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EQUITY - MARKET SCREENER

Axis Bank Ltd
Industry :  Banks - Private Sector
BSE Code
ISIN Demat
Book Value()
532215
INE238A01034
463.2346978
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
AXISBANK
14.8
331382.33
EPS(TTM)
Face Value()
Div & Yield %
72.55
2
0.09
 

As on: Apr 14, 2024 05:14 PM

Dear Members,

Your Board of Directors (Board) are pleased to present the 29th Annual Report of Axis Bank Limited (Bank) together with the audited financial statements for fiscal 2023.

Financial performance and state of the Bank's affairs

The highlights of the standalone financial performance for the fiscal year under review, are presented below:

(Rs. in crores)

Particulars

2022-23 2021-22 Growth

Balance sheet:

Deposits

946,945 821,972 15%

Savings bank deposits

297,416 242,449 23%

Current account deposits

149,120 127,557 17%

Term deposits

500,409 451,966 11%

Advances

845,303 707,947 19%

Retail advances

487,571 400,142 22%

Non-retail advances

357,732 307,805 16%

Total assets/liabilities

1,317,326 1,175,429 12%

Profit & loss account:

Net interest income

42,946 33,132 30%

Other income

16,501 15,221 8%

Fee income

16,216 13,001 25%

Trading profit1

(242) 1,627 -

Miscellaneous income

527 593 (11%)

Operating expenses

27,398 23,611 16%

Operating profit

32,049 24,742 30%

Provisions and contingencies (other than tax)

2,653 7,360 (64%)

Profit before exceptional items and tax

29,396 17,382 69%

Exceptional items2

12,490 - -

Profit after exceptions items, but before tax

16,906 17,283 (3%)

Provision for tax

7,326 4,357 68%

Net profit

9,580 13,025 (26%)

Balance in profit and loss account brought forward from previous fiscal year

38,100 29,985 -

Amount available for appropriation

47,680 43,010 -

Appropriations

Transfer to statutory reserve

2,395 3,256 -

Transfer to capital reserve

68 441 -

Transfer to/(from) investment reserve

(149) 149 -

Transfer to special reserve

841 609 -

Transfer to investment fluctuation reserve

73 455 -

Dividend paid

307 - -

Surplus carried over to balance sheet

44,145 38,100 -

1 Excluding merchant exchange profit

2 Exceptional items comprise (i) full amortization of Intangibles and Goodwill amounting to Rs.11,949 crores; (ii) impact of policy harmonisation of operating expenses and provisions amounting to Rs.361 crores; and (iii) one-time acquisition related expenses amounting to Rs.179 crores; on account of acquisition of Citibank India consumer business. Bank has fully charged to the profit and loss account all the exceptional items in fiscal 2023. The cumulative impact of all the exceptional items on Bank's profit and loss account (net of taxes) is Rs.12,353 crores (Refer note 18.1 of standalone and consolidated financial statements)

Key performance indicators

Key performance indicators

2022-23 2021-22

Interest income as a % of working funds1

7.09 6.26

Non-interest income as a % of working funds1

1.37 1.41

Net interest margin (%)

4.02 3.47

Return on average net worth (%)2

18.38 12.91

Operating profit as a % of working funds12

2.67 2.30

Return on average assets (%)2

1.82 1.21

Profit per employee3 (Rs. in lacs)

10.94 15.54

Business (Deposits less inter-bank deposits + advances) per employee3 (Rs. in crores)

20.00 17.92

Net non-performing assets as a % of net customer assets4

0.39 0.73

1 Working funds represent average total assets

2 Excluding exceptional items

3 Productivity ratios are based on average number of employees for the fiscal year

4 Customer assets include advances and credit substitutes.

Previous fiscal year's figures have been re-grouped wherever necessary.

Financial performance of the group

Subsidiaries of the Bank continued to deliver steady performance. The domestic subsidiaries, collectively, reported a net profit of Rs.1,304 crores in fiscal 2023. This translates into a return on investment of ~ 50%. Consolidated profit of the group (excluding exceptional items) for fiscal 2023 stood at Rs.23,172 crores, growing 64% year-on-year. Consolidated return on equity (excluding exceptional items) for fiscal 2023 stood at 18.84%, up 517 bps year-on-year, with subsidiaries contributing 46 bps.

