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EQUITY - MARKET SCREENER

Axis Bank Ltd
Industry :  Banks - Private Sector
BSE Code
ISIN Demat
Book Value()
532215
INE238A01034
405.2311182
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
AXISBANK
15.88
272855.8
EPS(TTM)
Face Value()
Div & Yield %
55.91
2
0.11
 

As on: Nov 28, 2022 07:07 AM

Dear Members,

Your Board of Directors (the Board) are pleased to present the 28th Annual Report of Axis Bank Limited (the Bank) together with the audited financial statements for fiscal 2022.

Financial Performance and State of the Bank's Affairs

The financial highlights (Standalone) for the year under review, are presented below:

(Rs In crores)

Particulars 2021-22 2020-21 Growth
Balance sheet
Deposits 821,721 697,986 18%
Savings Bank Deposits 242,449 204,473 19%
Current Account Deposits 127,306 113,276 12%
Term Deposits 451,966 380,237 19%
Advances 707,696 614,399 15%
Retail Advances 399,891 331,304 21%
Non-retail Advances 307,805 283,095 9%
Total Assets / Liabilities 1,175,178 986,798 19%
Profit & Loss account
Net Interest Income 33,132 29,239 13%
Other Income 15,221 12,264 24%
Fee Income 13,001 10,686 22%
Trading Profit1 1,627 1,218 34%
Miscellaneous Income 593 360 65%
Operating Expenses 23,611 18,375 28%
Operating Profit 24,742 23,128 7%
Provision for Tax 4,357 2,217 96%
Other Provisions and Write offs 7,360 14,322 (49%)
Net Profit 13,025 6,589 98%
Balance in Profit and Loss account brought forward from previous year 29,985 26,190
Amount Available For Appropriation 43,010 32,779
Appropriations
Transfer to Statutory Reserve 3,256 1,647
Transfer to Capital Reserve 441 848
Transfer to Investment Reserve 149 -
Transfer to Special Reserve 609 -
Dividend paid - -
Transfer to Investment Fluctuation Reserve 455 326
Surplus carried over to Balance Sheet 38,100 29,958

1 Excluding Merchant Exchange Profit

Key Performance Indicators

Key Performance Indicators 2021-22 2020-21
Interest Income as a % of working funds1 6.26 6.78
Non-interest Income as a % of working funds1 1.41 1.58
Net Interest Margin (%) 3.47 3.53
Return on Average Net Worth (%) 12.91 7.55
Operating Profit as a % of working funds1 2.30 2.74
Return on Average Assets (%) 1.21 0.70
Profit per employee2 (Rs In lacs) 15.54 8.66
Business (Deposits less inter-bank deposits + Advances) per employee2 (Rs In crores) 17.92 17.13
Net non-performing assets as a % of net customer assets3 0.73 1.05

1 Working funds represent average total assets

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

3 Customer assets include advances and credit substitutes Previous year figures have been re-grouped wherever necessary.

Acquisition of Citibank's India Consumer Business

The Board at its meeting held on 30 March, 2022, approved the purchase 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), as going concerns, without values being assigned to individual assets and liabilities of either of the business, subject to fulfilment of specific conditions and obtaining requisite approvals.

The Bank has executed Business Transfer Agreements (BTAs) with CBNA and CFIL on 30 March, 2022. The transaction will be given effect to in the books of the Bank on closing which is subject to receipt of regulatory and other applicable approvals and completion of customary and contractual conditions in accordance with the provisions of the BTAs.

The purchase comprises of credit cards, unsecured and secured lending portfolios, wealth management, private banking and retail deposit businesses in India. The employees of CBNA and CFIL consumer business will also be joining the Bank's workforce. The purchase is well aligned with the Bank's GPS strategy framework towards premiumization and granularization of customer base. The purchase will help to strengthen the Bank's retail banking franchise and accelerate its growth ambitions across various consumer banking segments.

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 and the same is available on the website of the Bank at https://www.axisbank.com/docs/default-source/quarterly-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 28 April, 2022, recommended final dividend of Rs 1/- per equity share of Rs 2/- each, subject to the approval of members at the ensuing 28th Annual General Meeting (AGM).

In terms of revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance sheet date' as notified by the Ministry of Corporate Affairs through amendments to the Companies (Accounting Standards) Amendment Rules, 2016, dated 30 March, 2016, such proposed dividend has not been recognised as a liability as on 31 March, 2022. Further, shares issued on exercise of ESOPs after 31 March, 2022 till record date will also be eligible for proposed dividend of fiscal 2022.

