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Axis Bank Ltd.

BSE: 532215 Sector: Financials
NSE: AXISBANK ISIN Code: INE238A01034
BSE 00:00 | 20 May 673.20 23.05
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OPEN 664.00
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VOLUME 165576
52-Week high 866.60
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P/E 15.87
Mkt Cap.(Rs cr) 206,743
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OPEN 664.00
CLOSE 650.15
VOLUME 165576
52-Week high 866.60
52-Week low 630.80
P/E 15.87
Mkt Cap.(Rs cr) 206,743
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Axis Bank Ltd. (AXISBANK) - Director Report

Company director report

The Board of Directors of the Bank (the Board) have the pleasure of presenting the 27thAnnual Report of the Bank together with the Audited Financial Statements IndependentAuditors Rs.Report and the Report on the business and operations of the Bank for thefinancial year ended 31 March 2021.

Financial Performance and the State of the Bank's Affairs:

The financial highlights for the year under review are presented below:

Particulars 2020-21 2019-20 Growth
Deposits 707306 640105 10%
• Savings Bank Deposits 204473 173592 18%
• Current Account Deposits 113276 90114 26%
Advances 623720 571424 9%
• Retail Advances 334514 305400 10%
• Non-retail Advances 289206 266024 9%
Total Assets/Liabilities 996118 915165 9%
Net Interest Income 29239 25206 16%
Other Income 14838 15537 (4%)
• Fee Income 10686 11019 (3%)
• Trading Profit(1) 2547 2420 5%
• Miscellaneous Income 1605 2098 (23%)
Operating Expenses 18375 17305 6%
Operating Profit 25702 23438 10%
Provision for Tax 2217 3277 (32%)
Other Provisions and Write offs 16896 18534 (9%)
Net Profit 6589 1627 305%
Balance in Profit and Loss account brought forward from previous year 26190 24323
Amount Available For Appropriation 32779 25950
Appropriations
Transfer to Statutory Reserve 1647 407
Transfer to Capital Reserve 848 340
Transfer to Reserve Fund - 1
Dividend paid (includes tax on dividend) - 289
Transfer to Investment Fluctuation Reserve 326 328
Surplus carried over to Balance Sheet 29958 24585

(1) Excluding Merchant Exchange Profit

Key Performance Indicators

Key Performance Indicators 2020-21 2019-20
Interest Income as a percentage of working funds* 6.78% 7.56%
Non-interest Income as a percentage of working funds* 1.58% 1.87%
Net Interest Margin 3.53% 3.51%
Return on Average Net Worth 7.55% 2.34%
Operating Profit as a percentage of working funds* 2.74% 2.83%
Return on Average Assets 0.70% 0.20%
Profit per Employee** Rs.8.66 lacs Rs.2.40 lacs
Business (Deposits less inter-bank deposits + Advances) per employee** Rs.17.13 crores Rs.17.27 crores
Net non-performing assets as a percentage of net customer assets*** 1.05% 1.56%

* Working funds represent average total assets

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

*** Customer assets include advances and credit substitutes Previous year figures havebeen re-grouped wherever necessary

Change in the Nature of Business

During the year under review there has been no change in the nature of business of theBank.

Capital Structure

Share Capital

During the year the Bank raised additional equity capital through issue and allotmentof 238038560 equity shares of Rs.2/- each of the Bank at a price of Rs.420.10 perEquity Share on 11 August 2020 pursuant to a Qualified Institutional Placement Issuein accordance with the relevant provisions of Chapter VI of the Securities and ExchangeBoard of India (Issue of Capital and Disclosure Requirements) Regulations 2018 Section42 of the Companies Act 2013 and the relevant Rules made thereunder.

Consequently the total issued and paid-up equity share capital of the Bank increasedby Rs.47.61 crores and the reserves of the Bank increased by Rs.9915.41 crores aftercharging off issue related expenses. The said funds were raised to further strengthen theBank's CET 1 ratio and to ensure that the Bank is well placed to deal with COVID impact onbusiness from a position of strength while ensuring that there is adequate capital tosupport its growth as the economy revives. The Audit Committee of Board of the Bank (AuditCommittee) at its meeting held on 28 October 2020 has reviewed and confirmed that theBank has utilised the said funds for the above-mentioned purposes and there was nodeviation in utilisation of the said funds.

During the year the Bank also issued and allotted 4032158 equity shares of Rs.2/-each of the Bank pursuant to exercise of stock options by some of the Whole TimeDirectors/Employees of the Bank and that of its subsidiary companies under the variousEmployee Stock Option Scheme(s).

Pursuant to the above allotments the total issued and paid-up equity share capital ofthe Bank increased by Rs.48.41 crores to Rs.612.75 crores as on 31 March 2021 as comparedto Rs.564.34 crores as on 31 March 2020.

The category wise Shareholding Pattern of the Bank as on 31 March 2021 was as under:

Sr. No. Category/Shareholder No. of Shares held % of total issued & paid-up Capital
Promoters
1 Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 103175065 3.37
2 Life Insurance Corporation of India 244821645 7.99
3 General Insurance Corporation of India 30855229 1.01
4 The New India Assurance Company Limited 20591585 0.67
5 National Insurance Company Limited 549681 0.02
6 The Oriental Insurance Company Limited 4977520 0.16
7 United India Insurance Company Limited 913248 0.03
Foreign Investors
8 Overseas Investors (including FIIs/OCBs/NRIs) 1766209517 57.65
9 Foreign Direct Investment (GDR) 75739625 2.47
Domestic Financial Institutions
10 Financial Institutions/Mutual Funds/Banks/NBFC/INC/AIF 605195660 19.75
11 Others 210719877 6.88
Total 3063748652 100.00

Re-classification to "Public" category from "Promoter" category

Three promoter entities of the Bank viz. United India Insurance Company LimitedNational Insurance Company Limited and The New India Assurance Company Limited haverequested the Board of the Bank to reclassify them to "Public" category from"Promoter" category in terms of Regulation 31A of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations") asamended.

The Board at its meetings held on 27 February 2021 26 March 2021 and 28 April 2021respectively considered and approved the said requests subject to the approval of theStock Exchanges Statutory/Regulatory Authorities and the Shareholders of the Bank interms of the SEBI Listing Regulations.

Listing

The Equity Shares of the Bank and the Unsecured Redeemable Non-Convertible SubordinatedPerpetual Debentures issued by the Bank on a private placement basis are listed onNational Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Bonds issued bythe Bank under the MTN programme are listed on Singapore Stock Exchange and the GreenBonds issued by the Bank are listed on London Stock Exchange.

Depository Receipts

The Global Depository Receipts (GDR) issued by the Bank are listed on London StockExchange.

The Bank has paid the listing fees to the said Stock Exchanges in respect of the abovesecurities for the financial year 2020-21.

Dividend

In terms of Regulation 43A of the SEBI Listing Regulations the Bank has formulated andadopted a Dividend Distribution Policy with the objective of appropriately rewardingShareholders through dividends while retaining the capital required for supporting itsfuture growth. The said Policy was reviewed by the Board at its meeting held on 27 April2021 and the same has been hosted on the website of the Bank athttps://www.axisbank.com/shareholders-corner/corporate-governance.

The Diluted Earnings per Share (EPS) of the Bank for the financial year 2020-21 stoodat Rs.22.09 per equity share of Rs.2/- each as compared to Rs.5.97 per equity share ofRs.2/- each in the previous financial year. The said increase in EPS reflects the Bank'sconfidence in its ability to consistently grow earnings over time.

