internal audit
function, reviewing findings of internal investigations, discussing the scope
of audit with external auditors and looking into reasons of substantial
defaults, if any, of non-payment to stakeholders.

Credit Committee

The Credit Committee consists of three independent directors and four
executive directors, including the Managing Director and Chief Executive
Officer and is chaired by an independent director. The current members are Dr.
Ashok Ganguly, Dr. Rakesh Khurana, Mr. D. Sengupta, Mr. K.V. Kamath, Ms. Lalita
D. Gupte, Ms. Kalpana Morparia and Mr. S. Mukherji. The Credit Committee
approves and reviews the credit policies and approves the proposals which,
based on the parameters laid down by the board, are beyond the powers of the
Management Committee. It also lays down an appropriate reporting system to keep
itself informed of the major decisions taken by the Management Committee. The
committee reviews proposals relating to borrower groups where the exposure of
ICICI is significant, proposals of companies where a director is interested,
proposals with a low credit rating and proposals of companies which are in
substantial default.

Management Committee

The Management Committee consists of executive directors and is presided
over by the Managing Director and Chief Executive Officer. The board has
delegated certain operational powers to the Management Committee relating to
approval of financial assistance. The board approves financial assistance only
in exceptional circumstances and in cases where the Managing

137

Director and Chief Executive Officer would like the Credit Committee's views
on certain key decisions.

Investment Committee

The Investment Committee, which is chaired by an independent director,
approves the basic policies and necessary limits governing disinvestment. It
also establishes criteria for investment in shares and securities in the
secondary market.

Resources, Treasury & Asset Liability Management Committee

The Resources, Treasury & Asset Liability Management Committee consists of
all the executive directors, and reviews the resources and treasury functions,
including management of assets and liabilities. For further details on the role
of this committee, see "Business--Risk Management--Quantitative and Qualitative
Disclosures about Market Risk".

Share Transfer & Shareholders'/Investors' Grievance Committee

The Share Transfer & Shareholders'/Investors' Grievance Committee consists
of two independent directors and two executive directors and is presided over
by an independent director. This committee reviews and approves share transfers
and addresses grievances of shareholders and investors.

Business Strategy Committee

The Business Strategy Committee was constituted by the board at its
meeting held on January 25, 2001. The committee consists of five directors,
including three independent directors, and is chaired by the Chairman of the
board. The committee has been constituted to review and examine ICICI's
business strategy and make recommendations to the board on the same.

Compensation and Benefits to Directors and Officers

Under ICICI's organizational documents, each director, except a director
who is from the government of India and the executive directors, is entitled to
remuneration for attending each meeting of the board or of a board committee.
The amount of remuneration is set by the board from time to time in accordance
with limitations prescribed by the Indian Companies Act or the government of
India. The remuneration for both the board meeting and the committee meeting is
currently fixed at Rs. 5,000. ICICI reimburses directors for travel and related
expenses in connection with board and committee meetings and with related
matters. If a director is required to perform services for ICICI beyond
attending meetings, ICICI may remunerate the director as determined by the
board of directors and this remuneration may be either in addition to or as
substitution for the remuneration discussed above.

At its meeting held on March 23, 2001, the board of directors fixed the
salaries to be paid to the executive directors effective May 3, 2001. This was
approved at the annual meeting of shareholders on June 26, 2001. The board or
any committee of the board may in its exclusive discretion fix within the range
stated below the salary payable to the management directors:

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Managing Director and
Chief Executive Officer...............Rs. 200,000 to Rs. 400,000 (US$ 4,269 to US$ 8,538) per month
Joint Managing Director and
Chief Operating Officer...............Rs. 160,000 to Rs. 320,000 (US$ 3,415 to US$ 6,830) per month
Other executive directors................Rs. 160,000 to Rs. 320,000 (US$ 3,415 to US$ 6,830) per month

Total compensation paid to ICICI's directors and executive officers was
Rs. 67 million (US$ 1 million) in fiscal 2001.

Bonus

Each year, ICICI's board of directors awards bonuses to ICICI employees,
including the executive directors, on the basis of performance and seniority.
The performance of each employee is judged by a management appraisal system.
The aggregate amount paid towards bonuses to all eligible ICICI employees was
Rs. 154 million (US$ 3 million) in fiscal 2001 and was Rs. 157 million (US$ 3
million) in fiscal 2000.

Voluntary Retirement Scheme

During fiscal 2000, ICICI successfully completed a Voluntary Retirement
Scheme, which was availed of by 223 staff members. The cost of employee
termination under the scheme aggregating Rs. 232 million (US$ 5 million) was
expensed as employee costs in the income statement for fiscal 2000. Costs
aggregating Rs. 81 million (US$ 2 million) were paid in fiscal 2000. In July
2000, ICICI extinguished the unpaid liability of Rs. 141 million (US$ 3
million) by purchasing an annuity policy from the Life Insurance Corporation of
India for a consideration of Rs. 157 million (US$ 3 million). Through the
annuity policy, ICICI is legally released from being the primary obligor under
the liability.

Employee Stock Option Scheme

ICICI has formulated an employee stock option scheme to encourage and
retain high performing employees. Up to 5.0% of ICICI's issued equity shares at
June 30, 2000 can be allocated towards employee stock options. The stock
options will entitle eligible employees of ICICI and its subsidiaries to apply
for equity shares. The Board Governance & Remuneration Committee determines the
eligibility of each employee based on an evaluation of the employee, including
an evaluation of the employee's work performance, technical knowledge and
leadership qualities.

The following table sets forth certain information regarding the stock
option grants ICICI has made to date under its employee stock option scheme.

------------------------------------------- ------------------------------- ----------------------------
Date of grant Number of options granted Exercise price (1)
------------------------------------------- ------------------------------- ----------------------------

August 3, 1999.......................... 2,323,750 Rs. 85.55 US$ 1.83
April 28, 2000.......................... 2,922,500 133.40 2.85
November 14, 2000....................... 20,000 82.90 1.77
May 3, 2001............................. 3,205,000 82.00 1.75
August 13, 2001......................... 60,000 52.50 1.12
<FN>
---------
(1) The exercise price is equal to the market price of ICICI's equity
shares on the date of grant. However, the share options granted on August
3, 1999 were accounted as a variable plan resulting in a compensation cost
of Rs. 97 million (US$ 2 million) which is being amortized over the
vesting period.
</FN>

139

These options vest in installments over a period of three years with
20.0%, 30.0% and 50.0% of the grants vesting at the end of each year. The
options can be exercised within 10 years from the date of the grant or five
years from the date of vesting whichever is later. During fiscal 2001, 32,500
share options were exercised at the exercise price prevailing on the grant date
of Rs. 85.55 (US$ 1.83) per equity share and 120,400 share options were
forfeited. At year-end fiscal 2001, 462,350 vested share options were
exercisable at the exercise price prevailing on the respective grant date. At
August 31, 2001, 1,748,175 vested share options were exercisable at the
exercise price prevailing on the respective grant dates.

In April 2000, ICICI Infotech approved an employee stock option plan.
Under the plan, ICICI Infotech is authorized to issue up to 12 million equity
shares to its employees and employees of ICICI. Eligible employees are granted
an option to purchase shares subject to vesting conditions. The options vest in
installments over a period of three years with 20.0%, 30.0% and 50.0% of the
options vesting at the end of each year. The options can be exercised within 10
years from the date of the grant. ICICI Infotech granted 2,344,800 stock
options to certain employees during fiscal 2001 at the fair value of the
underlying shares on the grant date of Rs. 37.50 (US$ 0.80) per equity share.
As shares of ICICI Infotech are not quoted on exchanges, the fair value
represents management's best estimates considering all available factors. Of
the above, 103,400 stock options were forfeited by year-end fiscal 2001.
Approximately 670,000 share options of ICICI Infotech were granted to executive
officers of ICICI in fiscal 2001.

In July 2000, ICICI Venture approved an employee stock option plan under
which ICICI Venture is authorized to issue up to 125,000 equity shares to its
employees and employees of ICICI. Eligible employees are granted an option to
purchase shares subject to vesting conditions. The options vest over a period
of three years with 20.0%, 30.0% and 50.0% of the options vesting at the end of
each year. The options can be exercised within 10 years from the date of the
grant. ICICI Ventures granted 81,400 stock options to certain employees during
fiscal 2001 at the fair value of the underlying shares on the grant date of Rs.
835.00 (US$ 17.82) per equity share. As shares of ICICI Venture are not quoted
on exchanges, the fair value represents management's best estimates considering
all available factors. Of the above, 2,500 stock options were forfeited by
year-end fiscal 2001. Approximately 25,100 share options of ICICI Venture were
granted to executive officers of ICICI in fiscal 2001.

Loans

ICICI has internal rules and regulations to grant loans to employees to
acquire certain assets such as property or vehicles. These loans currently
carry interest rates ranging from 2.5% to 3.5% per annum and are repayable over
fixed periods of time. The loans are generally secured by the assets acquired
by the employees. At March 31, 2001, there were Rs. 628 million (US$ 13
million) loans outstanding to ICICI's employees, including Rs. 31 million (US$
1 million) to certain ICICI directors and executive officers.

Gratuity

Under Indian law, ICICI is required to pay a gratuity to employees who
after at least five years of continuous service have resigned or retired. ICICI
has set up a gratuity fund. Actuarial valuation of the fund is done by an
independent actuary. In accordance with ICICI's gratuity fund rules, gratuity
liability is calculated based on certain assumptions regarding rate of
interest, salary growth, mortality and staff turnover. The total corpus of the
fund, as per the latest audited figures, at March 31, 2000 was Rs. 187 million
(US$ 4 million).

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Superannuation Fund

ICICI contributes 15.0% of the total annual salary of each employee to a
superannuation fund, which is administered by the Life Insurance Corporation of
India. An employee gets 33.0% of the commuted value on retirement and a monthly
pension after that for life. In the event of the death of an employee, the
beneficiary receives the accumulated balance of the commuted value of 67.0%.

Provident Fund

ICICI is statutorily required to maintain a provident fund as a part of
its retirement benefits to its employees. Each employee contributes 12.0% of
his salary and ICICI contributes an equal amount to the fund. This fund is
managed by in-house trustees. The investments of the fund are made according to
rules made by the government of India. The accounts of the fund are audited by
independent auditors. The corpus of the fund, as per the latest audited
figures, at March 31, 2000 was Rs. 393 million (US$ 8 million). ICICI
contributed Rs. 28 million (US$ 1 million) to the provident fund plan in fiscal
2001.

141

RELATED PARTY TRANSACTIONS

We have engaged in transactions with our affiliates, directors and
employees. The following represent the significant transactions between the
ICICI group and such related parties.

Banking Services. ICICI Bank provided banking services to us at market
rates. Non-interest income earned by ICICI Bank from us in fiscal 2001 amounted
to Rs. 72 million (US$ 2 million).

Derivative Transactions. ICICI Bank entered into interest rate swaps and
cross currency swaps with us. At March 31, 2001, contracts aggregating Rs. 2.9
billion (US$ 62 million) were outstanding for interest rate swaps and Rs. 4.4
billion (US$ 93 million) were outstanding for currency swaps. Net interest
earned by us in respect of these swaps amounted to Rs. 189 million (US$ 4
million) in fiscal 2001. Similarly, ICICI Bank entered into forward foreign
exchange contracts with us. Contracts aggregating Rs. 2.3 billion (US$ 48
million) were outstanding at year-end fiscal 2001.

Software Development Services. We provided software development services
to our affiliates, Tricolor Infotech International Inc. and Prudential ICICI
Asset Management Company Limited, and earned fees of Rs. 8 million (US$
170,750) in fiscal 2001. We developed software and provided software and
hardware support services to ICICI Bank, and earned fees of Rs. 73 million (US$
2 million) in fiscal 2001.

Back-office Support Services. We set up a common technology infrastructure
platform for the group, and ICICI Bank was charged Rs. 94 million (US$ 2
million) in fiscal 2001, for communication expenses, backbone infrastructure
expenses and data center costs. We provided telephone banking call-center
services and transaction processing services for the credit card operations of
ICICI Bank, and earned fees of Rs. 99 million (US$ 2 million) in fiscal 2001.

Indian Rupee Debt. Certain members of management hold bonds issued by
ICICI amounting to Rs. 8 million (US$ 170,750) in fiscal 2001 and Rs. 7 million
(US$ 149,410) in fiscal 2000.

Asset Management Services. We provided asset management services to
TCW/ICICI Investment Partners LLC and earned fees of Rs. 31 million (US$ 1
million) in fiscal 2001, Rs. 27 million (US$ 1 million) in fiscal 2000 and Rs.
27 million (US$ 1 million) in fiscal 1999.

Brokerage Services. We provided brokerage services to ICICI Bank and
earned fees of Rs. 1 million (US$ 21,340) in fiscal 2001.

Deposits and Borrowings. In fiscal 2001, we received interest of Rs. 202
million (US$ 4 million) on deposits with and call borrowings to ICICI Bank.

Lease of Premises and Facilities. In fiscal 2001, ICICI Bank paid rentals
of Rs. 193 million (US$ 4 million) to us for lease of premises, facilities and
other equipment.

Purchase of Assets. In fiscal 2001, ICICI Bank purchased certain assets
for Rs. 99 million (US$ 2 million) from us.

142

Expenses for Seconded Employees. ICICI Bank paid Rs. 4 million (US$
85,370) to us in fiscal 2001, for seconded employees. Similarly, ICICI Bank
received Rs. 5 million (US$ 106,720) from us in fiscal 2001 for employees
seconded to the ICICI group.

Share Transfer Services. We provided share transfer services to ICICI Bank
and earned fees of Rs. 8 million (US$ 170,750) in fiscal 2001.

Other Transactions. ICICI undertook a corporate brand advertising campaign
for the group, out of which an amount of Rs. 15 million (US$ 320,170) has been
recovered from ICICI Bank in fiscal 2001. ICICI set-up ATMs for ICICI Bank, and
earned fees of Rs. 8 million (US$ 170,750) during fiscal 2001. We marketed
retail products for ICICI Bank, and earned fees of Rs. 8 million (US$ 170,750)
in fiscal 2001.

Related Party Balances. The following table sets forth, for the periods
indicated, the balances payable to or receivable from related parties.

At March 31,
----------- ------------ -----------
2000 2001 2001
----------- ------------ -----------
(in millions)

Cash and cash equivalents........ Rs. -- Rs. 4,882 US$ 104
Loans............................ -- 192 4
Other assets..................... -- 147 3
Deposits......................... 14 -- --
Other liabilities................ Rs. -- Rs. 55 US$ 1

Employee Loans. ICICI has advanced housing, vehicle and general-purpose
loans to employees, bearing interest ranging from 2.5% to 3.5%. The tenure of
these loans range from five years to 25 years. The loans are generally secured
by the assets acquired by the employees. Employee loan balances outstanding at
year-end fiscal 2001 was Rs. 628 million (US$ 13 million) and at year-end
fiscal 2000 was Rs. 498 million (US$ 11 million).

Interest of Management in Certain Transactions. Except as otherwise stated
in this document, no amount or benefit has been paid or given to any of ICICI's
executive directors. During the period from April 1, 2000 to March 31, 2001,
ICICI's executive directors and executive officers borrowed an aggregate amount
of Rs. 9 million (US$ 192,102) from ICICI. An aggregate amount of Rs. 31
million (US$ 1 million) was outstanding at year-end fiscal 2001. These loans
currently carry interest rates ranging from 2.5% to 3.5% per annum and are
repayable over fixed periods of time.

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OVERVIEW OF THE INDIAN FINANCIAL SECTOR

The information in this section has been extracted from publicly available
documents from various sources, including officially prepared materials from
the government of India and its various ministries and the Reserve Bank of
India, and has not been prepared or independently verified by us. This is the
latest available information to our knowledge at year-end fiscal 2001.

The Reserve Bank of India, the central banking and monetary authority of
India, is the central regulatory and supervisory authority for the Indian
financial system. A variety of financial intermediaries in the public and
private sectors participate in India's financial sector, including the
following:

o commercial banks;

o long-term lending institutions;

o non-bank finance companies, including housing finance companies; and

o other specialized financial institutions, and state-level financial
institutions.

Until the early 1990s, the Indian financial system was strictly
controlled. Interest rates were administered, formal and informal parameters
governed the asset allocation, and strict controls limited entry into and
expansion within the financial sector. The government of India's economic
reform program, which began in 1991, encompassed the financial sector. The
first phase of the reform process began with the implementation of the
recommendations of the Committee on the Financial System, the Narasimham
Committee I. The reform process has now entered into its second phase. See
"--Banking Sector Reform--Committee on Banking Sector Reform (Narasimham
Committee II)".

This discussion presents an overview of the role and activities of the
Reserve Bank of India and of each of the major participants in the Indian
financial system, with a focus on the commercial banks and the long-term
lending institutions. This is followed by a brief summary of the banking reform
process along with the recommendations of various committees, which have played
a key role in the reform process. We then present a brief discussion on the
impact of the liberalization process on long-term lending institutions and
commercial banks. Finally, reforms in the non-banking financial sector are
briefly reviewed.

Reserve Bank of India

The Reserve Bank of India, established in 1935, is the central banking and
monetary authority in India. The Reserve Bank of India manages the country's
money supply and foreign exchange and also serves as a bank for the government
of India and for the country's commercial banks. In addition to these
traditional central banking roles, the Reserve Bank of India undertakes certain
developmental and promotional roles.

The Reserve Bank of India issues guidelines on exposure standards, income
recognition, asset classification, provisioning for non-performing assets and
capital adequacy standards for commercial banks, long-term lending institutions
and non-bank finance companies. The Reserve Bank of India requires these
institutions to furnish information relating to their businesses to the Reserve
Bank of India on a regular basis. For further discussion regarding Reserve Bank
of India's role as the regulatory and supervisory authority of India's
financial system and its impact on us, see "Supervision and Regulation".

144

Commercial Banks

Commercial banks in India have traditionally focused only on meeting the
short-term financial needs of industry, trade and agriculture. At year-end
fiscal 2001, there were 296 scheduled commercial banks in the country, with a
network of 65,908 branches serving approximately Rs. 9.5 trillion in deposit
accounts. Scheduled commercial banks are banks which are listed in the schedule
to the Reserve Bank of India Act, 1934, and may further be classified as public
sector banks, private sector banks and foreign banks. Commercial banks have a
presence throughout India, with nearly 71.4% of bank branches located in rural
or semi-urban areas of the country. A large number of these branches belong to
the public sector banks.

Public Sector Banks

Public sector banks make up the largest category in the Indian banking
system. They include the State Bank of India and its associate banks, 19
nationalized banks and 196 regional rural banks. Excluding the regional rural
banks, public sector banks have 46,181 branches, and account for 78.3% of
aggregate deposits and 76.2% of gross bank credit of the scheduled commercial
banks. The public sector banks' large network of branches enables them to fund
themselves out of low cost deposits.

The State Bank of India is the largest public sector bank in India. At
year-end fiscal 2001, the State Bank of India and its seven associate banks had
13,494 branches. They accounted for 24.7% of aggregate deposits and 29.4% of
gross bank credit of all scheduled commercial banks.

Regional rural banks were established from 1976 to 1987 by the central
government, state governments and sponsoring commercial banks jointly with a
view to develop the rural economy. Regional rural banks provide credit to small
farmers, artisans, small entrepreneurs and agricultural laborers. There were
196 regional rural banks at year-end fiscal 2001 with 14,431 branches,
accounting for 4.0% of aggregate deposits and 2.8% of gross bank credit of
scheduled commercial banks.

Private Sector Banks

After the first phase of bank nationalization was completed in 1969,
public sector banks made up the largest portion of Indian banking. The focus on
public sector banks was maintained throughout the 1970s and 1980s. Furthermore,
existing private sector banks, which showed signs of an eventual default, were
merged with state-owned banks. In July 1993, as part of the banking reform
process and as a measure to induce competition in the banking sector, the
Reserve Bank of India permitted entry by the private sector into the banking
system. This resulted in the introduction of nine private sector banks,
including ICICI Bank. These banks are collectively known as the "new" private
sector banks. With the merger of Times Bank Limited into HDFC Bank Limited in
February 2000, there are only eight "new" private sector banks at present. In
addition, 23 private sector banks existing prior to July 1993 are currently
operating.

At year-end fiscal 2001, private sector banks accounted for approximately
12.3% of aggregate deposits and 12.8% of gross bank credit of the scheduled
commercial banks. Their network of 5,117 branches accounted for 7.8% of the
total branch network of scheduled commercial banks in the country.

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Foreign Banks

At year-end fiscal 2001, there were 42 foreign banks with 179 foreign bank
branches operating in India. Foreign banks accounted for 5.3% of aggregate
deposits and 8.1% of gross bank credit of scheduled commercial banks at
year-end fiscal 2001. As part of the liberalization process, the Reserve Bank
of India has permitted foreign banks to operate more freely, subject to
requirements largely similar to those imposed on domestic banks. This has led
to increased foreign banking activity. During fiscal 2001, Standard Chartered
PLC acquired Grindlays Bank and the associated Grindlays Private Banking
business from ANZ Banking Group Limited.

The primary activity of most foreign banks in India has been in the
corporate segment. However, in recent years, some of the larger foreign banks
have started to make consumer financing a larger part of their portfolios based
on the growth opportunities in this area in India. These banks also offer
products such as automobile finance, home loans, credit cards and household
consumer finance.

Cooperative Banks

Cooperative banks cater to the financial needs of agriculture, small
industry and self-employed businessmen in urban and semi-urban areas of India.
The state land development banks and the primary land development banks provide
long-term credit for agriculture. In view of the recent liquidity and
insolvency problems in some cooperative banks, the Reserve Bank of India
undertook several interim measures, pending formal legislative changes,
including measures related to lending against shares, borrowings in the call
market and term deposits placed with other urban cooperative banks. In the
monetary and credit policy for fiscal 2002, the Reserve Bank of India has
proposed to set up a new apex supervisory body, which would take over the
entire inspection and supervisory functions in relation to scheduled and
non-scheduled urban cooperative banks.

Long-Term Lending Institutions

The long-term lending institutions were established to provide medium-term
and long-term financial assistance to various industries for setting up new
projects and for the expansion and modernization of existing facilities. These
institutions provide fund-based and non-fund-based assistance to industry in
the form of loans, underwriting, direct subscription to shares, debentures and
guarantees. The primary long-term lending institutions include ICICI Limited,
the Industrial Development Bank of India, the Industrial Finance Corporation of
India Limited and the Industrial Investment Bank of India.

The long-term lending institutions were expected to play a critical role
in Indian industrial growth and accordingly, had access to concessional
government funding. However, in recent years, the operating environment of the
long-term lending institutions has changed substantially. Although the initial
role of these institutions was largely limited to providing a channel for
government funding to industry, the reform process has required them to expand
the scope of their business activities. Their new activities include:

o fee-based activities like investment banking and advisory
services; and

o short-term lending activities including corporate finance and
working capital loans.

146

In addition, there are three other investment institutions at the national
level, Life Insurance Corporation of India, General Insurance Corporation of
India and its subsidiaries and Unit Trust of India, which also provide
long-term financial assistance to the industrial sector.

Non-Bank Finance Companies

There are over 10,000 non-bank finance companies in India, mostly in the
private sector. All non-bank finance companies are required to register with
the Reserve Bank of India. The non-bank finance companies may be categorized
into entities which take public deposits and those which do not. The companies
which accept public deposits are subject to strict supervision and capital
adequacy requirements of the Reserve Bank of India. ICICI Securities is a
non-bank finance company, which does not accept public deposits.

The scope and activities of non-bank finance companies have grown
significantly over the years. The primary activities of the non-bank finance
companies are consumer credit, including automobile finance, home finance and
consumer durable products finance, wholesale finance products to small and
medium-sized companies such as bills discounting, and fee-based services such
as investment banking and underwriting.

Over the last few years, certain non-bank finance companies have defaulted
to investors and depositors, and consequently actions (including bankruptcy
proceedings) have been initiated against them, many of which are currently
pending.

Housing Finance Companies

Housing finance companies form a distinct sub-group of the non-bank
finance companies. As a result of the various incentives given to investing in
the housing sector by the government in recent years, the scope of this
business has grown substantially. Housing Development Finance Corporation
Limited is a premier institution providing housing finance in India. In
addition, institutions like Life Insurance Corporation of India and ICICI and
several commercial banks have also established housing finance subsidiaries.
The National Housing Bank and the Housing and Urban Development Corporation
Limited are the two government-controlled financial institutions created to
improve the availability of housing finance in India.

Other Financial Institutions

Specialized Financial Institutions

In addition to the long-term lending institutions, there are various
specialized financial institutions which cater to the specific needs of
different sectors. They include the National Bank for Agricultural and Rural
Development, Export Import Bank of India, the Small Industries Development Bank
of India, ICICI Venture Funds Management Company Limited, Risk Capital and
Technology Finance Corporation Limited, Tourism Finance Corporation of India
Limited, Power Finance Corporation Limited and the Infrastructure Development
Finance Corporation Limited.

State Level Financial Institutions

State financial corporations operate at the state level and form an
integral part of the institutional financing system. State financial
corporations were set up to finance and promote small and medium-sized
enterprises. The state financial institutions are expected to achieve

147

balanced regional socio-economic growth by generating employment opportunities
and widening the ownership base of industry. At the state level, there are also
state industrial development corporations, which provide finance primarily to
medium-sized and large-sized enterprises.

Impact of Liberalization on the Indian Financial Sector

Until 1991, the financial sector in India was heavily controlled and
commercial banks and long-term lending institutions, the two dominant financial
intermediaries, had mutually exclusive roles and objectives and operated in a
largely stable environment, with little or no competition. Long-term lending
institutions were focused on the achievement of the Indian government's various
socio-economic objectives, including balanced industrial growth and employment
creation, especially in areas requiring development. Long-term lending
institutions were extended access to long-term funds at subsidized rates
through loans and equity from the government of India and from funds guaranteed
by the government of India originating from commercial banks in India and
foreign currency resources originating from multilateral and bilateral
agencies.

The focus of the commercial banks was primarily to mobilize household
savings through demand and time deposits and to use these deposits to meet the
short-term financial needs of borrowers in industry, trade and agriculture. In
addition, the commercial banks provided a range of banking services to
individuals and business entities.

However, since 1991, there have been comprehensive changes in the Indian
financial system. Various financial sector reforms, implemented since 1991,
have transformed the operating environment of the banks and long-term lending
institutions. In particular, the deregulation of interest rates, emergence of a
liberalized domestic capital market, and entry of new private sector banks,
along with the broadening of long-term lending institutions' product
portfolios, have progressively intensified the competition between banks and
long-term lending institutions.