Acquisition of Citibank's India consumer business

The Bank has acquired on a going concern basis, the business assets and business liabilities of Citibank's India consumer business from Citibank N. A. (acting through its branch in India) (CBNA) and the NBFC consumer business from Citicorp Finance (India) Limited (CFIL) collectively referred to as Citibank India consumer business, effective beginning of day 1 March, 2023 (referred to as legal day one) without values being assigned to individual assets and liabilities.

The transaction comprises the sale of the consumer businesses of Citibank India, which includes loans, credit cards, wealth management, commercial vehicle, construction equipment loans and retail banking operations. The acquisition provides the Bank with access to a premium customer segment, is a good strategic fit and is completely aligned with Axis Bank's GPS (Growth, Profitability & Sustainability) strategy. The Bank has gained access to the large, affluent and profitable customer franchise of Citibank, which aligns well with its premiumisation strategy.

The Board extends a warm 'Dil Se' welcome to the employees and customers of Citibank who have joined the Axis family and acknowledges their support during the transition period.

Dividend

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Bank has formulated and adopted a dividend distribution policy, which was reviewed by the Board. The policy is available on the website of the Bank at https://www.axisbank.com/docs/default-source/quarterlv-reports/dividend-distribution-policy-of-the-bank.pdf .

In view of the overall performance of the Bank and while retaining capital to support future growth, the Board at its meeting held on 27 April, 2023, recommended a final dividend of Rs.1/- per equity share of Rs.2/- each fully paid-up, subject to the approval of members at the ensuing 29th Annual General Meeting (AGM). The record date for payment of dividend is mentioned in the notice of the ensuing 29th AGM of the Bank.

In terms of Accounting Standard (AS) - 4 'contingencies and events occurring after the balance sheet date' as notified by the Ministry of Corporate Affairs (MCA) under Section 133 of the Companies Act, 2013 (Act) read together with the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Rules, 2021, such proposed dividend has not been recognised as a liability as on 31 March, 2023. Further, shares issued on exercise of stock options after 31 March, 2023 till record date will also be eligible for such proposed dividend.

In terms of the Income Tax Act, 1961, the dividend income is taxable in the hands of the members. Therefore, the dividend will be paid to the members after deduction of applicable tax, if any.

Capital structure Share capital

During fiscal 2023, the Bank issued and allotted 7,104,176 equity shares of 21- each, fully paid-up, pursuant to exercise of stock options by the whole-time directors/employees of the Bank and of its subsidiary companies, under the Bank's employee stock option scheme 2000-01 (ESOS).

Consequent to the above, the total issued and paid-up equity share capital of the Bank increased by Rs.1.42 crores to Rs.615.37 crores as on 31 March, 2023, as compared to Rs.613.95 crores, as on 31 March, 2022. The equity shares issued under the ESOS rank pari-passu with the existing equity shares of the Bank.

Apart from the above, the Bank did not raise any additional equity share capital during the fiscal year.

Debt instruments

During fiscal 2023, in order to strengthen its capital adequacy and to enhance its long-term resources, the Bank issued and allotted 12,000 unsecured, rated listed subordinated taxable redeemable Basel Ill compliant tier II non-convertible debentures (Series 30) of face value of Rs.1 crore each, aggregating to Rs.12,000 crores, on a private placement basis. The Audit Committee of the Board (ACB) at its meeting held on 23 January, 2023, had reviewed and confirmed that the Bank had utilized the said funds for the above-mentioned purposes only.

Capital adequacy ratio

The Bank's overall Capital Adequacy Ratio (CAR) under Basel Ill stood at 17.64% at the end of fiscal 2023, well above the benchmark requirement of 11.50% stipulated by the RBl. Of this, the common equity tier l (CET l) CAR was 14.02% (against minimum regulatory requirement of 8.00%) and tier l CAR was 14.57% (against minimum regulatory requirement of 9.50%). As on 31 March, 2023, the Bank's tier ll CAR under Basel Ill stood at 3.07%.