The Reserve Bank of India (RBI) through its notification dated 4 December 2020 statedthat in view of the ongoing stress and heightened uncertainty on account of COVID-19banks should continue to conserve capital to support the economy and absorb losses. Thenotification also stated that in order to further strengthen the banks' balance sheetswhile at the same time support lending to the real economy banks shall not make anydividend payment on equity shares from the profits pertaining to the financial year ended31 March 2020. The Bank did not declare any dividend for the year ended 31 March 2020.

Further the Board at its meeting held on 27 April 2021 has considered it prudent tonot propose any dividend for the year ended 31 March 2021 in light of the situationdeveloping around COVID-19 in the country and related uncertainty arising therefrom.

Deposits

Being a banking company the disclosures relating to deposits as required under Rule8(5) (v) & (vi) of the Companies (Accounts) Rules 2014 read with Sections 73 and 74of the Companies Act 2013 are not applicable to the Bank.

Ratings of Various Debt Instruments

The details of all credit ratings obtained by the Bank along with any revisionsthereto during the financial year 2020-21 for all the debt instruments outstanding as on31 March 2021 are disclosed in the Report on Corporate Governance forming part of thisreport.

Board of Directors

During the year the following changes took place in the composition of the Board ofthe Bank:

• Pursuant to the recommendation of the Nomination and Remuneration Committee ofDirectors (the NRC) the Board on 29 April 2020 approved the re-appointment of ShriRakesh Makhija as an Independent Director of the Bank for his second term as such witheffect from 27 October 2020 up to 26 October 2023 (both days inclusive) i.e. up to theexpiry of his tenure of 8 years as a director of the Bank in terms of the provisions ofSection 10A (2A) of the Banking Regulation Act 1949 after taking into account theoutcome of his performance evaluation. The said re-appointment was approved by theShareholders of the Bank at the 26th Annual General Meeting of the Bank held on31 July 2020 by means of a Special Resolution. During the said period Shri RakeshMakhija will not be liable to retire by rotation in terms of the provisions of Section149 (13) of the Companies Act 2013.

• Pursuant to the recommendation of the NRC the Board on 29 June 2020 approvedthe appointment of Shri T.C. Suseel Kumar Nominee of Life Insurance Corporation of India(LIC) Promoter of the Bank as an Additional Non-Executive (Nominee) Director of theBank w.e.f. 1 July 2020 in terms of Article 90 (1) (c) of the Articles of Associationof the Bank

and the provisions of Section 161 of the Companies Act 2013. The said appointment wasapproved by the Shareholders of the Bank by means of an Ordinary Resolution at the 26thAnnual General Meeting of the Bank held on 31 July 2020. Shri T. C. Suseel Kumar shall beliable to retire by rotation in terms of the provisions of Section 152 of the CompaniesAct 2013.

• Pursuant to the recommendation of the NRC the Board on 22 July 2020 approvedthe appointment of Smt. Meena Ganesh as an Independent Director of the Bank for a periodof 4 (four) years with effect from 1 August 2020 up to 31 July 2024 (both daysinclusive). The said appointment was approved by the Shareholders of the Bank by means ofan Ordinary Resolution passed through Postal Ballot on 9 December 2020. During the saidperiod Smt. Meena Ganesh shall not be liable to retire by rotation in terms of theprovisions of Section 149 (13) of the Companies Act 2013.

• Shri Pralay Mondal resigned as the Executive Director (Retail Banking) of theBank with effect from the close of business hours on 14 September 2020. The Board placeson record its appreciation for the contributions made by Shri Pralay Mondal during histenure as the Executive Director (Retail Banking) of the Bank.

• Pursuant to the recommendation of the NRC the Board on 28 October 2020approved the re-appointment of Smt. Ketaki Bhagwati as an Independent Director of theBank for her second term as such from 19 January 2021 up to 18 January 2024 (both daysinclusive) i.e. up to the expiry of her tenure of 8 (eight) years as a Director of theBank in terms of the provisions of Section 10A (2A) of the Banking Regulation Act 1949after taking into account the outcome of her performance evaluation. The saidre-appointment was approved by the Shareholders of the Bank by means of a SpecialResolution passed through Postal Ballot on 9 December 2020. During the said period Smt.Ketaki Bhagwati shall not be liable to retire by rotation in terms of the provisions ofSection 149 (13) of the Companies Act 2013.

• Pursuant to the recommendation of the NRC the Board on 28 October 2020approved the appointment of Shri Gopalaraman Padmanabhan as an Independent Director of theBank for a period of 4 (four) years with effect from 28 October 2020 up to 27 October2024 (both days inclusive). The said appointment was approved by the Shareholders of theBank by means of an Ordinary Resolution passed through Postal Ballot on 9 December 2020.During the said period Shri Gopalaraman Padmanabhan shall not be liable to retire byrotation in terms of the provisions of Section 149 (13) of the Companies Act 2013.

• Pursuant to the recommendation of the NRC the Board on 28 October 2020approved the appointment of Shri Ashish Kotecha as an Alternate Director to Shri StephenPagliuca Non-Executive (Nominee) Director of the Bank with effect from 1 November 2020in terms of the provisions of Section 161 of the Companies Act 2013 the relevant Rulesmade thereunder. The tenure of Shri Ashish Kotecha as an Alternate Director shall beco-terminus with that of Shri Stephen Pagliuca Original Director i.e. up to close of thebusiness hours on 18 December 2021 in terms of the Investor Agreement dated 10 November2017.

• Shri Rohit Bhagat ceased to be an Independent Director of the Bank with effectfrom the close of business hours on 15 January 2021 upon completion of the maximumpermissible tenure of 8 (eight) continuous years in terms of the provisions of Section10A (2A) of the Banking Regulation Act 1949. The Board acknowledges the invaluablecontributions rendered by Shri Rohit Bhagat during his tenure as an Independent Directorof the Bank and places on record its deep appreciation for the insightful perspectives andsuggestions provided by him at the meetings of the Board/Committees of the Bank.

• Shri B. Baburao Nominee of SUUTI Promoter of the Bank resigned as theNon-Executive (Nominee) Director of the Bank with effect from 22 January 2021 pursuantto the guidance received from SUUTI. The Board acknowledges the invaluable contributionsrendered by Shri B. Baburao during his tenure as a Non-Executive (Nominee) Director of theBank and places on record its deep appreciation for the insightful perspectives andsuggestions provided by him at the meetings of the Board/Committees of the Bank.

• Pursuant to the recommendation of the NRC the Board on 27 January 2021approved the appointment of Smt. Vasantha Govindan as an Additional Non-Executive(Nominee) Director (Nominee of SUUTI) of the Bank with effect from the said date and tohold office at such up to the date of the ensuing Annual General Meeting in terms ofArticles 90 (1) (c) of the Articles of Association of the Bank and the provisions ofSection 161 of the Companies Act 2013. Smt. Vasantha Govindan shall be liable to retireby rotation in terms of the provisions of Section 152 of the Companies Act 2013.

• Pursuant to the recommendation of the NRC the Board at its meeting held on 28April 2021 approved the proposals relating to:

• Re-appointment of Shri Amitabh Chaudhry as the Managing Director & CEO ofthe Bank for a further period of 3 (three) years w.e.f. 1 January 2022 up to 31December 2024 (both days inclusive). The terms and conditions relating to the saidre-appointment including remuneration will be placed for review and approval of theBoard at its meeting to be held in May 2021 which shall be subject to the approval ofthe RBI and the Shareholders of the Bank.

• Re-appointment of Shri Rajiv Anand as the Executive Director (Wholesale Banking)of the Bank who is liable to retire by rotation at the ensuing Annual General Meetingand who being eligible had offered himself for re-appointment in terms of the provisionsof Section 152 (6) of the Companies Act 2013.

