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Director's Report


Change Company Name
Axis Bank Ltd
Banks - Private Sector
BSE Code 532215 ISIN Demat INE238A01034 Book Value 486.12 NSE Symbol AXISBANK Div & Yield % 0.08 Market Cap ( Cr.) 407,268.82 P/E 16.38 EPS 80.45 Face Value 2

Dear Members,

Your Board of Directors (the "Board") is pleased to present its report on the performance of Axis Bank Limited (the "Bank") together with the audited financial statements for fiscal 2024.

Financial Performance and State of the Bank's Affairs

The Bank provides a complete suite of banking products and financial services covering retail banking, wholesale banking and treasury operations and is the third largest private sector bank in India in terms of total assets, based on public filings of private sector banks. The Bank's total assets increased from ' 1,317,326 crores as at 31 March, 2023 to ' 1,477,209 crores as at 31 March, 2024. Furthermore, total deposits increased from ' 946,945 crores as at 31 March, 2023 to ' 1,068,641 crores as at 31 March, 2024 and total advances increased from ' 845,303 crores as at 31 March, 2023 to ' 965,068 crores as at 31 March, 2024.

Operating revenue increased by 22% year-on-year ("Y-o-Y") to ' 72,336 crores in fiscal 2024. Net Interest Income ("NII") increased 16% to ' 49,894 crores in fiscal 2024. Non-interest income consisting of fee, trading and other income increased by 39% to ' 22,442 crores in fiscal 2024. Operating expenses (excluding exceptional items for fiscal 2023) grew 30% to ' 35,213 crores in fiscal 2024. As a result, the operating profit grew by 16% to ' 37,123 crores. Provisions and contingencies increased by 53% to ' 4,063 crores in fiscal 2024. Net profit grew by 160% to ' 24,861 crores in fiscal 2024.

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

Particulars 2023-24 B 2022-23 Growth
Balance sheet:
Deposits 1,068,641 946,945 13%
Savings bank deposits 302,132 297,416 2%
Current account deposits 157,268 149,120 5%
Term deposits 609,241 500,409 22%
Advances 965,068 845,303 14%
Retail advances 583,264 487,571 20%
Non-retail advances 381,804 357,732 7%
Total assets / liabilities 1,477,209 1,317,326 12%
Profit & loss account:
Net interest income 49,894 42,946 16%
Other income 22,442 16,143 39%
Fee income 20,257 15,858 28%
Trading profit1 1,731 (242) -
Miscellaneous income 454 527 (14%)
Operating expenses 35,213 27,040 30%
Operating profit 37,123 32,049 16%
Provisions and contingencies (other than tax) 4,063 2,653 53%
Profit before exceptional items and tax 33,060 29,396 12%
Exceptional items2 - 12,490 -
Profit after exceptional items, but before tax 33,060 16,906 96%
Provision for tax 8,199 7,326 12%
Net profit 24,861 9,580 160%
Particulars 2023-24 ? 2022-23 Growth
Balance in profit and loss account brought forward from previous year 44,145 38,100 -
Amount available for appropriation 69,006 47,680 -
Appropriations
Transfer to statutory reserve 6,215 2,395 -
Transfer to capital reserve 140 68 -
Transfer to investment reserve 242 (149) -
Transfer to special reserve 968 841 -
Dividend paid 308 307 -
Transfer to investment fluctuation reserve 879 73 -
Surplus carried over to balance sheet 60,254 44,145 -

1 Excluding merchant exchange profit.

2 Exceptional items comprise of the following items pertaining to the acquisition of Citibank India consumer business fully charged to the profit and loss account in fiscal 2023 (i) full amortisation of intangibles and goodwill amounting to ' 11,949 crores; (ii) impact of policy harmonisation of operating expenses and provisions amounting to ' 361 crores; and (iii) one-time acquisition related expenses amounting to ' 179 crores.

Key Performance Indicators

Key Performance Indicators B 2023-24 2022-23
Interest income as a % of working funds1 8.05 7.09
Non-interest income as a % of working funds1 1.65 1.37
Net interest margin (%) 4.07 4.02
Return on average net worth (%) 18.86 18.38*
Operating profit as a % of working funds1 2.73 2.67*
Return on average assets (%) 1.83 1.82*
Profit per employee2 (' in lacs) 25.29 10.94
Business (Deposits less inter-bank deposits + advances) per employee2 (' in crores) 20.19 20.00
Net non-performing assets as a % of net customer assets3 0.31 0.39

1 Working funds represent average total assets.

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

3 Customer assets include advances and credit substitutes.

* Excluding exceptional items.