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

Record Date

The record date for payment of dividend is mentioned in the notice of the ensuing 28th AGM of the Bank.

Capital Structure Share Capital

During the year, the Bank issued and allotted 5,999,184 equity shares of Rs 2/- each of the Bank, pursuant to exercise of stock options by the Whole-Time Directors / Employees of the Bank and of its Subsidiary Companies, under the Employee Stock Option Scheme.

Consequent to the above, the total issued and paid-up equity share capital of the Bank increased by Rs 1.20 crores to Rs 613.95 crores as on 31 March, 2022, as compared to Rs 612.75 crores, as on 31 March, 2021. The equity shares issued under the Employee Stock Option Scheme ranks 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 year.

Reclassification to "Public" category from "Promoter" category

During fiscal 2022, five promoters of the Bank viz. The United India Insurance Company Limited, National Insurance Company Limited, The New India Assurance Company Limited, General Insurance Corporation of India and The Oriental Insurance Company Limited had been reclassified from "Promoter" Category to "Public" Category in terms of Regulation 31A SEBI Listing Regulations.

Accordingly, as on date, the Bank has two promoters i.e. Administrator of the Specified Undertaking of the Unit Trust of India and Life Insurance Corporation of India.

Debt Instruments

During fiscal 2022, the Bank issued and allotted 26,000 Senior Unsecured Taxable Redeemable Non-Convertible Debentures (Series 6) of face value of Rs 10 lac each, aggregating to Rs 2,600 crore, on a private placement basis, to enhance long term resources for funding infrastructure projects and affordable housing. The Audit Committee of the Board (ACB) at its meeting held on 24 January, 2022, had reviewed and confirmed that the Bank had utilized the said funds for the above-mentioned purposes only.

The Bank also issued Sustainable Additional Tier 1 (AT1) notes amounting to US$ 600 million. These are listed on ISM, the SGX- ST, India INX and NSE IFSC at GIFT City. This was first such issuance from any Scheduled Commercial Bank in India.

Capital Adequacy Ratio

The Bank's overall Capital Adequacy Ratio (CAR) under Basel III stood at 18.54% at the end of fiscal 2022, well above the benchmark requirement of 11.50% stipulated by the Reserve Bank of India (RBI). Of this, the Common Equity Tier I (CET I) CAR was 15.24% (against minimum regulatory requirement of 8.00%) and Tier I CAR was 16.34% (against minimum regulatory requirement of 9.50%). As on 31 March, 2022, the Bank's Tier II CAR under Basel III stood at 2.20%.

Ratings of various Debt Instruments

The details of all credit ratings obtained by the Bank along with revisions thereto, if any, during fiscal 2022, for all the debt instruments outstanding as on 31 March, 2022, are provided in the Report on Corporate Governance, forming part of this annual report.

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 Companies Act, 2013 (the Act), are not applicable to the Bank.

Change in the Nature of Business

During fiscal 2022, 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 or commitments affecting the financial position of the Bank, between the end of the financial 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, 2022, the Bank has nine unlisted subsidiary companies, one step down subsidiary and one associate company:

1. Axis Asset Management Company Limited undertakes the activities of managing the mutual fund business.

2. Axis Mutual Fund Trustee Limited acts as the trustee for the mutual fund business.

3. Axis Capital Limited provides services relating to investment banking, equity capital markets, institutional stock broking, mergers and acquisition advisory etc.

4. Axis Finance Limited is an Non-Banking Finance Company and carries on the activities of corporate and structural lending, loan against property etc.

5. Axis Securities Limited is in the business of retail broking services.

6. A.Treds Limited is engaged in the business of facilitating financing of trade receivables.

7. Axis Trustee Services Limited is engaged in trusteeship activities, acting as debenture trustee and as trustee to various securitisation trusts.

8. Freecharge Payment Technologies Private Limited is in the business of providing merchant acquiring services, payment aggregation services, payment support services, and business correspondent to a Bank / Financial Institution, distribution of Mutual Funds.

9. Axis Bank UK Limited is the banking subsidiary of the Bank in the United Kingdom and undertakes the activities of banking. The Bank has entered into a Share Purchase Agreement on 31 March, 2021 for sale of 100% stake in its subsidiary, Axis Bank UK Limited to OpenPayd Holdings Ltd. This transaction is subject to approval by the UK Financial Regulator, the Prudential Regulation Authority (PRA).