Resolution(s) in respect of appointment/re-appointment of the Directors as aforesaidhave been included in the Notice convening the 27th Annual General Meeting ofthe Bank. Brief profiles of the said Directors have been annexed to the said Notice.

The Board has formed an opinion that the said Independent Directors who have beenappointed/re-appointed have the integrity expertise and experience (includingproficiency) which is beneficial to the business interest of the Bank.

Selection and Appointment of Directors

The selection and appointment of Directors of the Bank is done in accordance with therelevant provisions of the Companies Act 2013 the relevant Rules made thereunder theBanking Regulation Act 1949 the Guidelines issued by the RBI and the relevant provisionsof the SEBI Listing Regulations relating to Corporate Governance as amended from time totime.

The Bank has formulated and adopted the Succession Planning Policy for the Board ofDirectors and Key Officials of the Bank (the Policy) which has been subjected to anannual review by the NRC and the Board.

The objective of the Policy is to inter alia assess identify and nominate suitablecandidates to fill vacancies that may arise for positions of the Non-ExecutiveChairperson Independent Directors Managing Director & CEO (MD & CEO) Whole-TimeDirectors Group Executives Key Managerial Personnel and other Key officials of theBank/subsidiary companies from time to time to plan for succession of the said roles andto fill any vacancies that may arise out of impending move or retirement or resignation orsudden exit or for any reason whatsoever in such roles incumbent or named successorssignificant changes in role accountabilities substantive changes in the businessparameters and changes to the role holder or successor's aspiration.

The Policy also seeks to identify the competency requirements for the said positionsthe process to identify potential candidates and develop required competencies throughplanned training development and learning initiatives.

The NRC is responsible to the Board for leading the succession planning process inrespect of appointments/re-appointments of Directors employees in the grade of SeniorManagement Key Managerial Personnel and other Key officials of the Bank.

In terms of the Policy only an Independent Director can be considered for the post ofthe Non-Executive (Part-Time) Chairperson of the Bank and the succession planning processfor the post of the Non-Executive (Part-Time) Chairperson/Independent Director is requiredto be initiated 6 (six) months prior to the expiry of their current term or in case ofunforeseen circumstances with immediate effect.

Further the succession planning process for the post of the MD & CEO andWhole-time Directors of the Bank is required to be initiated at-least 9 (nine) monthsprior to the expiry of their current term or their date of retirement or as soon as theBank is informed of the decision of the MD & CEO or the Whole-time Director to resignor opt for an early retirement from the services of the Bank as the case may be or incase of unforeseen circumstances with immediate effect.

The Policy also provides for the course of action to be initiated in case of delay ornon-receipt of regulatory/statutory approvals relating to appointment/re-appointment ofthe MD & CEO or the Whole-time Director of the Bank or in case of a sudden vacancy inthe position of MD & CEO or the Whole-time Director of the Bank caused due to deathor permanent incapacitation or for any other reason whatsoever.

The NRC considers the skill set knowledge regional and industry experience trackrecord expertise and other relevant information and adherence to the fit and proper normsby each Director before making appropriate recommendations to the Board with regard totheir appointment/re-appointment which is designed to provide the Board with Members whohave diverse knowledge practical experience and requisite set of skills to serve thebusiness interests of the Bank and enhance the overall effectiveness of the Board.

Wherever necessary the NRC engages the services of an External Consultant/expert inthe field of succession planning to identify and assess the suitability of candidates forthe post of a Director of the Bank.

The Bank has also formulated and adopted the Policy on 'Fit and Proper Criteria toenable the NRC to assess and confirm to the Board that the person who is considered forbeing appointed/re-appointed as a Director of the Bank is compliant with the Fit andProper norms as prescribed by the RBI and the relevant provisions of the Companies Act2013 the SEBI Listing Regulations the Banking Regulation Act 1949 and the Guidelinesissued by IRDAI and as such is suitable to be appointed/re-appointed as a Director of theBank and recommend the same for the approval of the Board.

In terms of the said Policy the NRC assesses the 'Fit and Proper' status of theDirector before considering his candidature for appointment/re-appointment as a Directorof the Bank and annually i.e. as at 31st March every year.

The Directors of the Bank also sign the deed of covenants which binds them to dischargetheir responsibilities to the best of their abilities individually and collectively inorder to be eligible for being appointed/re-appointed as a Director of the Bank.

The prescribed information as stated in the forms/declarations/undertakings/consentgiven by the Directors (other than that of the Members of the NRC) are placed before theNRC and those submitted by the Members of the NRC are placed before the Board for itsreview and confirmation as aforesaid.

Policy on training for Board of Directors

The Bank has formulated and adopted the Policy on Training for Board of Directors (thePolicy) which aims at providing timely and wholesome orientation and training to itsDirectors to ensure that they are well versed with the business regulatory andoperational aspects of Banking.

The said Policy covers the following:

(i) Induction Program to be conducted for the Directors on their appointment on variousaspects relating to business and operations of the Bank.

(ii) Familiarization program to be conducted for Directors to familiarize them interalia with the Bank their roles rights responsibilities in the Bank nature of industryin which the Bank operates and the business model of the Bank.

(iii) Continuous Education and Learning Program which includes trainingprograms/sessions involving reputed consulting firms/experts with in-depth expertise invarious areas taking into account the business requirement of the Bank the existing skillsets of the Directors and recommendations made by them.

Declaration of Independence

All the Independent Directors of the Bank have submitted the requisite declarationsstating that they meet the criteria prescribed for independence under the provisions ofSection 149 (6) of the Companies Act 2013 and Regulation 16 of the SEBI ListingRegulations which were placed before the Board. The Board has confirmed and taken onrecord the declaration of Independence provided by the Independent Directors afterundertaking due assessment of the veracity of the same. In the opinion of the Board allthe Independent Directors fulfil the conditions specified under the said norms and areindependent of the Management.

Certificate from a Company Secretary in Practice

In terms of Regulation 34(3) read with Schedule V of the SEBI Listing Regulations theBank has obtained a Certificate from BNP & Associates Practising Company Secretariesconfirming that none of the Directors on the Board of the Bank have been debarred ordisqualified from being appointed or continuing as Directors of the companies either bythe Securities and Exchange Board of India or the Ministry of Corporate Affairs or anyother Statutory/Regulatory Authorities. The said certificate is annexed as part of thisreport.

Key Managerial Personnel

Shri Amitabh Chaudhry Managing Director & CEO Shri Rajiv Anand ExecutiveDirector (Wholesale Banking) Shri Rajesh Dahiya Executive Director (Corporate Centre)Shri Puneet Sharma President & Chief Financial Officer and Shri Girish V. KoliyoteCompany Secretary are the Key Managerial Personnel of the Bank in terms of Section 203(1)read with Section 2(51) of the Companies Act 2013 and Rule 8 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

Board Performance Evaluation

The Companies Act 2013 and the SEBI Listing Regulations relating to CorporateGovernance provides for evaluation of the performance of the Board its Committeesindividual Directors and the Chairperson of a company.

The Bank has institutionalised the Board Performance Evaluation Process. The NRC is thenodal agency for conducting the said performance evaluation. The NRC annually reviews andapproves the criteria and the mechanism for carrying out the exercise effectively.

The methodology used for the annual Board Performance Evaluation the outcome progressmade over last year and the proposed action for implementation during the financial year2021-22 is provided in the Report on Corporate Governance which forms part of thisreport.

