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 |