All of these factors are leading to a gradual disappearance of the
traditional boundaries between banks and long-term lending institutions.
Long-term lending institutions now compete directly with banks in several areas
of business. At the same time, since 1992, the long-term lending institutions'
access to subsidized domestic sources of long-term funds has diminished and
they now primarily depend upon market borrowings. They do not have complete
access to retail savings and demand deposits and have certain restrictions on
the short maturity funds that they are able to raise from the market.

Banking Sector Reform

Most large banks in India were nationalized in 1969 and thereafter were
subject to a high degree of control until reform began in 1991. In addition to
controlling interest rates and entry into the banking sector, these regulations
also channeled lending into priority sectors. Banks were required to fund the
public sector through the mandatory acquisition of low interest-bearing
government securities or statutory liquidity ratio bonds to fulfill statutory
liquidity requirements. As a result, bank profitability was low, impaired loans
(non-performing assets) were comparatively high, capital adequacy was
diminished, and operational flexibility was severely hindered.

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Committee on the Financial System (Narasimham Committee I)

The Committee on the Financial System (The Narasimham Committee I) was set
up in August 1991 to recommend measures for reforming the financial sector.
Many of the recommendations made by the committee, which addressed
organizational issues, accounting practices and operating procedures, were
implemented by the government of India. The major recommendations that were
implemented included the following:

o with fiscal stabilization and the government increasingly resorting
to market borrowing to raise resources, the statutory liquidity ratio
or the proportion of the banks' net demand and time liabilities that
were required to be invested in government securities was reduced
from 38.5% in the pre-reform period to 25.0% in October 1997;

o similarly, the cash reserve ratio or the proportion of the bank's net
demand and time liabilities that were required to be deposited with
the Reserve Bank of India was reduced from 15.0% in the pre-reform
period to 7.5% currently;

o special tribunals were created to resolve bad debt problems;

o almost all restrictions on interest rates for deposits were removed
except savings bank deposits and current account deposits;

o substantial capital infusion to several state-owned banks was
approved in order to bring their capital adequacy closer to
internationally accepted standards. The stronger public sector banks
were given permission to issue equity to further increase capital;
and

o banks were granted the freedom to open or close branches.

Committee on Banking Sector Reform (Narasimham Committee II)

The second Committee on Banking Sector Reform (Narasimham Committee II)
submitted its report in April 1998. The major recommendations of the committee
were in respect of capital adequacy requirements, asset classification and
provisioning, risk management and merger policies. The Reserve Bank of India
accepted and began implementing many of these recommendations in October 1998.

Working Group on Role of Banks and Financial Institutions

In December 1997, the Reserve Bank of India created a working group under
the chairmanship of Mr. S. H. Khan to harmonize the role and operations of
long-term lending institutions and banks. In its report submitted in April
1998, the Khan Working Group recommended that banks and long-term lending
institutions progressively move towards universal banking and encouraged the
development of a regulatory framework for this purpose.

Based on the recommendations of the Khan Working Group and the Narasimham
Committee II, the Reserve Bank of India, in January 1999, issued a discussion
paper entitled "Harmonizing the Role and Operations of Development Financial
Institutions and Banks". The paper described the future of the financial
system:

o the provision of diversified services both by banks and long-term
lending institutions should continue, subject to appropriate
regulation by the Reserve Bank of India;

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o ultimately there should be only banks and restructured non-bank
finance companies;

o the special role of long-term lending institutions being noted, a
transitional path was envisioned for them to become either
full-fledged non-bank finance companies or banks. This transitory
arrangement should be worked out in consultation with the Reserve
Bank of India;

o if a long-term lending institution chooses to provide commercial
banking services directly, permission to create a 100.0% owned
banking subsidiary would be considered by the Reserve Bank of India;

o any conglomerate in which a bank is present should be subject to
supervision and regulation on a consolidated basis; and

o supervisory functions should be isolated and brought under a
consistent supervisory framework. Ownership of financial
intermediaries should be transferred from the Reserve Bank of India
to the government of India. This would help ensure that the Reserve
Bank of India focused on its supervisory and regulatory functions.

Guidelines on approach to Universal Banking

Pursuant to the recommendations of the Narasimham Committee II and the
Khan Working Group on banks and financial institutions, the Reserve Bank of
India, in the mid-term monetary and credit policy for fiscal 2000, announced
that financial institutions have an option to transform into a bank subject to
compliance with the prudential norms as applicable to banks. If a financial
institution chooses to exercise the option available to it and formally decides
to convert itself into a universal bank, it may formulate a plan for the
transition path and strategy for smooth conversion into a universal bank over a
specified time frame. In this direction, on April 28, 2001, the Reserve Bank of
India issued guidelines on several operational and regulatory issues which are
required to be addressed in evolving the path for transition of a financial
institution to a universal bank. The salient features of the guidelines include
the following.

o Reserve requirements. Following the conversion into a universal bank,
a financial institution must comply with the cash reserve ratio and
statutory liquidity ratio requirements under the provisions of the
Reserve Bank of India Act, and the Banking Regulation Act.

o Priority sector lending. Following the conversion of a financial
institution into a universal bank, the obligation to lend to the
priority sector up to a prescribed percentage of net bank credit will
apply;

o Permissible activities. Any activity undertaken by a financial
institution but not permissible for a bank under the provisions of
the Banking Regulation Act, 1949, may have to be stopped or divested
after the conversion of a financial institution into a universal
bank;

o Nature of subsidiaries. If any of the existing subsidiaries of a
financial institution is engaged in an activity not permitted under
the provisions of the Banking Regulation Act, then following the
conversion of the financial institution into a universal bank, such
subsidiary or activity must be separated from the operations of the
universal bank since the provisions of the Banking Regulation Act
permits a bank to have subsidiaries only for specified activities;

o Restriction on investments. A financial institution with an equity
investment in a company in excess of 30.0% of the paid up share
capital of that company or 30.0%

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of its own paid-up share capital and reserves, whichever is less,
following its conversion into a universal bank, must divest such
excess holdings to comply with the provisions of the Banking
Regulation Act.

Recent Structural Reforms

Legislative Framework for Recovery of Debts due to Banks

Following the recommendations of the Narasimham Committee, the Recovery of
Debts due to Banks and Financial Institutions Act, 1993 was enacted. The
purpose of this legislation is to provide for the establishment of a tribunal
for speedy resolution of litigation and recovery of debts owed to banks or
financial institutions. This act creates tribunals before which the banks or
the financial institutions can file a suit for recovery of the amounts due to
them. However, if a scheme of reconstruction is pending before the Board for
Industrial and Financial Reconstruction, under the Sick Industrial Companies
(Special Provision) Act, 1985, no proceeding for recovery can be initiated or
continued before the tribunals. The government of India's Ministry of Finance,
in India's budget for fiscal 2002, has announced measures for the setting up of
more debt recovery tribunals and the eventual repeal of the Sick Industrial
Companies (Special Provision) Act, 1985.

As part of its efforts to continue bank reform, the Reserve Bank of India
has continued to announce a series of measures in the monetary and credit
policy statements aimed at deregulating and strengthening the financial system.

Credit Policy for Fiscal 2001

In the monetary and credit policy for fiscal 2001, the Reserve Bank of
India introduced the following structural reform measures in the banking
sector:

o Requirement of a minimum of 85.0% daily maintenance of cash reserve
ratio balances by banks was reduced to 65.0%;

o Financial institutions were given greater flexibility to fix interest
rates on term deposits; and

o A broad approach towards "universal banking" was outlined. A
development finance institution intending to transform itself into a
bank would need to prepare a transition path in order to fully comply
with the regulatory requirements of a bank. The institution concerned
may consult the Reserve Bank of India for such transition
arrangements. The Reserve Bank of India would consider such requests
on a case-by-case basis.

The mid-term review of monetary and credit policy for fiscal 2001
introduced the following major changes in the banking and financial sector:

o All India Financial Institutions have been allowed to issue corporate
papers with a minimum maturity of 15 days and a maximum maturity of
one year;

o Non-bank institutions would be smoothly phased out of the call/notice
money market;

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o General provision on standard assets of banks to be made eligible for
inclusion in Tier 2 capital; and

o The "past-due" concept, that allowed a grace period of 30 days in the
norms for income recognition, asset classification and provisioning
would be dispensed with effective March 31, 2001.

Credit Policy for Fiscal 2002

In the monetary and credit policy for fiscal 2002, the Reserve Bank of
India has recommended the following major changes applicable to the banking and
financial sector:

o with effect from March 31, 2004, loans are to be classified as
non-performing by banks when interest payment or principal repayment
is overdue for 90 days;

o with effect from March 31, 2002, loans are to be classified as
non-performing by financial institutions when interest payment or
principal repayment is overdue for 180 days;

o the interest rate on cash reserve balances maintained with the
Reserve Bank of India has been raised to 6.0% from 4.0%;

o inter-bank term liability of maturity 15 days and above has been
freed from the cash reserve requirement;

o minimum maturity for wholesale term deposits of Rs. 1.5 million and
above has been reduced to seven days from 15 days;

o lending below the Prime Lending Rate by banks has been allowed;

o the exposure ceiling will be computed uniformly in relation to total
capital as defined under International Capital Adequacy Standards
effective March 31, 2002. Total capital will now include both Tier-1
and Tier-2 capital;

o non-fund-based exposures will be reckoned at 100.0% in computing
risk-weighted assets effective April 1, 2003; and

o the ceiling on exposure for a single borrower will be brought down to
15.0% from 20.0% and the group exposure ceiling will be brought down
to 40.0% from 50.0% effective March 31, 2002.

Reforms of the Non-Bank Finance Companies

The standards relating to income recognition, provisioning and capital
adequacy were prescribed for non-bank finance companies in June 1994. The
registered non-bank finance companies were required to achieve a minimum
capital adequacy of 6.0% by year-end fiscal 1995 and 8.0% by year-end fiscal
1996 and to obtain a minimum credit rating. To encourage the companies
complying with the regulatory framework, the Reserve Bank of India announced in
July 1996 certain liberalization measures under which the non-bank finance
companies registered with it and complying with the prudential norms and credit
rating requirements were granted freedom from the ceiling on interest rates on
deposits and amount of deposits. A new set of regulatory measures were
announced by the Reserve Bank of India in January 1998. Effective April 1,
2001, the Reserve Bank of India has stipulated a cap of 14.0% on interest rates
on the deposits raised from the public by the non-bank finance companies.

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Efforts have also been made to integrate non-bank finance companies into
the mainstream financial sector. The first phase of this integration covered
measures relating to registrations and standards. These include requiring
non-bank finance companies to register and to have minimum net owned funds of
Rs. 2.5 million. Other measures introduced include requiring non-bank finance
companies to maintain a certain percentage of liquid assets and to create a
reserve fund. The percentage of liquid assets to be maintained by non-bank
finance companies has been revised uniformly upwards and beginning in April
1999, 15.0% of public deposits must be maintained.

The focus of supervision has now shifted to non-bank finance companies
accepting public deposits. This is because these companies will be subject to
deposit regulations and standards. A task force on non-bank finance companies
set up by the government of India submitted its report in October 1998, and
recommended several steps to rationalize the regulation of non-bank finance
companies. Accepting these recommendations, the Reserve Bank of India issued
new guidelines for non-bank finance companies, which were as follows:

o a minimum net owned fund of Rs. 2.5 million is mandatory before
existing non-bank finance companies may accept public deposits;

o a minimum investment grade rating is compulsory for loan and
investment companies accepting public deposits, even if they have the
minimum net owned funds;

o permission to accept public deposits was also linked to the level of
capital to risk assets ratio. Different capital to risk assets ratio
levels for non-bank finance companies with different ratings were
specified; and

o non-bank finance companies were advised to restrict their investments
in real estate to 10.0% of their net owned funds.

In the monetary and credit policy for fiscal 2000, the Reserve Bank of
India stipulated a minimum capital base of Rs. 20 million for all new non-bank
finance companies. In India's budget for fiscal 2002, the procedures for
foreign direct investment in non-bank finance companies were substantially
liberalized. The list of non-bank finance company activities eligible for
foreign equity investment was increased to 18 with the addition of micro-credit
and rural credit.

Regulations Review Authority

In March 1999, the Reserve Bank of India set up a Regulations Review
Authority to provide an opportunity to the public at large to seek
justification for and suggest deletion or modification of any regulation,
circular or return issued, or required by the Reserve Bank of India. This
authority is neither a forum for grievance redressal nor a policy-making forum.
This authority will, however, convey its views on an application to the
relevant department of the Reserve Bank of India. Based on the recommendations
of this authority, some of the existing regulations may come under review over
time.

Insurance

The R.N. Malhotra Committee was set up in April 1993 to recommend reforms
in the insurance industry. This committee submitted its report on January 7,
1994 and its major recommendations were as follows:

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o the entry of the private sector in the insurance industry should be
allowed;

o India's two insurance corporations, the Life Insurance Corporation of
India and General Insurance Corporation of India should be
privatized, with the government retaining a 50.0% stake;

o the licensing system for surveyors should be abolished;

o the tariff regime in general insurance must continue;

o contributions to pension schemes must be exempt from tax;

o settlement of claims must be expedited; and

o high priority should be given to activating the regulatory apparatus.

As a first step towards implementation of the recommendations of the
Malhotra Committee on Reforms in the Insurance Sector, the budget for fiscal
1996 indicated that an independent regulatory authority would be set up for the
insurance industry, and the Insurance Regulatory Authority was set up in 1996.

In December 1999, the parliament approved the Insurance Regulatory and
Development Authority Bill, 1999. This bill has opened up the Indian insurance
sector for foreign and private investors. This bill allows foreign equity
participation in new insurance companies of up to 26.0%. The new company should
have a minimum paid up equity capital of Rs. 1.0 billion to carry out the
business of life insurance or general insurance or Rs. 2.0 billion to carry out
exclusively the business of reinsurance. An Insurance Regulatory and
Development Authority has been set up to regulate, promote and ensure orderly
growth of the insurance industry.

In the monetary and credit policy for fiscal 2001, the Reserve Bank of
India issued guidelines governing the entry of banks and financial institutions
into the insurance business. The objective of the guidelines is to allow only
financially strong banks and financial institutions to enter the insurance
business. These guidelines permit banks and financial institutions to enter the
business of underwriting insurance through joint ventures if they meet the
stipulated criteria relating to their net worth, capital adequacy ratio,
profitability track record and level of impaired loans and the performance of
their existing subsidiary companies. These guidelines specify the maximum
percentage of the paid up capital and of the net worth of the bank or financial
institution that can be invested in the joint venture. To keep the risks
associated with each of the businesses distinct, the guidelines envisage an
"arms length" relationship between the bank or financial institution and the
insurance company. Foreign equity participation of up to 26.0% is presently
allowed in the insurance sector subject to the issuance of a necessary license
by the Insurance Regulatory and Development Authority.

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SUPERVISION AND REGULATION

Reserve Bank of India Regulations

ICICI is regulated and supervised by the Reserve Bank of India. The
Reserve Bank of India requires ICICI to furnish statements, information and
certain details relating to its business. It has issued guidelines for
financial institutions and commercial banks on income recognition, asset
classification, capital adequacy standards and provisioning for non-performing
assets (impaired loans). The Reserve Bank of India has also set up a Board for
Financial Supervision, under the chairmanship of the Governor of the Reserve
Bank of India. This Board is assisted by the Financial Institutions Division of
the Department of Banking Supervision of the Reserve Bank of India which is
responsible for supervision of financial institutions. The Financial
Institutions Division of the Department of Banking Supervision is authorized to
make requests for information from or undertake both on-site inspection and
off-site surveillance of financial institutions. ICICI Bank is licensed as a
"banking company" and is also regulated and supervised by the Reserve Bank of
India.

Loan Loss Provisions and Non-Performing Assets

In March 1994, the Reserve Bank of India issued formal guidelines on
income recognition, asset classification, provisioning standards and valuation
of investments applicable to long-term lending institutions, which are revised
from time to time. These guidelines are applied for the calculation of
non-performing assets (impaired loans) under Indian GAAP. The discussion of
asset quality in this annual report is under US GAAP and the US GAAP standards
applied are set forth in "Business--Loan Portfolio--Recognition of Impaired
Loans."

The principal features of these Reserve Bank of India guidelines
applicable for the financial statements under Indian GAAP, which have been
implemented with respect to ICICI's loans, debentures, lease assets, hire
purchases and bills are set forth below.

Non-Performing Assets

Pursuant to the Reserve Bank of India guidelines for financial
institutions, a non-performing asset is an asset in respect of which any amount
of interest has remained overdue for more than 180 days or any amount of
principal has remained overdue for more than 365 days. In the monetary and
credit policy for fiscal 2002, the norms have been revised to 180 days overdue
for both interest and principal payments with effect from fiscal 2002. In the
case of a banking company, like ICICI Bank, any amount of principal or interest
must have remained overdue for more than two quarters (180 days) before being
classified as a non-performing asset. With effect from fiscal 2004, banks have
to classify an asset as non-performing when principal or interest has remained
overdue for more than 90 days. Interest in respect of non-performing assets is
not recognized or credited to the income account unless collected.

Asset Classification

In line with the Reserve Bank of India circular on
restructured/rescheduled assets, issued on March 28, 2001 for financial
institutions, and on March 30, 2001 for banks, and the earlier guidelines on
asset classification, assets are classified as described below:

o Standard Assets. Assets that do not have any problems or do not carry
more than normal risk attached to the business. In case of standard
assets which are restructured

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or rescheduled, they shall continue to be classified under standard
assets for a period of one year.

o Sub-Standard Assets. Assets that are non-performing assets for a
period not exceeding 18 months, or have been renegotiated or
rescheduled after the project to which they relate has achieved cash
break-even. A sub-standard asset that is restructured or rescheduled
shall continue to be placed in the sub-standard asset category for a
period of one year.

o Doubtful Assets. Assets that are non-performing assets for more than
18 months, or carry potential threats to recoveries on account of
erosion in the value of security and other factors such as fraud.

o Loss Assets. Assets on which losses have been identified but the
amount has not been written off wholly or partially or assets that
are considered uncollectible.

Renegotiated or rescheduled loans will be eligible to be upgraded only
after satisfactory performance during a period of one year from the first due
date of interest or principal pursuant to the rescheduled terms.

Provisioning and Write-Offs

Provisions are based on guidelines specific to the classification of the
assets. The following guidelines apply to the various asset classifications:

o Standard Assets. A general provision of 0.25% is required.

o Sub-Standard Assets. A provision of 10.0% is required.

o Doubtful Assets. A 100.0% provision is required to be made against
the unsecured portion of the doubtful asset and charged against
income. The value assigned to the collateral securing a loan is the
amount reflected on the borrower's books or the realizable value
determined by third party appraisers. In cases where there is a
secured portion of the asset, depending upon the period for which the
asset remains doubtful, a 20.0% to 50.0% provision is required to be
taken against the secured asset as follows:

- Up to one year: 20.0% provision
- One to three years: 30.0% provision
- More than three years: 50.0% provision

o Loss Assets. The entire asset is required to be written off or
provided for.

From fiscal 2001, ICICI decided to make accelerated provisions against
non-performing loans under Indian GAAP. Pursuant to the revised provisioning
policy, ICICI will achieve a 50.0% provision cover against the secured portion
of a non-performing asset in an accelerated time frame of three years, as
compared to the five-and-a-half-year period prescribed by the Reserve Bank of
India.

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Classification and Valuation of Investments

The Reserve Bank of India has issued guidelines for the classification and
valuation of investments. These guidelines were revised by the Reserve Bank of
India effective March 31, 2001, so as to bring the norms closer to the
international best practices. The guidelines, among others, require financial
institutions to classify their entire investment portfolio at March 31, 2001 as
"held to maturity", "available for sale" and "held for trading". Similar
guidelines are also applicable to scheduled commercial banks effective
September 30, 2000.

Legal Reserve Requirements

Cash Reserve Ratio

A banking company such as ICICI Bank is required to maintain a
specified percentage of its demand and time liabilities, excluding inter-bank
deposits and certain specified liabilities, by way of a cash reserve with
itself and by way of a balance in a current account with the Reserve Bank of
India. The cash reserve ratio to be currently maintained by the scheduled
commercial banks is 7.5%. The Reserve Bank of India pays no interest on the
cash reserves up to 3.0% of the demand and time liabilities and currently pays
6.0% on the balance.

The cash reserve ratio has to be maintained on an average basis for a
fortnightly period and should not be below 50% during the first week and not
lower than 65% in the following week of the required cash reserve ratio on any
particular day except the last business day of the fortnight. On the last
business day of the fortnight, no restrictions apply.

Ever since the Reserve Bank of India introduced the financial sector
reforms, the goal has been to reduce the cash reserve ratio. The cash reserve
ratio has been reduced from 15.0% in fiscal 1990 to 7.5% currently. It has been
indicated by the Reserve Bank of India that the ratio would ultimately be
reduced to the statutory minimum of 3.0%.

Statutory Liquidity Ratio

In addition to the cash reserve ratio, a banking company such as ICICI
Bank is required to maintain a specified percentage of its net demand and time
liabilities by way of liquid assets like cash, gold or approved securities. The
percentage of this liquidity ratio is fixed by the Reserve Bank of India from
time to time. Currently, the Reserve Bank of India requires banking companies
to maintain a liquidity ratio of 25.0%.

Regulations on Asset Liability Management

For Banks

At present, Reserve Bank of India regulations for asset liability
management require banks to draw up asset-liability gap statements separately
for rupee and for four major foreign currencies. These gap statements are
prepared by scheduling all assets and liabilities according to the stated and
anticipated re-pricing date, or maturity date. These statements have to be
submitted to the Reserve Bank of India on a regular basis. The Reserve Bank of
India has advised banks to actively monitor the difference in the amount of
assets and liabilities maturing or being re-priced in a particular period and
place internal prudential limits on the gaps in each time period, as a risk
control mechanism. Additionally, the Reserve Bank of India had asked banks to
manage their asset-liability structure such that the liquidity gap, if
negative, should not exceed 20.0% of cash

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outflows in 1-14 and 15-28 days periods. This 20.0% limit on negative gaps has
been made mandatory with effect from April 1, 2000.

For Financial Institutions

The Reserve Bank of India issued guidelines on asset-liability management
for financial institutions for implementation from April 1, 2000. The
guidelines introduce a formal framework for the management of liquidity and
interest rate risk. A financial institution is required to constitute an Asset
Liability Committee headed by the Chief Executive Officer or the Chairman and
Managing Director or the Deputy Managing Director or the Executive Director.
Senior management from relevant functions should be represented in the Asset
Liability Committee. The Management Committee of the Board or any committee
specifically constituted for the purpose should oversee the implementation of
the asset liability management system. Further, the Reserve Bank of India has
stipulated liquidity and interest rate-risk sensitivity gap reports, which have
to be prepared currency-wise. The reports have to be prepared by grouping asset
and liability cashflows in relevant maturity or re-pricing time periods. The
guidelines define the time periods and also state the norms for the
classification of assets and liabilities in particular time periods.

The liquidity report and the interest rate sensitivity report are being
prepared on a regular basis. Short-term liquidity gap limits stipulate that the
negative gap in the 1-14 day and in the 15-28 day time periods should not
exceed 10.0% and 15.0% of the outflows, respectively. A financial institution
is advised to monitor its asset-liability positions with respect to these
limits and also stipulate other internal liquidity limits that it deems
appropriate. For interest rate risk, the Reserve Bank of India has recommended
that the board of directors or the Asset Liability Committee of the financial
institution should decide the prudential tolerance limits.

Directed Lending

Priority Sector Lending Requirements

The Reserve Bank of India requires Indian commercial banks such as ICICI
Bank to lend a certain percentage of their net bank credit to specific sectors
(the priority sectors) such as agriculture, small-scale industry, small
businesses and export companies. Total priority sector advances should be 40.0%
of net bank credit with agricultural advances required to be 18.0% of net bank
credit and advances to weaker sections required to be 10.0% of net bank credit.

Any shortfall in the amount required to be lent to the priority sectors
may be required to be deposited with developmental banks like National Bank for
Agriculture and Rural Development and Small Industries Development Bank of
India. These deposits can be for a period of up to five years.

The Reserve Bank of India requires banks to lend a minimum of 3.0% of
incremental deposits in the previous fiscal year towards housing finance. This
can be in the form of home loans to individuals or subscription to the
debentures and bonds of National Housing Bank and housing development
institutions recognized by the government of India.

Export Credit

The Reserve Bank of India also requires Indian commercial banks such as
ICICI Bank to make loans to exporters at concessional rates of interest. This
enables exporters to have access to an internationally competitive financing
option. Pursuant to existing guidelines, 12.0% of ICICI

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Bank's net bank credit is required to be in the form of export credit. ICICI
Bank provides export credit for pre-shipment and post-shipment requirements of
exporter borrowers in rupees and foreign currencies.

Capital Adequacy Requirements

ICICI and ICICI Bank are subject to the capital adequacy requirements of
the Reserve Bank of India, which, based on the guidelines of the Basle
Committee on Banking Regulations and Supervisory Practices, 1988, requires them
to maintain a minimum ratio of capital to risk adjusted assets and off-balance
sheet items of 9.0%, at least half of which must be Tier 1 capital.

The total capital of a company is classified into Tier 1 and Tier 2
capital. Tier 1 capital, the core capital, provides the most permanent and
readily available support against unexpected losses. It comprises paid-up
capital and reserves consisting of any statutory reserves, free reserves,
capital reserves or special reserves created pursuant to the Indian Income Tax
Act, 1961 reduced by equity investments in subsidiaries, intangible assets, and
the gap in provisioning and losses in the current period and those brought
forward from the previous period. Recently, the Reserve Bank of India has,
subject to certain conditions, also permitted the inclusion of certain types of
non-cumulative preference shares in Tier 1 capital.

Tier 2 capital consists of undisclosed reserves, revaluation reserves (at
a discount of 55.0%), general provisions and loss reserves (allowed up to a
maximum of 1.25% of weighted risk assets), hybrid debt capital instruments
(which combine certain features of both equity and debt securities),
subordinated debt with an initial maturity of not less than five years and
redeemable cumulative non-convertible preference shares with an initial
maturity of not less than five years. Subordinated debt and redeemable
cumulative non-convertible preference shares are subject to progressive
discounts for inclusion in Tier 2 capital and are limited, in the aggregate, to
50.0% of Tier 1 capital. Tier 2 capital cannot exceed Tier 1 capital.

Risk adjusted assets are the risk weighted total of specified funded and
non-funded items. Degrees of credit risk expressed as percentage weighting have
been assigned to balance sheet assets and conversion factors to off-balance
sheet items. The value of each asset item is multiplied by the relevant weights
to produce risk-adjusted values of assets and off-balance-sheet items.
Guarantees are treated similarly to funded exposure and are subject to similar
risk weightings. All foreign exchange open position limits of ICICI and ICICI
Bank carry a 100.0% risk weight. Starting from March 31, 2000, investments in
government and approved securities also carry a risk weight of 2.5% for
fluctuation in prices. Effective March 31, 2001, a risk-weight of 2.5% to cover
market risk also has to be assigned in respect of non-government or
non-approved securities over and above the existing risk weights for credit
risk in these securities. Banks and financial institutions are required to
assign a 100.0% risk weight for all state-government guaranteed securities
issued by defaulting entities. The aggregate risk weighted assets are taken
into account for determining the capital adequacy ratio.