Meetings of the Board/Committees

The schedule in respect of the meetings of the Board/Committees to be held during thenext financial year and for the ensuing Annual General Meeting is circulated in advance toall the Members of the Board. During the year 8 meetings of the Board were held and thegap between the said meetings did not exceed the limit of 120 days as prescribed underthe relevant provisions of the Companies Act 2013 the relevant Rules made thereunder andthe SEBI Listing Regulations relating to Corporate Governance.

Audit Committee of Board

The composition role and functions of the Audit Committee of Board (ACB) of the Bankis disclosed in the Report on Corporate Governance which forms part of this report.

Remuneration Policy

The Bank has formulated and adopted the Remuneration Policy for Non-ExecutiveChairperson and Non-Executive Directors of the Bank and the Remuneration Policy for theManaging Director & CEO Whole-time Directors Material Risk Takers Control FunctionStaff and other employees of the Bank (the Policies) in terms of the relevant provisionsof Section 178 of the Companies Act 2013 the relevant Rules made thereunder the SEBIListing Regulations relating to Corporate Governance and the Guidelines issued by the RBIin this regard.

During the year the said Policies were reviewed and approved by the NRC and the Board.

The details of the said Policies have been disclosed in the Report on CorporateGovernance which forms part of this report. The said Policies have been hosted on thewebsite of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/Compliance-Report in terms of the SEBI Listing Regulations.

Whistle Blower Policy and Vigil Mechanism

The details of the Whistle Blower Policy and Vigil Mechanism of the Bank have beendisclosed in the Report on Corporate Governance which forms part of this report.

Subsidiaries Joint Ventures and Associates

As on 31 March 2021 the Bank has the following nine unlisted subsidiary companies andone step down subsidiary;

i) Axis Asset Management Company Limited undertakes the activities of managing themutual fund business.

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

iii) Axis Capital Limited provides services relating to investment banking equitycapital markets institutional stock broking mergers and acquisition advisory etc.

iv) Axis Finance Limited is an NBFC and carries on the activities of corporate andstructural lending loan against property etc.

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

vi) A.TREDS Limited is engaged in the business of facilitating financing of tradereceivables.

vii) Axis Trustee Services Limited is engaged in trusteeship activities acting asdebenture trustee and as trustee to various securitisation trusts.

viii) Freecharge Payment Technologies Private Limited is in the business of providingMerchant acquiring services payment aggregation services payment support services andbusiness correspondent to a Bank/Financial Institution distribution of Mutual Funds.

ix) Axis Bank UK Limited is the banking subsidiary of the Bank in the United Kingdomand undertakes the activities of banking.

x) Axis Capital USA LLC is a wholly owned subsidiary of Axis Capital Limitedincorporated in USA and provides financial services relating to equity capital marketinstitutional stock broking to institutional investors in USA.

Merger of Freecharge Payment Technologies Private Limited (FCPTL) and AccelystSolutions Private Limited (ASPL)

On 27 March 2018 the Board of Directors of ASPL and FCPTL had approved a Scheme forAmalgamation of ASPL into and with FCPTL. ASPL and FCPTL filed the final petition forapproval of the said merger before the National Company Law Tribunal ('NCLT'). Theappointed date for amalgamation is 7 October 2017 and the effect of the said merger wasto be given on this date or any other date as may be prescribed by the NCLT. Subsequent tothe final hearing in the matter conducted during the year FCPTL received the copy of theorder approved by NCLT Delhi and the same was filed with the Ministry of Company Affairsin November 2019.

However in the case of ASPL NCLT Mumbai amended the appointed date of amalgamationfrom 7 October 2017 to 1 April 2018. Since the Scheme of Amalgamation filed by the FCPTLwas already approved by NCLT Delhi with the appointed date of 7 October 2017 the orderof NCLT Mumbai sanctioning the Scheme of Amalgamation could not be implemented due todiscrepancy in the appointed date as aforesaid. Therefore ASPL filed an application on10 September 2020 in NCLT Mumbai to amend the appointed date from 1 April 2018 to 7October 2017 as originally and mutually decided by FCPTL and ASPL and as mentioned in thesaid Scheme of Amalgamation. However since NCLT Mumbai was disinclined to grantamendment ASPL then filed an appeal before the National Company Law Appellant Tribunal(NCLAT) and withdrew application which was filed in NCLT Mumbai.

NCLAT vide its order dated 24 March 2021 has allowed ASPL's appeal thereby settingaside the order of NCLT Mumbai. As such the said merger will be given effect from 7October 2017. The NCLT Delhi had already approved the scheme of merger on 22 October2019. The said merger will be effective from the date of filing of certified copy of theOrder of NCLAT with Registrar of Companies.

Accordingly accounting impact of the said Scheme has been considered in theconsolidated financial statements as at 31 March 2021.

Merger of Axis Finance Limited and Axis Private Equity Limited

Axis Private Equity Limited has been merged with Axis Finance Limited. The scheme ofmerger with Axis Finance Limited has been approved by NCLT Mumbai and the certified copyof the order was received on 23 July 2020 and approval of the Ministry of CorporateAffairs (MCA) was received on 2 September 2020.

Sale of Axis Bank UK Limited

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 Limited UnitedKingdom. This transaction is subject to approval of the UK Financial Regulator thePrudential Regulation Authority (PRA).

Consolidated Financial Statements

In accordance with the provisions of Section 129(3) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 as amended the Bank has prepared itsconsolidated financial statements which forms part of this report. The financial positionand performance of each of the Bank's subsidiary companies is given in the ManagementDiscussion & Analysis Report and the statement containing the salient features of thefinancial statements of the said subsidiary companies of the Bank which is annexed tothis report.

In accordance with the third proviso to Section 136(1) of the Companies Act 2013 theAnnual Report of the Bank containing therein its standalone financial statements and theconsolidated financial statements and all other documents required to be attached theretohave also been hosted on the website of the Bankhttps://www.axisbank.com/shareholders-corner/shareholders- information/annual-reports.

Further in accordance with the fourth proviso to the said section the audited annualaccounts of each of the said subsidiary companies of the Bank have been hosted on thewebsite of the Bank https://www.axisbank.com/shareholders-corner/shareholders-information/annual-reports.

Any shareholder interested in obtaining a physical copy of the said financialstatements may write to the Company Secretary at the Registered Office of the Bank.Further please note that the said financial statements will also be available forinspection by the shareholders of the Bank and Trustees of Debenture holders at theRegistered Office of the Bank during business hours from 11.00 a.m. to 1.00 p.m. on allworking days except Saturdays Sundays Bank Holidays and National Holidays.

Related Party Transactions

During the year the Bank has not entered into any materially significant transactionswith its Promoters Directors Management Subsidiaries or Relatives of theDirectors/Management which could lead to potential conflict of interest between the Bankand these parties other than transactions entered into in the ordinary course of itsbusiness.

Transactions entered into by the Bank with related parties in the normal course of itsbusiness were placed before the ACB. There were no transactions entered with relatedparties which were not in the normal course of the business of the Bank nor were thereany transactions with related parties or others which were not on an arm's length basis.Accordingly Form AOC-2 is not applicable to the Bank. A statement giving details of allrelated party transactions entered pursuant to the omnibus approval so granted is placedbefore the ACB for their review. The Bank has developed a Standard Operating Procedure forthe purpose of identifying and monitoring such transactions.

The Policy on Related Party Transactions has been reviewed by the Audit Committee andthe Board and the same has been hosted on the website of the Bank athttps://www.axisbank.com/shareholders-corner/corporate-governance/ in terms of the SEBIListing Regulations relating to Corporate Governance.