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 ' 1,591 crores in fiscal 2024. This translates into a return on investment of 54%. Consolidated net profit of the group for fiscal 2024 stood at ' 26,386 crores, growing 144% Y-o-Y. Consolidated return on equity for fiscal 2024 stood at 19.29%, up 1,003 bps Y-o-Y, with subsidiaries contributing 43 bps.

Divergence in Asset Classification and Provisioning for NPAs

In terms of RBI guidelines, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI's annual supervisory process in their notes to accounts to the financial statements. The disclosure is required if either or both of the following conditions are satisfied: (a) the additional provisioning for NPAs assessed by RBI exceeds 5% of the reported profit before provisions and contingencies for the reference period; and (b) the additional gross NPAs identified by RBI exceed 5% of the published incremental gross NPAs for the reference period.

Based on the above, no disclosure on divergence in asset classification and provisioning for NPAs is required with respect to RBI's annual supervisory process for fiscal 2023.

Dividend

In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "SEBI Listing Regulations"), the Bank has formulated and adopted a Dividend Distribution Policy, which was reviewed by the Board. The said policy is available on the website of the Bank at https://www. axisbank.com/shareholders-corner/corporate-governance. The Bank has been in compliance with its Dividend Distribution Policy during the past three fiscal years.

In view of the overall performance of the Bank, while retaining capital to support future growth and in line with the Dividend Distribution Policy, the Board at its meeting held on 24 April, 2024, recommended a final dividend of ' 1/- per equity share of ' 2/- each fully paid (i.e., 50% of the face value), subject to the approval of members at the ensuing 30th Annual General Meeting (the "AGM"). Upon approval, the dividend will be paid to the members whose names appear in the register of members of the Bank and in the statement of beneficiary position furnished by the National Securities Depository Limited and the Central Depository Services (India) Limited as on the record date i.e., Friday, 12 July, 2024. The total dividend payout will be approximately ' 308 crores resulting in a payout of 1.24% of the standalone profit after tax of the Bank. Additional shares issued by the Bank pursuant to exercise of stock options / stock units, until the record date shall also be eligible for such proposed dividend. The total dividend payout shall stand modified accordingly. In terms of the provisions of the Income Tax Act, 1961, dividend income is taxable in the hands of the members, and therefore will be subject to deduction of applicable tax.

In terms of Accounting Standard (AS) - 4 ‘Contingencies and Events Occurring After the Balance Sheet Date' as notified by the Ministry of Corporate Affairs (the "MCA") under Section 133 of the Companies Act, 2013 (the "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, 2024.

Integrated Annual Report

In terms of SEBI circular dated 6 February, 2017, the Bank has voluntarily published its first Integrated Annual Report for fiscal 2024, which includes both financial and non-financial information and is based on the International Integrated Reporting Framework ("IIRC"). This report covers aspects such as organisation's strategy, governance framework, performance, risk management and prospects of value creation based on the six forms of capitals viz., financial capital, intellectual capital, manufactured capital, human capital, social and relationship capital, and natural capital.

Capital Structure Share Capital

During fiscal 2024, the Bank issued and allotted 9,718,363 equity shares of ' 2/- each, pursuant to exercise of stock options / stock units by the whole-time directors / employees of the Bank and of its subsidiary companies, under the Bank's Employee Stock Option Scheme, 2000-01 and Employee Stock Unit Scheme, 2022.

Consequent to the above, the total issued and paid-up equity share capital of the Bank increased by ' 1.94 crores to ' 617.31 crores as on 31 March, 2024, vis-a-vis ' 615.37 crores, as on 31 March, 2023. The equity shares issued under the above schemes 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 year.

Debt Instruments

During fiscal 2024, the Bank on 7 March, 2024, issued and allotted 385,100 fully paid, senior, rated, listed, unsecured, taxable, redeemable, long term non-convertible debentures (Series-7) of face value of ' 100,000 each, aggregating to ' 3,851 crores, at a coupon rate of 7.64% on a private placement basis for enhancing long term resources for funding infrastructure and affordable housing. The aforesaid debentures shall be redeemed at par on maturity on 7 March, 2034. The Audit Committee of the Board (the "ACB") at its meeting held on 24 April, 2024, has reviewed and confirmed that the Bank has utilised the said funds for the above-mentioned purposes.