Credit Exposure Limits

As a prudent measure aimed at better risk management and avoidance of
concentration of credit risk, the Reserve Bank of India has prescribed credit
exposure limits for long-term lending institutions and banks in respect of
their lending to individual borrowers and to all companies in a single group
(or sponsor group).

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The limits set by the Reserve Bank of India are as follows:

o Effective April 1, 2000, exposure to individual borrowers must not
exceed 20.0% of paid-up capital and free reserves (capital funds) of
the bank or financial institution. However, at October 31, 1999, if
the exposure level of any institution or bank to a single borrower
was in excess of 20.0% of the capital funds, it would have a two year
period to reduce exposure to 20.0%, i.e., by October 31, 2001.

o Exposure to sponsor groups must not exceed 50.0% of the capital funds
of the bank or financial institution. In the event the additional
credit exposure is in respect of infrastructure projects, exposure to
group borrowers may be up to 60.0% of the capital funds of the bank
or financial institution.

o In the monetary and credit policy for fiscal 2002, the concept of
capital funds has been broadened to represent total capital (Tier 1
and Tier 2). Simultaneously, the exposure ceiling for single borrower
has been reduced from 20.0% to 15.0% effective March 31, 2002.
Similarly, the group exposure limits will be reduced effective March
31, 2002, to 40.0% of capital funds. In case of financing for
infrastructure projects, the limit is extendable by another 10.0%,
i.e., up to 50.0%.

Exposure includes funded and non-funded credit limits, underwriting and
other similar commitments. The exposure limit is calculated as the aggregate of
actual outstanding and undisbursed or undrawn commitments. In respect of
non-funded credit limits, only 50.0% of such outstandings is taken into account
for determining exposure limits. However, in line with international best
practices, it has been decided that non-fund based exposures should be reckoned
at 100.0% in determining individual and group borrower exposure ceiling,
effective April 1, 2003.

Capital Market Exposure Limits for Banks

Pursuant to the Reserve Bank of India guidelines, the exposure of banks to
the capital market by way of investments in shares, convertible debentures and
units of equity oriented mutual funds, within the overall exposure to sensitive
sectors, should not exceed 5.0% of the outstanding domestic credit (excluding
inter-bank lending and advances outside India) at March 31 of the previous
fiscal year. These guidelines were revised on May 11, 2001 specifying the types
of capital market exposure that could be undertaken by banks. Further, the 5.0%
ceiling will be computed in relation to the total advances (including
commercial paper) at March 31 of the previous fiscal year.

Borrowing Guidelines

ICICI requires specific approval of the Ministry of Finance and Reserve
Bank of India for borrowings in foreign currency. See also "Restriction on
Foreign Ownership of Indian Securities". The guidelines on raising of resources
by financial institutions were modified on June 21, 2000. Presently, financial
institutions are not required to seek the Reserve Bank of India's prior
approval or registration for raising of resources by way of issuance of bonds
(both public issuances and private placements) subject to the fulfillment of
certain conditions relating to the minimum maturity of the bond, call/put
options, the yield-to-maturity offered and the `exit' option on the bonds. The
outstanding total resources mobilized by an individual financial institution
should not exceed 10 times its net owned funds as per the latest audited
balance sheet. In respect of floating rate bonds, financial institutions are
required to seek prior approval from the Reserve Bank of India with regard to
the "reference rate" selected and the methods of floating

160

rate determination. Prudential requirements set by other regulatory authorities
such as the Stock Exchange Board of India also apply. The Reserve Bank of India
has also stipulated certain restrictions on the mobilization of funds through
other specified instruments.

Foreign Currency Dealership

ICICI, as a restricted authorized dealer, has been granted permission to
engage in foreign exchange transactions in all foreign currencies in respect of
raising foreign currency resources, granting foreign currency sub-loans,
servicing foreign currency debt repayment obligations, opening letters of
credit, opening accounts with banks abroad, issuing guarantees, entering
derivative transactions, carrying out risk management activities and other
activities that are incidental to ICICI's normal functions authorized under its
organizational documents.

Authorized dealers such as ICICI are required to determine their own open
positions in accordance with certain guidelines and these limits are approved
by the Reserve Bank of India. ICICI Bank is authorized to conduct all foreign
currency transactions under current Indian regulations.

Regulations and Guidelines of the Securities and Exchange Board of India

The Securities and Exchange Board of India was established to protect the
interests of public investors in securities and to promote the development of,
and to regulate, the Indian securities market. We are subject to the Securities
and Exchange Board of India regulations for our capital issuances, as well as
our underwriting, custodial, depositary participant and debenture trusteeship
activities directly, and for investment banking, registrar and transfer agents
and broking in respect of business carried on by our subsidiaries. These
regulations provide for our registration with the Securities and Exchange Board
of India for each of these activities, functions and responsibilities. We are
required to adhere to a code of conduct applicable for these activities.

Under the regulations governing capital issuances of securities, ICICI is
designated as a "designated financial institution" by the Securities and
Exchange Board of India. The regulations governing designated financial
institutions differ from those governing capital issuances by other financial
and industrial companies. Benefits available to ICICI as a designated financial
institution include exercise of green-shoe option of up to 100.0% of the issue
size, while this benefit is not available to non-designated financial
institutions. The Securities and Exchange Board of India also permits filing of
an umbrella prospectus by designated financial institutions for debt issuances
during a fiscal year. The Securities and Exchange Board of India has provided
for a minimum subscription clause, wherein an issuer shall refund the amounts
raised during a public issue if the minimum subscription of 90.0% is not
received. However, designated financial institutions, in their issuances, do
not have to comply with the minimum subscription clause. These regulations also
require designated financial institutions to maintain a debt to equity ratio
not exceeding 12:1 and a minimum notional debt service coverage ratio of 1.2.

The Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997 exempts ICICI, on account of it being a
public financial institution under the Companies Act, 1956, from public offer
requirements, when it acquires shares in the ordinary course of business on its
own account or as a pledgee.

161

Public Financial Institution Status

ICICI is a public financial institution under the Indian Companies Act,
1956. The special status of public financial institutions is also recognized
under other statutes including the Indian Income Tax Act, 1961, Sick Industrial
Companies (Special Provisions) Act, 1985 and Recovery of Debts Due to Banks and
Financial Institutions Act, 1993. As a public financial institution, ICICI is
entitled to certain benefits under various statutes including the following:

o For income tax purposes, ICICI's deposits and bonds are prescribed
modes for investing and depositing surplus money by charitable and
religious trusts.

o The government of India has permitted non-government provident,
superannuation and gratuity funds to invest up to 40.0% of their
annual accretion of funds in bonds and securities issued by public
financial institutions. Further, the trustees of these funds may at
their discretion invest an additional 20.0% of such accretions in
these bonds and securities.

o Indian law provides that a public financial institution cannot,
except as provided by law or practice, divulge any information
relating to or to the affairs of its customers.

o The Recovery of Debts Due to Banks and Financial Institutions Act,
1993 provides for establishment of debt recovery tribunals for
recovery of debts due to any bank or public financial institution or
to a consortium of banks and public financial institutions. Under
this Act, the procedures for recoveries of debt have been simplified
and time frames have been fixed for speedy disposal of cases. Upon
establishment of the debt recovery tribunal, no court or other
authority can exercise jurisdiction in relation to matters covered by
this Act, except the higher courts in India in certain circumstances.

o The Reserve Bank of India has stipulated a 20.0% risk weighting on
commercial banks' investments in bonds issued by public financial
institutions.

In the event ICICI ceases to be a public financial institution, it would
be an event of default under some of ICICI's loan agreements related to foreign
currency borrowings.

Income Tax Benefits

Under the Indian Income Tax Act, ICICI is allowed a deduction of up to
40.0% of its taxable business income derived from the business of long-term
financing (defined as loans and advances extended for a period of not less than
five years) which is included in the special reserve, provided that the total
amount of this reserve does not exceed two times the paid-up share capital and
general reserves. ICICI has been granted this benefit because it is a financial
institution engaged in providing long-term financing for industrial development
activity which the government of India encourages. Effective fiscal 1998, if a
special reserve is created, it must be maintained and if it is utilized, it
must be treated as taxable income of the year in which it is utilized.

The taxable income of ICICI does not include dividends, interest
(including any fee or commission for giving any guarantee to or enhancing
credit) or long-term capital gains from investments made by way of shares or
long-term finance in any enterprise or undertaking wholly engaged in the
business of (i) developing, (ii) maintaining and operating or (iii) developing,
maintaining and operating any infrastructure in accordance with and subject to
the provisions of the Income Tax Act. The taxable income of ICICI also excludes
dividend income, which is

162

declared, distributed or paid in accordance with and subject to the provisions
of the Income-tax Act.

Under the Income Tax Act, any bad debts or part thereof written off as
irrecoverable, are allowable as a deduction from the total income of ICICI in
accordance with and subject to the provisions contained therein. Interest on
certain categories of bad and doubtful debts are chargeable to tax only in the
year of receipt or credit to ICICI's income statement whichever is earlier.

Under the Income Tax Act, the long-term capital gains arising out of the
sale of capital assets excluding bonds and debentures (except capital indexed
bonds issued by the government) are computed after indexing the cost of the
acquisition or improvement. Taxable long-term capital gains, if any, on the
sale of listed securities are charged to tax at a concessional rate.

Deposit Insurance

ICICI Bank takes both demand and time deposits. In India, the Deposit
Insurance and Credit Guarantee Corporation, a 100.0% subsidiary of the Reserve
Bank of India, insures bank deposits of Rs. 100,000 (US$ 2,134) or less.

163

EXCHANGE CONTROLS

Restrictions on Conversion of Rupees

There are restrictions on the conversion of rupees into dollars. Before
February 29, 1992, the Reserve Bank of India determined the official value of
the rupee in relation to a weighted basket of currencies of India's major
trading partners. In the February 1992 budget, a new dual exchange rate
mechanism was introduced by allowing conversion of 60.0% of the foreign
exchange received on trade or current account at a market-determined rate and
the remaining 40.0% at the official rate. All importers were, however, required
to buy foreign exchange at the market rate except for certain specified
priority imports. In March 1993, the exchange rate was unified and allowed to
float. In February 1994 and again in August 1994, the Reserve Bank of India
announced relaxations in payment restrictions in the case of a number of
transactions. Since August 1994, the government of India has substantially
complied with its obligations owed to the International Monetary Fund, under
which India is committed to refrain from using exchange restrictions on current
international transactions as an instrument in managing the balance of
payments. Effective July 1995, the process of current account convertibility
was advanced by relaxing restrictions on foreign exchange for various purposes,
such as foreign travel and medical treatment.

In December 1999, the Indian parliament passed the new Foreign Exchange
Management Act, 1999, which has become effective on June 1, 2000, replacing the
earlier Foreign Exchange Regulation Act, 1973. This new legislation indicates a
major shift in the policy of the government with regard to foreign exchange
management in India. While the Foreign Exchange Regulation Act, 1973, was aimed
at the conservation of foreign exchange and its utilization for the economic
development of the country, the objective of the Foreign Exchange Management
Act, 1999, is to facilitate external trade and promote the orderly development
and maintenance of the foreign exchange market in India.

The Foreign Exchange Management Act, 1999, permits most transactions
involving foreign exchange except those prohibited or restricted by the Reserve
Bank of India. The Foreign Exchange Management Act, 1999, has eased
restrictions on current account transactions. However, the Reserve Bank of
India continues to exercise control over capital account transactions (i.e.,
those which alter the assets or liabilities, including contingent liabilities,
of persons). The Reserve Bank of India has issued regulations under the Foreign
Exchange Management Act, 1999, to regulate the various kinds of capital account
transactions, including certain aspects of the purchase and issuance of shares
of Indian companies.

Restrictions on Sale of the Equity Shares underlying the ADSs and for
Repatriation of Sale Proceeds

ADSs issued by Indian companies to non-residents have free transferability
outside India. However, under Indian regulations and practice, the approval of
the Reserve Bank of India is required for the sale of equity shares underlying
the ADSs (other than a sale on a stock exchange or in connection with an offer
made under the takeover regulations) by a non-resident of India to a resident
of India as well as for renunciation of rights to a resident of India.
Investors who seek to sell in India any equity shares withdrawn from the
depositary facility and to convert the rupee proceeds from such sale into
foreign currency and repatriate such foreign currency from India will, subject
to the foregoing, have to obtain Reserve Bank of India approval for each such
transaction.

164

The Reserve Bank of India has recently issued certain notifications after
the announcement of India's budget for fiscal 2002 for the liberalization of
the capital account. On specific guidelines to be issued by the regulatory
authorities, in contrast to prior regulations, an ADS holder who surrenders an
ADS and receives shares may be able to redeposit those shares in the depositary
facility in exchange for ADSs. Also, an investor who has purchased shares in
the Indian market may deposit them in the ADS program and receive ADSs from the
overseas depositary. However, in either case, the deposit or redeposit of
equity shares may be limited by securities law restrictions and will be
restricted so that the cumulative aggregate number of shares that can be
deposited or redeposited as of any time cannot exceed the cumulative aggregate
number of equity shares withdrawn from the depositary facility as of such time.
Indian companies have been permitted to sponsor ADS/GDR issues with an overseas
depositary against shares held by a shareholder, who wish to use this option
subject to compliance with Foreign Currency Convertible Bonds and Ordinary
Shares (through Depository Receipt Mechanism) Scheme, 1993 and guidelines
issued by the government.

165

MARKET PRICE INFORMATION

Equity Shares

ICICI's outstanding equity shares are listed and traded on the Bangalore,
Calcutta, Delhi, Madras, Mangalore and Vadodara Stock Exchanges, the Bombay
Stock Exchange or the BSE and on the National Stock Exchange of India Limited
or the NSE. The equity shares were first listed on the BSE in 1955. The prices
for equity shares as quoted in the official list of each of the Indian stock
exchanges are in Indian rupees. The following table shows:

o the reported high and low closing prices quoted in rupees for the
equity shares on the BSE; and

o the reported high and low closing prices for the equity shares,
translated into U.S. dollars, based on the noon buying rate on the
last business day of each period presented.

Price per equity share(1)
----------------------------------------------------
High Low High Low
----------------------------------------------------

Annual prices:
Fiscal 1997........................................... Rs. 113.00 Rs. 50.25 US$ 3.15 US$ 1.40
Fiscal 1998........................................... 106.75 57.75 2.70 1.46
Fiscal 1999........................................... 122.60 39.30 2.88 0.92
Fiscal 2000........................................... 190.05 41.40 4.35 0.95
Fiscal 2001........................................... 154.00 69.00 3.30 1.48
Quarterly prices:
Fiscal 2000:
First Quarter......................................... 78.00 41.40 1.80 0.95
Second Quarter........................................ 95.00 72.00 2.17 1.65
Third Quarter......................................... 113.45 75.95 2.61 1.75
Fourth Quarter........................................ 190.05 96.50 4.35 2.21
Fiscal 2001:
First Quarter......................................... 154.00 101.95 3.45 2.28
Second Quarter........................................ 151.80 97.85 3.30 2.12
Third Quarter......................................... 102.85 69.00 2.20 1.48
Fourth Quarter........................................ 112.00 84.90 2.39 1.81
Fiscal 2002:
First Quarter......................................... 89.50 69.45 1.90 1.47
Second Quarter (through August 31).................... 71.65 51.40 1.52 1.09
Monthly prices:
March 2001............................................ 104.00 84.90 2.22 1.81
April 2001............................................ 87.75 77.00 1.87 1.64
May 2001.............................................. 89.50 81.55 1.90 1.74
June 2001............................................. 80.05 69.45 1.70 1.47
July 2001............................................. 71.65 58.35 1.52 1.24
August 2001........................................... 59.30 51.40 1.26 1.09
<FN>
---------------
(1) Data from the BSE. The prices quoted on the NSE and other stock exchanges may be different.
</FN>

166

On August 31, 2001, the closing price of equity shares on the BSE was Rs.
52.90 equivalent to US$ 1.12 per equity share (US$ 5.60 per ADS on an imputed
basis) translated at the noon buying rate of Rs. 47.17 per US$ 1.00 on August
31, 2001.

At August 23, 2001, there were approximately 551,180 holders of record of
our equity shares, of which 95 had registered addresses in the United States
and held an aggregate of approximately 203,969 equity shares.

ADSs

ICICI's ADSs, each representing five equity shares, were originally issued
in September 1999 in a public offering and were listed and traded on the New
York Stock Exchange under the symbol IC.d. The equity shares underlying the
ADSs have been listed on the Bangalore, Calcutta, Delhi, Madras, Mangalore and
Vadodara Stock Exchanges, the BSE and the NSE.

Subsequent to ICICI's ADS offering in September 1999, ICICI completed an
exchange offer of its GDRs for its SEC-registered ADSs on a one-for-one basis.
ICICI's GDRs, each representing five equity shares, were originally issued in
August 1996 and listed on the London Stock Exchange. Subsequent to this
exchange offer in November 1999, ICICI's GDRs were delisted from the London
Stock Exchange. These ADSs were listed and traded on the New York Stock
Exchange under the symbol IC. The trading symbol of the ADSs sold in the public
offering in September 1999, IC.d, was different from the trading symbol of the
ADSs issued in the exchange offer, IC. The equity shares underlying the ADSs
sold in the public offering were issued in the middle of fiscal 2000 and were
subject to a pro rata dividend for fiscal 2000 whereas the equity shares
underlying the ADSs issued in the exchange offer were issued in August 1996 and
were subject to a full dividend for fiscal 2000. Subsequent to June 19, 2000,
the record date for the final dividend for fiscal 2000, all of ICICI's
outstanding ADSs ranked pari passu and since then have traded under the symbol
IC on the New York Stock Exchange. At August 23, 2001, we had approximately
51.28 million ADSs, equivalent to 256.41 million equity shares, outstanding.

167

The following table sets forth, for the periods indicated, the reported
high and low closing prices on the New York Stock Exchange for the outstanding
ADSs traded under the symbol IC.

Price per ADS
--------------------------
High Low
--------------------------

Annual prices:
Fiscal 2000.................................... US$ 40.50 US$ 10.63
Fiscal 2001.................................... 26.75 7.25
Quarterly prices:
Fiscal 2000:
Third Quarter
(from November 1, 1999)........................ 17.50 10.63
Fourth Quarter ................................ 40.50 15.25
Fiscal 2001:
First Quarter.................................. 26.75 14.56
Second Quarter................................. 18.94 11.00
Third Quarter.................................. 12.25 7.25
Fourth Quarter................................. 13.19 10.63
Fiscal 2002:
First Quarter.................................. 12.20 9.15
Second Quarter (through August 31)............. 9.95 6.69
Monthly prices:
March 2001..................................... 13.10 11.10
April 2001..................................... 12.17 10.40
May 2001....................................... 12.20 10.58
June 2001...................................... 11.76 9.15
July 2001...................................... 9.95 7.96
August 2001.................................... 8.05 6.69

168

RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

India strictly regulates ownership of Indian companies by foreigners.
Foreign investment in Indian securities, including the equity shares
represented by the ADSs, is generally regulated by the Foreign Exchange
Management Act, 1999, which permits transactions involving the inflow or
outflow of foreign exchange and empowers the Reserve Bank of India to prohibit
or regulate such transactions.

The Foreign Exchange Management Act permits most transactions involving
foreign exchange except those prohibited or restricted by the Reserve Bank of
India. The Foreign Exchange Management Act has eased restrictions on current
account transactions. However, the Reserve Bank of India continues to exercise
control over capital account transactions (i.e., those which alter the assets
or liabilities, including contingent liabilities, of persons). The Reserve Bank
of India has issued regulations under the Foreign Exchange Management Act to
regulate the various kinds of capital account transactions, including certain
aspects of the purchase and issuance of shares of Indian companies.

The Reserve Bank of India has issued a notification under the provisions
of the Foreign Exchange Management Act relaxing the requirement of prior
approval for an Indian company making an ADS issue provided that the issuer is
eligible to issue ADSs pursuant to guidelines issued by the Ministry of Finance
and has the necessary approval from the Foreign Investment Promotion Board.

Under the foreign investment rules, there are four applicable restrictions
on foreign ownership:

o Under the foreign direct investment route, foreign investors may own
equity shares of ICICI only with the approval of the Foreign
Investment Promotion Board; this approval is granted on a
case-by-case basis except, as discussed immediately below, where the
investment is by acquisition of ADSs or GDRs;

o Under the Issue of Foreign Currency Convertible Bonds and Equity
Shares (through Depositary Receipt Mechanism) Scheme, 1993, foreign
investors may purchase ADSs or GDRs, subject to the receipt of all
necessary government approvals at the time the depositary receipt
program is set up;

o Under the portfolio investment route, foreign institutional
investors, subject to registration with the Securities and Exchange
Board of India and the Reserve Bank of India, may be permitted to own
in the aggregate up to an additional 24.0% of ICICI's equity shares
that are not represented by ADSs or GDRs; no single foreign
institutional investor may own more than 10.0% of ICICI's equity
shares; and

o Non-resident Indians and corporate bodies predominantly owned by
non-resident Indians may own up to 10.0% of ICICI's equity shares; no
single non-resident Indian or corporate body predominantly owned by
non-resident Indians may own more than 5.0% of ICICI's total equity
shares.

At March 31, 2001, foreign investors owned 47.8% of ICICI's equity
shares in total and 32.7% through the ADS program.

ICICI, like all Indian companies, was required to obtain the approval of
the Ministry of Finance to raise equity in the international markets. One of
the conditions set by the Ministry of Finance in its approval to ICICI's ADS
offering in September 1999 was that the total foreign

169

equity shareholding in ICICI, by all possible routes, should not exceed 49.0%
including existing foreign direct investors, non-resident Indian and overseas
corporate body investors, the existing GDR investors, the existing investors in
the foreign currency corporate borrowings of ICICI, foreign institutional
investors and the holders of the ADSs issued in the offering. The other
conditions of the Ministry of Finance's approval for the offering were that
control must rest with Indian shareholders, that investors in the ADSs may not
be granted voting rights and that the ADSs will be voted by the depositary in
accordance with the direction of the board of directors. In accordance with the
conditions stipulated by the Ministry of Finance, the depositary has the right
to vote on the equity shares represented by the ADSs as directed by ICICI's
board of directors so as to keep management control of ICICI in the hands of
Indian shareholders.

ICICI does not have any agreement with its government-controlled
shareholders regarding management control, voting rights, anti-dilution or any
other matter. However, any future equity offerings by ICICI, like any other
Indian public company, would require the approval of shareholders representing
at least 75.0% of the total equity shares voted at a general meeting of the
shareholders. Accordingly, given the size of their holdings, the approval of
ICICI's government-controlled shareholders would be required to approve any
future issuance of additional equity shares. To prevent dilution of the
ownership of the principal government-controlled shareholders and in light of
the government's desire that control must rest with Indian shareholders, ICICI
offered 68.5 million shares to its principal government-controlled
shareholders, the Life Insurance Corporation of India, General Insurance
Corporation of India and its subsidiaries and Unit Trust of India, in a private
placement on September 9, 1999 and also offered 41.5 million equity shares in a
public offering in India from September 9-14, 1999. Both of these offerings
were carried out at a price of Rs. 73.00 per equity share, approximately the
market price on the date the board of directors approved the private placement
and the domestic public offering.

As an investor in ADSs, you do not need to seek the specific approval from
the government of India to purchase, hold or dispose of your ADSs. In the
offering, ICICI was required to obtain the approval of the government of
India's Ministry of Finance, the Foreign Investment Promotion Board, the
Reserve Bank of India, the Department of Company Affairs and the relevant stock
exchanges, all of which were duly obtained by ICICI.

Equity shares which have been withdrawn from the depositary facility and
transferred on our register of shareholders to a person other than the
depositary or its nominee may be voted by that person. However, you may not
receive sufficient advance notice of shareholder meetings to enable you to
withdraw the underlying equity shares and vote at such meetings.

Notwithstanding the foregoing, if a foreign institutional investor,
non-resident Indian or overseas corporate body were to withdraw its equity
shares from the ADS program, its investment in the equity shares would be
subject to the general restrictions on foreign ownership noted above and may be
subject to the portfolio investment restrictions, including the 10-24.0%
portfolio investment limitations, and the 5-10.0% non-resident Indian
limitation. Secondary purchases of securities of Indian companies in India by
foreign direct investors or investments by non-resident Indians, persons of
Indian origin, overseas corporate bodies and foreign institutional investors
above the ownership levels set forth above require government of India approval
on a case-by-case basis.

You will be required to make a public offer to the remaining shareholders
if you withdraw your equity shares from the ADS program and your direct or
indirect holding in ICICI exceeds 15.0% of ICICI's total equity (under the
Takeover Code).

170

If you wish to sell the equity shares withdrawn from the depositary
facility, you will be required to receive the prior approval of the Reserve
Bank of India, unless the sale is on a stock exchange or in connection with an
offer under the Takeover Code.

171

DIVIDENDS

Under Indian law, a company pays dividends upon a recommendation by its
board of directors and approval by a majority of the shareholders at the annual
general meeting of shareholders held within six months of the end of each
fiscal year. The shareholders have the right to decrease but not increase the
dividend amount recommended by the board of directors. Dividends may be paid
out of company profits for the fiscal year in which the dividend is declared or
out of undistributed profits of prior fiscal years. We have paid dividends
consistently every year since fiscal 1956.

The following table sets forth, for the periods indicated, the dividend
per equity share and the total amount of dividends payable on the equity
shares, both exclusive of dividend tax.

-------------------------------------------------------------------------------
Dividend per Total amount of
Fiscal year equity share dividends payable
-------------------------------------------------------------------------------
(in millions)

1999.......................... Rs. 5.5 Rs. 2,641
2000.......................... 5.5 3,504
2001.......................... 5.5 4,319

Until fiscal 1997, investors were required to pay tax on dividend income.
From fiscal 1998, dividend income was made tax-exempt. However, ICICI was
required to pay a 10.0% tax on distributable profits. From fiscal 1999, this
tax rate rose to 11.0% because of a 10.0% surcharge imposed on all taxes by the
government. For all distributions subsequent to May 2000, ICICI was required to
pay a 22.0% tax on distributable profits which included a 20.0% tax and a 10.0%
surcharge on such tax. The tax rate has since been reduced and ICICI is
required to pay a 10.2% tax on distributable profits for all distributions
subsequent to May 2001 which includes a 10.0% tax and a 2.0% surcharge on such
tax.