Employee Stock Option Plan (ESOP)

Since the financial year 2000-01 the Bank has formulated and adopted Employee StockOption Schemes (ESOS) for the benefit of the eligible Employees/Managing Director &CEO and Whole Time Directors of the Bank and that of its subsidiary companies("eligible Employees/Directors") in terms of the Securities and Exchange Boardof India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines1999/Securities and Exchange Board of India (Share Based Employee Benefits) Regulations2014 as amended. The objective of the said ESOS is to enhance employee motivation enableemployees to participate directly or indirectly in the long-term growth and financialsuccess of the Bank to act as a retention mechanism by enabling employee participation inthe business of the Bank as its active stakeholder and to usher an Rs.owner-manager'culture and to achieve greater synergy between the Bank and the subsidiary companies.

In terms of the ESOS as on 31 March 2021 up to 265087000 stock options areavailable for grant by the Bank to the eligible Employees/Directors of the Bank and thatof its subsidiary companies. The eligibility and number of stock options to be granted tosuch eligible Employees/Directors is determined on the basis of the outcome of theirperformance evaluation and such other criteria as may be approved by the NRC/Board fromtime to time.

During the period from February 2001 to January 2019 the Shareholders of the Bank hadapproved the grant of stock options as aforesaid on seven occasions. Under the first twoESOS of the Bank and in respect of the grant of stock options made by the Bank up to 29April 2004 the option conversion price was set at the average of the daily high-lowprice of the Bank's equity shares traded during the 52 weeks preceding the date ofapproval of grant by the Board/NRC prevailing on the Stock Exchange which had the maximumtrading volume of the Bank's equity share during the said period. Thereafter under thethird and subsequent ESOS of the Bank and in respect of the said grants made by the Bankon or after 10 June 2005 the stock option conversion price was changed to the latestavailable closing price of the equity shares of the Bank prevailing on the Stock Exchangewhich recorded higher trading volume on the day prior to the date of approval of grant bythe NRC.

Pursuant to the sub-division of the equity shares of the Bank the Shareholders of theBank at the 20th Annual General Meeting held on 27 June 2014 also approvedthe consequential adjustments to the stock options granted to the eligibleEmployees/Directors under the various ESOS of the Bank such that all stock optionsavailable for grant (including lapsed and forfeited options available for reissue) andthose already granted but not vested and those vested but not exercised as on the recorddate fixed for the purpose of sub-division were proportionately converted into optionsbearing equity shares of the face value of Rs.2/- each of the Bank and the grant price ofall the outstanding stock options (unvested vested and unexercised) as on the said recorddate for the purpose of sub-division were proportionately adjusted by dividing theexisting grant price by 5. The record date for the said sub-division was 30 July 2014.

Since 24 February 2001 up to 31 March 2021 the NRC/Board had out of the said265087000 stock options approved the grant of 294796853 stock options (including30410573 stock options which had lapsed and were forfeited) to the eligibleEmployees/Directors in terms of the various ESOS of the Bank. The said stock options arenon-transferable and vest at rates of 30% 30% and 40% on each of three successiveanniversaries following the date of respective grant subject to standard vesting andother conditions as set out in the respective ESOS of the Bank. The said stock options arerequired to be exercised by the concerned eligible Employees/Directors within a period offive years from the date of its respective vesting in terms of the respective ESOS ofthe Bank.

As of 31 March 2021 out of the said 294796853 stock options so granted237538932 stock options have been vested out of which 212476626 stock options havebeen exercised and the balance 25062306 stock options remain unexercised. Further26847348 stock options remained unvested and 30410573 stock options had been treatedas lapsed and forfeited.

During the year the Bank has granted stock options to the eligible employees/directorsof the Bank and that of its subsidiary companies in terms of the ESOS duly reviewed andapproved by the NRC in terms of the provisions of the SEBI (Share Based EmployeeBenefits) Regulations 2014 as amended.

Statutory disclosures as mandated under the provisions of Regulation 14 of the SEBI(Share Based Employee Benefits) Regulations 2014 as amended have been hosted on thewebsite of the Bank at https://www.axisbank.com/shareholders-corner/corporate-governance/compliance-report.

Corporate Governance

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

The Quarterly Report on Corporate Governance has been submitted by the Bank to theStock Exchanges in terms of Regulation 27(2) of the SEBI Listing Regulations. The saidreports have been uploaded on the website of the Bank athttps://www.axisbank.com/shareholders-corner/corporate-governance/quarterly-reports.

The Report on Corporate Governance for the financial year 2020-21 along with theCertificate issued by the Statutory Auditors of the Bank confirming compliance with themandatory requirements relating to Corporate Governance as stipulated under Chapter IV ofthe SEBI Listing Regulations forms part of this report.

The Corporate Governance framework of the Bank incorporates all the mandatoryrequirements as prescribed in the SEBI Listing Regulations. The Bank has also adopted thenon-mandatory requirements as recommended in the SEBI Listing Regulations as detailed inthe Report on Corporate Governance which forms part of this report.

Information under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Bank has complied with the provisions relating to the constitution of InternalCommittee under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The information relating to complaints received and redressed duringthe financial year 2020-21 is disclosed in the Report on Corporate Governance which formspart of this report.

Directors' Responsibility Statement

The Board of Directors of the Bank hereby declares and confirms the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:

a) That in the preparation of the annual accounts for the financial year ended 31March 2021 the applicable accounting standards had been followed along with properexplanation relating to material departures.

b) That such accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Bank as at 31 March 2021 and of theprofit of the Bank for the year ended on that date.

c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Bank and for preventing and detecting fraud and otherirregularities.

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

e) That internal financial controls to be followed by the Bank were in place and thatthe same were adequate and were operating effectively.

f) That proper system to ensure compliance with the provisions of all applicable lawswas in place and the same were adequate and operating effectively.

Annual Return

The Annual Return will be uploaded on the website of the Bank as mandated underSection 92 (3) read with Section 134 (3) of the Companies Act 2013 and the same can beaccessed at https://www.axisbank.com/shareholders-corner/shareholders-information.

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 respectof Directors/Employees of the Bank is provided as an annexure to this report.

As on 31 March 2021 the Bank had sixty nine (69) employees who were employedthroughout the year and were in receipt of remuneration of more than Rs.1.02 crores perannum and seventeen (17) employees of the Bank who were employed for part of the year andwere in receipt of remuneration of more than Rs.8.50 lacs per month.

In terms of Section 136 of the Companies Act 2013 the copy of the financialstatements of the Bank including the consolidated financial statements the auditor'sreport and relevant annexures to the said financial statements and reports are being sentto the Members and other persons entitled thereto excluding the information in respect ofthe said eighty six (86) employees of the Bank containing the particulars as specified inRule 5 (2) of the said Rules which is available for inspection by the Members at theRegistered Office of the Bank during business hours of the Bank up to the date of theensuing Annual General Meeting.

Any Member interested in obtaining a copy thereof may write to the Company Secretaryof the Bank at its Registered Office or at shareholders@axisbank.com .

Conservation of Energy & Technology Absorption:

Conservation of Energy

i) The steps taken by the Bank are as follows:

(a) Solar Roof top/on Ground Installations across select Branches/Offices aggregating~ 7.05 MW. IOT (Internet of Things) based monitoring of power generated through solarplants across rooftop over 245 branch locations.

(b) Solar power purchase under Power Purchase Agreement (PPA) Model for Banks BusinessContinuity Centre (Data Centre) Bangalore ~ 3.50 lacs units p.m.

(c) Centralised Energy Management System (CEMS) augmented to 1493 branches fromearlier 893 branches to monitor and control energy consumption.

(d) Attain Green Building standard ratings by Indian Green Building Council (IGBC) forGreen Energy at Axis House Mumbai and Axis House Noida by implementing the necessarymeasures for Energy and operational Efficiency.