Capital Adequacy Ratio

The Bank's overall Capital Adequacy Ratio ("CAR") under Basel III stood at 16.63% at the end of fiscal 2024, well above the benchmark requirement of 11.50% stipulated by the RBI. Of this, the Common Equity Tier I ("CET I") CAR was 13.74% (against minimum regulatory requirement of 8.00%) and Tier I CAR was 14.20% (against minimum regulatory requirement of 9.50%). As on 31 March, 2024, the Bank's Tier II CAR under Basel III stood at 2.43%.

Ratings of various Debt Instruments

The details of credit ratings obtained by the Bank along with any revisions thereto, if any, during fiscal 2024, for all the debt instruments outstanding as on 31 March, 2024, are provided in the Report on Corporate Governance, forming part of this Integrated Annual Report.

Reclassification to ‘Public' Category from ‘Promoter' Category

In terms of the letter received from the Administrator of the Specified Undertaking of the Unit Trust of India ("SUUTI"), one of the promoters of the Bank, withdrawing nomination of its director on the Board of the Bank, surrendering its nomination rights, consequent amendments to the Bank's Articles of Association, and pursuant to the approval of the Stock Exchanges for reclassification of SUUTI from promoter to public category, SUUTI has ceased to be a promoter with effect from 17 July, 2023. As on date, Life Insurance Corporation of India ("LIC") is the only promoter of the Bank.

Subsidiaries, Joint Ventures and Associates

Details of subsidiary and associate companies as on 31 March, 2024 are tabulated below:

Sr. No. Name of the Company

Subsidiary/ Associate

Business Activity

Percentage stake 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 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. 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 Step down subsidiary Pension fund management business under the National Pension System. 47.27% (Axis Asset Management Company Limited* - 51%, Axis Bank Limited - 9.02%)
12. Max Life Insurance Company Limitedf Associate Life insurance and long-term saving and protection products. 12.99%

* Axis Bank Limited holds 75% in Axis Asset Management Company Limited.

# Post receipt of all regulatory approvals, the Bank has increased its group's holding in the Associate to 19.02% by investing an additional sum of ' 1,612 crores in April 2024.

In addition, a new company named ‘Freecharge Business and Technology Service Limited' was incorporated on 16 March, 2024 to exclusively act as business correspondent and technological service provider to the Bank. No capital was infused by the Bank as on the date of this report.

As on 31 March, 2024, 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 Integrated 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 Integrated 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 Integrated Annual Report.

In accordance with the third proviso to Section 136(1) of the Act, the Integrated Annual Report of the Bank, containing standalone financial statements and the consolidated financial statements and all other documents required to be attached thereto is 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 subsidiary companies 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 at shareholders@axisbank.com.

Corporate Governance

The Bank is committed to upholding the highest standards of corporate governance and it constantly benchmarks itself with the best national and global governance and disclosure practices.

The Report on Corporate Governance for fiscal 2024 along with general shareholder information forms part of this Integrated Annual Report. M P Chitale & Co., Chartered Accountants (ICAI Firm Registration No. 101851W), Joint Statutory Auditor of the Bank, has issued a certificate confirming compliance with the provisions of corporate governance by the Bank for fiscal 2024, 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.

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 recommended in the SEBI Listing Regulations, as detailed in the Report on Corporate Governance.

Management's Discussion and Analysis Report

The Management's Discussion and Analysis Report as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, forms part of this Integrated Annual Report.

Board of Directors

Cessation of Directorship / Resignation / Retirement of Directors

1. T. C. Suseel Kumar, Non-Executive (Nominee of LIC, promoter of the Bank) Director of the Bank, ceased to be a member of the Board upon withdrawal of his nomination by LIC with effect from 29 July, 2023.

2. Manoj Kohli, Independent Director of the Bank, tendered his resignation with effect from the close of business hours on 11 August, 2023, due to personal and family commitments.

3. Rakesh Makhija, ceased to be Independent Director and Non-Executive (Part-time) Chairman of the Bank with effect from close of business hours on 26 October, 2023, upon completion of tenure under the provisions of the Banking Regulation Act, 1949.

4. Consequent to the reduction of stake held in the Bank by BC Asia Investments VII Limited, Integral Investments South Asia IV and BC Asia Investments III Limited (the entities affiliated to Bain Capital) below 2%, Ashish Kotecha, Non-Executive (Nominee of entities affiliated to Bain Capital) Director of the Bank, ceased to be a member of the Board, in terms of the Investment Agreement between the Bank and the entities affiliated to Bain Capital, with effect from the close of business hours on 14 December, 2023.