Ratings of various debt instruments

The details of credit ratings obtained by the Bank along with any revisions thereto, if any, during fiscal 2023, for all the debt instruments outstanding as on 31 March, 2023, are provided in the report on corporate governance, forming part of this annual report.

Reclassification to "public" category from "promoter" category

The Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), one of the promoters of the Bank, vide its letter dated 27 March, 2023 has withdrawn the nomination of its nominee director from the Board of the Bank. SUUTI has also surrendered its right to appoint one nominee director on the Board, requested the Bank (i) to make appropriate amendments to the Articles of Association of the Bank (AOA) and (ii) to exit SUUTI from "promoter" category and reclassify it to "public" category. Accordingly, the Board on 27 March, 2023 noted the aforesaid letters and approved the amendment to the Bank's AOA, limited to cancellation of nomination rights of SUUTI and other consequential changes thereupon, subject to the approval of the members of the Bank and Reserve Bank of India (RBl). The members of the Bank vide postal ballot on 28 April, 2023 have approved the amendment to the AOA of the Bank. The approval of RBl on amendment to the AOA is awaited, as on the date of this report.

Further, the Board at its meeting held on 28 April, 2023 has approved the request of SUUTI for reclassification, subject to approval of the stock exchanges. Since SUUTI does not hold any equity shares in the Bank, the provisions of Regulation 31A(3)(a)(iii) of the SEBI Listing Regulations with respect to approval of the members are not applicable. The application to the stock exchanges will be made within the prescribed timelines.

Deposits

Being a banking company, the disclosures relating to deposits as required under Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74 of the Act, are not applicable to the Bank.

Change in the nature of business

During fiscal 2023, there has been no change in the nature of business of the Bank.

Material changes and commitments affecting the financial position of the Bank

There were no material changes and commitments affecting the financial position of the Bank, between the end of the fiscal year of the Bank to which the financial statements relate and up to the date of this report.

Subsidiaries, joint ventures and associates

As on 31 March, 2023, the Bank has nine unlisted subsidiary companies, two step down subsidiary companies and one associate company:

Sr. no.

Name of the subsidiary/ associate company

Subsidiary/ associate

Business activity

% of shares held by the group

1.

Axis Asset Management Company Limited

Subsidiary

Managing investment portfolios of the scheme(s) launched by Axis Mutual Fund, Axis Alternative Investment Fund- category II & III and portfolios under portfolio management services.

75%

2.

Axis Mutual Fund Trustee Limited

Subsidiary

Trustee for the mutual fund business.

75%

3.

Axis Capital Limited

Subsidiary

Business of intermediation such as investment banking, capital market advisory, private equity advisory, M&A advisory and institutional equities.

100%

4.

Axis Finance Limited

Subsidiary

Non-banking financial company (NBFC) offering loans to corporates, MSME's and retail customers.

100%

5.

Axis Securities Limited

Subsidiary

Retail broking services.

100%

6.

A. Treds Limited

Subsidiary

Facilitating financing of trade receivables.

67%

7.

Axis Trustee Services Limited

Subsidiary

Trusteeship activities and agency & administration services.

100%

8.

Freecharge Payment Technologies Private Limited

Subsidiary

Merchant acquiring services, payment aggregation services, payment support services, and business correspondent to a bank/financial institution, distribution of mutual funds.

100%

9.

Axis Bank UK Limited

Subsidiary

Banking activities in the United Kingdom.

100%

10.

Axis Capital USA, LLC,

Step down subsidiary

Services relating to equity capital market, stock broking to institutional investors in USA.

100% (held by Axis Capital Limited)

11.

Axis Pension Fund Management Limited (Incorporated on 17 May, 2022)

Step down subsidiary

Pension fund management business under the national pension system.

47.27%

12.

Max Life Insurance Company Limited

Associate

Life insurance and long-term saving and protection products.