Future dividends will depend upon our revenues, cash flow, financial
condition and other factors. As an owner of ADSs, you will be entitled to
receive dividends payable in respect of the equity shares represented by such
ADSs. The equity shares represented by ADSs will rank pari passu with existing
equity shares. At present, we have equity shares issued in India and equity
shares represented by ADSs.

As per the present guidelines in India, with respect to equity shares
issued by the company during a particular fiscal year, dividends declared and
paid for such fiscal year are paid in full and are no longer pro-rated from the
date of issuance to the end of such fiscal year. For a description of the tax
consequences of dividends paid to our shareholders, see "Taxation--Indian
Tax--Taxation of Distributions".

172

TAXATION

Indian Tax

The following discussion of Indian tax consequences for investors in ADSs,
and equity shares received upon redemption of ADSs, who are not resident in
India whether of Indian origin or not is based on the provisions of the Indian
Income Tax Act, 1961, including the special tax regime for ADSs contained in
Section 115AC, which has been extended to cover additional ADSs that an
investor may acquire in an amalgamation or restructuring of the company, and
certain regulations implementing the Section 115AC regime. The Indian Income
Tax Act is amended every year by the Finance Act of that year. Some or all of
the tax consequences of the Section 115AC regime may be amended or modified by
future amendments to the Indian Income Tax Act.

The summary is not intended to constitute a complete analysis of the tax
consequences under Indian law of the acquisition, ownership and sale of ADSs
and equity shares by non-resident investors. Potential investors should,
therefore, consult their own tax advisers on the tax consequences of such
acquisition, ownership and sale, including specifically the tax consequences
under Indian law, the law of the jurisdiction of their residence, any tax
treaty between India and their country of residence, and in particular the
application of the regulations implementing the Section 115AC regime.

Recent Amendments to the Section 115 AC regime

The Finance Act for the year 2001-2002 effected certain amendments to the
Indian Income Tax Act and specifically Section 115 AC. Section 115 AC was
entirely replaced by a new section. Under the new section, the term 'Global
Depository Receipts' is used in place of the word 'share' as under the previous
Section. The term GDR includes ADRs. The amendments extend the concessional tax
rate to GDRs issued against the following:

o a fresh issue of underlying shares;

o a disinvestment by the government;

o the reconversion of shares into ADRs/GDRs; and

o the shares of a listed Indian company on disinvestment of the shares
held by the listed holding company.

Residence

For the purpose of the Indian Income Tax Act, an individual is a resident
of India during any fiscal year, if he (i) is in India in that year for 182
days or more or (ii) having within the four years preceding that year been in
India for a period or periods amounting in all to 365 days or more, is in India
for period or periods amounting in all to 60 days or more in that year. The
period of 60 days is substituted by 182 days in case of an Indian citizen who
has left India for employment outside India or a non-resident Indian who comes
on a visit to India during the financial year. A company is resident in India
in any fiscal year if it is registered in India or the control and management
of its affairs is situated wholly in India in that year. A firm or other
association of persons is resident in India except where the control and the
management of its affairs are situated wholly outside India.

173

Taxation of Distributions

Dividends distributed will not be subject to tax in the hands of the
shareholders. Consequently, withholding tax on dividends paid to shareholders
does not apply. However, if dividends are declared, the company is required to
pay a 10.2% tax (inclusive of the applicable surcharge) on distributable
profits.

Taxation on Redemption of ADSs

The acquisition of equity shares upon a redemption of ADSs by a
non-resident investor will not give rise to a taxable event for Indian tax
purposes.

Taxation on Sale of Equity Shares or ADSs

Any transfer of ADSs or equity shares outside India by a non-resident
investor to another non-resident investor does not give rise to Indian capital
gains tax. Subject to any relief under any relevant double taxation treaty, a
gain arising on the sale of an equity share to a resident of India or where the
sale is made inside India will generally give rise to a liability for Indian
capital gains tax. Such tax is required to be withheld at source. Where the
equity share has been held for more than 12 months (measured from the date of
advice of redemption of the ADSs by the depositary), the rate of tax is 10.2%.
Where the equity share has been held for 12 months or less, the rate of tax
varies and will be subject to tax at normal rates of income tax applicable to
non-residents under the provisions of the Indian Income Tax Act, subject to a
maximum of 48.0%. The actual rate depends on a number of factors, including,
but not limited to, the nature of the non-resident investor and the nature of
such investor's income chargeable in India. During the period the underlying
equity shares are held by non-resident investors on a transfer from the
depositary upon redemption of ADRs, the provisions of the Avoidance of Double
Taxation Agreement entered into by the government of India with the country of
residence of the non-resident investors will be applicable in the matter of
taxation of any capital gain arising on a transfer of the equity shares. The
double taxation treaty between the United States and India does not provide US
residents with any relief from Indian tax on capital gains.

For purposes of determining the amount of capital gains arising on a sale
of an equity share for Indian tax purposes, the cost of acquisition of an
equity share received upon redemption of an ADS will be the price of the share
prevailing on the BSE or the National Stock Exchange on the date on which the
depositary advises the custodian of such redemption, not the acquisition cost
of the ADS being redeemed. The holding period of an equity share received upon
redemption of an ADS will commence from the date of advice of redemption by the
depositary.

Rights

Distribution to non-resident holders of additional ADSs or equity shares
or rights to subscribe for equity shares made with respect to ADSs or equity
shares are not subject to tax in the hands of the non-resident holder.

It is unclear as to whether capital gain derived from the sale of rights
by a non-resident holder not entitled to exemption under a tax treaty to
another non-resident holder outside India will be subject to Indian capital
gains tax. If rights are deemed by the Indian tax authorities to be situated
within India, as the situs of ICICI is in India, the gains realized on the sale
of rights will be subject to customary Indian taxation as discussed above.

174

Buyback of Securities

Indian companies are not subject to any tax on the buyback of their
shares. However, the shareholders will be taxed on any resulting gains. ICICI
would be required to deduct tax at source.

Stamp Duty

Upon the issuance of the equity shares underlying the ADSs, ICICI was
required to pay a stamp duty of 0.1% per share of the issue price. A transfer
of ADSs is not subject to Indian stamp duty. Normally, upon the acquisition of
equity shares from the depositary in exchange for ADSs representing such equity
shares in physical form, an investor would be liable for Indian stamp duty at
the rate of 0.5% of the market value of the equity shares at the date of
registration. Similarly, a sale of equity shares by an investor would also be
subject to Indian stamp duty at the rate of 0.5% of the market value of the
equity shares on the trade date, although customarily such tax is borne by the
transferee, that is, the purchaser. However, ICICI equity shares are
compulsorily deliverable in dematerialized form, and under Indian stamp law, no
stamp duty is payable on the acquisition or transfer of equity shares in
dematerialized form.

Other Taxes

At present, there are no taxes on wealth, gifts and inheritance which may
apply to the ADSs and underlying equity shares.

Service Tax

Brokerage or commissions paid to stockbrokers in connection with the sale
or purchase of shares is subject to a service tax of 5.0%. The stockbroker is
responsible for collecting the service tax and paying it to the relevant
authority.

United States Tax

The following discussion describes certain US federal income tax
consequences of the acquisition, ownership and sale of ADSs that are generally
applicable to US investors. For these purposes, you are an US investor if you
are:

o a citizen or resident of the United States under US federal income
tax laws;

o a corporation organized under the laws of the United States or of any
political subdivision of the United States; or

o an estate or trust the income of which is includable in gross income
for US federal income tax purposes regardless of its source.

This discussion only applies to ADSs that you own as capital assets.

175

Please note that this discussion does not discuss all of the tax
consequences that may be relevant in light of your particular circumstances. In
particular, it does not address investors subject to special rules, including:

o insurance companies;

o tax-exempt entities;

o dealers in securities;

o financial institutions;

o persons who own the ADSs as part of an integrated investment
(including a straddle, hedging or conversion transaction) comprised
of the ADSs, and one or more other positions for tax purposes;

o persons whose functional currency is not the US dollar; or

o persons who own actually or constructively 10.0% or more of ICICI's
voting stock.

This discussion is based on the tax laws of the United States currently in
effect (including the Internal Revenue Code of 1986, as amended, referred to as
"the Code"), Treasury Regulations, Revenue Rulings, and judicial decisions.
These laws may change, possibly with retroactive effect.

Although the matter is not entirely clear, it is likely and this
discussion assumes that ICICI will be a passive foreign investment company for
US federal income tax purposes. It is also likely that some of ICICI's
subsidiaries will be passive foreign investment companies.

For US federal income tax purposes, if you own an ADS, you will generally
be treated as the owner of the equity shares underlying the ADS.

Please consult your tax advisor with regard to the application of the US
federal income tax laws to the ADSs in your particular circumstances, including
the passive foreign investment company rules described below, as well as any
tax consequences arising under the laws of any state, local or foreign taxing
jurisdictions.

Taxation of Dividends

Subject to the discussion under "Passive Foreign Investment Company Rules"
below, dividends you receive on the ADSs, other than certain pro rata
distributions of common shares or rights to acquire common shares or ADSs, will
generally constitute foreign source dividend income for US federal income tax
purposes. The amount of the dividend you will be required to include in income
will be equal to the US dollar value of the rupees, calculated by reference to
the exchange rate in effect on the date the payment is received by the
depositary, regardless of whether the payment is converted into US dollars. If
you realize gain or loss on a sale or other disposition of rupees, it will be
US source ordinary income or loss. You will not be entitled to claim a
dividends-received deduction for dividends paid by ICICI.

Passive Foreign Investment Company Rules

In general, a foreign corporation is a passive foreign investment company
for any taxable year in which (i) 75.0% or more of its gross income consists of
passive income (such as dividends, interest, rents and royalties) or (ii) 50.0%
or more of the average quarterly value of its assets consists of assets that
produce, or are held for the production of, passive income. Although

176

the matter is not entirely clear, it is likely that ICICI will be a passive
foreign investment company for US federal income tax purposes. It is also
likely that some of ICICI's subsidiaries will be passive foreign investment
companies. If ICICI is a passive foreign investment company at any time that
you own ADSs, you will be generally subject to the rules described below even
if ICICI ceases to be a passive foreign investment company subsequently. Please
consult your tax advisor about how you will be treated if ICICI ceases to be a
passive foreign investment company while you own ADSs.

Except as described below regarding the mark-to-market election, special
rules will generally apply to:

o any "excess distributions" on the ADSs (generally, any distributions
received by you on the ADSs in a taxable year other than the first
year in which you hold the ADSs that are greater than 125.0% of the
average annual distributions received by you in the three preceding
taxable years, or, if shorter, your holding period for the ADSs); and

o any gain realized on the sale or other disposition (including a
pledge) of the ADSs.

Under these rules:

o the excess distribution or gain would be allocated ratably over your
holding period for the ADSs;

o the amount allocated to the current taxable year would be taxed as
ordinary income; and

o the amount allocated to each of the prior taxable years would be
subject to tax at the highest rate of tax in effect for your class of
taxpayer for that year, and an interest charge for the deemed
deferral benefit would be imposed on the resulting tax attributable
to each prior year.

As long as ICICI's ADSs are regularly traded on the New York Stock
Exchange, you will be able to make a mark-to-market election with respect to
the ADSs. If you make the mark-to-market election upon acquisition of the ADSs,
you will be required to include as ordinary income each year the excess of the
fair market value of the ADSs over your adjusted basis in the ADSs, and will be
entitled to deduct as an ordinary loss each year the lesser of:

o the excess of your original or if applicable, adjusted basis in the
ADSs over their fair market value; or

o the excess of the total amounts included in income in prior years
over the total amount of deductions allowed in prior years under the
mark-to-market rules.

Your adjusted basis in the ADSs will be increased by the amount of any
income inclusions and will be decreased by the amount of any deductions. If you
dispose of the ADSs for an amount in excess of your adjusted basis, the gain
will be taxed at ordinary income tax rates.

If you make a mark-to-market election, it will be effective for the
taxable year for which the election is made and all subsequent taxable years,
unless ICICI's ADSs cease to be regularly traded on the New York Stock Exchange
or the IRS consents to the revocation of the election.

177

If you make the mark-to-market election after the year in which you
acquire the ADSs, you will be subject to the rules governing excess
distributions and gain described above with respect to:

o distributions and disposition proceeds received in the first taxable
year that you make the election; and

o an amount equal to the excess of the fair market value of the ADSs
for the year you make the election over your adjusted basis in the
ADSs.

You should consult your tax advisor about the availability of making a
mark-to-market election and whether doing so would be advisable in your
specific situation.

Under proposed Treasury regulations, which have a proposed retroactive
effective date that would apply to an investment in the ADSs, you may be
subject to tax, even if you make a mark-to-market election, in connection with:

o distributions made by any of ICICI's subsidiary passive foreign
investment companies;

o gain ICICI recognizes on the disposition of any of ICICI's subsidiary
passive foreign investment companies;

o gain ICICI is deemed to recognize on certain restructurings of its
holdings of any of its subsidiary passive foreign investment
companies; and

o future offerings by ICICI of equity shares or ADSs.

You could be subject to tax in these circumstances even if you do not
actually receive any cash in connection with these events. Please consult your
tax advisor about the application of these proposed regulations to an
investment in the ADSs.

ICICI does not intend to comply with the requirements necessary for you to
make another election (the qualified electing fund election), which is
sometimes available to shareholders of a passive foreign investment company.

For each year in which you hold the ADSs, you will be required to file an
annual return on IRS Form 8621 that describes the distributions received from
your ownership of ADSs and any gain realized on the sale or other disposition
of ADSs you owned. Gain or loss from the disposition of ADSs will generally be
US source income or loss.

178

USE OF PROCEEDS

Pursuant to ICICI's Registration Statement on Form F-1 (File No.
333-10792), which was declared effective by the Securities and Exchange
Commission on September 21, 1999, ICICI registered US$ 315 million of its
equity shares, par value Rs. 10 per share, each represented by 0.2 ADSs, and
offered and sold 32,142,857 ADSs, each representing five equity shares, at the
public offering price of US$ 9.80 per ADS or aggregating US$ 314,999,999. ICICI
received net proceeds of US$ 302,400,000 from the sale of these ADSs, after
deducting the underwriting discount and actual offering expenses of US$
12,599,999. The joint global coordinators of this offering were Merrill Lynch
(Singapore) Pte. Limited and Morgan Stanley & Co. International Limited.

From September 21, 1999 to March 31, 2001, we had used net offering
proceeds of US$ 264,390,000 for financing purposes. This use of proceeds was in
line with the use of proceeds described in ICICI's Registration Statement.

179

PRESENTATION OF FINANCIAL INFORMATION

ICICI has prepared its historical financial statements in accordance with
Indian generally accepted accounting principles. Starting in fiscal 1999, we
adopted US generally accepted accounting principles for the ICICI group and
published in ICICI's annual shareholders' report US GAAP consolidated financial
statements for the ICICI group and Indian GAAP unconsolidated financial
statements for ICICI and its subsidiaries. We intend to continue to report the
consolidated financial statements for the ICICI group in US GAAP and the
unconsolidated financial statements for ICICI and its subsidiaries in Indian
GAAP.

The financial information in this annual report has been prepared in
accordance with US GAAP, unless we have indicated otherwise. Our fiscal year
ends on March 31 of each year so all references to a particular fiscal year are
to the year ended March 31 of that year. In this annual report, all references
to "consolidated financial statements" are to the consolidated financial
statements of the ICICI group for fiscal years 1999, 2000 and 2001 and at
year-end fiscal 2000 and 2001, including the notes to these financial
statements, audited by KPMG, India, independent auditors. The consolidated
financial statements, including the notes to these financial statements, are
set forth at the end of this annual report.

As used in this annual report, all references to "minority interest" are
primarily to the 39.7% equity interest in ICICI Securities not owned by ICICI
in fiscal 1997 and 1998 (substantially all of which was bought back by ICICI in
fiscal 1999), the 25.8% equity interest in ICICI Bank sold by ICICI to the
public in fiscal 1998, the approximately 8.0% equity interest in ICICI Infotech
sold by ICICI to a strategic investor in fiscal 2001 and the 26.0% equity
interest in ICICI Prudential Life Insurance held by Prudential plc of the UK in
fiscal 2001. Effective March 10, 2001, ICICI Bank acquired Bank of Madura
Limited, an old private sector bank, in an all stock merger and as a result,
the ownership interest of ICICI was reduced from 62.2% to 55.6%. In addition,
during March 2001, ICICI reduced its interest in ICICI Bank to 46.4% through
sales of equity shares in the Indian secondary markets to institutional
investors. As a result of the foregoing, ICICI Bank ceased to be a subsidiary
of ICICI as of March 22, 2001 and was accounted for under the equity method of
accounting from April 1, 2000, the beginning of the fiscal year in which our
majority ownership in ICICI Bank was deemed to be temporary.

Although we have translated in this annual report certain rupee amounts
into dollars for convenience, this does not mean that the rupee amounts
referred to could have been, or could be, converted into dollars at any
particular rate, the rates stated below, or at all. All translations from
rupees to dollars are based on the noon buying rate in the City of New York for
cable transfers in rupees at March 30, 2001. The Federal Reserve Bank of New
York certifies this rate for customs purposes on each date the rate is given.
The noon buying rate on March 30, 2001 was Rs. 46.85 per US$ 1.00. The exchange
rates used for convenience translations differ from the actual rates used in
the preparation of our consolidated financial statements.

180

ADDITIONAL INFORMATION

Memorandum and Articles of Association

Objects and Purposes

Pursuant to Clause III of ICICI's Memorandum of Association covering the
objects of ICICI, the objectives of ICICI in general are to carry on the
business of assisting industrial companies within the private sector of
industry in India by:

o assisting in the creation, expansion and modernization of such
companies;

o encouraging and promoting the participation of private capital, both
internal and external, in such companies; and

o encouraging and promoting private ownership of industrial investments
and the expansion of investment markets.

Further to the above general purposes, ICICI also offers a wide range of
products and services to corporate and retail customers in India through a
number of business operations, subsidiaries and affiliates.

Directors' Powers

Our directors' powers include the following:

o Article 76 of the Articles of Association provides that the directors
may raise and secure the payment of amounts in a manner and upon such
terms and conditions in all respects as they think fit and in
particular by the issue of bonds, debenture stock, or any mortgage or
charge or other security on the undertaking or the whole or any part
of the property of ICICI (both present and future) including its
uncalled capital.

o Article 133 of the Articles of Association provides that no director
of ICICI shall, as a director, take any part in the discussion of or
vote on any contract or arrangement if such director is directly or
indirectly concerned or interested.

o Article 161 of the Articles of Association provides that the board of
directors of the Company shall manage the business of the company and
shall have the power to do all acts which the company is by its
Memorandum of Association authorized to do and those acts which are
by statute required to be approved by the shareholders at the annual
general meeting of the company. All the powers of the directors shall
be subject to the provisions of the Indian Companies Act, 1956, and
no subsequent regulation can invalidate any prior act of the
directors which would have been valid, if such regulation had not
been made.

o Directors have no powers to vote in absence of a quorum.

181

Amendment to Rights of Holders of Equity Shares

Any change to the existing rights of the equity holders can be made only
by amending the Articles of Association which would require a special
resolution of the shareholders, which must be passed by not less than three
times the number of votes cast against the resolution.

Change in Control Provisions

Article 49 and Article 52 of the Articles of Association provide that the
board of directors may at their discretion decline to register or acknowledge
any transfer of shares in respect of shares upon which ICICI has a lien.
Moreover, the board of directors may refuse to register the transfer of any
shares if the total nominal value of the shares or other securities intended to
be transferred by any person would, together with the total nominal value of
any shares held in ICICI, exceed 1.0% of the paid up equity share capital of
ICICI or if the board of directors is satisfied that as a result of such
transfer, it would result in the change in the board of directors or change in
the controlling interest of ICICI and that such change would be prejudicial to
the interests of ICICI. However, under the Indian Companies Act, the
enforceability of such transfer restrictions is unclear.

Incorporation by Reference

ICICI incorporates by reference the information disclosed under
"Description of Equity Shares" in its Registration Statement on Form F-1 (File
No. 1-14954).

182

INDEX TO US GAAP FINANCIAL STATEMENTS

Page

Independent Auditors' Report................................................ F-2
Consolidated Balance Sheets................................................. F-3
Consolidated Statements of Income........................................... F-4
Consolidated Statements of Stockholders' Equity and Other Comprehensive
Income................................................................... F-5
Consolidated Statements of Cash Flows....................................... F-6
Notes to the Consolidated Financial Statements.............................. F-8

F-1

INDEPENDENT AUDITORS' REPORT

To the board of directors and stockholders of ICICI Limited

We have audited the accompanying consolidated balance sheets of ICICI
Limited and subsidiaries as of March 31, 2001 and 2000, and the related
consolidated statements of income, stockholders' equity and other comprehensive
income, and cash flows for each of the years in the three-year period ended
March 31, 2001. These consolidated financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of ICICI Limited and
subsidiaries as of March 31, 2001 and 2000, and the results of their operations
and their cash flows for each of the years in the three-year period ended March
31, 2001, in conformity with accounting principles generally accepted in the
United States.

As discussed in Note 12 to the consolidated financial statements,
effective April 1, 1999, the company changed its method of accounting for
depreciation of property and equipment.

The United States dollar amounts are presented in the accompanying
consolidated financial statements solely for the convenience of the readers and
have been translated to United States dollars on the basis described in Note 1
to the consolidated financial statements.

Mumbai, India KPMG
May 3, 2001 except for Note 30 which is as of September 17, 2001

F-2

ICICI LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
as of March 31, 2000 and 2001

As of March 31,
--------------- ------------- -------------
2000 2001 2001
--------------- ------------- -------------
(in millions except share data)
Assets

Cash and cash equivalents....................................... Rs. 71,131 Rs. 30,987 US$ 661
Trading account assets.......................................... 57,396 18,878 403
Securities :
- Available for sale (amortized cost Rs. 14,798 million and
Rs. 13,281 million as of March 31, 2000 and 2001,
respectively)............................................... 11,148 7,646 163
- Held to maturity (fair value Rs. 699 million and
Rs. 1,563 million as of March 31, 2000 and 2001,
respectively)............................................... 645 1,506 32
- Non-readily marketable equity securities..................... 6,542 6,394 137
- Venture capital investments.................................. 536 4,569 98
Investments in affiliates....................................... 264 7,899 169
Loans, net of allowance for loan losses, security deposits and
unearned income............................................... 561,448 602,023 12,850
Customers' liability on acceptances ............................ 12,333 2,715 58
Property and equipment, net..................................... 11,775 12,039 257
Assets held for sale............................................ -- 841 18
Intangible assets, net.......................................... 560 1,827 39
Deferred tax assets............................................. 37 4,587 98
Interest and fees receivable.................................... 14,896 13,878 296
Other assets.................................................... 25,568 24,656 526
------------ ------ ------- -------------
Total assets.................................................... 774,279 740,445 15,805
------------ ------ ------- -------------
Liabilities
Deposits
- Interest-bearing............................................. 82,827 6,072 130
- Non-interest-bearing......................................... 13,855 -- --
Trading account liabilities..................................... 19,263 12,483 266
Short-term borrowings........................................... 68,495 87,512 1,868
Bank acceptances outstanding.................................... 12,333 2,715 58
Long-term debt.................................................. 436,320 505,025 10,780
Other liabilities............................................... 40,985 36,908 788
Deferred credit, net............................................ 1,563 1,310 28
Taxes and dividends payable..................................... 12,750 10,498 224
Deferred tax liabilities........................................ 475 806 17
Redeemable preferred stock...................................... 10,207 698 15
------------ ------------- -----------
Total liabilities............................................... 699,073 664,027 14,173
------------ ------------- ----------
Commitments and contingencies (Note 31)

Minority interest............................................... 4,298 496 11

Stockholders' equity
Common stock at Rs. 10 par value: 1,600,000,000 shares
authorized as of March 31, 2000 and 2001; Issued and
outstanding 785,311,548 and 785,344,048 shares as of
March 31, 2000 and 2001, respectively ........................ 7,832 7,848 168
Additional paid-in capital...................................... 37,347 38,110 813
Retained earnings............................................... 28,338 34,196 730
Deferred compensation........................................... (70) (33) (1)
Accumulated other comprehensive income.......................... (2,539) (4,199) (90)
------------ ------------- ----------

------------ ------------- ----------
Total stockholders' equity...................................... 70,908 75,922 1,621
------------ ------------- ----------
Total liabilities and stockholders' equity...................... Rs. 774,279 Rs. 740,445 US$ 15,805
=============== ============= ==========

--------------
(1) Exchange Rate : Rs. 46.85 = US$ 1.00 at March 30, 2001.

See accompanying notes to the consolidated financial statements.

F-3

ICICI LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
for the years ended March 31, 1999, 2000 and 2001

Year ended March 31,
------------- ------------ ------------ ------------
1999 2000 2001 2001
------------- ------------ ------------ ------------
(in millions except share data)
Interest income

Interest and fees on loans.................................... Rs. 63,087 Rs. 69,339 Rs. 76,595 US$ 1,635
Interest and dividends on securities ......................... 921 1,922 560 12
Interest and dividends on trading account assets ............. 4,315 7,426 2,836 61
Interest on balances and deposits with banks.................. 2,151 1,759 910 19
Other interest income......................................... 495 352 585 12
------------- ------------ ------------ ------------
Total interest income......................................... 70,969 80,798 81,486 1,739
------------- ------------ ------------ ------------
Interest expense
Interest on deposits.......................................... 4,362 6,104 490 10
Interest on long-term debt.................................... 48,355 52,893 57,242 1,222
Interest on short-term borrowings............................. 4,607 6,867 8,780 187
Interest on trading account liabilities....................... 644 1,538 1,445 31
Other interest expense ....................................... 75 90 4 --
------------- ------------ ------------ ------------
Total interest expense........................................ 58,043 67,492 67,961 1,451
------------- ------------ ------------ ------------
Net interest income........................................... 12,926 13,306 13,525 289
Provision for loan losses..................................... 6,067 6,363 9,892 211
------------- ------------ ------------ ------------
Net interest income after provision for loan losses........... 6,859 6,943 3,633 78
Non-interest income
Fees, commission and brokerage................................ 3,642 4,258 5,317 113
Trading account revenue....................................... 481 2,157 847 18
Securities transactions....................................... 273 2,363 (1,709) (36)
Gain on sale of stock of subsidiaries/affiliates.............. -- -- 2,507 54
Foreign exchange income/(loss)................................ 829 428 (657) (14)
Software development and services............................. -- 5 701 15
Gain/(loss) on sale of property and equipment................. -- 212 (31) (1)
Rent.......................................................... 17 22 413 9
Other non-interest income..................................... 318 370 646 14
------------- ------------ ------------ ------------
Total non-interest income..................................... 5,560 9,815 8,034 171
------------- ------------ ------------ ------------
Non-interest expense
Salaries and employee benefits................................ 943 1,618 1,940 41
General and administrative expenses........................... 2,665 3,497 3,609 77
Amortization of intangible assets............................. 187 187 259 6
------------- ------------ ------------ ------------
Total non-interest expense.................................... 3,795 5,302 5,808 124
------------- ------------ ------------ ------------
Equity in earning/(loss) of affiliates........................ (34) 20 856 18
Minority interest............................................. (170) (361) 34 1
------------- ------------ ------------ ------------
Income before income taxes.................................... 8,420 11,115 6,749 144
Income tax expense............................................ 1,194 2,033 119 2
------------- ------------ ------------ ------------
Income before extraordinary items and cumulative effect of 6,630
accounting change........................................... 7,226 9,082 142
Extraordinary gain, net of tax................................ 292 -- -- --
Cumulative effect of accounting change, net of tax............ -- 249 -- --
------------- ------------ ------------ ------------
Net income.................................................... Rs. 7,518 Rs. 9,331 Rs. 6,630 US$ 142
============= ============ ============ ============
Earnings per equity share (Rs.)
- Basic...................................................... Rs. 15.66 Rs. 14.45 Rs. 8.44 US$ 0.18
- Diluted.................................................... 13.52 13.77 8.41 0.18
Weighted average number of equity shares used in computing earnings
per equity share (millions)
- Basic...................................................... 480 646 785
- Diluted ................................................... 577 687 785

--------------
(1) Exchange Rate : Rs. 46.85 = US$ 1.00 at March 30, 2001.