5. Ketaki Bhagwati, ceased to be an Independent Director of the Bank with effect from close of business hours on 18 January, 2024, upon completion of tenure under the provisions of the Banking Regulation Act, 1949.

The Board acknowledges the invaluable contributions rendered by T. C. Suseel Kumar, Manoj Kohli, Rakesh Makhija, Ashish Kotecha and Ketaki Bhagwati during their tenure as directors and places on record its deep appreciation for their guidance as members of the Board.

Appointment / Re-appointment of Directors

During fiscal 2024, pursuant to the recommendation of the Nomination and Remuneration Committee (the "NRC"), the Board appointed the following directors:

1. N. S. Vishwanathan was appointed as an Independent Director of the Bank for a period of four years with effect from 30 May, 2023 upto 29 May, 2027 (both days inclusive).

N. S. Vishwanathan was further appointed as the Non-Executive (Part-Time) Chairman of the Bank, for a period of three years with effect from 27 October, 2023 upto 26 October, 2026 (both days inclusive), in place of Rakesh Makhija.

The aforesaid appointments were approved by the members of the Bank at its 29th AGM held on 28 July, 2023. RBI vide its letter dated 26 July, 2023 has approved the appointment of N. S. Vishwanathan as the Non-Executive (Part-Time) Chairman of the Bank.

2. Mini Ipe, nominated by LIC, promoter of the Bank, was appointed as a Non-Executive (Nominee of LIC, promoter of the Bank) Director, with effect from 29 July, 2023. The said appointment was approved by the members of the Bank vide postal ballot on 26 October, 2023.

3. Subrat Mohanty was appointed as an Executive Director of the Bank, for a period of three years with effect from 17 August, 2023 upto 16 August, 2026 (both days inclusive). The said appointment was approved by the members of the Bank at its 29th AGM held on 28 July, 2023. RBI vide its letter dated 17 August, 2023 has also approved the said appointment.

4. Pranam Wahi was appointed as an Independent Director of the Bank for a period of four years with effect from 15 February, 2024 upto 14 February, 2028 (both days inclusive), subject to approval of the members of the Bank vide postal ballot notice dated 4 April, 2024, the result of which will be declared on or before 14 May, 2024.

5. Munish Sharda was appointed as an Executive Director of the Bank, for a period of three years with effect from 27 February, 2024 upto 26 February, 2027 (both days inclusive). The said appointment was approved by the members of the Bank vide postal ballot on 1 December, 2023. RBI vide its letter dated 27 February, 2024 has also approved the appointment.

6. Meena Ganesh was re-appointed as an Independent Director of the Bank on 25 April, 2024, for a further period of four years, with effect from 1 August, 2024 upto 31 July, 2028 (both days inclusive). Based on performance evaluation and recommendation of the NRC, the Board recommends her re-appointment to the members of the Bank.

7. G. Padmanabhan was re-appointed as an Independent Director of the Bank on 25 April, 2024, for a further period of four years, with effect from 28 October, 2024 upto 27 October, 2028 (both days inclusive). Based on performance evaluation and recommendation of the NRC, the Board recommends his re-appointment to the members of the Bank.

8. Amitabh Chaudhry was re-appointed as the Managing Director & CEO of the Bank, on 25 April 2024, for a further period of three years, with effect from 1 January, 2025 upto 31 December, 2027 (both days inclusive). Based on performance evaluation and recommendation of the NRC, the Board recommends his re-appointment to the members of the Bank. The terms and conditions relating to the said re-appointment, including remuneration, forms part of the AGM notice. The said re-appointment is subject to approval of the RBI.

9. Rajiv Anand, Deputy Managing 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 has formed an opinion that N. S. Vishwanathan, Pranam Wahi, Meena Ganesh and G. Padmanabhan 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.

N. S. Vishwanathan, Pranam Wahi, Meena Ganesh, G. Padmanabhan and Amitabh Chaudhary are not liable to retire by rotation. Mini Ipe, Subrat Mohanty and Munish Sharda are liable to retire by rotation.

Resolution(s) in respect of re-appointment of Meena Ganesh, G. Padmanabhan, Amitabh Chaudhry and Rajiv Anand are included in the notice convening the 30th AGM of the Bank.