12.99%

As on 31 March, 2023, the Bank did not have any joint venture company.

The financial position and performance of each of the Bank's subsidiary companies is given in the management discussion & analysis report, which forms part of this annual report.

Consolidated financial statements

In accordance with the provisions of Section 129(3) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, as amended, the Bank has prepared consolidated financial statements, which forms part of this annual report. The statement in form AOC-1 containing the salient features of the financial statements of the subsidiary companies and associate company of the Bank, also forms part of this annual report.

In accordance with the third proviso to Section 136(1) of the Act, the annual report of the Bank, containing standalone financial statements and the consolidated financial statements and all other documents required to be attached thereto are available on the website of the Bank at https://www.axisbank.com/shareholders-corner/shareholders-information/annual-reports.

Further, in accordance with the fourth proviso to the said section, the audited financial statements of each of the said subsidiary companies of the Bank are available on the website of the Bank at https://www.axisbank.com/shareholders-corner/shareholders- information/annual-reports. The said financial statements will be available for inspection by the members of the Bank and trustees of debenture holders at the registered office of the Bank during business hours on all working days except Saturdays, Sundays, bank holidays and national holidays. Any member interested in obtaining a physical copy of the said financial statements can send an email to the company secretary of the Bank on shareholders@axisbank.com.

Particulars of loans, guarantees and investments

Pursuant to Section 186(11) of the Act, the provisions of Section 186 of the Act, except sub-section (1), do not apply to a loan made, guarantee given or security provided by a banking company in the ordinary course of its business.

The particulars of investments made by the Bank are disclosed in schedule 8 of the financial statements as per the applicable provisions of the Banking Regulation Act, 1949.

Corporate governance

The Bank is committed to achieving and adhering to the highest standards of corporate governance and it constantly benchmarks itself with global best practices, in this regard.

The corporate governance framework of the Bank incorporates all the mandatory requirements as prescribed in the SEBI Listing Regulations. The Bank has also adopted the non-mandatory requirements as recommended in the SEBI Listing Regulations, as detailed in the report on corporate governance.

The report on corporate governance for fiscal 2023 along with general shareholder information forms part of this annual report. M. P. Chitale & Co., Chartered Accountants (ICAI firm registration no. 101851W), joint statutory auditor of the Bank has issued a certificate confirming the compliance with the provisions of Corporate Governance by the Bank for the year ended 31 March, 2023, as stipulated in Regulations 17 to 27 and clauses (b) to (i) of Regulation 46 (2) and paragraphs C, D and E of Schedule V to the SEBI Listing Regulations, and the same is attached along with the report on corporate governance.

Management's discussion and analysis report

The management's discussion and analysis report as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, forms part of this annual report.

Board of directors

Appointment/re-appointment of directors

During fiscal 2023, pursuant to the recommendation of the Nomination and Remuneration Committee of Directors (NRC), the Board appointed/re-appointed the following directors:

1. Manoj Kohli was appointed as an Independent Director of the Bank on 17 June, 2022, for a period of four years with effect from 17 June, 2022 upto 16 June, 2026 (both days inclusive). The said appointment was approved by the members of the Bank at the 28th AGM held on 29 July, 2022.

2. P.N. Prasad was appointed as an Independent Director of the Bank on 20 October, 2022, for a period of four years with effect from 20 October, 2022 upto 19 October, 2026 (both days inclusive). The said appointment was approved by the members of the Bank vide postal ballot on 16 January, 2023.

3. CH SS Mallikarjunarao was appointed as an Independent Director of the Bank on 24 January, 2023, for a period of four years with effect from 1 February, 2023 upto 31 January, 2027 (both days inclusive). The said appointment was approved by the members of the Bank vide postal ballot on 28 April, 2023.

Manoj Kohli, P. N. Prasad and CH SS Mallikarjunarao are not liable to retire by rotation.

The Board has formed an opinion that Manoj Kohli, P. N. Prasad and CH SS Mallikarjunarao have the integrity, expertise and requisite experience, which is beneficial to the business interest of the Bank. Further, they are in compliance with provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to enrolling their name in the online databank of independent directors and qualifying the online proficiency self-assessment test for independent directors.