(e) Procure 100% Green Power (RE) through Electricity Board (Maharashtra) for largeoffices wherever feasible.

(f) Implement usage of Lithium based Battery Backup for all new UPS installations andexisting replacements.

(g) Implement usage of Invertor Based Air conditioning machines for all Metro and UrbanBranches and use of R32 gas for all Air conditioning installations.

(h) Replacement of conventional lighting to LED lights for all balance Branches withinFY 22.

(i) On Grid Inverter Solution to reduce diesel consumption in rural branches augmentedto 260 branches from earlier 100 branches. Estimated savings in Diesel consumption worksout to ~2.22 lacs litres per annum.

(j) Maintenance of unity power factor through APFC panels in auto mode for optimum useof power at Axis House Mumbai and Noida.

(k) Installation of Motion sensors for workstations and common area lighting at AxisHouse Mumbai Regional Office Bengaluru. Introduce Motion sensor-based lighting inupcoming Branches and Offices.

(l) Conversion of Food/Wet waste at Axis House Mumbai into manure through compostmachine for use in landscaping/gardening.

(m) Electrical Vehicle Charging facility at Large buildings Axis House Mumbai &Noida MIDC Andheri.

(n) Re-cycling of Dry waste at Axis House Mumbai into stationery items like notepads.

(o) Daily re-cycling of 150 KL of water through Sewage Treatment Plant at Axis HouseMumbai.

(p) Reduction of water consumption at Axis House Mumbai through use of aerators.

(q) Rain Water Harvesting of ~2000 KL of water yearly at Axis House Mumbai.

(r) Savings of water consumption by use of Sensors/Bio-blocks in urinals at SelectLarge Offices.

(s) Installation of sensors in washbasins to optimise flow of water at Select LargeOffices.

ii) Capital Investments on Energy Conservation Initiatives:

(a) Rs.44 crores on Solar Plant installations

(b) Capital Investment incurred of ~ Rs.79 Lacs towards implementation of On GridInverter across rural Branches.

(c) LED light replacement project has been undertaken under amortization model overperiod of 5 years. 1.75 crores p.a. for 5 years

(d) CEMS project is on saving and sharing Model basis.

(e) Capital investment incurred of ~ Rs.71.63 Lacs towards implementation of Internetof Thing (IoT) based remote solar monitoring across 245 Branches.

(f) Expected additional investments ~ Rs.5 crore for Invertor based AC and UPS withLithium Battery for upcoming new Branches/Offices.

Technology Absorption

i) The efforts made towards technology absorption:

With the objective of making banking simple and hassle-free for customers the Bank hasundertaken various technology driven business initiatives to deliver value throughcontinuous technology adoption and innovation. During the year a large scale ITtransformation was undertaken to strengthen Bank's technology capabilities further.

(a) Following the COVID-19 pandemic the Bank has prioritized initiatives across itsdigital channels to cope with the change in customer engagement. The Bank has alreadydelivered products such as ASAP a/c opening full Video KYC capability for accountopening PPF account openings Mutual fund KYC digital collections on its digitalplatforms to improve customer experience.

(b) The Bank actively encouraged large scale Work-From-Home mandate and provided allenablement necessary to support its employees to efficiently perform their duties. TheBank triggered enterprise mobility and collaborative tools like MS Teams and Intuneramped up VPN/VDI capacity quick provisioning and allocation of laptops across allcritical employees. In order to provide employees the convenience of using their personaldevices for sales and servicing activities the Bank rolled out BYOD compatibleapplications across products and businesses.

(c) The Bank has embarked on a transformation journey that cuts across all aspects ofIT function and focuses on areas like Engineering excellence - Agility and DevOps Channelarchitecture - Omni-channel experience Application & data architecture - applicationupgrade & advanced analytics capabilities advancement of enterprise integration andstandardized & virtualized infrastructure.

(d) While pushing to deliver new customer facing products the Bank has alsostrengthened its infrastructure to maintain high performance and availability standardsexpected by customers and regulators. The Bank is re-architecting its technologyinfrastructure to be Cloud native allowing the necessary agility speed and flexibilityfor scale. The Bank has a multi-cloud set up that is supported by a strong governance toidentify applications that benefit from going to cloud right sizing exercises andimplementation of right cost controls while continuing to focus on security.

(e) The Bank continues to re-invent and re-invest in technologies including mobilitycognitive intelligence application programming interface (API) banking Robotic ProcessAutomation and Artificial Intelligence/Machine Learning to develop winning propositionsfor its customers. In order to drive seamless integration with partners Bank's Open APIplatform has been further enhanced to onboard partners thereby generating more businessand driving volumes. The Bank has scaled the adoption of robotics process automation andArtificial Intelligence/Machine Learning augmenting operational efficiency higheraccuracy and reduction in processing time while serving customers.

(f) The Bank has also undertaken a transformation journey to make the IT teamfuture-ready. The transformation program will build the foundation for becomingbest-in-class across key areas. The transformation program focuses on achieving 4 keyoutcomes - a) deliver tech products faster b) enable critical capabilities c) improveresilience d) optimize expenditure across engineering excellence channel architectureintegration automation infrastructure etc. The Bank has seen significant progress acrossthe targeted outcomes as it continues to build on the initial success.

(g) The Bank continues to pursue a holistic cyber security program with a comprehensiveCyber Security Policy and Standards based on industry best practices in compliance withregulatory guidelines. The Bank has deployed its cyber security structure and frameworkbased on National Institute of Standards and Technology (NIST) Standard. The Bank's cybersecurity framework is built and operated around five fundamental areas including IdentifyProtect Detect Respond and Recover. The Bank is compliant to ISO27001 and PCIDSSstandards. The Bank has a 24x7 Security Operations Centre and Cyber Security OperationsSystem.

(h) The Bank has deployed Cyber Security controls to protect its information assetsfrom unauthorized access hacking attempts data loss and has implemented variousdetection and monitoring technologies to proactively detect and respond to any cyberthreats. Some of the controls are as follows:

a) Multifactor authentication has been enabled for users connecting through Remoteaccess.

b) Secure and isolated environment for Remote access to critical systems wereconfigured to prevent sensitive data leak or unauthorized access.

c) Advanced End-Point controls and Data Leakage Prevention (DLP) control to detect andprevent endpoints being target of cyber-attacks.

d) Spam and Phishing emails protection have been enabled to protect against email-basedcyber-attacks that were rampant during the pandemic.

Directors' Report

e) 24x7 security monitoring along with usage of Cyber Security Threat Intelligence todetect malicious underground activities against the Bank.

f) In addition the above controls; the Bank has also enabled enhanced monitoring forRemote users to detect and prevent; any Unauthorized and unusual remote access Useraccess to Bank systems from unusual geographies Concurrent user access from differentlocations etc. and Data Leakage monitoring for Web channel Email channel and End Points.

ii) The benefits derived like product improvement cost reduction product developmentor import substitution:

In addition to focusing on developing new age technology products the Bank continuesto strengthen its core systems and applications with planned upgrades. The infrastructureis also being upgraded to deliver improved resiliency. The Bank is also exploring opensource products and platforms to provide reliability and flexibility without adding asignificant cost of licensing and support. With initiatives such as IntelligentAutomation the Bank has created Bot store and AI model store which have led to FTE costsavings TAT & error reduction.

iii) In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year):

(a) The details of technology imported

1. No hardware procurements have been made in foreign currency.

2. Software licenses and upgrades have been procured over the past 3 financial yearsdetailed as under.

(b) The year of import:

The details for the Financial Years 2018-19 2019-20 and 2020-21 are provided below:

PO Issue Year Currency Paid Amount
18-19 USD 1800702.00
19-20 USD 1700382.96
20-21 USD 786852.00
Total 4287936.96

(c) Whether the technology been fully absorbed:

All licenses procured have been put to use.