Key Managerial Personnel

During the year, Subrat Mohanty and Munish Sharda were appointed as Executive Directors of the Bank, with effect from 17 August, 2023 and 27 February, 2024 respectively. As on the date of this report, following are the Key Managerial Personnel (the "KMP") as per 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.

Name of the KMP

Designation

Amitabh Chaudhry

Managing Director & CEO

Rajiv Anand

Deputy Managing Director

Subrat Mohanty

Executive Director

Munish Sharda

Executive Director

Puneet Sharma

Group Executive & Chief Financial Officer

Sandeep Poddar

Company Secretary

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 viz., 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 Integrated Annual Report.

Declaration of Independence

All the independent directors of the Bank have confirmed that they meet the criteria prescribed for independence under the provisions of Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and continue to comply with the Code of Conduct laid down under Schedule IV of the Act.

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 provide 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 annually reviews and approves the criteria and the mechanism for carrying out the exercise effectively.

The methodology used for the annual board performance evaluation, the outcome, progress made over last year and the proposed actions for implementation during fiscal 2025, are provided in the Report on Corporate Governance, which forms part of this Integrated 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 fiscal 2024.

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, 2024 and of the profit of the Bank for the year ended on that date.

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

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

e) adequate internal financial controls to be followed by the Bank 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 2024, nine meetings of the Board were held. Details of Board meetings, Board composition, committee meetings and committee composition are provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Audit Committee of the Board

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

During fiscal 2024, the Board has accepted all the recommendations made by the ACB.

Related Party Transactions

During fiscal 2024, all the related party transactions were entered in the ordinary course of the business of the Bank and on an arm's length basis. Accordingly, there were no transactions entered during the fiscal year that fall under the scope of Section 188(1) of the Act, hence, form AOC-2 is not applicable to the Bank.

The details of related party transactions are provided in note no. 3.5 of schedule 18 to the standalone financial statements and in note no. 2.8 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 Integrated Annual Report.

Adequacy of Internal Financial Controls related to Financial Statements

The Bank has laid down a system of internal financial controls with reference to its financial statements. The integrity and reliability of the internal control systems are achieved through clear policies and procedures, process automation, training and development of employees, and an organisation structure that segregates responsibilities. These controls are reviewed and tested by the internal audit team to ensure the accuracy and completeness of the accounting records and the preparation of reliable financial statements.

The internal financial controls of the Bank with respect to the financial statements are adequate and are operating effectively.

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 lnd 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 statements for the year beginning 1 April, 2018. However, the RBI in its press release issued on 5 April, 2018 deferred the applicability of lnd 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 lnd 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 lnd 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 lnd AS financial statements to RBI on a half-yearly basis.

In line with the RBI guidelines on lnd AS implementation, the Bank has formed a Steering Committee comprising of members from the concerned functional areas, headed by the Deputy Managing Director. The Steering Committee reviews the proforma Ind AS financial statements and provides guidance on critical areas of implementation on a periodic basis. A progress report on the status of lnd AS implementation in the Bank is presented to the ACB and the Board on a quarterly basis. Accounting impact on the application of Ind AS shall be recognised as and when it becomes statutorily applicable to banks and in the manner so prescribed.

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, 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 Integrated 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

In order to enhance employee motivation, create a retention mechanism, usher in an ‘owner-manager' culture, align the interest of the key executives / employees with that of the shareholders 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 Bank's long-term growth and financial success, the following share based employee benefit schemes have been formulated and adopted by the Bank:

• Axis Bank Employee Stock Option Scheme, 2000-01 ("ESOS")

• Axis Bank Employee Stock Unit Scheme, 2022 ("ESUS")

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"]. A certificate from the Secretarial Auditor of the Bank that the ESOS and ESUS have been implemented in accordance with the SEBI (SBEB and SE) Regulations and in accordance with the resolutions passed by the members of the Bank, will be placed at the ensuing AGM.

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

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, 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 report.

In accordance with the provisions of Section 136(1) of the Act, the Integrated 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 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 2024 is provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Auditors Statutory Auditors

M. P. Chitale & Co., Chartered Accountants (ICAI firm registration no. 101851W) and C N K & 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 year.

There are no qualifications, reservations, adverse remarks or disclaimers made in the statutory auditors' report.