Ashish Kotecha, Non-Executive (Nominee Director) of the Bank, is liable to retire at ensuing AGM, and being eligible seeks re-appointment. Based on performance evaluation and recommendation of the NRC, the Board recommends his re-appointment to the members of the Bank.

The Board at its meeting held on 28 April, 2023, has appointed Subrat Mohanty as an Executive Director of the Bank with effect from (i) 1 May, 2023 or (ii) the date of approval of his appointment by RBI, whichever is later. His appointment is for a period of three years from the effective date of his appointment and is subject to approval of the members of the Bank and RBI. Subrat Mohanty would be liable to retire by rotation.

Resolutions in respect of re-appointment of Ashish Kotecha and appointment of Subrat Mohanty, have been included in the notice convening the 29th AGM of the Bank.

RBI vide its letter dated 24 June, 2022 has approved the re-appointment of Rajiv Anand as the Deputy Managing Director of the Bank, for a further period of three years, with effect from 4 August, 2022 up to 3 August, 2025 (both days inclusive). Further, RBI vide its letter dated 12 July, 2022 has approved the re-appointment of Rakesh Makhija as Non-Executive (Part-Time) Chairman of the Bank, with effect from 18 July, 2022 up to 26 October, 2023 (both days inclusive).

Resignation/retirement of directors

1. S. Vishvanathan ceased to be an Independent Director of the Bank, with effect from the close of business hours on 10 February, 2023, upon completion of the maximum permissible tenure of eight continuous years, in terms of the provisions of Section 10A(2A) of the Banking Regulation Act, 1949.

2. Vasantha Govindan, ceased to be Non-Executive (Nominee Director) of the Bank with effect from 27 March, 2023, upon withdrawal of her nomination by SUUTI.

The Board acknowledges the invaluable contributions rendered by S. Vishvanathan and Vasantha Govindan during their tenure as directors and places on record its deep appreciation for their guidance as members of the Board.

Key managerial personnel

Amitabh Chaudhry, Managing Director & CEO, Rajiv Anand, Deputy Managing Director, Puneet Sharma, Group Executive & Chief Financial Officer and Sandeep Poddar, Senior Vice President II & Company Secretary are the key managerial personnel of the Bank, in terms of Section 203(1) read with Section 2(51) of the Act and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

There has been no change in the key managerial personnel of the Bank during the fiscal year under review.

Selection and appointment of directors

The selection and appointment of directors of the Bank is done in accordance with the applicable provisions of the Act, rules made thereunder, the Banking Regulation Act, 1949, the guidelines issued by the RBI and the relevant provisions of the SEBI Listing Regulations. The Bank has formulated and adopted various policies with respect to selection and appointment of directors i.e. succession planning policy for the Board and key officials of the Bank, policy on fit and proper criteria for directors of the Bank, Board diversity policy and policy on training of directors, the details of which are provided in report on corporate governance, which forms part of this annual report.

Declaration of independence

All the independent directors of the Bank have confirmed that they meet the criteria prescribed for independence under the provisions of Section 149(6) of the Act and Regulation 16(l)(b) of the SEBI Listing Regulations.

The Board has assessed the veracity of the confirmations submitted by the independent directors and thereafter has taken the same on record.

In the opinion of the Board, all the independent directors are independent of the management.

Board performance evaluation

The Act and the SEBI Listing Regulations relating to corporate governance provides for evaluation of the performance of the Board, its committees, individual directors and the chairperson of a company.

The Bank has institutionalised the board performance evaluation process. The NRC is the nodal agency for conducting the said performance evaluation. The NRC annually reviews and approves the criteria and the mechanism for carrying out the exercise effectively.

The methodology used for the annual board performance evaluation, the outcome, progress made over last fiscal year and the proposed actions for implementation during fiscal 2024, are provided in the report on corporate governance, which forms part of this annual report.