10. Axis Capital USA, LLC, is a wholly owned subsidiary of Axis Capital Limited incorporated in USA and provides financial services relating to equity capital market, institutional stock broking to institutional investors in USA.

11. Max Life Insurance Company Limited, an associate of the Bank, is in the business of life insurance and long-term saving and protection products. Axis Bank Limited (9.99%) along with its subsidiaries viz. Axis Capital Limited (2%) and Axis Securities Limited (1%) collectively hold 12.99% in Max Life Insurance Company Limited.

As on 31 March, 2022, the Bank did not have any joint venture company.

The financial position and performance of each of the Subsidiary Companies of the Bank 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 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 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 best practices, in this regard.

The Report on Corporate Governance for fiscal 2022 along with General Shareholder Information forms part of this annual report. M P Chitale & Co., Chartered Accountants (Firm Registration No. 101851W), Joint Statutory Auditor of the Bank have issued certificate confirming compliance with the mandatory requirements relating to Corporate Governance as stipulated under Chapter IV of the SEBI Listing Regulations, and the same is appearing before the Report on Corporate Governance.

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.

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

1. Amitabh Chaudhry was re-appointed as the Managing Director & CEO of the Bank on 28 April, 2021, for a further period of three years, with effect from 1 January, 2022 up to 31 December, 2024 (both days inclusive). The said re-appointment was approved by the members of the Bank at 27th AGM held on 30 July, 2021 and by RBI vide letter dated 14 October, 2021.

2. Prof. S. Mahendra Dev was appointed as an Independent Director of the Bank on 14 June, 2021, for a period of four years with effect from 14 June, 2021 up to 13 June, 2025 (both days inclusive). The said appointment was approved by the members of the Bank at 27th AGM held on 30 July, 2021. He is not liable to retire by rotation, in terms of Section 149(13) of the Act.

The Board formed an opinion that Prof. S. Mahendra Dev has the integrity, expertise and requisite experience, which is beneficial to the business interest of the Bank. Further, he is in compliance with passing of online proficiency self-assessment test, as prescribed under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

3. Ashish Kotecha was appointed as an Non-Executive (Nominee of entities affiliated to Bain Capital) Director of the Bank on 14 December, 2021, to hold office with effect from 19 December, 2021 up to 18 December, 2024 or till the time entities affiliated to Bain Capital are directly holding in the aggregate at least two percent (2%) of the equity share capital of the Bank on a fully diluted basis, whichever is earlier. The said appointment was approved by the members of the Bank vide postal ballot on 6 March, 2022. He is liable to retire by rotation, in terms of Section 152 of the Act.

4. (a) Rajiv Anand, Executive Director (Wholesale Banking) was re-designated as the Deputy Managing Director of the Bank and the said re-designation was approved by RBI from the date of its letter i.e. 27 December, 2021 up to 3 August, 2022 i.e. remainder of his tenure as the Executive Director (Wholesale Banking) of the Bank. The said re-designation was approved by the members of the Bank vide postal ballot on 6 March, 2022.

(b) Rajiv Anand was re-appointed as the Deputy Managing Director of the Bank on 10 January, 2022, for a further period of three years, with effect from 4 August, 2022 up to 3 August, 2025 (both days inclusive). The said re-appointment was approved by the members of the Bank vide postal ballot on 6 March, 2022. The approval of RBI for the aforesaid re-appointment is awaited.

5. Rakesh Makhija was re-appointed as the Non-Executive (Part-time) Chairman of the Bank on 25 January, 2022, from 18 July, 2022 up to 26 October, 2023 (both days inclusive). The said re-appointment was approved by the members of the Bank vide postal ballot on 6 March, 2022. The approval of RBI for the aforesaid re-appointment is awaited.

6. Girish Paranjpe was re-appointed as an Independent Director of the Bank on 29 April, 2022, for a further period of four years, with effect from 2 November, 2022 up to 1 November, 2026 (both days inclusive). Based on performance evaluation and recommendation of the NRC, the Board recommends his re-appointment to the members of the Bank.

7. T. C. Suseel Kumar, Non-Executive (Nominee Director) of the Bank, whose office is liable to retire at the ensuing AGM, being eligible seeks re-appointment, in terms of the provisions of Section 152(6) of the Act. Based on performance evaluation and recommendation of the NRC, the Board recommend his re-appointment to the members of the Bank.