(d) If not fully absorbed areas where absorption has not taken place and the reasonsthereof:

NA.

The expenditure incurred on Research and Development: Nil Foreign Exchange Earning andOutgo

The provisions relating to Section 134(3)(m) of the Companies Act 2013 on particularsrelating to Foreign Exchange Earning and Outgo are not applicable to a Banking Company assuch no disclosure is being made in this regard.

Management's Discussion and Analysis Report

The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34(2) (e) of the SEBI Listing Regulations is provided as anannexure to this report.

Risk Management

Pursuant to Regulation 21 of the SEBI Listing Regulations the Bank has constituted aRisk Management Committee. The details of the said Committee and its terms of referenceare set out in the Report on Corporate Governance which forms part of this report.

The Bank has formulated and adopted a robust Risk Management Framework. Whilst theBoard is responsible for framing implementing and monitoring the Risk ManagementFramework it has delegated its powers relating to monitoring and reviewing of risksassociated with the business of the Bank to the said Committee. The details of the RiskManagement Framework and issues related thereto have been explained in the Management'sDiscussion and Analysis Report which is provided as an annexure to this report.

Business Responsibility Report

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations top 1000 listedentities based on their market capitalisation as on 31 March every year are required tosubmit their Business Responsibility Report (BRR) as a part of their Annual Report. TheBank's BRR describing the initiatives taken by the Bank from an Environmental Social andGovernance perspective has been hosted on the website of the Bank athttps://www.axisbank.com/shareholders-corner/shareholders-information/business-responsibility-report. Any Member interested in obtaining a copy of the BRR may write tothe Company Secretary of the Bank at shareholders@axisbank.com or submit a written requestto the Registered Office of the Bank.

Particulars of Loans Guarantees and Investments

Pursuant to Section 186(11) of the Companies Act 2013 the provisions of Section 186of the Companies Act 2013 except sub-section (1) do not apply to a loan made guaranteegiven 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 theFinancial Statements as per the applicable provisions of the Banking Regulation Act 1949.

Corporate Social Responsibility

The Bank has constituted the Corporate Social Responsibility (CSR) Committee of theBoard in compliance with the relevant provisions of Section 135 of the Companies Act2013 read with the Companies (Corporate Social Responsibility Policy) Amendment Rules2021 which was notified by the Ministry of Corporate Affairs (MCA) on 22 January 2021(revised CSR norms).

The Board at its meeting held on 28 April 2021 reviewed and approved the CSR Policy ofthe Bank formulated and adopted in terms of the revised CSR norms as recommended by theCSR Committee.

The CSR Policy contains the approach and guidance given by the Board taking intoaccount the recommendations of the CSR Committee including principles for selectionimplementation and monitoring of the CSR Project(s)/Program(s) and formulation of theAnnual Action Plan. The CSR Policy has been hosted on the website of the Bank athttps://www.axisbank.com/csr

The brief outline of the CSR Policy overview of the CSR Project(s)/Program(s)undertaken by the Bank composition of the CSR Committee details of Impact assessmentconducted details of the amount available for set off average net profits of the Bankfor the past three financial years prescribed CSR obligation and expenditure details ofthe amounts spent or unspent by the Bank on CSR activities during the year under reviewdetails of creation or acquisition of capital asset etc. in line with the revised CSRnorms have been provided as an annexure to this report.

Plan and Status of IND AS Implementation

The RBI had issued a circular in February 2016 requiring banks to implement IndianAccounting Standards (Ind AS) and prepare standalone and consolidated Ind AS financialstatements with effect from 1 April 2018. Banks were also required to report thecomparative financial statements for the financial year 2017-18 to be published alongwith the financial statement for the year beginning 1 April 2018. However the RBI in itspress 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 on22 March 2019 has deferred the implementation of Ind AS till further notice.

In line with the RBI guidelines on Ind AS implementation the Bank has formed aSteering Committee comprising members from the concerned functional areas headed by theExecutive Director (Wholesale Banking). A quarterly progress report on the status of IndAS implementation in the Bank is presented to the Audit Committee. During the financialyear 2016-17 the Bank had undertaken a preliminary diagnostic analysis of the GAAPdifferences between Indian GAAP vis-a-vis Ind AS.

The Bank has also identified and evaluated data gaps processes and system changesrequired to implement Ind AS. The Bank is in the advanced stage of implementing necessarychanges in its IT system and other processes. The Bank has been holding workshops andtraining for its staff which will continue in the current year. The Bank is submittingProforma Ind AS financial statements to RBI on a quarterly basis. The Bank is alsoexamining impact of Ind AS on business planning budgeting taxation capital planning andon capital adequacy.

Statutory Auditors

At the 24th Annual General Meeting of the Shareholders of the Bank held on20 June 2018 M/s Haribhakti & Co. LLP Chartered Accountants Mumbai (MembershipNumber 103523W/W100048) were appointed as the Statutory Auditors of the Bank to holdoffice as such from the conclusion of the 24th Annual General Meeting until theconclusion of the 28th Annual General Meeting subject to the approval of theReserve Bank of India and on such remuneration as may be approved by the Audit Committee.

On 27 April 2021 the RBI issued a Circular on appointment of Statutory Auditors interms of Section 30 (1A) of the Banking Regulation Act 1949 which is effective from thefinancial year 2021-22. In terms of the said Circular the statutory audit of Banks withasset size of Rs.15000 crore and above as at the end of 31 March 2021 shall beconducted under joint audit by a minimum of two audit firms. Further in order to protectthe independence of the Statutory Auditor banks can appoint auditors for a continuousperiod of three years subject to the firms satisfying the eligibility norms every year.

The Board of Directors have taken note of the aforesaid circular and advised themanagement to assess the implications on the Bank. The Board will review and approve thisitem and ensure compliance with the substantive/procedural requirements of this directiveand/or clarifications general or specific if any issued by RBI in this matter at asubsequent board meeting and also finalise the contents of the AGM notice in relation tothis item at its subsequent meeting.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the relevantprovisions of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Bank had appointed M/s BNP & Associates Company Secretaries Mumbai to actas the Secretarial Auditor of the Bank for the financial year 2020-21.

The secretarial audit of the Bank was conducted in respect of the matters as prescribedin the said Rules and set out in the Secretarial Audit Report for the financial year2020-21 which is provided as an annexure to this report.

There are no qualifications reservations or adverse remarks made by the SecretarialAuditor of the Bank in its report. However the Secretarial Auditor has made anobservation with respect to payment of an amount of Rs.41.43 lacs to the Securities andExchange Board of India (SEBI) to settle the matter in respect of an alleged default underRegulation 7(2)(b) of the SEBI (Prohibition of Insider Trading) Regulations 2015.

The Bank on 4 January 2021 had received a Summary Settlement Notice dated 28December 2020 from SEBI in relation to the alleged default under Regulation 7(2)(b) ofthe SEBI (Prohibition of Insider Trading) Regulations 2015. The Bank has withoutadmitting or denying the findings of facts and conclusions of law submitted a settlementapplication on 29 January 2021 to SEBI in accordance with the provisions of the SEBI(Settlement Proceedings) Regulations 2018 and paid the settlement amount of Rs. 41.43lacs.

Pursuant to which SEBI passed a Settlement Order on 15 February 2021 (the SettlementOrder) and the proposed proceedings to be initiated for the alleged default has beendisposed off and the matter stands settled.