Directors' responsibility statement

In terms of Section 134(3)(c) of the Act, the directors hereby state that:

a) the applicable accounting standards have been followed in the preparation of the annual accounts for the fiscal 2023.

b) accounting policies have been selected and applied consistently, and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank as at 31 March, 2023 and of the profit of the Bank for the fiscal year ended on that date.

c) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

e) adequate internal financial controls for the Bank to follow, have been laid down and these are operating effectively.

f) proper and adequate systems have been devised to ensure compliance with the provisions of all applicable laws and these systems are operating effectively.

Meetings of the Board/committees

The schedule in respect of the meetings of the Board/committees, to be held during the next fiscal year is circulated in advance to all the members of the Board.

During fiscal 2023, nine meetings of the Board were held. Details of board meetings is provided in the report on corporate governance, which forms part of this annual report.

Audit Committee of Board

The composition, role and functions of ACB, is provided in the report on corporate governance, which forms part of this annual report.

During fiscal 2023, the Board has accepted all the recommendations made by the ACB.

Related party transactions

During fiscal 2023, all the related party transactions were entered into in the ordinary course of the business of the Bank and on an arm's length basis. Accordingly, during the fiscal year, no transaction falling under the scope of Section 188(1) of the Act was entered into. Hence, form AOC-2 is not applicable to the Bank.

The details of related party transactions are provided in the note number 4.5 of schedule 18 to the standalone financial statements and in the note number 3.8 of schedule 18 to the consolidated financial statements.

Whistle blower policy and vigil mechanism

The Bank has formulated and adopted a whistle blower policy and vigil mechanism, details of which have been provided in the report on corporate governance, which forms part of this annual report.

Maintenance of cost records

Being a banking company, provisions of Section 148(1) of the Act, relating to maintenance of cost records is not applicable to the Bank.

Adequacy of internal financial controls related to financial statements

The Bank has put in place adequate internal financial controls with reference to its financial statements. These controls ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements.

Plan and status of Ind AS implementation

The RBI had issued a circular in February 2016 requiring banks to implement Indian accounting standards (Ind AS) and prepare standalone and consolidated Ind AS financial statements with effect from 1 April, 2018. Banks were also required to report the comparative financial statements for fiscal 2018, to be published along with the financial statement for the fiscal year beginning 1 April, 2018. However, the RBI in its press release issued on 5 April, 2018 deferred the applicability of Ind AS by one year (i.e. 1 April, 2019) for scheduled commercial banks. Further, RBI in a circular issued on 22 March, 2019 has deferred the implementation of Ind AS till further notice.

During fiscal 2017, the Bank had undertaken a preliminary diagnostic analysis of the GAAP differences between Indian GAAP vis-a-vis Ind AS. The Bank has also identified and evaluated data gaps, processes and system changes required to implement Ind AS. The Bank is in the process of implementing necessary changes in its IT systems wherever required and other processes in a phased manner. The Bank is also submitting proforma Ind AS financial statements to RBI on a half-yearly basis.

In line with the RBI guidelines on Ind AS implementation, the Bank has constituted a Steering Committee comprising members from the concerned functional areas, headed by the Deputy Managing Director of the Bank. A progress report on the status of Ind AS implementation in the Bank is presented to the ACB and the Board on a quarterly basis.

Remuneration policy

The Bank has formulated and adopted a remuneration policy for its non-executive chairman and non-executive directors and a remuneration policy for its managing director & CEO, whole-time directors, material risk takers, control function staff and other employees (policies), in terms of the relevant provisions of Section 178 of the Act, the relevant rules made thereunder, the SEBI Listing Regulations and guidelines/circulars issued by the RBI.

The details of the said policies have been provided in the report on corporate governance, which forms part of this annual report. The said policies are available on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate- governance in terms of the SEBI Listing Regulations.

Share based employee benefits

Axis Bank employee stock option scheme, 2000-01

The Bank has formulated and adopted Axis Bank employee stock option scheme, 2000-01 (ESOS) for the eligible employees of the Bank and that of its subsidiary companies, in terms of the regulations/guidelines issued by the Securities and Exchange Board of India (SEBI).