Resolutions in respect of re-appointments of Girish Paranjpe and T. C. Suseel Kumar have been included in the Notice convening the 28th AGM of the Bank.

Resignation / Retirement of Directors

1. Stephen Pagliuca ceased to be the Non-Executive Director (Nominee of entities affiliated to Bain Capital) of the Bank, with effect from the close of business hours on 18 December, 2021, upon expiry of his tenure pursuant to the Investment Agreement between the Bank and BC Asia Investments VII Limited, Integral Investments South Asia IV and BC Asia Investments III Limited (Investment Agreement). Consequently, the tenure of Ashish Kotecha as an Alternate Director to the Original Director, Stephen Pagliuca also expired with effect from said date.

2. The Board on 29 September, 2021, considering the aspirations of Rajesh Dahiya, Executive Director (Corporate Centre) of the Bank, accepted his decision seeking early retirement from the services of the Bank. Accordingly, Rajesh Dahiya ceased to be the Executive Director (Corporate Centre) and a Key Managerial Personnel of the Bank with effect from the close of business hours on 31 December, 2021.

Key Managerial Personnel

During fiscal 2022, following changes took place in the Key Managerial Personnel of the Bank:

1. Rajesh Dahiya ceased to be the Executive Director (Corporate Centre) of the Bank with effect from the close of business hours on 31 December, 2021 due to early retirement.

2. Girish Koliyote ceased to be the Company Secretary and Compliance Officer of the Bank, with effect from the close of business hours on 8 October, 2021 due to resignation.

3. Pursuant to the recommendations of the NRC, the Board appointed Sandeep Poddar, as the Company Secretary and Compliance Officer of the Bank, with effect from 10 January, 2022.

The Board places on record its sincere appreciation for the valuable contribution made by Rajesh Dahiya and Girish Koliyote during their tenure with the Bank.

Accordingly, Amitabh Chaudhry, Managing Director & CEO, Rajiv Anand, Deputy Managing Director, Puneet Sharma, Group Executive & Chief Financial Officer and Sandeep Poddar, Senior Vice President & 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.

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(1)(b) of the SEBI Listing Regulations.

The Board has assessed the veracity of the confirmations submitted by the Independent Directors and thereafter took 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 year and the proposed action for implementation during fiscal 2023, 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 had been followed in the preparation of the annual accounts for the financial year ended 31 March, 2022.

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, 2022 and of the profit of the Bank for the 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

The schedule in respect of the meetings of the Board / Committees, to be held during the next financial year is circulated in advance to all the Members of the Board.

During fiscal 2022, 12 meetings of the Board were held and the gap between the said meetings did not exceed the limit of 120 days, as prescribed under the relevant provisions of the Act, the relevant Rules made thereunder and the applicable SEBI Listing Regulations.

Audit Committee of the Board

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

The Board has accepted all the recommendations made by the ACB.

Related Party Transactions

During fiscal 2022, the Bank has not entered into any materially significant transactions with its related parties, which could lead to potential conflict of interest between the Bank and these parties, other than transactions entered into with them in the ordinary course of its business.

A statement giving details of all related party transactions, entered into pursuant to the omnibus approval so granted, is placed before the ACB of the Bank for their review on a quarterly basis. No transactions were entered into with related parties, which were not in the ordinary course of the business of the Bank or which were not on an arm's length basis. Accordingly, there are no transactions required to be reported in Form AOC-2. The Bank has a Standard Operating Procedure for the purpose of identifying and monitoring such transactions. In terms of the amended provisions of SEBI Listing Regulations relating to related party transactions, the Bank vide Postal ballot on 8 April, 2022 has obtained the approval of the members of the Bank for material related party transactions of the Bank for fiscal 2023. The Bank in accordance with the SEBI circular no. SEBI/HO/CFD/CMD1/CIR/P/2022/47 dated 8 April 2022, will seek approval of the members at the ensuing 28th AGM for material related party transactions, which will be valid up to the date of the 29th AGM.

The Policy on Related Party Transactions has been reviewed by the ACB and the Board and the same is available on the website of the Bank at https://www.axisbank.com/docs/default-source/quarterly-reports/6policy-on-related-party-transactions.pdf in terms of the SEBI Listing Regulations.

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 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 Board of Directors 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 (the 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/docs/default-source/quarterly- reports/comprehensive-remuneration-policy.pdf, in terms of the SEBI Listing Regulations.