In terms of the provisions of Section 139 of the Act, and applicable provisions of the Banking Regulation Act, 1949, the Board, on the recommendation of the ACB, recommends the appointment of M. M. Nissim & Co. LLP, Chartered Accountants (ICAI firm registration no. 107122W / W100672) and KKC & Associates LLP, Chartered Accountants (ICAI firm registration no. 105146W / W100621) as Joint Statutory Auditors of the Bank to hold office from the conclusion of the 30th AGM until the conclusion of the 33rd AGM, on such terms and conditions, including remuneration, as may be approved by the ACB, subject to the approval of the members and the RBI.

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.

Secretarial Auditor

The Bank has voluntarily adopted a policy on ‘Appointment of Secretarial Auditors', duly approved by the Board, on the recommendations of the ACB, which inter-alia provides for the selection, appointment and rotation of secretarial auditors.

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 has appointed Bhandari & Associates, Company Secretaries, as Secretarial Auditors of the Bank, for fiscal 2024.

The secretarial audit of the Bank was conducted in respect of the matters as prescribed in the said rules and set out in the secretarial audit report, for fiscal 2024, attached as Annexure 2 to this report. There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors of the Bank, in their report.

In terms of SEBI circular dated 8 February, 2019, relating to Annual Secretarial Compliance Report, the Bank has appointed Bhandari & Associates, Company Secretaries, for issuing the aforesaid report for fiscal 2024. The Bank has submitted the Annual Secretarial Compliance Report to the stock exchanges within the prescribed statutory timelines.

The Board, on the recommendation of the ACB, has re-appointed Bhandari & Associates, Company Secretaries, as Secretarial Auditors of the Bank, for fiscal 2025.

Certificate of Non-Disqualification of Directors

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 2024, pursuant to Section 143(12) of the Act, neither the Joint Statutory Auditors nor the Secretarial Auditors 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 applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively 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 the 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 Integrated 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 Integrated Annual Report.

Corporate Social Responsibility

The Bank has been formally undertaking Corporate Social Responsibility ("CSR") activities since 2006, with the founding of 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 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 formulated and adopted a CSR policy which provides the focus areas (in accordance with Schedule VII of the Act) under which various developmental initiatives are undertaken.

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

The Annual Report on CSR activities of the Bank during fiscal 2024, in accordance with the CSR Rules, is attached as Annexure 4 to this report.

Further details on CSR activities also form part of this Integrated Annual Report.

Business Responsibility and Sustainability Report

In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, top 1000 listed entities based on their market capitalisation as on 31 March, every year, were required to submit Business Responsibility Report ("BRR"), as a 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, which 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.

SEBI vide circular no. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12 July, 2023 has updated the format of BRSR to include BRSR Core which is a set of key performance indicators / metrics under nine ESG attributes. SEBI has further mandated the top 150 listed companies (by market capitalisation) to undertake a reasonable assurance of the BRSR Core from fiscal 2024.

The Bank's BRSR for fiscal 2024 along with the opinion on reasonable assurance from DNV Business Assurance India Private Limited, is available on the website of the Bank at https://www.axisbank.com/shareholders-corner/shareholders- information/business-responsibility-report.

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 of the Bank in Form MGT-7 as on 31 March, 2024, as mandated under the provisions of Section 92(3) read with Section 134(3)(a) 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.

Other Disclosures

Change in the nature of business: There has been no change in the nature of business of the Bank.

Significant and material order passed by regulators or courts or tribunals impacting the going concern status and future operations of the Bank: There were no significant and / or material orders passed by any regulator, court or tribunals against the Bank, which could impact its going concern status or future operations.

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.

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 to which the financial statements relate and the date of this report.

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.

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.

Annexures

The following statements / reports / certificates are annexed to the Board's Report:

1. Disclosures pursuant to Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

2. Secretarial Audit Report pursuant to Section 204 of the Act and Regulation 24A of the SEBI Listing Regulations.

3. Certificate from Secretarial Auditor on non-disqualification of directors pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulations.

4. Annual Report on CSR activities of the Bank for fiscal 2024.

5. The particulars of Conservation of Energy, Technology Absorption, and Foreign Exchange Earnings and Outgo as prescribed under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014.

Acknowledgements and Appreciations

The Board places on record its gratitude to the Government of India, 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 ongoing support and guidance.

The Board would also like to extend its sincere gratitude to each of its valued customers for the continued patronage and to all the members of the Bank for the ongoing support.

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

For and on behalf of the Board of Directors

Place: Mumbai

N. S. Vishwanathan

Date: 25 April, 2024 Chairman