The members of the Bank vide postal ballot on 16 January, 2023 have approved certain amendment to ESOS in order to extend the benefits of ESOS to all eligible employees of the present/future associate companies. These amendments are not prejudicial to the interests of the employees.

Axis Bank employees stock unit scheme, 2022

In order to act as a retention mechanism, usher in an 'owner-manager' culture, align the interest of the key executives/employees with that of the members in driving long-term value creation for the Bank, achieve greater synergy between the Bank and its subsidiary and associate companies and enable employees to participate in the long-term growth and the Bank's financial success, the Bank has formulated and adopted Axis Bank employees stock unit scheme, 2022 (ESUS) for eligible employees of the Bank/its subsidiaries and associates in terms of the regulations/guidelines issued by the SEBI, which was approved by the members of the Bank vide postal ballot on 16 January, 2023.

The aforesaid ESOS and ESUS are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI (SBEB and SE) Regulations 2021). A certificate from the secretarial auditor of the Bank that the ESOS and ESUS have been implemented in accordance with the SEBI Regulations and in accordance with the resolutions passed by the members of the Bank, will be placed at the 29th AGM of the Bank.

Disclosure as mandated under the provisions of Regulation 14 of the SEBI (SBEB and SE) Regulations 2021, is available on the website of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report .

Particulars of employees

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, in respect of directors/employees of the Bank, is attached as Annexure 1 to this report.

In terms of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of this annual report.

In accordance with the provisions of Section 136(1) of the Act, the annual report excluding the aforesaid information, is being sent to the members of the Bank and others entitled thereto. The said information is available for inspection by the members at the registered office of the Bank during business hours of the Bank up to the date of the ensuing AGM.

Any member interested in obtaining a copy thereof, may write to the company secretary of the Bank at its registered office or at shareholders@axisbank.com.

Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Bank has formulated and adopted a policy on prevention of sexual harassment of women at workplace. The Bank has complied with the provisions relating to the constitution of internal committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The information relating to complaints received and redressed during fiscal 2023 is provided in the report on corporate governance, which forms part of this annual report.

Statutory auditors

M.R. Chitale & Co., Chartered Accountants (ICAI firm registration no. 101851W) and CNK & Associates LLP, Chartered Accountants (ICAI firm registration no. 101961WI/W100036) were appointed as the joint statutory auditors of the Bank at the 27th AGM, to hold office from the conclusion of the 27th AGM until the conclusion of the 30th AGM, on such terms and conditions, including remuneration, as may be approved by the ACB, subject to the approval of the RBI every fiscal year.

In accordance with the RBI guidelines, the Bank has framed a policy on appointment of statutory auditors and has also identified internal set of evaluation criteria for assessing the goodness of fit in terms of experience and eligibility for the audit firms including auditor independence.

There are no qualifications, reservations, adverse remarks or disclaimer made by M.R. Chitale & Co., Chartered Accountants, and CNK & Associates LLP, Chartered Accountants, in the statutory auditors report.

Secretarial auditor

Pursuant to the provisions of Section 204 of the Act and the relevant provisions of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank had appointed Bhandari & Associates, company secretaries, as the secretarial auditor of the Bank, for fiscal 2023.

The secretarial audit of the Bank was conducted in respect of the matters prescribed in the said rules and set out in the secretarial audit report, for fiscal 2023, attached as Annexure 2 to this report. There are no qualifications, reservations, adverse remarks or disclaimers made by the secretarial auditor of the Bank, in its report.

In terms of SEBI circular no CIRICFDICMDl/2712019 dated 8 February, 2019, relating to annual secretarial compliance report, the Bank had appointed Bhandari & Associates, company secretaries, for issuing the aforesaid report for fiscal 2023. The Bank will submit the annual secretarial compliance report to the stock exchanges within the prescribed time.

Certificate from a company secretary in practice

In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, the Bank has obtained a certificate from Bhandari & Associates, company secretaries, confirming that none of the directors on the Board of the Bank have been debarred or disqualified from being appointed or continuing as directors of the companies either by the SEBI or the MCA or any other statutory/ regulatory authorities. The said certificate is attached as Annexure 3 to this report.