Employee Stock Option Scheme

The Bank has formulated and adopted Employee Stock Option Scheme (ESOS) for the eligible Employees, Managing Director & CEO and Executive Directors of the Bank and that of its Subsidiary Companies, in terms of the Regulations / Guidelines issued by the Securities and Exchange Board of India.

Pursuant to the authority given by the members at the AGM held on 30 July, 2021, the NRC approved certain amendments to the ESOS of the Bank in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 [SEBI (SBEB and SE) Regulations 2021]. None of these amendments were prejudicial to the interests of the employees.

The ESOS is in compliance with the SEBI (SBEB and SE) Regulations, 2021. A certificate from the Secretarial Auditor of the Bank that the ESOS has been implemented in accordance with SEBI (SBEB and SE) Regulations 2021 and in accordance with the resolutions passed by the members of the Bank, will be placed at the 28th AGM of the Bank.

Disclosures 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 also 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 Annual General Meeting.

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 2022 is provided in the Report on Corporate Governance, which forms part of this annual report.

Statutory Auditors

The members at the 24th AGM of the Bank held on 20 June, 2018 appointed Haribhakti & Co. LLP, Chartered Accountants, (Membership Number 103523W / W100048) as the Statutory Auditors of the Bank to hold office as such from the conclusion of the 24th AGM until the conclusion of the 28th AGM of the Bank.

RBI vide its notification no. RBI/2021-22/25 Ref. No. DoS.QD.ARG/SEC01/08.91.001/2021-22 dated 27 April, 2021, has issued guidelines on appointment of Statutory Central Auditors (SCAs) / Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) (the "RBI Guidelines"). The RBI Guidelines states that the Statutory Audit of Banks should be conducted jointly by two eligible audit firms, who shall be appointed for a continuous period of three years, subject to them satisfying the eligibility norms as stipulated therein, each year.

Further, as per the clarification issued by the RBI, Haribhakti & Co. LLP who had completed three years until fiscal 2021, ceased to be the Statutory Auditors of the Bank on the conclusion of 27th AGM of the Bank.

Accordingly, based on the recommendation of the ACB and the Board, the members of the Bank approved the appointment of M P Chitale & Co., Chartered Accountants (Firm Registration No. 101851W) and CNK & Associates LLP, Chartered Accountants (Firm Registration No. 101961W/ W100036), as the Joint Statutory Auditors of the Bank, 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. The approval of the RBI is required to be sought for the appointment of Joint Statutory Auditors every year.

In accordance with the requirement of the aforesaid 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 P 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, to act as the Secretarial Auditor of the Bank, for fiscal 2022.

The Secretarial Audit of the Bank was conducted in respect of the matters as prescribed in the said Rules and set out in the Secretarial Audit Report, for fiscal 2022, attached as Annexure 2 to this Report. There are no qualifications, reservations, adverse remarks or disclaimer made by the Secretarial Auditor of the Bank, in its report.

In terms of SEBI circular no CIR/CFD/CMD1/27/2019 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 2022. The Bank will submit the Annual Secretarial Compliance Report to the Stock Exchanges within the prescribed time limit.

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 Securities and Exchange Board of India or the Ministry of Corporate Affairs or any other Statutory / Regulatory Authorities. The said certificate is attached as Annexure 3 to this Report.

Reporting of Frauds by Auditors

During fiscal 2022, 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 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 undertaking Corporate Social Responsibility (CSR) activities since 2006 through Axis Bank Foundation (ABF), its CSR arm. With the introduction of Section 135 of the Act which made CSR mandatory, the Bank expanded its spectrum of activities to reach out to the communities it serves across the length and breadth of the country.

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 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-responsibility.

The Annual Report on CSR activities and details of amount spent or unspent by the Bank during fiscal 2022, in accordance with the CSR Rules, is attached as Annexure 4 to this Report.

Business Responsibility Report

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, top 1000 listed entities based on their market capitalisation as on 31st March, every year, are required to submit their Business Responsibility Report (BRR), as a part of their annual report. The Bank's BRR describing the initiatives taken by the Bank from an Environmental, Social and Governance perspective is available on the website of the Bank at https://www.axisbank.com/shareholders-corner/shareholders-information/business- responsibility-report.

Significant and Material Order Passed by Regulators or Courts or Tribunals Impacting the Going Concern Status and Operations of the Bank

During fiscal 2022, 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

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: 29 April, 2022 Chairman