See accompanying notes to the consolidated financial statements.

F-4

ICICI LIMITED AND SUBSIDIARIES

US GAAP CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
OTHER COMPREHENSIVE INCOME
for the years ended March 31, 1999, 2000 and 2001

Accumulated
Other Total
Common stock Additional Comprehensive Stock-
No. of Paid-in Retained Deferred Income, Net holders'
shares Amount Capital Earnings Compensation of Tax Equity
--------------------------------------------------------------------------------------
(in millions except share data)
------------ ---------- ---------- ---------- -------------- -------------- ----------

Balance as of March 31, 1998... 478,445,852 Rs. 4,781 Rs.14,646 Rs.17,601 Rs. -- Rs. (4,152) Rs.32,876
------------ ---------- ---------- ---------- -------------- -------------- ----------
Common stock issued............ 1,657,061 20 126 -- -- -- 146
Comprehensive income
Net income................... -- -- -- 7,518 -- -- 7,518
Unrealized losses on
securities, net............ -- -- -- -- -- (1,099) (1,099)
----------
Comprehensive income........... -- -- -- -- -- -- 6,419
==========
Cash dividends declared
(Rs. 5.5 per common share)... -- -- -- (2,930) -- -- (2,930)
Balance as of March 31, 1999... 480,102,913 4,801 14,772 22,189 -- (5,251) 36,511
------------ ---------- ---------- ---------- -------------- -------------- ----------
Common stock issued............ 305,208,635 3,031 18,364 -- -- -- 21,395
Compensation related to
employee stock option plan... -- -- 97 -- (97) -- --
Amortization of compensation... -- -- -- -- 27 -- 27
Increase in carrying value on
direct issuance of
stock by subsidiary.......... -- -- 4,114 -- -- -- 4,114
Comprehensive income
Net income................... -- -- -- 9,331 -- -- 9,331
Unrealized gains on
securities, net............ -- -- -- -- -- 2,712 2,712
----------
Comprehensive income.......... -- -- -- -- -- -- 12,043
==========
Cash dividends declared
(Rs. 4.5 per common share)... -- -- -- (3,182) -- -- (3,182)
Balance as of March 31, 2000... 785,311,548 7,832 37,347 28,338 (70) (2,539) 70,908
------------ ---------- ---------- ---------- -------------- -------------- ----------
Common stock issued on exercise
of stock options............. 32,500 -- 3 -- -- -- 3
Amortization of compensation .. -- -- -- -- 37 -- 37
Increase in carrying value on
direct issuance of stock
by subsidiary ............... -- -- 1,242 -- -- -- 1,242
Tax effect of increase in
carrying value on direct issuance -- -- (605) -- -- -- (605)
of stock by subsidiary ......
Comprehensive income
Net income .................. -- -- -- 6,630 -- -- 6,630
Unrealized losses on
securities, net ........... -- -- -- -- -- (1,674) (1,674)
Translation adjustments ..... -- -- -- -- -- 14 14
----------
Comprehensive income -- -- -- -- -- -- 4,970
==========
Cash dividends declared
(Rs. 1 per common share) .. -- -- -- (772) -- -- (772)
Other.......................... -- 16 123 -- -- -- 139
Balance as of March 31, 2001... 785,344,048 Rs. 7,848 Rs.38,110 Rs.34,196 Rs.(33) Rs. (4,199) Rs.75,922
------------ ---------- ---------- ---------- -------------- -------------- ----------
Balance as of March 31, 2001
(US$)........................ 168 813 730 (1) (90) 1,621
------------ ---------- ---------- ---------- -------------- -------------- ----------

--------------
(1) Exchange Rate : Rs. 46.85 = US$ 1.00 at March 30, 2001.

See accompanying notes to the consolidated financial statements.

F-5

ICICI LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended March 31, 1999, 2000 and 2001

Year ended March 31,
------------- ------------ ------------ -----------
1999 2000 2001 2001
------------- ------------ ------------ -----------
(in millions except share data)
Operating activities

Net income.................................................... Rs. 7,518 Rs. 9,331 Rs. 6,630 US$ 142
Adjustments to reconcile net income to net cash (used in)/
provided by operating activities:
Provision for loan losses..................................... 6,067 6,363 9,892 211
Depreciation.................................................. 490 431 663 14
Amortization.................................................. 187 187 259 6
Deferral of discount and expenses on borrowings............... 820 838 1,213 26
Deferred income tax........................................... 69 (103) (4,339) (93)
Revaluation loss on foreign currency balances................. 54 22 -- --
Other than temporary decline in value of securities
available for sale.......................................... 1,231 1,444 1,835 39
Unrealized loss on trading account securities................. 132 24 136 3
Undistributed equity in earning/(loss) of affiliates.......... 34 (20) (856) (18)
Minority interest............................................. 170 361 (34) (1)
(Gain)/loss on sale of property and equipment, net............ -- (212) 31 1
(Gain)/loss on sale of securities available for sale.......... (1,504) (3,807) (126) (3)
(Gain) on sale of subsidiary's stock.......................... -- -- (2,507) (54)
Cumulative effect of accounting change, net of tax............ -- (249) -- --
Change in assets and liabilities
Trading account assets........................................ (24,334) (21,494) 10,153 217
Other assets.................................................. (4,901) (1,371) (2,402) (51)
Interest and fees receivable.................................. (1,998) (1,946) (131) (3)
Trading account liabilities................................... 5,954 5,892 (4,857) (104)
Other liabilities............................................. 11,536 10,294 1,260 27
Taxes payable................................................. (2,194) 1,773 (1,302) (28)
------------- ------------ ------------ -----------
Net cash (used in)/provided by operating activities........... (669) 7,758 15,518 331
============= ============ ============ ===========
Investing activities
Purchase of held to maturity securities....................... -- (644) (861) (18)
Purchase of available for sale securities .................... (4,234) (16,563) (6,462) (138)
Proceeds from sale of available for sale securities........... 4,831 20,862 1,756 37
Purchase of venture capital investments....................... -- (387) (4,094) (87)
Purchase of non-readily marketable equity securities.......... -- (2,020) -- --
Proceeds from sale of non-readily marketable equity securities 923 -- 148 3
Proceeds from sale of subsidiary's stock...................... -- -- 4,075 87
Origination of loans, net..................................... (105,235) (92,431) (97,561) (2,082)
Purchase of property and equipment............................ (3,600) (4,320) (3,927) (84)
Proceeds from sale of property and equipment.................. 115 276 145 3
Investments in affiliates..................................... -- -- (33) (1)
Purchase of minority interest in subsidiary, net of
cash acquired .............................................. (844) -- -- --
Payment for business acquisition, net of cash acquired........ -- -- (1,950) (42)
------------- ------------ ------------ -----------
Net cash used in investing activities......................... (108,044) (95,227) (108,764) (2,322)
============= ============ ============ ===========

--------------------
(1) Exchange Rate : Rs. 46.85 = US$ 1.00 at March 30, 2001.

See accompanying notes to the consolidated financial statements.

F-6

ICICI LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
for the years ended March 31, 1999, 2000 and 2001

Year ended March 31,
------------ ----------- ----------- -----------
1999 2000 2001 2001
------------ ----------- ----------- -----------
(in millions except share data)
Financing activities

Increase in deposits, net......................................... Rs. 31,310 Rs. 36,077 Rs. 8,050 US$ 172
Proceeds from short-term borrowings, net.......................... 12,325 30,514 21,204 453
Proceeds from issuances of long-term debt......................... 144,654 53,524 182,015 3,885
Repayment of long-term debt....................................... (58,533) (47,909) (112,047) (2,392)
Proceeds from issuance of redeemable preferred stock ............. 7,690 -- -- --
Redemption of redeemable preferred stock.......................... (160) (750) (9,577) (204)
Proceeds from issuance of common stock............................ 146 20,865 142 3
Proceeds from issuance of common stock by subsidiary.............. -- 7,338 465 10
Cash dividends paid............................................... (3,171) (3,182) (775) (17)
------------ ----------- ----------- -----------
Net cash provided by financing activities......................... 134,261 96,477 89,477 1,910
============ =========== =========== ===========
Effect of deconsolidation of subsidiary on cash
and cash equivalents............................................ -- -- (36,361) (776)
------------ ----------- ----------- -----------
Effect of exchange rate on cash and cash equivalents.............. -- -- (14) --
------------ ----------- ----------- -----------
Net increase/(decrease) in cash and cash equivalents.............. 25,548 9,008 (40,144) (857)
Cash and cash equivalents at the beginning of the year............ 36,575 62,123 71,131 1,518
------------ ----------- ----------- -----------
Cash and cash equivalents at the end of the year.................. Rs. 62,123 Rs. 71,131 Rs. 30,987 US$ 661
============ =========== =========== ===========

Supplementary information:

Cash paid for:
Interest........................................................ Rs. 47,912 Rs. 59,411 Rs. 57,144 US$ 1,220
Taxes .......................................................... 4,607 2,759 2,919 62

Non-cash items:
Foreclosed assets............................................... -- -- 2,024 43
Change in unrealized gain/(loss) on securities available for sale, net (1,099) 2,712 (1,674) (36)
---------------
(1) Exchange Rate : Rs. 46.85 = US$ 1.00 at March 30, 2001.

Conversion of convertible instruments to equity shares

During the year ended March 31, 2000, convertible debt instruments
aggregating Rs. 530 million were converted to 34.6 million equity shares in
accordance with the original terms of the instruments.

Effect of deconsolidation of subsidiary

For non-cash impact of deconsolidation of ICICI Bank Limited during the
year ended March 31, 2001, see Note 9.

See accompanying notes to the consolidated financial statements.

F-7

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Significant accounting policies

Overview

ICICI Limited together with its subsidiaries (collectively, ICICI or the
company) is a diversified financial services group providing a variety of
banking and financial services including project finance, working capital
finance, investment banking, treasury products and services, retail banking and
broking. Further, the company has recently entered the software development and
services and insurance businesses. ICICI is headquartered in Mumbai, India.

Principles of consolidation

The consolidated financial statements include the accounts of ICICI
Limited (parent company) and all of its subsidiaries, which are more than 50%
owned and controlled. All significant inter-company accounts and transactions
are eliminated on consolidation. The company accounts for investments in common
stock of affiliates by the equity method where its investments in the voting
stock gives it the ability to exercise significant influence over the investee.

As discussed in Note 2, the financial statements of ICICI Bank Limited
were consolidated in the years ended March 31, 1999 and 2000 and are accounted
for by the equity method in the year ended March 31, 2001.

Basis of preparation

The accounting and reporting policies of ICICI used in the preparation of
these consolidated financial statements reflect general industry practices and
conform to generally accepted accounting principles in the United States (US
GAAP).

The preparation of consolidated financial statements in conformity with US
GAAP requires that management makes estimates and assumptions that affect the
reported amount of assets and liabilities and disclosures of contingent assets
and liabilities as of the date of the financial statements and the reported
income and expense for the reporting period. Management believes that the
estimates used in the preparation of the consolidated financial statements are
prudent and reasonable. The actual results could differ from these estimates.

Foreign currencies

The consolidated financial statements are reported in Indian rupees (Rs.),
the national currency of India. The functional currency of each entity within
ICICI is its respective local currency.

The assets and liabilities of ICICI's foreign operations are translated
into Indian rupees at current exchange rates, and revenues and expenses are
translated at average exchange rates for the year. Resulting translation
adjustments are reflected as a component of other comprehensive income.

Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the functional currency,
except those transactions which operate as a hedge of an identifiable foreign
currency commitment or as a hedge of a foreign currency investment position,
are included in the results of operations as incurred.

F-8

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Solely for the convenience of the readers, the financial statements as of
and for the year ended March 31, 2001, have been translated into United States
dollars at the noon buying rate in New York City on March 30, 2001, for cable
transfers in Indian rupees, as certified for customs purposes by the Federal
Reserve of New York of US$ 1 = Rs. 46.85. No representation is made that the
Indian rupee amounts have been, could have been or could be converted into
United States dollars at such a rate or any other certain rate on March 31,
2001, or at any other certain date.

Revenue recognition

Interest income is accounted on an accrual basis except in respect of
impaired loans, where it is recognized on a cash basis. Income from leasing and
hire-purchase operations is accrued in a manner to provide a fixed rate of
return on outstanding investments.

Fees from activities such as investment banking, loan syndication and
financial advisory services are accrued based on the stage of completion of the
underlying transactions. Fees for guarantees and letters of credit are
amortized over the contracted period of the commitment.

Revenues from software development and services comprise income from
time-and-material and fixed-price contracts. Revenue with respect to
time-and-material contracts is recognized as related services are performed.
Revenue with respect to fixed-price contracts is recognized in accordance with
the percentage of completion method of accounting. Provisions for estimated
losses on contracts-in-progress are recorded in the period in which such losses
become probable based on the current contract estimates.

Cash equivalents

ICICI considers all highly liquid investments, which are readily
convertible into cash and have contractual maturities of three months or less
from the date of purchase, to be cash equivalents. The carrying value of cash
equivalents approximates fair value.

Securities and trading account activities

ICICI classifies investments in debt and readily marketable equity
securities, other than venture capital investments, into three categories based
upon management's intention at the time of purchase: securities held to
maturity, trading account securities and securities available for sale.
Realized gains and losses on the sale of securities are recorded at the time of
sale.

Securities held to maturity are carried at cost, adjusted for amortization
of premiums and accretion of discounts. ICICI has the intent and ability to
hold these securities until maturity.

Trading account securities, primarily debt securities and foreign exchange
products, are recorded at fair value with realized and unrealized gains and
losses included in non-interest income. Interest on trading account securities
is recorded in interest income. The fair value of trading account assets is
based upon quoted market prices or, if quoted market prices are not available,
estimates using similar securities or pricing models.

F-9

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

All securities not classified as held to maturity or trading account
securities are classified as available for sale. These include securities used
as part of the ICICI's asset and liability management strategy, which may be
sold in response to changes in interest rates, prepayment risk, liquidity needs
and similar factors. Securities available for sale are recorded at fair value
with unrealized gains and losses recorded net of tax as a component of other
comprehensive income. Equity securities, which are traded on a securities
exchange within six months of the balance sheet are considered as publicly
traded. The last quoted price of such securities is taken as their fair value.

Non-readily marketable equity securities for which there is no readily
determinable fair value are recorded at cost.

Securities on which there is an unrealized loss that is deemed to be other
than temporary are written down to fair value with the loss recorded in
non-interest income as a loss on securities transactions. Other than temporary
diminution is identified based on management's evaluation.

Securities acquired through conversion of loans in a troubled debt
restructuring are recorded at the fair value on the date of conversion and
subsequently accounted for as if acquired for cash.

ICICI's venture capital subsidiaries carry their investments at fair
value, with changes in fair value recognized in other non-interest income. The
fair values of publicly traded venture capital investments are generally based
upon quoted market prices. In certain situations, including thinly-traded
securities, large-block holdings, restricted shares or other special
situations, the quoted market price is adjusted to produce an estimate of the
attainable fair value for the securities. For securities that are not publicly
traded, fair value is determined in good faith pursuant to procedures
established by the board of directors. In determining the fair value of these
securities, consideration is given to the financial condition and operating
results of the underlying companies, prospect and any other factors deemed
relevant. Generally, these investments are carried at cost during the first
year, unless a significant event occurs that effects the long-term value of the
investment. Because of the inherent uncertainty of the valuations, those
estimated values may differ significantly from the values that would have been
used had a ready market for the investment existed. Substantially all venture
capital investments were acquired during the year ended March 31, 2001.

Trading account liabilities represent borrowings from banks in the
inter-bank call money market, borrowings from banks and corporates in the
course of trading operations and balances arising from repurchase transactions.

Loans

Loans are reported at the principal amount outstanding, inclusive of
interest accrued and due per the contractual terms. Loan origination fees (net
of loan origination costs) are deferred and recognized as an adjustment to
yield over the life of the loan. Interest is accrued on the unpaid principal
balance and is included in interest income.

Loans include aggregate rentals on lease financing transactions and
residual values, net of related unearned income. Lease financing transactions
substantially represent direct financing leases. Loans also include the
aggregate value of purchased securitized receivables, net of unearned income.
Loans further include credit substitutes, such as privately placed debt
instruments, which are not readily marketable.

F-10

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

ICICI identifies a commercial loan as impaired and places it on
non-accrual status when it is probable that ICICI will be unable to collect the
scheduled payments of principal and interest due under the contractual terms of
the loan agreement. A commercial loan is also considered to be impaired and
placed on a non accrual basis if interest is greater than 180 days overdue or
principal is greater than 360 days overdue. Delays or shortfalls in loan
payments are evaluated along with other factors to determine if a loan should
be classified as impaired. The decision to classify a loan as impaired is also
based on an evaluation of the borrower's financial condition, collateral,
liquidation value and other factors that affect the borrower's ability to pay.

ICICI classifies a loan as a troubled debt restructuring where it has made
concessionary modifications, that it would not otherwise consider, to the
contractual terms of the loan to a borrower experiencing financial
difficulties. Restructured loans, which are considered troubled debts, are
placed on non-accrual status when doubt as to timely collection of principal or
interest per the rescheduled terms exists.

When a loan is placed on non-accrual status, interest accrued and
uncollected on the loan, is reversed from income and interest is thereafter
included in income only to the extent actually received in cash. When borrowers
demonstrate over an extended period, the ability to repay a loan in accordance
with the contractual terms of the loan, the loan classified as non-accrual, is
returned to accrual status. With respect to restructured loans, performance
prior to the restructuring or significant events that coincide with the
restructuring are evaluated in assessing whether the borrower can meet the
rescheduled terms and may result in the loan being returned to accrual status
at the time of restructuring or after a performance period.

Consumer loans are generally identified as impaired not later than a
predetermined number of days overdue on a contractual basis. The number of days
is set at an appropriate level by loan product. The policy for suspending
accruals of interest and impairment on consumer loans varies depending on the
terms, security and loan loss experience characteristics of each product.

Allowance for loan losses

ICICI evaluates its entire credit portfolio on a periodic basis and grades
its accounts considering both qualitative and quantitative criteria. This
evaluation includes an account by account analysis of the loan portfolio, and
an allowance is made for any probable loss on each account. In evaluating its
credit losses, management has estimated recovery of such loans at various
stages of time to recovery and discounted these using the effective interest
rate of the loans. In estimating recovery, ICICI considers its past credit loss
experience and such other factors, which in its judgement, deserve current
recognition in estimating probable credit losses. It is possible that actual
recoveries may differ from those estimated and consequently actual loss could
differ from the estimate. The aggregate allowance for loan losses is increased
by amounts charged to the provision for credit losses, net of releases of
provisions as a result of cash collection. Smaller balance, homogeneous loans
including installment and consumer mortgage, revolving credit are collectively
evaluated for impairment. The allowance for loan losses attributable to these
loans is based upon the aging of the portfolio and historical loss experience,
adjusted for changes in trends and conditions. Based on these analysis, the
allowance of loan losses is maintained at levels considered adequate by
management to provide for credit losses inherent in these portfolios.

F-11

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation.
The cost of additions, capital improvements and interest during the
construction period are capitalized, while maintenance and repairs are charged
to expenses when incurred. Property and equipment to be disposed off are
reported as assets held for sale at the lower of carrying amount or fair value,
less cost to sell.

Depreciation is provided over the estimated useful lives of the assets or
lease term whichever is shorter.

Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net undiscounted cash flows expected to be generated by the asset. If
such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets.

Property under construction and advances paid towards acquisition of
property and equipment are disclosed as capital work in progress. The interest
costs incurred for funding an asset during its construction period are
capitalized based on the average outstanding investment in the asset and the
average cost of funds. The capitalized interest cost is included in the cost of
the relevant asset and is depreciated over the estimated useful life of the
asset.

Capitalized costs of computer software obtained for internal use represent
costs incurred to purchase computer software from third parties and direct
costs of materials and services incurred on internally developed software. The
capitalized costs are amortized on a straight-line basis over the estimated
useful life of the software.

Intangible assets

Intangible assets include goodwill and identified intangible assets such
as employee workforce and customer relationships, which arise or have been
acquired in business combinations. Values have been assigned to the identified
intangible assets based on available evidence and are amortized on a
straight-line basis over the estimated useful life.

Deferred credit

Deferred credit represents the unallocated excess of fair value of assets
acquired over the cost of acquisition. The deferred credit is amortized to
income over the periods estimated to be benefited.

Issue of shares by subsidiary/affiliate

An issuance of shares by a subsidiary/affiliate to third parties reduces
the proportionate ownership interest of the company in the investee. A change
in the carrying value of the investment in a subsidiary/affiliate due to such
direct sale of unissued shares by the investee is accounted for as a capital
transaction, and is recognized in stockholders' equity when the transaction
occurs.

F-12

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Income taxes

The company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.
SFAS 109 requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method deferred tax assets and
liabilities are determined based on the difference between the financial
reporting and tax basis of assets and liabilities using enacted tax rates
expected to apply to taxable income in the years the temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of income
in the period of change. Deferred tax assets are recognized subject to a
valuation allowance based upon management's judgement as to whether realization
is considered more likely than not.

Employee benefit plans

ICICI provides a variety of benefit plans to eligible employees.
Contributions to defined contribution plans are charged to income in the period
in which they accrue. Current service costs for defined benefit plans are
accrued in the period to which they relate. Prior service costs, if any,
resulting from amendments to the plans are recognized and amortized over the
remaining period of service of the employees.

Stock-based compensation

ICICI uses the intrinsic value based method of Accounting Principle Board
(APB) Opinion No.25, Accounting for Stock Issued to Employees, to account for
its employee stock-based compensation plans. Compensation cost for fixed and
variable stock based awards is measured by the excess, if any, of the fair
market price of the underlying stock over the exercise price. Compensation cost
for fixed awards is measured at the grant date, while compensation cost for
variable awards is estimated until the number of shares an individual is
entitled to receive and the exercise price or purchase price are known
(measurement date).

Risk management instruments

ICICI enters into certain interest rate instruments, including interest
rate swaps to manage exposure to interest rate risk by altering the interest
rate risk characteristics of assets or liabilities or hedging exposure to
certain risks. For those interest rate instruments that alter the repricing
characteristics of assets or liabilities, the net differential to be paid or
received on the instruments is treated as an adjustment to the yield on the
underlying assets or liabilities (the accrual method). To qualify for accrual
accounting, the interest rate instruments must be designated to specific assets
or liabilities or pools of similar assets or liabilities and must effectively
alter the interest rate characteristics of the related assets or liabilities.
For instruments that are designated to floating-rate assets or liabilities, to
be effective, there must be high correlation between the floating interest rate
index on the underlying assets or liability and the offsetting rate on the
derivative. If correlation were to cease for any interest rate instrument
hedging net interest income, it would then be accounted for as a trading
instrument. If an interest rate instrument hedging net interest income is
terminated, the gain or loss is deferred and amortized over the shorter of the
remaining contractual life of the terminated risk management instrument or the
maturity of the designated asset or liability. If the designated asset or
liability matures, is sold, is settled or its balance falls below the

F-13

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

notional amount of the hedging instrument, the hedge is usually terminated; if
not, accrual accounting is discontinued to the extent that the notional amount
exceeds the balance, and accounting for trading instruments is applied to the
excess amount.

The company also enters into foreign exchange contracts to hedge a portion
of its own foreign exchange exposure, including foreign currency positions.
Such contracts are designated as traded contracts and have been accounted for
at their fair value with revaluation gain/loss recognized in the statement of
income.

Extinguishment of debt

ICICI accounts for reacquisition of its outstanding debt securities as an
extinguishment of debt when it pays the creditors and is relieved of its
obligations for the liability. The difference between the re-acquisition price
and the net carrying amount of the extinguished debt is recognized in the
statement of income in the period of extinguishment. Such gains and losses from
extinguishment of debt are aggregated and, if material, classified as an
extraordinary item, net of the related income tax effect.

Dividends

Dividends on common stock and the related dividend tax are recognized on
approval by the board of directors.

Earnings per share

Basic earning per share is computed by dividing net income by the weighted
average number of common stock outstanding during the period. Diluted earnings
per share reflects the potential dilution that could occur if securities or
other contracts to issue equity shares were exercised or converted.

Reclassifications

Certain reclassifications have been made in the financial statements of
prior years to conform to classifications used in the current year. These
changes had no impact on previously reported results of operations or
stockholders' equity.

2. Dilution of interest in ICICI Bank Limited

In March 2000, ICICI Bank Limited (ICICI Bank), a consolidated subsidiary
providing commercial banking services, issued 15.9 million ADS to third parties
representing 31.8 million common shares at an offer price of US dollar 11 per
ADS. The proceeds from the offering, after deducting underwriting discounts and
other direct issue costs were Rs. 7,338 million. As a result of the issuance,
the proportionate ownership interest of the company in ICICI Bank reduced from
74.2% to 62.2%.

The offering price per share exceeded ICICI's carrying amount per share in
ICICI Bank, resulting in an increase in the carrying value of ICICI's
investment in ICICI Bank by Rs. 4,114 million. This change in the carrying
value has been recognized in the statement of stockholders' equity as a capital
transaction.

In accordance with the Reserve Bank of India guidelines prevalent at the
time of incorporation of ICICI Bank, the company was required to reduce its
ownership interest in ICICI Bank to 40% at some point in the future. Based on
certain regulatory

F-14

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

developments subsequent to the incorporation of ICICI Bank, the company has
been in discussions with the Reserve Bank of India to determine whether and to
what extent it was still required to reduce its ownership in ICICI Bank. In
February 2001, the Reserve Bank of India communicated its final views on the
matter requiring the company to take steps to reduce its interest to 40%
immediately.