Reporting of frauds by auditors

During fiscal 2023, pursuant to Section 143(12) of the Act, neither the statutory auditors nor the secretarial auditor of the Bank have reported any instances of frauds committed in the Bank by its officers or its employees.

Secretarial standards

The Bank is in compliance with the secretarial standards on meetings of the board of directors (SS-1) and the secretarial standards on general meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI). The Bank has also voluntarily adopted the recommendatory secretarial standard on dividend (SS-3) and secretarial standard on report of the board of directors (SS-4) issued by the ICSI.

Risk management

Pursuant to Regulation 21 of the SEBI Listing Regulations, the Bank has constituted a Risk Management Committee. The details of the said committee and its terms of reference are set out in the report on corporate governance, which forms part of this annual report.

The Bank has formulated and adopted a robust risk management framework. Whilst the Board is responsible for framing, implementing and monitoring the risk management framework, it has delegated its powers relating to monitoring and reviewing of risks associated with the business of the Bank to the said committee. The details of the risk management framework and issues related thereto have been disclosed in the management's discussion and analysis report, which forms part of this annual report.

Corporate social responsibility

The Bank has been formally undertaking corporate social responsibility (CSR) activities since 2006, through Axis Bank Foundation (ABF). With the introduction of Section 135 of the Act making CSR mandatory, the Bank expanded its spectrum of activities to undertake interventions across India in identified themes, directly, through ABF and through other credible implementation partners.

Pursuant to the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CSR Rules), as amended, the Bank has constituted the CSR Committee of the Board.

The Bank has formulated and adopted a CSR policy which provides the focus areas (in accordance with Schedule VII of the Act) under which various developmental initiatives are undertaken.

The composition of the CSR Committee, CSR policy and projects/programs approved by the Board are available on the website of the Bank at https://www.axisbank.com/csr/social-responsibilitv .

The annual report on CSR activities and details of amount spent or unspent by the Bank during fiscal 2023, in accordance with the CSR Rules, is attached as Annexure 4 to this report.

Business responsibility and sustainability report

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, top 1,000 listed entities based on their market capitalisation as on 31 March, every fiscal year, were required to submit business responsibility report (BRR), as part of their annual report.

In November 2018, the MCA constituted a committee to revise the national voluntary guidelines (NVG) on which the BRR was based. These guidelines were subsequently revised and released as the national guidelines on responsible business conduct (NGRBC) in 2019. Further, the BRR was aligned to the NGRBC and renamed and released as the business responsibility and sustainability report (BRSR) in 2020.

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, SEBI, vide its circular dated 10 May, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, to be submitted as a part of their annual report.

The Bank's BRSR for fiscal 2023 forms part of this annual report.

Significant and material order passed by regulators or courts or tribunals impacting the going concern status and future operations of the Bank

During fiscal 2023, no significant and/or material order was passed by any regulator, court or tribunal against the Bank, which could impact its going concern status or future operations.

Conservation of energy & technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure 5 to this report.

Annual return

The annual return in Form MGT-7, as mandated under the provisions of Section 92(3) read with Section 134(3) of the Act, has been uploaded on the website of the Bank and is available at https://www.axisbank.com/shareholders-corner/shareholders- information/annual-return.

Acknowledgements and appreciations

The Board places on record its gratitude to the RBI, MCA, SEBI, other statutory and regulatory authorities, financial institutions, stock exchanges, registrar and share transfer agent, debenture trustees, depositories and correspondent banks for their continued support and guidance.

The Board also places on record its appreciation to its valued customers for their continued patronage and to the members of the Bank for their continued support.

The Board also expresses its heartfelt thanks and gratitude to each employee and their families for their continued commitment towards the Bank and its customers, who by demonstrating strong work ethics, professionalism, teamwork and initiatives helped the Bank continue to serve its depositors and customers and reinforce its customer centric image despite the challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai

Rakesh Makhija

Date: 28 April, 2023

Chairman