In terms of SEBI circular no CIR/CFD/CMD1/27/2019 dated 8 February 2019 relating toAnnual Secretarial Compliance Report the Bank had appointed M/s. BNP & AssociatesCompany Secretaries to conduct the Secretarial Compliance for the financial year 2020-21.The Bank will submit the Annual Secretarial Compliance Report to the Stock Exchangeswithin the prescribed time limit.

Maintenance of Cost Records

Being a banking company the Bank is not required to maintain cost records under theprovisions of Section 148(1) of the Companies Act 2013.

Reporting of Frauds by Auditors

During the financial year 2020-21 pursuant to Section 143(12) of the Companies Act2013 neither the Statutory Auditors nor the Secretarial Auditor of the Bank have reportedany instances of frauds committed in the Bank by its officers or its employees.

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

During the financial year 2020-21 no significant and/or material order was passed byany Regulator Court or Tribunal against the Bank which could impact its going concernstatus or its future operations.

Adequacy of Internal Financial Controls related to Financial Statements

The Board has inter alia reviewed the adequacy and effectiveness of the Bank's internalfinancial controls relating to its financial statements.

The Board has discussed with the Management of the Bank the major financial riskexposures and the steps taken by it to monitor and control such exposures overseen andreviewed the functioning of the Whistle Blower Mechanism (which is a part of the Bank'sFraud Risk Management Policy) and the findings in respect of the investigations conductedon frauds which were material in nature and the actions taken by the Management in thisregard.

CEO & CFO Certification

Certificate issued by Shri Amitabh Chaudhry Managing Director & CEO and ShriPuneet Sharma President & CFO of the Bank for the financial year ended 31 March2021 was placed before the Board at its meeting held on 27 April 2021 in terms ofRegulation 17(8) of the SEBI Listing Regulations.

Material Changes and Commitments affecting the Financial Position of the Bank

There are no material changes and commitments which affected the financial position ofthe Bank which occurred between the end of the financial year of the Bank to which thefinancial statements relate and up to the date of this report.

Measures taken to counter Covid-19 Pandemic

The Board acknowledges the role of the front-line staff who despite the challengesfaced due to the outbreak of COVID - 19 Pandemic ensured continuity in the operations ofthe Bank.

The Bank on its part undertook series of pro-active steps right from the inception ofthe COVID - 19 Pandemic crisis. The framework of proactive action has been focused onreducing the heightened risks arising out of the COVID - 19 Pandemic across all facets ofrisks impacting the business - safety of staff and business continuity from operationalrisk likely impact on asset quality from credit risk trading risk due to sharp change inunderlying risk factors in the investment book liquidity pressure owing to change in theperception of borrower on cash flows as well as deposit withdrawals owing to disruptionsunder civic lockdown etc.

The actions have been taken on the following five fronts:

(a) Protecting people - issuing and implementing advisories around staff healthhygiene and safe working environment in offices and branches quarantine & socialdistancing etc. This has been further enhanced by a flexible and responsive stance whichis aligned with the evolving situation on the ground especially in the context of thesecond wave local authority requirements etc. During the second wave under thedirections of Central Emergency Response Team (CERT) a war room was set up to ensure helpis provided for hospitalisation medicine and other support including oxygen concentratorsand a comprehensive resource guide "With You" was made available. Further toprotect our employees CERT deployed a vaccination program in partnership for all ourstaff members.

(b) Ensuring continuity - testing and deploying business continuity plans includingdriving and scaling up work-from-home initiative. Business operations and availability ofchannels such as branches contact centres and ATM have been monitored closely.Introduction of Covid framework to facilitate smooth customer transactions even duringlockdown by keeping the risks at acceptable levels.

(c) Protecting operations - putting in place additional controls and monitoring aroundkey operational risk parameters that could see an increase in a lockdown andwork-from-home environment. This includes parameters around cyber security which are beingtracked closely.

(d) Maintaining liquidity - enhanced monitoring of liquidity position including depositmix deposit withdrawals etc.

(e) Conserving capital-credit advisories around originating and disbursal of newexposures with enhanced monitoring of existing vulnerable credit exposure. The Bank hasalso put in place policies to implement the various regulatory dispensations andinterventions that have been put in place during the course of the COVID - 19 Pandemic bythe government and by the RBI.

The governance around the above has been put in place under the aegis of a CERT headedby the Executive Director (Corporate Centre) of the Bank reporting directly to theManagement Committee of the Bank.

The CERT meets regularly to review the situation under each of the said fronts toassess the risk profile which required specific interventions and to take appropriatemitigation measures in response to the situation at the ground level.

CSR Initiatives towards COVID - 19 Pandemic

The onset of the calendar year 2020 ushered with it a global pandemic that rapidlyspread across the globe impacting lives livelihoods and most significantly putting themedical infrastructure under tremendous stress.

During these trying times the Bank as a responsible corporate citizen proactivelyundertook various steps to mitigate the hardships of the community affected by thepandemic. This included collaborating with various Government and Local Bodies like theMunicipal Corporations District Authorities Police Departments and medical centres - thefrontline warriors to provide vital medical accoutrements like PPE kits maskssanitizers ventilators intubation boxes thermal guns and other essential apparatus withthe mission to tackle the grim situation. The Bank during the year covered more than 15states across the country through this participative approach of endowing reliefmaterials. The Bank adopted a multi-pronged approach to provide succour to its customersemployees business partners and the community at large that integrated both curative andpreventive measures.

The efforts of the Bank were ably buttressed by Axis Bank Foundation (ABF) whichleveraged its network of NGO partners to reach out to the affected communities through aslew of measures ranging from providing basic food hygiene supplies and ration kits tocreating awareness about the pandemic. The ration kits comprising of food medical andhygiene supplies were provided to economically weaker households and vulnerablecommunities including migrant workers. ABF also initiated local production of masks toensure a steady supply to communities at an affordable price.

The joint efforts of the Bank and ABF underscored what the Axis Group truly stands for- being "Dil Se Open".

Annexures

The following documents are annexed to the Directors' Report:

(i) Management's Discussion and Analysis Report of the Bank for the financial yearended 31 March 2021.

(ii) Independent Auditor's Certificate on Compliance with the Corporate GovernanceRequirements under the SEBI Listing Regulations.

(iii) Report on Corporate Governance of the Bank for the financial year ended 31March 2021.

(iv) Disclosure on remuneration pursuant to Section 197 of the Companies Act 2013 readwith Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.

(v) Annual Report on CSR activities undertaken by the Bank during the financial yearended 31 March 2021 in terms of the Notification dated 22 January 2021 issued by theMCA.

(vi) Secretarial Audit Report of the Bank for the financial year ended 31 March 2021.

(vii) Certificate relating to non-disqualification of Directors from being appointed orcontinuing as Directors under Regulation 34(3) of the SEBI Listing Regulations.

Acknowledgements and Appreciations

The Board places on record its gratitude to the RBI MCA SEBI other Statutory andRegulatory Authorities Financial Institutions Stock Exchanges Registrar and ShareTransfer Agent Debenture Trustees Depositories and Correspondent Banks for theircontinued support and guidance.

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

The Board also expresses its heartfelt thanks and gratitude to each employee and theirfamilies for their continued commitment towards the Bank and its customers who bydemonstrating strong work ethics professionalism teamwork and initiatives helped theBank continue to serve its depositors and customers and reinforce its customer centricimage despite the challenging environment.

The Board also expresses its solidarity and gratitude towards medical professionalsbankers police armed forces and other frontline covid warriors who have cemented theirposition as the foremost champions of humanity. We salute their courage valour andselflessness in serving the society.

For and on behalf of the Board of Directors
Place: Pune Rakesh Makhija
28 April 2021 Chairman

.