In March 2001, ICICI Bank acquired Bank of Madura Limited, a banking
company, through issuance of stock. The acquisition was recorded by the
purchase method. As a result of the issuance, the ownership interest of the
company in ICICI Bank was reduced from 62.2% to 55.6%. The issuance price
exceeded ICICI's carrying amount per share in ICICI Bank resulting in an
increase in the carrying value of ICICI's investment in ICICI Bank by Rs. 1,242
million. This change in the carrying value, net of the related tax effect of
Rs. 140 million, has been recognized in the statement of stockholders' equity
as a capital transaction.

Further, during March 2001, the company sold a 9.2% interest in ICICI Bank
to institutional investors for a consideration of Rs. 3,499 million. The gain
on sale of Rs. 1,996 million, is included in the statement of income. This
reduced the company's interest in ICICI Bank to 46.4%. The company is currently
in the process of taking adequate steps to ensure compliance with the
requirement of the Reserve Bank of India on further dilution of ownership
interest.

In view of the company's ownership interest in ICICI Bank having been
reduced to below majority level, the company has determined that consolidation
of ICICI Bank is no longer appropriate and has accounted for its ownership
interest under the equity method beginning April 1, 2000, the beginning of the
fiscal year in which the majority ownership interest was deemed to be
temporary. ICICI Bank continues to be reported on a consolidated basis for the
years ended March 31, 1999 and 2000.

3. Sale of stock of ICICI Infotech Services Limited

During the year ended March 31, 2001, ICICI diluted its interest in ICICI
Infotech Services Limited to 92% through sale of an 8% interest to a strategic
investor for a consideration of Rs. 576 million. The gain on sale of Rs. 511
million is included in the statement of income.

4. Acquisitions

During the year ended March 31, 2001, ICICI acquired the following
software development and services companies based in the United States, Ivory
International Inc., Objects Xperts Inc. and Command Systems Inc., and Ajax
Software Solutions Limited, a software development company based in India.
These companies were acquired for an aggregate purchase price of approximately
Rs. 2,524 million and were accounted for under the purchase method of
accounting. The acquisitions resulted in goodwill of Rs. 1,391 million, which
is amortized over a period of 5 years. The revenues and total assets of the
acquired companies are immaterial to the consolidated results of operations and
financial position of ICICI.

5. Cash and cash equivalents

Cash and cash equivalents as of March 31, 2001, include interest-bearing
deposits with banks aggregating Rs. 21,693 million (2000: Rs. 47,340 million).

F-15

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

6. Trading account assets

A listing of the trading account assets is set out below:

As of March 31,
--------------------------
2000 2001
--------------------------
(in millions)
Government of India securities ............ Rs. 46,281 Rs. 8,889
Corporate debt securities.................. 9,239 7,289
Equity securities.......................... 1,567 2,677
Revaluation gain on derivative and
foreign exchange contracts............... 309 23
--------------------------
Total...................................... Rs. 57,396 Rs. 18,878
==========================

As of March 31, 2001, trading account assets include certain Government of
India securities amounting to Rs. 4,821 million (2000: Rs. 10,842 million),
which are pledged with the Reserve Bank of India for the purpose of
collateralizing short-term borrowings.

7. Securities

The portfolio of securities is set out below:

As of March 31, 2000 As of March 31, 2001
----------------------------------------------------------------------------------------------
Amortized Gross Gross Fair value Amortized Gross Gross Fair value
cost unrealized unrealized cost unrealized unrealized
gain loss gain loss
----------------------------------------------------------------------------------------------
(in millions)

Available for sale
Corporate debt
securities........... Rs. 2,558 Rs. 34 Rs. -- Rs. 2,592 Rs. 485 Rs. 4 Rs. -- Rs. 489
Government of India
securities........... 914 89 -- 1,003 975 35 -- 1,010
---------------------------------------------------------------------------------------------
Total debt securities. 3,472 123 -- 3,595 1,460 39 -- 1,499
Equity securities..... 11,326 1,203 (4,976) 7,553 11,821 482 Rs. (6,156) Rs. 6,147
---------------------------------------------------------------------------------------------
Total securities
available for sale.. Rs. 14,798 Rs. 1,326 Rs. (4,976) Rs. 11,148 Rs. 13,281 Rs. 521 Rs. (6,156) Rs. 7,646
=============================================================================================
Held to maturity
Corporate debt
securities............ Rs. 84 Rs. -- Rs. -- Rs. 84 Rs. 418 Rs. -- Rs. (1) Rs. 417
Government of
India securities.... 560 54 -- 614 1,088 58 -- 1,146
Other debt securities. 1 -- -- 1 -- -- -- --
---------------------------------------------------------------------------------------------
Total securities
held to maturity.... Rs. 645 Rs. 54 Rs. -- Rs. 699 Rs. 1,506 Rs. 58 Rs. (1) Rs. 1,563
=============================================================================================
Non-readily
marketable equity
securities(1)....... Rs. 6,542 Rs. 6,394
========== ==========

(1) Represents securities acquired as a part of project financing activities
or conversion of loans in debt restructurings.

During the year ended March 31, 2001, as part of its ongoing evaluation of
its securities portfolio, the company recorded an impairment charge of Rs.
1,835 million (2000: Rs. 1,444 million, 1999: Rs. 1,231 million) for other than
temporary decline in value of available for sale and non-readily marketable
equity securities.

F-16

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Income from securities available for sale

A listing of income from securities available for sale is set out below:

Year ended March 31,
----------------------------------------
1999 2000 2001
----------------------------------------
(in millions)
Interest......................Rs. 245 Rs. 388 Rs. 128
Dividends .................... 676 1,502 406
----------------------------------------
Total.........................Rs. 921 Rs. 1,890 Rs. 534
----------------------------------------
Gross realized gain...........Rs. 1,538 Rs. 5,851 Rs. 474
Gross realized loss........... (34) (2,044) (348)
----------------------------------------
Total.........................Rs. 1,504 Rs. 3,807 Rs. 126
========================================

Maturity profile of debt securities

A listing of each category of available for sale and held to maturity debt
securities as of March 31, 2001, by maturity is set out below:

Available for sale Held to maturity
---------------------------------------------------
Amortized Fair value Amortized Fair value
Cost cost
---------------------------------------------------
(in millions)

Corporate debt securities
Less than one year................. Rs. 35 Rs. 35 Rs. 418 Rs. 417
One to five years.................. 309 310 -- --
Five to ten years.................. 109 111 -- --
Greater than ten years............. 32 33 -- --
-------------------------------------------------
485 489 418 417
-------------------------------------------------
Government of India securities
Less than one year................. 96 97 -- --
One to five years.................. 619 638 -- --
Five to ten years.................. 260 275 -- --
Greater than ten years............. -- -- 1,088 1,146
-------------------------------------------------
975 1,010 1,088 1,146
-------------------------------------------------
Total debt securities.............. Rs. 1,460 Rs. 1,499 Rs. 1,506 Rs. 1,563
=================================================

8. Repurchase transactions

ICICI has undertaken repurchase and reverse repurchase transactions in
government of India securities. The average level of repurchase transactions
outstanding during the year ended March 31, 2001, was Rs. 420 million (2000:
Rs. 652 million). The average level of reverse repurchase transactions
outstanding during the year ended March 31, 2001, was Rs. 309 million (2000:
Rs. 662 million). As of March 31, 2001, outstanding repurchase and reverse
repurchase transactions were Rs. Nil (2000: Rs. 2,664 million) and Rs. Nil
(2000: Rs. 565 million) respectively.

F-17

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

9. Investments in affiliates

ICICI Bank

As discussed in Note 2, the company has accounted for its 46.4% interest
in ICICI Bank by the equity method for the year ended March 31, 2001. The
carrying value of the investment in ICICI Bank as of March 31, 2001, was Rs.
7,562 million. The company's equity in the income of ICICI Bank for the year
ended March 31, 2001, was Rs. 814 million. The market value of the investment
in ICICI Bank based on the quoted market price as of March 31, 2001, was Rs.
16,903 million. ICICI Bank was accounted for as a consolidated subsidiary
during the years ended March 31, 1999 and 2000.

The summarized balance sheet of ICICI Bank as of March 31, 2001, and
summarized statement of income for the year ended March 31, 2001, is set out
below:

As of
Balance sheet March 31, 2001
--------------
(in millions)
Cash and cash equivalents ...........................Rs. 47,306
Trading account assets............................... 18,725
Securities .......................................... 35,731
Loans ............................................... 93,030
Other assets ........................................ 25,216
---------------
Total assets.........................................Rs. 220,008
===============

Deposits.............................................Rs. 164,254
Trading account liabilities ......................... 4,700
Other liabilities ................................... 34,747
Stockholders' equity................................. 16,307
---------------
Total liabilities and stockholders' equity...........Rs. 220,008
===============

Year ended
Statement of income March 31, 2001
---------------
(in millions)
Interest income......................................Rs. 12,406
Interest expense..................................... (8,408)
---------------
Net interest income.................................. 3,998
Provision for loan losses............................ (1,082)
Non-interest income.................................. 1,754
Non-interest expense................................. (3,104)
Income taxes......................................... (258)
---------------
Net income...........................................Rs. 1,308
===============

ICICI's share of reported earnings in ICICI Bank will be reduced to 46.0%
in the event that contingent issuances of equity shares arising from stock
options granted by ICICI Bank are exercised in the future. The aggregate impact
of these issuances is not material based on the share of earnings for the year
ended March 31, 2001.

Prudential ICICI Asset Management Company Limited (Pru-ICICI)

The company has accounted for its 45% interest in Pru-ICICI using the
equity method. The carrying value of the investment in Pru-ICICI as of March
31, 2001, was Rs. 304 million (2000: Rs. 264 million). The company's equity in
the income of

F-18

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Pru-ICICI for the year ended March 31, 2001, was Rs. 42 million (2000: Rs. 20
million, 1999: loss of Rs. 34 million).

Prudential ICICI Trust Limited (Pru-Trust)

The company has accounted for its 45% interest in Pru-Trust using the
equity method. The carrying value of the investment in Pru-Trust as of March
31, 2001, was Rs. 2 million (2000: Rs. Nil). The company's equity in the income
of Pru-Trust for the year ended March 31, 2001, was Rs. 2 million (2000: Rs.
Nil, 1999: Rs. Nil).

Tricolor Infotech International Inc. (Tricolor)

The company has accounted for its 50% interest in Tricolor using the
equity method. The carrying value of the investment in Tricolor as of March 31,
2001, was Rs. 17 million (2000: Rs. Nil). The company's equity in the loss of
Tricolor for the year ended March 31, 2001, was Rs. 2 million (2000: Rs. Nil,
1999: Rs. Nil).

TCW/ICICI Investment Partners LLC (TCW)

The company has accounted for its 50% interest in TCW using the equity
method. The carrying value of the investment in TCW as of March 31, 2001, was
Rs. 14 million (2000: Rs. Nil). The company's equity in the income of TCW for
the year ended March 31, 2001, was Rs. Nil (2000: Rs. Nil, 1999: Rs. Nil).

10. Loans

A listing of loans by category is set out below:

As of March 31,
-------------------------
2000 2001
-------------------------
(in millions)

Project finance.....................................................Rs. 463,718 Rs. 515,971
Working capital finance ............................................ 75,606 44,442
Lease financing..................................................... 53,555 61,822
Consumer loans and credit card receivables.......................... 6,679 27,106
Other .............................................................. 18,156 12,457
-------------------------
Gross loans......................................................... 617,714 661,798
Unearned income..................................................... (18,968) (23,365)
Security deposits................................................... (3,213) (3,375)
-------------------------
Loans, net of unearned income and security deposits................. 595,533 635,058
Allowances for loan losses.......................................... (34,085) (33,035)
-------------------------
Loans, net..........................................................Rs. 561,448 Rs. 602,023
=========================

Project finance loans are generally secured by property, plant and
equipment and other tangible assets. Normally, the working capital loans are
secured by a first lien on current assets, principally comprising inventory and
receivables. Additionally, in certain cases ICICI may obtain additional
security for working capital loans through a first or second lien on property
and equipment, pledge of financial assets like marketable securities and
corporate/personal guarantees.

F-19

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

As of March 31, 2001, gross loans include debit balances in demand deposit
accounts of Rs. Nil (2000: Rs. 2,794 million) and loans given to individuals
outside India of Rs. Nil (2000: Rs. 265 million).

During the year ended March 31, 2000, ICICI purchased certain unquoted
equity securities from a corporate with a 'put' and 'call' option. Under the
terms of the transfer, ICICI has a put option to sell the securities to the
corporate at a pre-determined consideration. Additionally, the corporate has a
call option to repurchase the transferred securities at a pre-determined
consideration. ICICI cannot transfer the securities to a third party within the
period of the option. The call and the put option can be exercised between 13
months to 18 months. As ICICI has not obtained control over the transferred
assets, it has recorded the transfer as a secured loan with pledge of
collateral. As of March 31, 2000 and 2001, other loans include Rs. 994 million
representing such a lending.

Lease financing

Contractual maturities of ICICI's investment in lease financing and its
components, which are included in loans are set out below:

As of
March 31, 2001
-----------------
(in millions)
Gross finance receivables for the year ending March 31,
2002......................................................... Rs. 11,690
2003......................................................... 8,633
2004......................................................... 9,006
2005......................................................... 8,571
2006......................................................... 6,455
Thereafter................................................... 17,467
-------------
61,822
Unearned income.............................................. (18,706)
Security deposits............................................ (3,375)
-------------
Investment in lease financing................................ Rs. 39,741
=============

Maturity profile of loans

A maturity of loans, other than investment in lease financing is set out
below:

As of March 31,
------------------------
2000 2001
------------------------
(in millions)
Less than one year ..........................Rs. 156,820 Rs. 176,230
One to five years............................ 279,126 271,349
Greater than five years...................... 128,213 152,397
------------------------
Total........................................Rs. 564,159 Rs. 599,976
========================

Restructured loans

The company classifies a debt restructuring as a troubled debt
restructuring (restructured loan) when it grants a concession, that it would
not otherwise consider, to a borrower in financial difficulties. As of March
31, 2001, the company had committed to

F-20

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

lend Rs. 750 million (2000: Rs. Nil) to a borrower who is a party to a troubled
debt restructuring.

Impaired loans, including restructured loans

A listing of restructured loans is set out below:

As of March 31,
-----------------------
2000 2001
-----------------------
(in millions)
Project finance...........................Rs. 18,513 Rs. 37,726
Working capital finance................... 33 818
Other..................................... -- 5,137
-----------------------
Restructured loans........................ 18,546 43,681
Allowance for loan losses ................ (7,751) (11,372)
-----------------------
Restructured loans, net...................Rs. 10,795 Rs. 32,309
-----------------------
Restructured loans:
With a valuation allowance...............Rs. 18,546 Rs. 40,196
Without a valuation allowance ........... -- 3,485
-----------------------
Restructured loans........................Rs. 18,546 Rs. 43,681
=======================

A listing of other impaired loans is set out below:

As of March 31,
-----------------------
2000 2001
-----------------------
(in millions)
Project finance...........................Rs. 45,616 Rs. 39,430
Working capital finance................... 1,420 1,234
Lease financing .......................... 2,965 899
Consumer loans and credit card
receivables ............................ 24 32
Other..................................... 549 149
-----------------------
Other impaired loans...................... 50,574 41,744
Allowance for loan losses ............... (26,334) (21,663)
-----------------------
Other impaired loans, net.................Rs. 24,240 Rs. 20,081
-----------------------
Other impaired loans:
With a valuation allowance...............Rs. 50,574 Rs. 41,744
Without a valuation allowance ........... -- --
-----------------------
Other impaired loans......................Rs. 50,574 Rs. 41,744
=======================

During the year ended March 31, 2001, interest income of Rs. 1,989 million
(2000: Rs. 1,035 million, 1999: Rs. 402 million) was recognized on impaired
loans on a cash basis. Gross impaired loans averaged Rs. 76,642 million during
the year ended March 31, 2001 (2000: Rs. 63,804 million).

Concentration of credit risk

Concentration of credit risk exists when changes in economic, industry or
geographic factors similarly affect groups of counterparties whose aggregate
credit exposure is material in relation to ICICI's total credit exposure.
ICICI's portfolio of financial instruments is broadly diversified along
industry and product lines within the country.

F-21

11. Allowance for loan losses

Changes in the allowance for loan losses

Movements in the allowance for loan losses are set out below:

Year ended March 31,
------------------------------------
1999 2000 2001
------------------------------------
(in millions)

Allowance for loan losses at the beginning of the year......Rs. 22,457 Rs. 28,524 Rs. 34,085
Effect of deconsolidation of subsidiary on allowance for
loan losses................................................ -- -- (747)
Provisions for loan losses, net of releases of provisions
as a result of cash collections........................... 6,067 6,363 9,892
------------------------------------
28,524 34,887 43,230
Loans charged-off........................................... -- (802) (10,195)
------------------------------------
Allowance for loan losses at the end of the year............Rs. 28,524 Rs. 34,085 Rs. 33,035
====================================

Until the year ended March 31, 2000, the parent company followed a policy
whereby loan balances were not charged-off against the allowance for loan
losses. This policy was in response to the regulatory environment governing
debt recovery proceedings in India. During the year ended March 31, 2001,
changes in the tax laws necessitated that loan balances deemed unrecoverable be
charged-off against the allowance for loan losses. Accordingly, the parent
company charged-off significant loan balances deemed unrecoverable during the
year ended March 31, 2001.

12. Property and equipment

A listing of property and equipment by asset category is set out below:

As of March 31,
-----------------------
2000 2001
-----------------------
(in millions)
Land.............................................Rs. 1,454 Rs. 1,520
Buildings........................................ 5,570 5,941
Equipment and furniture.......................... 4,238 4,330
Capital work-in-progress......................... 1,867 1,351
Others........................................... 163 355
-----------------------
Gross value of property and equipment............ 13,292 13,497
Accumulated depreciation......................... (1,517) (1,458)
-----------------------
Property and equipment, net......................Rs. 11,775 Rs. 12,039
=======================

Depreciation charge for the year ended March 31, 2001, is Rs. 663 million
(2000: Rs. 431 million, 1999: Rs. 490 million). Interest capitalized for the
year ended March 31, 2001, is Rs. Nil (2000: Rs. 19 million, 1999: Rs. 231
million).

Land and buildings include certain assets of Rs. 541 million which have
not yet been registered in the company's name pending regulatory transfer
approvals.

Property and equipment include certain assets of Rs. 1,196 million
acquired through foreclosure of loans, which are intended to be used by the
company in its normal business operations.

F-22

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Effective April 1, 1999, the parent company changed the method of
accounting for depreciation of property and equipment from the written-down
value method to the straight-line method. Under the written-down value method,
depreciation is charged over the reducing balance of the fixed asset over its
estimated useful life whereas under the straight-line method, the depreciation
is charged at a fixed rate on the original cost of the fixed asset over its
estimated useful life. The new method of depreciation was adopted to provide an
improved measure of the company's capital investment and is consistent with
industry practices. The new method has been applied prospectively with a
cumulative adjustment for all prior periods.

The effect of the change on the net income for the year ended March 31,
2000, was Rs. 226 million. The cumulative effect of the change aggregating Rs.
405 million, net of the related income tax effect of Rs. 156 million, to apply
retroactively the new method has been included in the statement of income for
the year ended March 31, 2000.

The previously reported amounts for the year ended March 31, 1999 and pro
forma amounts assuming the new depreciation method is applied retroactively are
set out below:

Actual Proforma
------------------------
Income before extraordinary items................Rs. 7,226 Rs. 7,347
Earnings per share (Rs.)
Basic ........................................... 15.05 15.31
Diluted ......................................... 13.01 13.21

Net income.......................................Rs. 7,518 Rs. 7,639
Earnings per share (Rs.)
Basic .............................................. 15.66 15.91
Diluted ......................................... ...13.52 13.72

13. Assets held for sale

The company owns property and equipment, which are to be disposed of
through a sale, as the company has shifted operations to a central location.
The carrying amount of such assets as of March 31, 2001 was Rs. 13 million
(2000: Rs. Nil), which is lower than its fair value.

As of March 31, 2001, assets held for sale include certain assets of Rs.
828 million (2000: Rs. Nil) acquired through foreclosure of loans.

F-23

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

14. Intangible assets, net

A listing of intangible assets by category is set out below:

Economic
useful life
(in years) As of March 31,
------------------------------------
2000 2001
----------------------
(in millions)

Goodwill ............................................... 5 Rs. 934 Rs. 2,325
Accumulated amortization................................ (374) (613)
----------------------
Goodwill, net........................................... 560 1,712
----------------------
Employee workforce and customer relationships .......... 5 - 135
Accumulated amortization................................ - (20)
----------------------
Other intangible assets, net............................ - 115
----------------------
Intangible assets, net.................................. Rs. 560 Rs. 1,827
======================

15. Other assets

Other assets consist of the following:
As of March 31,
--------------------------
2000 2001
--------------------------
(in millions)
Debtors............................................Rs. 856 Rs. 1,911
Staff advances..................................... 660 741
Advance taxes...................................... 15,000 14,585
Security deposits.................................. 1,215 937
Advance for purchases of securities................ 1,394 2,766
Prepaid expenses................................... 74 198
Other.............................................. 6,369 3,518
--------------------------
Total..............................................Rs. 25,568 Rs. 24,656
==========================

16. Deposits

Deposits include demand deposits, which are non-interest-bearing and
savings and time deposits, which are interest-bearing. A listing of deposits is
set out below:
As of March 31,
--------------------------
2000 2001
--------------------------
(in millions)
Interest-bearing
Savings deposits ..................................Rs. 5,332 Rs. --
Time deposits...................................... 77,495 6,072
--------------------------
82,827 6,072
Non-interest-bearing
Demand deposits.................................... 13,855 --
--------------------------
Total..............................................Rs. 96,682 Rs. 6,072
==========================

F-24

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Contractual maturities of deposits as of March 31, 2001, are set out
below:

(in millions)
------------
Deposits maturing during the year ending March 31,
2002........................................................Rs. 3,613
2003........................................................ 450
2004........................................................ 1,335
2005........................................................ 3
2006........................................................ 671
Thereafter.................................................. --
-----------
Total deposits..............................................Rs. 6,072
===========

As of March 31, 2001, aggregate of deposits with individual balances
greater than Rs. 5 million were Rs. 3,306 million (2000: Rs. 70,176 million).

17. Short-term borrowings

Short-term borrowings represent non-trading borrowings with an original
maturity of less than one year.

18. Long-term debt and redeemable preferred stock

Long-term debt

Long-term debt represents debt with an original maturity of greater than
one year. Maturity distribution is based on contractual maturities or earlier
dates at which debt is callable at the option of the holder. A significant
portion of the long-term debt bears a fixed rate of interest. Interest rates on
floating-rate debt are generally linked to the London Inter-bank Offer Rate or
similar money market rates. The segregation between fixed-rate and
floating-rate obligations is based on the contractual terms.

A listing of long-term debt as of March 31, 2001, by maturity and interest
rate profile is set out below:

Various Various
fixed-rate floating-rate Total
obligations obligations
---------------------------------------
(in millions)
Long-term debt maturing during the
year ending March 31,.................
2002.................................... Rs. 97,416 Rs. 22,481 Rs. 119,897
2003.................................... 103,090 15,100 118,190
2004.................................... 86,067 12,800 98,867
2005.................................... 37,652 6,946 44,598
2006.................................... 46,965 6,247 53,212
Thereafter.............................. 56,569 16,077 72,646
--------------------------------------
Total................................... 427,759 79,651 507,410
Less: Unamortized debt issue cost...... (2,385)
-----------
Total................................... Rs. 505,025
===========

All long-term debt is unsecured. Debt aggregating Rs. 42,376 million
(2000: Rs. 44,419 million) is guaranteed by the government of India.

Long-term debt is denominated in various currencies. As of March 31, 2001,
long-term debt comprises Indian rupee debt of Rs. 404,017 million

F-25

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

(2000: Rs. 342,816 million) and foreign currency debt of Rs. 101,008 million
(2000: Rs. 93,504 million).

Indian rupee debt

A listing of major category of Indian rupee debt is set out below:

As of March 31,
---------------------------------------------------------------------
2000 2001
---------------------------------------------------------------------
Weighted Weighted
average average Average
interest interest residual
Category Amount rate Amount rate Range maturity
---------------------------------------------------------------------
(in millions)

Bonds issued to
institutional/individual
investors................... Rs. 310,175 13.7% Rs. 374,629 12.9% 8.1-16.8% 2.9 years
Bonds eligible for statutory
reserve requirements(1)..... 24,072 10.8% 21,653 11.1% 7.5-12.0% 6.6 years
Borrowings from government
of India(2)................. 8,569 12.3% 7,735 12.4% 11.0-16.0% 5.3 years
--------------------------------------------------------------------
Total........................ Rs. 342,816 13.5% Rs. 404,017 12.8% 3.1 years
====================================================================

(1) Banks in India are required to mandatorily maintain a specified percentage
of certain liabilities as cash or in approved securities. These bonds
issued by ICICI are approved securities under the rules.
(2) Includes interest-free borrowings from the government of India aggregating
Rs. 220 million (2000: Rs. 190 million). The borrowing was initially
recorded at its fair value of Rs. 100 million based on the prevailing
interest rate of 16% for borrowings of a similar term and risk. Interest
is being imputed for each reporting period using this rate.

Foreign currency debt

A listing of major category of foreign currency debt is set out below:

As of March 31,
--------------------------------------------------------------------
2000 2001
--------------------------------------------------------------------
Weighted Weighted
average average Average
interest Interest residual
Category Amount rate Amount rate Range maturity
--------------------------------------------------------------------
(in millions)

Borrowings from
international development
agencies (1) (2)............Rs. 21,244 5.4% Rs. 21,473 5.6% 0-8.5% 17.6 years
Other borrowings from
international markets....... 72,260 6.3% 79,535 6.5% 0-9.1% 2.2 years
--------------------------------------------------------------------
Total........................Rs. 93,504 6.1% Rs. 101,008 6.3% 5.5 years
====================================================================

(1) These borrowings have been raised under specific lines of credit from
international development agencies. The borrowings have lender-imposed
restrictions that limit the use of the funds for specified purposes, which
include lending to specified sectors.
(2) As of March 31, 2001, under these lines of credit, the company has an
unutilized option to borrow Rs. 9,468 million as per an agreed schedule
over a period of 5 years at various interest rates.

Convertible debt

Included in long term debt were the folowing convertible issues:

12.5% convertible debentures

The 12.5% convertible debentures were convertible into common stock by
July 18, 1999, either at par or at a premium not exceeding Rs. 5 per common
share, to be

F-26

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

decided by the board of directors of ICICI. During the year ended
March 31, 2000, the debentures were converted into 34.5 million common shares
at a premium of Rs. 5 per share aggregating Rs. 518 million. These shares will
rank pari passu in all respects with existing common shares of the company
except they participated in dividend in respect of the year ended March 31,
2000, on a pro rata basis.

2.5% US dollar convertible bonds

The 2.5% US dollar convertible bonds were convertible to common stock at
the option of the bondholders before March 3, 2000. The conversion was at a
fixed price of Rs. 220 per share. No bondholder exercised the option to convert
the bonds. During the year ended March 31, 2001, ICICI redeemed these bonds at
par aggregating US$ 200 million.

3.5% US dollar convertible bonds

The 3.5% US dollar convertible bonds were convertible to common stock at
the option of the bondholder on or before April 1, 1999. The conversion was at
a fixed price of Rs. 193 per share. If the bonds were not converted by the
bondholders, the bondholders had the right to seek redemption at a
predetermined price on April 1, 1999. Alternatively, ICICI can seek redemption
at par from April 1, 1999 to April 1, 2004. During the year ended March 31,
2000, 63,398 shares were issued to bondholders at Rs. 193 per share. The
remaining bonds were redeemed at the predetermined price, aggregating US$ 98.2
million.

Redeemable preferred stock

During the year ended March 31, 2001, the company redeemed preferred stock
with a face value of Rs. 9,577 million. The stock was issued in 1998 to take
advantage of the regulatory developments related to the withdrawal of
distribution tax, and the redemption in the current year, as per the terms of
issue, was in response to the reinstatement of such tax.

ICICI issued preferred stock with a face value of Rs. 3,500 million during
the year ended March 31, 1998 under the scheme of business combination with ITC
Classic Finance Limited. This preferred stock bears a dividend yield of 0.001%
and is redeemable at face value after 20 years. The preferred stock was
initially recorded at its fair value of Rs. 466 million. Subsequently, interest
is being imputed for each reporting period. The imputed interest rate of 10.6%
was determined based on the then prevailing interest rate for government of
India securities of similar maturity. The carrying amount of this redeemable
preferred stock as of March 31, 2001 is Rs. 698 million (2000: Rs. 630
million).

19. Other liabilities

Interest accrued

Other liabilities as of March 31, 2001, include Rs. 21,775 million (2000:
Rs. 20,778 million) of interest accrued but not due on borrowings.

F-27

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Borrowings from Kreditanstalt fur Wiederaufbau

The company has borrowings from Kreditanstalt fur Wiederaufbau (KfW), an
international development agency, under specific lines of credit. The terms of
the borrowings provide for limitations on usage, whereby funds can be used only
for specified purposes. The borrowings are guaranteed by the government of
India.

With respect to certain borrowings, the terms of the borrowing agreement
provide that a portion of the interest payable on the borrowing shall be paid
to the government of India instead of the lender. KfW and the government of
India have entered into an agreement whereby the interest paid to the
government of India is repaid to the company either in the form of a grant or a
loan. While the loan is repayable as per a specified schedule, the grants do
not have a repayment schedule. The interest amounts received from the
government of India bear limitations on usage and are required to be advanced
as loans/contributions for specified purposes. Similarly, with respect to
certain other borrowings from KfW, the terms of the borrowing agreement provide
that a portion of the interest payable on the borrowings shall be retained by
ICICI and used to be advanced as loans/contributions for specified purposes.

The company periodically advances loans/contributions for specified
purposes out of these funds and reports such utilizations to the government of
India/KfW. However, no time schedule has been specified for the usage of the
funds. In the event that the funds are not utilized for specified purposes, the
government of India/KfW have the right to require repayment of the
grant/retained interest. Additionally, KfW can modify the scope of the
specified purposes. The company retains the income derived from the loans made
out of the funds. Similarly, it bears the risks of default on the loans.

The interest repaid by the government of India in the form of grants and
the interest retained under the agreement with KfW do not represent
contributions as they specify donor-imposed conditions, the breach of which,
would enable the donor to demand repayment of the grants/retained interest.
Accordingly, the grants/retained interest have been reported as liabilities.

Other liabilities as of March 31, 2001, include grants of Rs. 1,649
million (2000: Rs. 1,761 million) and retained interest of Rs. 361 million
(2000: Rs. 295 million).

20. Common stock

ICICI presently has only one class of common stock. In the event of
liquidation of the affairs of the company, all preferential amounts, if any,
shall be discharged by the company. The remaining assets of the company, after
such discharge shall be distributed to the holders of common stock in
proportion to the common stock held by shareholders.

During the year ended March 31, 2000, ICICI issued 32 million American
Depositary Shares (ADS) representing 161 million common shares. The common
stock represented by the ADS are similar to other common stock, except for
voting rights. While every holder of common stock, as reflected in the records
of the company, has one vote in respect of each share held, the ADS have no
voting rights due to a condition contained in the approval of the offering from
the Ministry of Finance of India. Under the depositary agreement, the
depositary of the ADS will vote as directed by the Board of directors of ICICI
limited.

F-28

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Additionally, during the year ended March 31, 2000, ICICI issued 68
million common shares to institutional investors in India through a private
placement and 41 million common shares through a public offering in India.

21. Retained earnings and dividends

Retained earnings as of March 31, 2001, include profits aggregating Rs.
11,875 million and Rs. Nil (2000: Rs. 1,110 million and Rs. 1,039 million),
which are not distributable as dividends under Indian Company and Banking law
respectively. These relate to profits on redemption of preferred stock and
requirements regarding earmarking a part of profits under banking laws.

Retained earnings as of March 31, 2001, include reserves of Rs. 9,208
million (2000: Rs. 9,200 million) earmarked under Indian tax laws to avail tax
benefits and which are not distributable as dividends. Any transfer of balances
from such earmarked reserves would result in withdrawal of the tax exemption on
the transferred amounts.

Indian statutes mandate that dividends be declared out of distributable
profits only after the transfer of a specified percentage of net income,
computed in accordance with current regulations, to reserves. Should the
company declare and pay dividends, such dividends will be paid in Indian rupees
to each holder of common stock in proportion to the number of shares held to
the total common stock outstanding as on that date. Issuances of common stock
during a period would be entitled to dividend on a pro rata basis based on the
date of issuance. Additionally, the remittance of dividends outside India is
governed by Indian statutes on foreign exchange transactions. Dividend payments
are also subject to dividend taxes applicable at the time of the declaration.

F-29

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

22. Earnings per share

A computation of the earnings per share is set out below:

Year ended March 31,
----------------------------------------------------------------
1999 2000 2001
----------------------------------------------------------------
Fully Fully Fully
Basic diluted Basic diluted Basic diluted
----------------------------------------------------------------
(in millions, except earnings per share data)

Earnings
Net income before extraordinary items and
cumulative effect of accounting change
(before dilutive impact)..................Rs. 7,226 Rs. 7,226 Rs. 9,082 Rs. 9,082 Rs. 6,630 Rs. 6,630
Interest on convertible debt instruments... -- 276 -- 132 -- --
Contingent issuances of
subsidiaries/affiliates................... -- -- -- -- -- (25)
-----------------------------------------------------------------
Net income before extraordinary items
and cumulative effect of accounting
change (adjusted for full dilution)...... 7,226 7,502 9,082 9,214 6,630 6,605
Extraordinary items, net of tax............ 292 292 -- -- -- --
Cumulative effect of accounting change,
net of tax................................ -- -- 249 249 -- --
-----------------------------------------------------------------
Net income (adjusted for full dilution).... 7,518 7,794 9,331 9,463 6,630 6,605
-----------------------------------------------------------------
Common stock
Weighted-average common stock outstanding.. 480 480 646 646 785 785
Dilutive effect of convertible debt
instruments............................... -- 97 -- 41 -- --
Dilutive effect of employee stock options.. -- -- -- -- -- --
-----------------------------------------------------------------
Total...................................... 480 577 646 687 785 785
-----------------------------------------------------------------
Earnings per share
Net income before extraordinary items and
cumulative effect of accounting change ... 15.05 13.01 14.06 13.41 8.44 8.41
Extraordinary items........................ 0.61 0.51 -- -- -- --
Cumulative effect of accounting change .... -- -- 0.39 0.36 -- --
-----------------------------------------------------------------
Net income.................................Rs. 15.66 Rs. 13.52 Rs. 14.45 Rs. 13.77 Rs. 8.44 Rs. 8.41
-----------------------------------------------------------------

For the purpose of calculating diluted earnings per share, the net income
is adjusted for interest (after tax) on convertible instruments.

For the purpose of determining the impact of dilution, it is assumed that
convertible instruments are converted to common stock at the beginning of the
year, at prices which are most advantageous to the holders of the instruments.
Shares assumed to be issued have been weighted for the period the convertible
instruments are outstanding. All series of convertible instruments are
dilutive.

Options to purchase 2,323,750 equity shares and 2,922,500 equity shares
granted to employees at a weighted average exercise price of Rs. 85.5 and Rs.
133.4 were outstanding during the year ended March 31, 2000 and 2001,
respectively, but were not included in the computation of diluted earnings per
share because the exercise price of the options was greater than the average
market price of the equity shares during the period.

F-30

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

23. Regulatory capital

Under Indian regulations, the parent company, ICICI Bank and ICICI
Securities (a consolidated subsidiary) are required to maintain a minimum total
capital adequacy ratio of 9%, 9% and 15% respectively. Further, the parent
company and ICICI Bank are required to maintain a minimum Tier I capital
adequacy ratio of 4.5%.

The capital adequacy ratio is required to be calculated in line with the
guidelines issued by the Reserve Bank of India. The capital adequacy ratio of
these entities is set out below:

ICICI Limited ICICI Bank
------------------------------------
As of March 31, As of March 31,
------------------------------------
2000 2001 2000
------------------------------------
Tier I capital adequacy ratio............... 11.5% 9.7% 17.4%
Tier II capital adequacy ratio.............. 5.8% 5.0% 2.2%
------------------------------------
Total capital adequacy ratio................ 17.3% 14.7% 19.6%
====================================

ICICI Securities had a total capital adequacy ratio of 30.7% and 27.8% as
of March 31, 2000 and 2001 respectively.

24. Regulated investments

Under Indian regulations, ICICI Bank is required to maintain a specified
percentage of its net demand and time liabilities as cash balances or in the
form of investments in approved securities. The amount required to be
maintained as of March 31, 2000, was Rs. 20,570 million. As of March 31, 2000,
ICICI Bank was in compliance with such regulated investment requirements.

Additionally, ICICI Bank is required under Indian regulations to maintain
specified cash balances with the Reserve Bank of India that are subject to
withdrawal and usage restrictions. As of March 31, 2000, cash and cash
equivalents include Rs. 6,904 million maintained as cash balances with the
Reserve Bank of India under these regulations.

25. Segmental disclosures and related information

Segmental disclosures

SFAS 131, Disclosure about Segments of an Enterprise and Related
Information, establishes standards for the reporting of information about
operating segments. Operating segments are defined as components of an
enterprise for which separate financial information is available that is
regularly evaluated by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The varied financial services
activities of ICICI are carried out by a number of legal entities. Thus, while
the parent company focuses primarily on medium-term and long-term project
financing, other activities such as commercial banking, investment banking,
retail distribution, broking and venture capital financing are conducted by
subsidiaries/ affiliates. Each subsidiary/affiliate focuses on specific
activities and represents an

F-31

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

operating segment.

The project financing segment (ICICI Limited) provides medium-term and
long-term project and infrastructure financing, securitization and factoring
and lease financing. The commercial banking segment (ICICI Bank) provides
working capital finance and foreign exchange services to clients. Further, it
provides deposit and loan products to retail customers. The investment banking
segment (ICICI Securities) deals in the debt, equity and money markets and
provides corporate advisory products such as mergers and acquisition advice,
loan syndication advice and issue management services.

As discussed in Note 2, the results of ICICI Bank, which represents the
commercial banking segment, are reported by equity method with effect from
April 1, 2000. However, for management reporting, the entire results of ICICI
Bank continue to be reported as if the business were a consolidated entity. The
segment information presented is consistent with the management reporting.

The profit and loss of reportable segments is set out below:

-----------------------------------------------------------------------------------------------------
Project financing Commercial banking Investment banking
-----------------------------------------------------------------------------------------------------
Year ended March 31, Year ended March 31, Year ended March 31,
-----------------------------------------------------------------------------------------------------
1999 2000 2001 1999 2000 2001 1999 2000 2001
-----------------------------------------------------------------------------------------------------
(in millions)

Income from external
customers
Interest income ......Rs. 63,885 Rs. 70,603 Rs. 77,438 Rs. 5,471 Rs. 8,434 Rs. 12,206 Rs. 1,384 Rs. 2,176 Rs. 1,888
Other income.......... 3,987 6,264 6,207 844 1,718 1,682 338 722 943
Income from other
operating segments
Interest income ...... 410 498 832 -- -- 200 123 181 142
Other income.......... 144 118 550 11 41 72 26 36 11
-----------------------------------------------------------------------------------------------------
Total income.......... 68,426 77,483 85,027 6,326 10,193 14,160 1,871 3,115 2,984

Interest expense...... 52,800 59,840 65,424 4,255 6,656 8,408 1,103 1,467 1,633
Depreciation ......... 276 330 469 175 201 352 24 18 15
Provision for loan
losses............... 5,497 5,847 9,840 465 427 1,082 106 76 13
Other expenses........ 2,423 3,710 2,886 625 1,128 2,752 343 383 447
-----------------------------------------------------------------------------------------------------
Income before taxes... 7,430 7,756 6,408 806 1,781 1,566 295 1,171 876
Income tax expense.... 834 890 (520) 201 379 258 97 401 370
Gains on extinguishment
of debt, net of tax.. 292 -- -- -- -- -- -- -- --

Cumulative effect of
accounting change,
net of tax........... -- 249 -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------
Net income............Rs. 6,888 7,115 6,928 605 1,402 1,308 198 770 506
=====================================================================================================

A listing of certain assets of reportable segments is set out
below:

As of March 31,
---------------------------------------------------------------
Project financing Commercial banking Investment banking
---------------------------------------------------------------
2000 2001 2000 2001 2000 2001
---------------------------------------------------------------
(in millions)

Property and equipment............Rs. 8,986 Rs. 9,649 Rs. 2,097 Rs. 4,059 Rs. 130 Rs. 123
Investments in affiliates......... 264 7,868 -- -- -- --

Transactions between reporting segments are at arms-length and are
accounted similar to transactions with external parties.

F-32

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

A reconciliation between the segment income and consolidated totals of
ICICI is set out below:

-----------------------------------------------------------------------------------------------------
Total income Income before taxes Net income
-----------------------------------------------------------------------------------------------------
Year ended March 31, Year ended March 31, Year ended March 31,
-----------------------------------------------------------------------------------------------------
1999 2000 2001 1999 2000 2001 1999 2000 2001
-----------------------------------------------------------------------------------------------------
(in millions)

Project financing...Rs. 68,426 Rs. 77,483 Rs. 85,027 Rs. 7,430 Rs. 7,756 Rs. 6,408 Rs. 6,888 Rs. 7,115 Rs. 6,928
Commercial
banking.......... 6,326 10,193 14,160 806 1,781 1,566 605 1,402 1,308
Investment
banking.......... 1,871 3,115 2,984 295 1,171 876 198 770 506
Other operating
segments......... 748 1,538 5,458 207 783 90 145 420 --
Elimination of
commercial
banking.......... -- -- (14,160) -- -- (1,566) -- -- (1,308)
Other eliminations. (936) (1,795) (3,062) (318) (376) (625) (318) (376) (804)
-----------------------------------------------------------------------------------------------------
Consolidated total. Rs. 76,435 Rs. 90,534 Rs. 90,407 Rs. 8,420 Rs. 11,115 Rs. 6,749 Rs. 7,518 Rs. 9,331 Rs. 6,630
=====================================================================================================

A reconciliation between the segment assets and consolidated totals of
ICICI is set out below:

As of March 31,
------------------------
2000 2001
------------------------
(in millions)
Project financing................................Rs. 629,826 Rs. 700,544
Commercial banking............................... 131,371 220,008
Investment banking............................... 23,255 17,619
Other operating segments(1)...................... 8,498 41,584
Elimination of commercial banking ............... -- (220,008)
Other eliminations............................... (18,671) (19,302)
------------------------
Consolidated total...............................Rs. 774,279 Rs. 740,445
========================

(1) Includes assets of Rs. 27,106 million as of March 31, 2001 (2000: Rs.
4,537 million) of the personal financial services business that are
reported separately to the chief operating decision maker.

Geographic distribution

The business operations of ICICI are largely concentrated in India.
Activities outside India are restricted to resource mobilization in the
international markets and operations of certain software development and
services subsidiaries in the United States. The income, assets and net income
attributable to foreign operations are immaterial.

Major customers

ICICI provides banking and financial services to a wide base of customers.
There is no major customer which contributes more than 10% of total income.

26. Employee benefits

Gratuity

In accordance with Indian regulations, ICICI provides for gratuity, a
defined benefit retirement plan covering all employees. The plan provides a
lump sum payment to vested employees at retirement or termination of employment
based on the respective

F-33

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

employee's salary and the years of employment with ICICI. The gratuity benefit
provided by ICICI to its employees is equal to or greater than the statutory
minimum.

In respect of the parent company, the gratuity benefit is provided to the
employees through a fund set-up by ICICI. ICICI is responsible for settling the
gratuity obligation through contributions to the fund. The plan is fully
funded.

In respect of the remaining entities within the group, the gratuity
benefit is provided through annual contributions to a fund administered and
managed by the Life Insurance Corporation of India. Under this scheme, the
settlement obligation remains with ICICI, although the Life Insurance
Corporation of India administers the scheme and determines the contribution
premium required to be paid by ICICI.

The following table sets forth the funded status of the plans and the
amounts recognized in the financial statements:

As of March 31,
-----------------
2000 2001
-----------------
(in millions)
Change in benefit obligations
Projected benefit obligations at beginning of the year........Rs. 178 Rs. 146
Divestitures.................................................. -- (12)
Service cost.................................................. 17 12
Interest cost................................................. 19 16
Expected benefits payments.................................... (4) (6)
Actuarial (gain)/loss on obligations.......................... (64) 51
----------------
Projected benefit obligations at the end of the year.......... 146 207
----------------
Change in plan assets
Fair value of plan assets at beginning of the year............ 189 160
Divestitures.................................................. -- (17)
Expected return on plan assets................................ 23 16
Employer contributions........................................ 16 59
Actual benefits paid.......................................... (68) (16)
Actuarial (gain)/loss......................................... -- 11
----------------
Plan assets at the end of the year............................ 160 213
----------------
Funded status................................................. 14 6
Unrecognized actuarial loss................................... 16 66
Unrecognized transitional obligation.......................... (23) (21)
Unrecognized prior service cost............................... 11 10
----------------
Net prepaid gratuity cost.....................................Rs. 18 Rs. 61
----------------

F-34

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The components of the net gratuity cost are set out below:

Year ended March 31,
----------------------------------
1999 2000 2001
----------------------------------
(in millions)

Service cost................................................. Rs. 10 Rs. 17 Rs. 12
Interest cost................................................ 16 19 16
Expected return on assets.................................... (19) (23) (16)
Amortization of transition asset/liability................... (1) (1) (1)
Amortization of prior service cost........................... -- -- 1
Actuarial (gain)/loss........................................ -- (1) --
----------------------------------
Net gratuity cost............................................ Rs. 6 Rs. 11 Rs. 12
==================================

The actuarial assumptions used in accounting for the gratuity plan are
given below:

As of March 31,
-----------------------
2000 2001
-----------------------
Discount rate....................................... 12% 11%
Rate of increase in the compensation levels......... 8-10% 10%
Rate of return on plan assets....................... 11-12% 10.5%

As of March 31, 2001, of the total plan assets, Rs. 8 million (2000: Rs.
13 million) has been invested in debt securities of the parent company.

Superannuation

The permanent employees of ICICI are entitled to receive retirement
benefits under the superannuation scheme operated by ICICI. Superannuation is a
defined contribution plan under which ICICI contributes annually a sum
equivalent to 15% of the employee's eligible annual salary to the fund manager,
Life Insurance Corporation of India, which undertakes to pay the lump sum and
annuity benefit payments pursuant to the scheme. ICICI contributed Rs. 51
million to the superannuation plan for the year ended March 31, 2001 (2000: Rs.
62 million, 1999: Rs. 46 million).

Provident fund

In accordance with Indian regulations, all employees of ICICI are entitled
to receive benefits under the provident fund plan through a defined
contribution plan in which both the employee and ICICI contribute monthly at a
determined rate. These contributions are made to a fund set-up by ICICI and
administered by a Board of Trustees. Further, in the event the return on the
fund is lower than 11% (current guaranteed rate of return to the employees),
such difference is contributed by ICICI and charged to the statement of income.
ICICI contributed Rs. 55 million to the provident fund plan for the year ended
March 31, 2001 (2000: Rs. 52 million, 1999: Rs. 45 million).

27. Voluntary retirement scheme

During the year ended March 31, 2000, ICICI terminated the employment of
223 employees through a Voluntary Retirement Scheme (Scheme). The Scheme
covered several levels of employees, who met specific conditions relating to
age and period of employment with ICICI. Costs of employee termination under
the Scheme aggregating Rs. 232 million have been expensed as employee costs in
the statement of income for the

F-35

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

year ended March 31, 2000. Costs aggregating Rs. 81 million have been paid
during the year ended March 31, 2000, while the balance amounts were payable
per an agreed schedule.

In July 2000, ICICI extinguished its unpaid liability of Rs. 141 million
by purchasing an annuity policy from the Life Insurance Corporation of India
for a consideration of Rs. 157 million. Through the annuity policy, ICICI was
legally released from being the primary obligor under the liability. The
difference between the carrying amount of the liability and the amount paid to
Life Insurance Corporation of India is recognized through the statement of
income.

28. Extraordinary gain

During the year ended March 31, 1999, ICICI extinguished debt by
re-purchasing foreign currency bonds from the international markets. The bonds
were repurchased at discounts to their face values resulting in a gain of Rs.
449 million. This gain, net of the related income tax effect of Rs. 157
million, is disclosed as an extraordinary gain.

29. Employee Stock Option Plan

ICICI Limited

In August 1999, ICICI Limited approved an Employee Stock Option Plan
(ICICI Plan). Under the ICICI Plan, ICICI is authorized to issue upto 39.27
million equity shares to eligible employees. Eligible employees are granted an
option to purchase shares subject to vesting and performance conditions. The
options vest in a graded manner over 3 years with 20%, 30% and 50% of the
options vesting at the end of each year. In the event that an employee does not
meet the performance condition specified for an individual year, the options
vesting during that year would be forfeited. The options can be exercised
within 10 years from the date of the grant.

Due to the performance condition, the ICICI Plan was initially accounted
as a variable plan. During the year ended March 31, 2000, ICICI Limited
recorded compensation cost of Rs. 97 million based on the excess of the quoted
market price as of March 31, 2000, over the exercise price. The compensation is
amortized over the vesting period.

In April 2000, the ICICI Plan was modified to eliminate the performance
condition.The date of modification qualified as the measurement date to record
compensation cost. As the quoted market price on the measurement date closely
approximated the price as of March 31, 2000, the previously recorded
compensation was not adjusted.

Subsequent awards, during the year ended March 31, 2001, qualify as fixed
awards and ICICI has not recorded any compensation cost on these awards as the
exercise price was equal to the quoted market price of underlying equity shares
on the grant date.

Compensation expense under the ICICI Plan for the year ended March 31,
2001 is Rs. 38 million (2000: Rs. 27 million, 1999: Rs. Nil).

F-36

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

ICICI Bank

In February 2000, ICICI Bank approved an Employee Stock Option Plan (Bank
Plan). Under the Bank Plan, ICICI Bank is authorized to issue up to 9.84
million equity shares to its employees and employees of the parent company.
Eligible employees are granted an option to purchase shares subject to vesting
conditions. The options vest in a graded manner over 3 years with 20%, 30% and
50% of the options vesting at the end of each year. The options can be
exercised within 10 years from the date of the grant.

During the year ended March 31, 2000, ICICI has not recorded any
compensation cost as the exercise price was equal to the quoted market price of
the underlying equity shares on the grant date.

ICICI Infotech

In April 2000, ICICI Infotech approved an Employee Stock Option Plan
(Infotech Plan). Under the Infotech Plan, ICICI Infotech is authorized to issue
up to 12 million equity shares to its employees and employees of the parent
company. Eligible employees are granted an option to purchase shares subject to
vesting conditions. The options vest in a graded manner over 3 years with 20%,
30% and 50% of the options vesting at the end of each year. The options can be
exercised within 10 years from the date of the grant.

During the year ended March 31, 2001, ICICI has not recorded any
compensation cost as the exercise price was equal to the fair value of the
underlying equity shares on the grant date. As shares of ICICI Infotech are not
quoted on exchanges, the fair value represents management's best estimates
considering all available factors.

ICICI Venture

In July 2000, ICICI Venture, a consolidated subsidiary, approved an
Employee Stock Option Plan (Venture Plan). Under the Venture Plan, ICICI
Venture is authorized to issue up to 125,000 equity shares to its employees and
employees of the parent company and other consolidated subsidiaries within the
group. Eligible employees are granted an option to purchase shares subject to
vesting conditions. The options vest over a period of 3 years. The options can
be exercised within 10 years from the date of the grant.

During the year ended March 31, 2001, ICICI has not recorded any
compensation cost as the exercise price was equal to the fair value of the
underlying equity shares on the grant date. As shares of ICICI Venture are not
quoted on exchanges, the fair value represents management's best estimates
considering all available factors.

F-37

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Stock option activity

Stock option activity under the above stock option plans is set out below:

Year ended March 31, 2000
--------------------------------------------------------------
ICICI Limited ICICI Bank
--------------------------------------------------------------
Option Exercise price Option Exercise price
shares and grant date shares and grant date
outstanding fair value outstanding fair value
--------------------------------------------------------------

Outstanding at the beginning of
the year....................... -- Rs. -- -- Rs. --
Granted during the year........ 2,323,750 85.5 1,788,000 171.9
Forfeited during the year...... -- -- (75,000) 171.9
Exercised during the year...... -- -- -- --
------------ --------------
Outstanding at the end of
the year..................... 2,323,750 1,713,000
============ ==============
Exercisable at the end
of the year.................. -- -- -- --

Year ended March 31, 2001
-------------------------------------------------------------------------------------
ICICI Limited ICICI Infotech ICICI Venture
-------------------------------------------------------------------------------------
Option Exercise price Option Exercise price Option Exercise price
shares and grant shares and grant shares and grant
outstanding date fair value outstanding date fair value outstanding date fair value
-----------------------------------------------------------------------------------------

Outstanding at the
beginning of the year....... 2,323,750 Rs. 85.5 -- Rs. -- -- Rs. --
Granted during the year...... 2,922,500 133.4 2,344,800 37.5 81,400 835
Forfeited during the year.... (120,400) 85.5 (103,400) 37.5 (2,500) 835
Exercised during the year.... (32,500) 85.5 -- -- -- --
---------- ----------- -----------
Outstanding at the end of
the year................... 5,093,350 2,241,400 -- 78,900
========== =========== ===========
Exercisable at the end of
the year................... 462,350 85.5 -- -- -- --

Pro forma disclosure

The company has adopted the pro forma disclosure provisions of SFAS 123.
Had compensation cost been determined in a manner consistent with the fair
value approach described in SFAS 123, the company's net income and earnings per
share as reported would have changed to the amounts indicated below:

Year ended March 31,
-------------------------
2000 2001
-------------------------

Net income (in millions)
As reported............................................................Rs..9,331 Rs. 6,630
Adjusted ..................................................................9,335 6,539
Earnings per share: Basic (in Rs. )
As reported................................................................14.45 8.44
Adjusted ..................................................................14.46 8.33
Earnings per share: Diluted (in Rs. )
As reported................................................................13.77 8.41
Adjusted ..................................................................13.77 8.29

F-38

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The fair value of the options is estimated on the date of the grant using
the Black-Scholes options pricing model, with the following assumptions:

ICICI Limited ICICI Bank ICICI Infotech ICICI Venture

---------------------------------------------------------

Dividend yield............................ 5.9% 0.7% 6.4% 2.4%
Expected life............................. 10 years 3 years 10 years 10 years
Risk free interest rate................... 10.4% 11% 10.6% 11.4%
Volatility................................ 30% 30% 0% 0%

30. Income taxes

Components of deferred tax balances

The tax effects of significant temporary differences are reflected through
a deferred tax asset/liability, which is included in the balance sheet of
ICICI.

The components of the deferred tax balances are set out below:

As of March 31,
-----------------------
2000 2001
-----------------------
(in millions)

Deferred tax assets
Provision for loan losses.................................................Rs. 5,169 Rs.10,420
Unrealized losses on securities available for sale............................. 795 1,282
Investments in trading securities.............................................. -- 36
Unearned income................................................................ 615 1,050
Other than temporary diminution in the value of securities available for
sale........................................................................... 401 1,366
Capital loss carryforward...................................................... 57 53
Business loss carryforward..................................................... -- 105
Minimum alternate tax credit carryforward...................................... 940 207
Other.......................................................................... 26 470
-----------------------
Total deferred tax asset.......................................................8,003 14,989
-----------------------

Deferred tax liabilities
Property and equipment....................................................... (8,190) (10,334)
Unrealized gains on securities available for sale.............................. (9) (15)
Investments in trading securities.............................................. (27) --
Increase in carrying value on direct issuance of stock by subsidiary........... -- (505)
Undistributed earnings of subsidiary and affiliates............................ -- (227)
Other.......................................................................... (215) (127)
-----------------------
Total deferred tax liability................................................. (8,441) (11,208)
-----------------------

Net deferred tax asset/(liability) .......................................Rs. (438) Rs. 3,781
=======================
Current ..................................................................Rs. 314 493
Non-current ...................................................................(752) 3,288

In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of the
deferred tax asset is dependent on the generation of future taxable income
during the periods in which the temporary differences become deductible.
Management considers the scheduled reversal of the projected future taxable
income, and tax planning strategies in making this assessment. Based on the
level of historical taxable income and projections for future taxable income
over the periods in which the deferred tax assets are deductible, management
believes that it is more likely than not that the company will realize the
benefits of those deductible differences. The amount of deferred tax assets
considered realizable, however could be reduced in the near term if estimates
of future taxable income are reduced.

As of March 31, 2001, ICICI has a deferred tax asset for capital loss
carryforward, of which Rs. 27 million and Rs. 26 million will expire on March
31, 2005

F-39

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

and 2006 respectively. Further, ICICI has a deferred tax asset for minimum
alternate tax credit amounting to Rs. 207 million which will expire on March
31, 2005.

The Indian operations of ICICI Infotech are exempt from Indian income
taxes, being profits attributable to export operations and profits from
undertakings situated in software technology and hardware technology parks.
Under the tax holiday, the taxpayer can utilize an exemption from income taxes
for a period of ten consecutive years. During the year ended March 31, 2001,
ICICI Infotech incurred a tax loss of Rs. 19 million (2000: Rs. Nil).

In the financial statements of the company for the year ended March 31,
2001 signed and issued by the board of directors on May 3, 2001, deferred tax
assets amounting to Rs. 817 million arising on account of provision for other
than temporary diminution in the value of investments classified as 'available
for sale' were not recognized due to an error in accounting for deferred income
taxes. This error has been rectified in the consolidated financial statements
for the year ended March 31, 2001 presented herein and filed with the
Securities and Exchange Commission on Form 20-F in September 2001 as set out
below.

---------------- ------------------
As reported in As adjusted and
May 2001 Reported herein
---------------- ------------------
(in millions except share data)

Deferred tax assets........................................ Rs. 3,770 Rs. 4,587
Retained earnings.......................................... 33,379 34,196
Income tax expense......................................... 936 119
Net income................................................. 5,813 6,630
EPS - basic................................................ 7.40 8.44
EPS - diluted.............................................. Rs. 7.37 Rs. 8.41

F-40

Reconciliation of tax rates

The following is the reconciliation of expected income taxes at the
statutory income tax rate to income tax expense as reported:

Year ended March 31,
---------- ----------- ----------
1999 2000 2001
---------- ----------- ----------
(in millions)

Income before income taxes ..................................... Rs. 8,420 Rs. 11,115 Rs. 6,749
Statutory tax rate.............................................. 35% 38.5% 39.55%
Income tax expense at the statutory tax rate.................... 2,947 4,279 2,669
Increases/(reductions) in taxes on account of:
Special tax deductions available to financial institutions...... (1,184) (1,218) (542)
Exempt interest and dividend income............................. (706) (1,625) (525)
Income charged at rates other than statutory tax rate........... 28 (239) (974)
Changes in the statutory tax rate............................... -- 16 (192)
Expenses disallowed for tax purposes............................ 405 419 179
Tax on undistributed earnings of subsidiary and
affiliates...................................................... -- -- 227
Other........................................................... (296) 401 (723)
---------- ----------- ----------
Income tax expense reported..................................... Rs. 1,194 Rs. 2,033 Rs. 119
========== =========== ==========

F-41

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Components of income tax expense from continuing operations

The components of income tax expense/(benefit) from continuing operations
are set out below:

Year ended March 31,
---------------------------------
1999 2000 2001
---------------------------------
(in millions)

Current......................................................... Rs. 1,125 Rs. 2,136 Rs. 4,458
Deferred........................................................ 69 (103) (4,339)
---------- ----------- ----------
Income tax expense reported..................................... Rs. 1,194 Rs. 2,033 Rs. 119
========== =========== ==========

Allocation of income taxes

The total income tax expense/(benefit) was recorded as follows:

Year ended March 31,
----------------------------------
1999 2000 2001
----------------------------------
(in millions)

Income from continuing operations............................ Rs. 1,194 Rs. 2,033 Rs. 119
Extraordinary gain........................................... 157 -- --
Cumulative effect of accounting change....................... -- 156 --
Unrealized gain/(loss) on securities available for sale ..... (297) 721 (481)
Increase in carrying value on direct issuance of stock by
subsidiary................................................... -- -- 605
----------------------------------
Income tax expense/(benefit) recorded........................ Rs. 1,054 Rs. 2,910 Rs. 243
==================================

31. Commitments and contingencies

Loan commitments

ICICI has outstanding undrawn commitments to provide loans and financing
to customers. These loan commitments aggregated Rs. 70,981 million as of March
31, 2001 (2000: Rs. 78,440 million). The interest rate on these commitments is
dependent on the lending rates on the date of the loan disbursement. Further,
the commitments have fixed expiration dates and are contingent upon the
borrower's ability to maintain specific credit standards.

Guarantees

As a part of its project financing and commercial banking activities,
ICICI has issued guarantees to enhance the credit standing of its customers.
These generally represent irrevocable assurances that ICICI will make payments
in the event that the customer fails to fulfill its financial or performance
obligations. Financial guarantees are obligations to pay a third party
beneficiary where a customer fails to make payment towards a specified
financial obligation. Performance guarantees are obligations to pay a third
party beneficiary where a customer fails to perform a non-financial contractual
obligation. The guarantees are generally for a period not exceeding 10 years.

The credit risk associated with these products, as well as the operating
risks, are similar to those relating to other types of financial instruments.
Fees are recognized over the term of the facility.

F-42

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Details of guarantees outstanding are set out below:

As of March 31,
--------------------------
2000 2001
--------------------------
(in millions)
Financial guarantees................. Rs. 46,253 Rs. 53,167
Performance guarantees............... 11,811 6,083
--------------------------
Total................................ Rs. 58,064 Rs. 59,250
==========================

Capital commitments

ICICI is obligated under a number of capital contracts. Capital contracts
are job orders of a capital nature which have been committed. As of the balance
sheet date, work had not been completed to this extent. Estimated amounts of
contracts remaining to be executed on capital account aggregated Rs. 681
million as of March 31, 2001 (2000: Rs. 808 million).

Tax contingencies

Various tax-related legal proceedings are pending against ICICI. Potential
liabilities, if any, have been adequately provided for, and the company does
not estimate any incremental liability in respect of these proceedings.

Litigation

In January 2001, certain international banks filed a claim against ICICI
before the English Courts at London challenging certain transactions between
ICICI and a borrower to whom both ICICI and the plaintiffs are lenders. These
transactions relate to certain lease, brand-financing and investment agreements
between ICICI and the borrower. Such transactions aggregate approximately Rs.
5,700 million. The plaintiffs allege that such specified transactions breach
the Security Agent and Trust Agreement between ICICI and the plaintiffs,
whereby ICICI was appointed as a trustee for the plaintiffs.

The plaintiffs have sought:

o A declaration that the specified transactions are void;

o Damages and/or compensation equal to the sum of money sufficient to
compensate each of the plaintiffs for loss of security;

o Interest in equity computed in quarterly rests and/or pursuant to
Section 35A of the UK Supreme Court Act of 1981; and

o Costs of litigation.

Given the preliminary stage of the proceedings, management is unable to
make a reasonable assessment of the final outcome of the litigation and
accordingly has not recorded any liability associated with this contingency.

F-43

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

In addition to the litigation noted above, ICICI is from time to time
subject to routine litigation incidental to its business.

Management believes, based on consultation with counsel, that the ultimate
resolution of the above litigations will not have a material adverse effect on
the company's results of operations, financial condition, or liquidity.
However, the final outcome of the litigations cannot be predicted with
certainty, and accordingly, no assurance can be given that the ultimate
resolution of the litigations will not have a material impact on the company's
results of operations, financial condition or liquidity.

Operating lease commitments

ICICI has commitments under long-term operating leases principally for
premises and automated teller machines. The following is a summary of future
minimum lease rental commitments as of March 31, 2001, for non-cancelable
leases:

(in
millions)
-------------
Lease rental commitments for the year ending March 31,
2002...................................................... Rs. 136
2003...................................................... 128
2004...................................................... 65
2005...................................................... 56
2006...................................................... 33
Thereafter................................................ 48
-----------
Total minimum lease commitments........................... Rs. 466
===========

32. Related party transactions

ICICI has transactions with its affiliates and directors/employees. The
following represent the significant transactions between ICICI and such related
parties:

Banking services

ICICI Bank provided banking services to ICICI on terms that equate those
offered to other customers. Non-interest income earned during the year ended
March 31, 2001, amounted to Rs. 72 million.

Derivative transactions

ICICI Bank entered into interest rate swaps and cross currency swaps with
ICICI. Contracts aggregating Rs. 2,900 million and Rs. 4,352 million were
outstanding as of March 31, 2001, for interest rate swaps and currency swaps
respectively. Net interest in respect of these swaps amounted to Rs. 189
million during the year ended March 31, 2001.

Similarly, ICICI Bank entered into forward foreign exchange contracts with
ICICI. Contracts aggregating Rs. 2,262 million were outstanding as of March 31,
2001.

Software development services

ICICI provided software development services to Tricolor and Pru-ICICI and
earned fees of Rs. 8 million during the year ended March 31, 2001.

F-44

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

ICICI developed software and provided software and hardware support
services to ICICI Bank, and earned fees of Rs. 73 million during the year ended
March 31, 2001.

Back-office support services

ICICI set up a common technology infrastructure platform for the group,
and ICICI Bank was charged Rs. 94 million during the year ended March 31, 2001,
towards communication expenses, backbone infrastructure expenses and data
centre costs.

ICICI provided telephone banking call-centre services and transaction
processing services for the credit card operations of ICICI Bank, and earned
fees of Rs. 99 million during the year ended March 31, 2001.

Indian rupee debt

Certain members of management hold bonds issued by ICICI Limited amounting
to Rs. 8 million (2000: Rs. 7 million).

Asset management services

ICICI provided asset management services to TCW and earned fees of Rs. 31
million during the year ended March 31, 2001 (2000: Rs. 27 million, 1999: Rs.
27 million).

Brokerage services

ICICI provided brokerage services to ICICI Bank and earned fees of Rs. 1
million during the year ended March 31, 2001.

Deposits and borrowings

During the year ended March 31, 2001, ICICI Bank paid interest on
deposits/call borrowings of Rs. 202 million to ICICI.

Lease of premises and facilities

During the year ended March 31, 2001, ICICI Bank paid rentals of Rs. 193
million to ICICI for lease of premises, facilities and other equipment.

Purchase of assets

During the year ended March 31, 2001, ICICI Bank purchased certain assets
for Rs. 99 million from ICICI.

Expenses for seconded employees

ICICI Bank paid Rs. 4 million during the year ended March 31, 2001, to
ICICI for seconded employees. Similarly, ICICI Bank received Rs. 5 million
during the year ended March 31, 2001, from ICICI for employees seconded to
ICICI.

F-45

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Share transfer services

ICICI provided share transfer services to ICICI Bank and earned fees of
Rs. 8 million during the year ended March 31, 2001.

Other transactions

ICICI undertook a corporate brand advertising campaign for the group, out
of which an amount of Rs. 15 million has been recovered from ICICI Bank during
the year ended March 31, 2001.

ICICI set-up Automated Teller Machines for ICICI Bank, and earned fees of
Rs. 8 million during the year ended March 31, 2001.

ICICI marketed retail products for ICICI Bank, and earned fees of Rs. 8
million during the year ended March 31, 2001.

Related party balances

The following balances payable to/receivable from related parties are
included in the balance sheet:

As of March 31,
------------------
2000 2001
------------------
(in millions)
Cash and cash equivalents......................... Rs. -- Rs.4,882
Loans............................................. -- 192
Other assets...................................... -- 147
Deposits.......................................... 14 --
Other liabilities................................. -- 55

Employee loans

ICICI has advanced housing, vehicle and general purpose loans to
employees, bearing interest ranging from 2.5% to 3.5%. The tenure of these
loans range from 5 years to 25 years. The loans are generally secured by the
assets acquired by the employees. Employee loan balances outstanding as of
March 31, 2001, of Rs. 762 million (2000: Rs. 773 million) are included in
other assets.

33. Off-balance sheet financial instruments

Foreign exchange and derivative contracts

ICICI enters into foreign exchange forwards, options, swaps and other
derivative products with inter-bank participants and customers, which enable
customers to transfer, modify or reduce their foreign exchange and interest
rate risks. In addition, ICICI uses foreign exchange contracts and other
instruments as a part of its own balance sheet and risk management. These
instruments are used to manage foreign exchange and interest rate risk relating
to specific groups of on-balance sheet assets and liabilities.

Forward exchange contracts are commitments to buy or sell at a future
date, a currency at a contracted price. Swap contracts are commitments to
settle in cash at a future date or dates, based on differentials between
specified financial indices, as applied to a notional principal amount. Option
contracts give the purchaser, for a fee, the right,

F-46

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

but not the obligation, to buy or sell within a limited time, a financial
instrument or currency at a contracted price that may also be settled in cash,
based on differentials between specified indices.

The market and credit risks associated with these products, as well as the
operating risks, are similar to those relating to other types of financial
instruments. Market risk is the exposure created by potential fluctuations in
interest rates, foreign exchange rates and other values, and is a function of
the type of product, the volume of transactions, the tenor and terms of the
agreement and the underlying volatility. Credit risk is the exposure to loss in
the event of non-performance by the other party to the transaction. The extent
of loss on account of a counterparty default will depend on the replacement
value of the contract at the current market rates. The recognition in earnings
of unrealized gains on these transactions is subject to management's assessment
of collectibility.

The following table presents the aggregate notional principal amounts of
ICICI's outstanding foreign exchange and derivative contracts together with the
related balance sheet credit exposure:

As of March 31,
Notional principal amounts Balance sheet credit exposure
Particulars (Note 1) (Note 2)
--------------------------------------------------------
2000 2001 2000 2001
--------------------------------------------------------
(in millions)

Interest rate products
Swap agreements (hedge contracts)........ Rs. 40,201 Rs. 48,860 Rs. -- Rs. --
Swap agreements (traded contracts)....... -- 1,570 -- (5)
-----------------------------------------------------
Total.................................... Rs. 40,201 Rs. 50,430 Rs. -- Rs. (5)
=====================================================
Foreign exchange products
Forward contracts (hedge contracts)...... Rs. 48,355 -- Rs. -- Rs.
Forward contracts (traded contracts)..... 56,159 630 309 22
Swap agreements (hedge contracts)........ 30,552 23,429 -- --
-----------------------------------------------------
Total.................................... Rs.135,066 Rs. 24,059 Rs. 309 Rs. 22
=====================================================

(1) Notional amounts are key elements of derivative financial instrument
agreements. However, notional amounts do not represent the amounts
exchanged by the counterparties and do not measure the company's exposure
to credit or market risks. The amounts exchanged are based on the notional
amounts and other terms of the underlying derivative agreements.
(2) Balance sheet credit exposure denotes the mark-to-market impact of the
derivative and foreign exchange products on the reporting date.

34. Estimated fair value of financial instruments

ICICI's financial instruments include financial assets and liabilities
recorded on the balance sheet, as well as off-balance sheet instruments such as
foreign exchange and derivative contracts.

Fair value estimates are generally subjective in nature, and are made as
of a specific point in time based on the characteristics of the financial
instruments and relevant market information. Where available, quoted market
prices are used. In other cases, fair values are based on estimates using
present value or other valuation techniques. These techniques involve
uncertainties and are significantly affected by the assumptions used and
judgements made regarding risk characteristics of various financial
instruments, discount rates, estimates of future cash flows, future expected
loss experience and other factors. Changes in assumptions could significantly
affect these estimates and the resulting fair values. Derived fair value
estimates cannot necessarily be

F-47

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

substantiated by comparison to independent markets and, in many cases, could be
realized in an immediate sale of the instruments.

Fair value estimates are based on existing financial instruments without
attempting to estimate the value of anticipated future business and the value
of assets and liabilities that are not considered financial instruments.
Disclosure of fair values is not required for certain items such as investment
accounted for under the equity method of accounting, obligations for pension
and other post-retirement benefits, income tax assets and liabilities, property
and equipment, prepaid expenses, core deposit intangibles and the value of
customer relationships associated with certain types of consumer loans,
particularly the credit card portfolio, and other intangible assets.
Accordingly, the aggregate fair value amount presented do not purport to
represent, and should not be considered representative of, the underlying
market or franchise value of the company. In addition, because of differences
in methodologies and assumptions used to estimate fair values, the company's
fair values should not be compared to those of other financial institutions.

The following describes the methods and assumptions used by the company in
estimating the fair values of financial instruments.

Cash and cash equivalents

The carrying amounts reported in the balance sheet approximate fair values
because maturities are less than three months.

Trading account assets and liabilities

Trading account assets and liabilities are carried at fair value in the
balance sheet. Values for trading securities are generally based on quoted, or
other independent, market prices. Values for interest rate and foreign exchange
products are based on quoted, or other independent, market prices, or are
estimated using pricing models or discounted cash flows.

Securities

Fair values are based primarily on quoted, or other independent, market
prices. For certain debt and equity investments that do not trade on
established exchanges, and for which markets do not exist, estimates of fair
value are based upon management's review of the investee's financial results,
condition and prospects.

Loans

The fair values of certain commercial and consumer loans are estimated by
discounting the contractual cash flows using interest rates currently being
offered for loans with similar terms to borrowers of similar credit quality.
The carrying value of certain other loans approximates fair value due to the
short-term and/or repricing characteristics of these loans. For impaired loans,
the impairment is considered while arriving at the fair value.

F-48

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Deposits

The carrying amount of deposits with no stated maturity or maturities of
less than three months is considered to be equal to their fair value. Fair
value of fixed-rate time deposits is estimated by discounting contractual cash
flows using interest rates currently offered on the deposit products. Fair
value for variable-rate time deposits approximates their carrying value. Fair
value estimates for deposits do not include the benefit that results from the
low-cost funding provided by the deposit liabilities compared to the cost of
alternative forms of funding (core deposit intangibles).

Long-term debt, short-term borrowings and redeemable preferred stock

The fair value of the company's debt, including short-term borrowings, is
estimated based on quoted market prices for the issues for which there is a
market, or by discounting cash flows based on current rate available to the
company for similar types of borrowing arrangements.

Off-balance sheet instruments

Fair values for off-balance sheet instruments are estimated based on
quoted market prices or dealer quotes, and represent what the company would
receive or pay to execute a new agreement with similar terms considering
current interest rates. The fair values of interest rate and foreign exchange
contracts used to manage interest rate, currency and market risk are estimated
based on market information and other relevant characteristics using pricing
models.

F-49

ICICI LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

A listing of the fair values by category of financial assets and financial
liabilities is set out below:

As of March 31, As of March 31,
2000 2001
-----------------------------------------------------
Carrying Estimated Carrying Estimated
value fair value value fair value
-----------------------------------------------------
(in millions)

Financial assets
Trading account assets..................... Rs. 57,396 Rs. 57,396 Rs. 18,878 Rs. 18,878
Securities (1)............................. 18,871 18,925 20,115 20,172
Loans (2).................................. 561,448 571,453 602,023 603,810
Other financial assets (3)................. 83,464 83,464 33,702 33,702
-----------------------------------------------------
Total...................................... Rs. 721,179 Rs. 731,238 Rs. 674,718 676,562
=====================================================
Financial liabilities
Interest-bearing deposits.................. Rs. 82,827 Rs. 83,217 Rs. 6,072 6,100
Non-interest-bearing deposits.............. 13,855 13,855 -- --
Trading account liabilities................ 19,263 19,263 12,483 12,483
Short-term borrowings...................... 68,495 68,495 87,512 88,025
Long-term debt............................. 436,320 455,604 505,025 520,188
Redeemable preferred
stock...................................... 10,207 10,314 698 709
Other financial liabilities (4)............ 12,333 12,333 2,715 2,715
-----------------------------------------------------
Total...................................... Rs. 643,300 Rs. 663,081 Rs. 614,505 Rs. 630,220
=====================================================
Derivatives (5)
Interest rate swaps........................ 63 280
Currency swaps............................. (342) 426

(1) Includes non-readily marketable equity securities of Rs. 7,074 million
(2000: Rs. 6,542 million) for which there are no readily determinable fair
values.
(2) The carrying value of loans is net of the allowance for loan losses,
security deposits and unearned income.
(3) Includes cash and cash equivalents and customers acceptance liability for
which the carrying value is a reasonable estimate of fair value.
(4) Represents acceptances outstanding, for which the carrying value is a
reasonable estimate of fair value.
(5) Represents the gains/losses on fair valuation of the end-user derivative
products.

For and on behalf of the Board

N. VAGHUL
Chairman

K.V. KAMATH
Managing Director &
Chief Executive Officer

LALITA D. GUPTE
Joint Managing Director &
Chief Operating Officer

KALPANA MORPARIA
Executive Director

JYOTIN MEHTA SHALINI S. SHAH S. MUKHERJI
General Manager & General Manager Executive Director
Company Secretary

F-50

EXHIBIT INDEX

Exhibit No. Description of Document
----------- -----------------------

1.1 ICICI Articles of Association, as amended (incorporated by
reference from ICICI's Registration Statement on Form F-1 (File
No. 333-10792) filed on September 10, 1999).

1.2 ICICI Memorandum of Association, as amended (incorporated by
reference from ICICI's Registration Statement on Form F-1 (File
No. 333-10792) filed on September 10, 1999).

2.1 Deposit Agreement among ICICI, Bankers Trust Company and the
holders from time to time of American Depositary Receipts issued
thereunder (including as an exhibit, the form of American
Depositary Receipt) (incorporated by reference from ICICI's
Registration Statement on Form F-1 (File No. 333-10792) filed on
September 10, 1999).

2.2 ICICI's Specimen Certificate for Equity Shares (incorporated by
reference from ICICI's Registration Statement on Form F-1 (File
No. 333-10792) filed on September 10, 1999).

4.1 ICICI Employee Stock Option Plan. (incorporated by reference
from ICICI's Annual Report on Form 20-F for the year ended March
31, 2000 filed on September 27, 2000).

4.2 ICICI Bank's Employee Stock Option Plan. (incorporated by
reference from ICICI's Annual Report on Form 20-F for the year
ended March 31, 2000 filed on September 27, 2000).

4.3 ICICI Infotech Employee Stock Option Plan

4.4 ICICI Venture Employee Stock Option Plan

4.5 Scheme of Amalgamation of Bank of Madura Limited with ICICI Bank
Limited (incorporated by reference from ICICI Bank's Annual
Report on Form 20-F for the year ended March 31, 2001 filed on
September 28, 2001)

4.6 Letter from the Reserve Bank of India to ICICI Bank Limited
dated February 27, 2001 and Order from the Reserve Bank of India
dated February 26, 2001 approving the Scheme of Amalgamation of
Bank of Madura Limited with ICICI Bank Limited (incorporated by
reference from ICICI Bank's Annual Report on Form 20-F for the
year ended March 31, 2001 filed on September 28, 2001)

8.1 List of Subsidiaries (included under "Business - Subsidiaries
and Affiliates herein).

For further information with respect to us and our equity shares, we refer
you to the filings we have made with the SEC. Statements contained in this
annual report concerning the contents of any document are not necessarily
complete. If a document has been filed as an exhibit to any filing we have made
with the SEC, we refer you to the copy of the document that has been filed.
Each statement in this annual report relating to a document filed as an exhibit
is qualified in

all respects by the filed exhibit. We are subject to the informational
requirements of the Exchange Act and, in accordance therewith, file reports and
other information with the SEC.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

For ICICI LIMITED

By : /s/Jyotin Mehta
---------------
Name : Mr. Jyotin Mehta
Title : General Manager and Company Secretary.

Place : Mumbai
Date : September 28, 2001