Axis Bank Ltd
Chairman Speech
"Staying true to our ethos of customer centricity, our 78,000+ team members
collectively and individually went above and beyond their call of duty to serve our
customers, our communities and most importantly our nation and the economy during one of
the most challenging phases of our lifetime
Amitabh Chaudhry
Dear Shareholders,
Fiscal 2020-21 was truly an extraordinary year in history. The unprecedented health
crisis that still continues to unfold across the country, brought the best out of us as we
made steady progress towards our medium-term GPS objectives while delivering on our 'Dil
Se Open' promise to our stakeholders.
Through the year, our support to customers and communities in helping them emerge from
the COVID pandemic remained unwavering. I am proud of the commendable efforts and
character displayed by all the team members of Axis family. I would also like to thank all
the COVID Warriors for the tremendous job that they have been doing, especially the
healthcare professionals, who are constantly fighting all odds to save thousands of lives.
As the economy continues to combat the second wave of unprecedented COVID-19 pandemic,
we as a Bank reiterate our commitment of being 'Open' to our customers' needs, concerns,
challenges and aspirations. My heart goes out to all who have been directly impacted by
the pandemic. However, the fast pace of vaccination and slowdown in new infections in
several states do provide hope. I am confident that we can and will come out of this
together.
Despite the challenges that came our way in 2020, our proactive approach towards
strengthening the organisational core and technological capabilities, along with focused
execution helped us overcome the odds. Significant investments in digital banking,
adopting a cloud-first technology and analytics-driven decision-making definitely helped
us deliver strong operational performance. Every passing quarter we improved, led by our
focus on building granularity across business segments and ‘One Axis' philosophy to
drive sustainable and profitable growth. At the same time, we continue to remain prudent
and conservative in fortifying our balance sheet and enhancing our capital levels in an
uncertain environment, we all are hoping is short lived.
During the fiscal, we witnessed consistent and strong sequential growth in deposits,
advances and fees. Our focus towards building a quality liability franchise saw sustained
momentum with 18% growth in average granular retail deposits consisting of CASA and RTD
deposits. Our advances grew 9% y-o-y led by quality growth across our Retail, Commercial
Banking (CBG) and Corporate banking segments.
The operating profitability continued to remain steady with 16% growth in net interest
income and 10% growth in operating profits, despite our prudent stance on accounting
policies. Our focus on granularity in fees continued to play out well with the share of
granular retail and transaction banking, including forex-related fees increasing to 83%.
We also continued to deliver on our profitability vector of improvement in efficiencies
across our businesses, with reduction in cost to average assets to 1.96% from 2.09% in
previous fiscal.
We remained proactive and prudent in our approach towards provisioning and policies and
had been very selective towards restructuring and ECLGS.
Over the year, we took several actions across accounting and provisioning policy
changes to ensure that our balance sheet remains resilient across cycles. We increased our
provision coverage ratio from 69% to 72% while also building significant additional
non-NPA provisioning buffers of over '12,000 crores, which translates to standard asset
coverage ratio of 1.95%. Further, our rule-based provisioning norms have ensured that NPAs
are provided early and adequately. The Bank's net NPA declined from 1.56% to 1.05% and the
fund-based BB and below book remained flat in percentage terms as compared to the last
fiscal.
During fiscal 2020-21, the Bank successfully raised '10,000 crores of capital. This
strengthened the Bank's capital ratios further, with total adequacy of 19.12% and CET1
ratio of 15.40%. The Bank's strong balance sheet and healthy capital position ensures that
we enter this cycle from a position of strength.
As an organisation we have been constantly evolving, challenging ourselves to raise the
bar on innovation and strengthening our core, to transform into a more agile and
future-ready organisation. We have been working towards our goal to deliver distinctive
and world-class customer experience through an optimal mix of human touch and technology.
During the year, we continued to strengthen the core pillars of our franchise - people,
products and technology for driving executional excellence. We made some important
organisational structure changes in wholesale and retail segments to streamline and
simplify our functioning and bring in greater accountability, productivity and
efficiencies.
We also bolstered our leadership team significantly with our existing leaders taking on
larger and newer responsibilities, while we brought in new talent who had the breadth and
the experience to match our aspirations.
The pandemic also accelerated the technology investments and execution of
transformation projects.
We significantly ramped up the opex and capex spends in technology towards modernising
the core systems, scaling up the Cloud portfolio for supporting the real-time business
models and building resilience across our operations. We adopted a cloud-first approach
for our digital banking platform with over 50 initiatives on cloud, which is one of the
highest in this area within the Indian financial service sector.
During the year, we started a multi-year technology transformation programme that will
accelerate our journey towards our goal of being a sustainable future-ready Bank. We have
made significant investment in the ‘Business Solutions Group' to drive innovative
technology solutions and build greater collaboration between business and technology. We
have adopted agile methodology with multiple cross-functional squads working on over 220
high-priority, organisation-wide transformation projects.
The execution of these projects have largely remained on track with 50% of them fully
completed with promising outcomes in the form of reduction in turnaround times, improved
productivity and better customer experience. The implementation of tech-driven
transformation project
‘Sankalp' in our CBG segment, for example, has helped in reducing the loan
approval time by nearly 75% while pushing the productivity of RMs up by 2 to 3 times.
Our investments towards strengthening our operational and technological infrastructure
well before the outbreak of pandemic in India ensured that all our critical operations
were executed on time. Almost all of our branches and ATMs too remained functional
following all the health safety and regulatory guidelines.
We implemented one of the largest Work-From-Home programmes in the industry with over
20,000 concurrent users who were able to work remotely with access to all the Bank
systems. Further almost all of our team members co-ordinated seamlessly amongst themselves
and external stakeholders using the collaborative tools. We also enabled over 60,000
frontline team members on Bring Your Own Device (BYOD) environment, thereby helping them
to maintain connect and serve customers during the pandemic.
We also strengthened our digital collection infrastructure that helped in higher demand
resolution during the year.
The Bank has over the last decade built a strong Retail franchise with powerful
distribution network, wide deposit customer base and robust data analytics capabilities
that have enabled us to grow our business in challenging time period.
On the deposits side, our focus on deepening existing liability relationships and
acquiring the quality customers as part of premiumisation strategy continued to progress
well. During the year, we acquired over 6.7 million new liability relationships including
over 2.8 million new savings account relationships that had higher average balances across
retail savings and premium segment accounts.
Our emphasis on acquiring top corporate relationships in salary segment resulted in 25%
y-o-y growth in our salary deposits book.
During the year, our domestic retail advances book grew 11% as we continued with our
focus on growing the secured retail lending products segment like home loans, LAP, SBB
that grew by 12%, 20% and 30% y-o-y respectively. Our disbursements across the secured
segments continued to improve sequentially through the year and touched new highs aided by
improvement in operational processes and focused execution.
Over the last two years, we have initiated several large process transformation and
technology initiatives across our branches and other distribution channels to bring in
effectiveness and efficiencies while delivering distinctive and seamless omnichannel
experience to our customers. During the year, we sourced over 70% of retail assets from
existing Bank customers; with ~56% contribution from our branches.
We have also increasingly been leveraging our alternate Axis Virtual Centre (AVC)
channel that has over 1,500 virtual relationship managers across six centres to deepen
relationships and scale up growth. This channel continues to play an important role in
reaching out to customers with over 3 million customer contacts every month.
Our Deep Geo initiative continued to scale well as we expanded coverage to 1,577
branches and enrolled over 13,600 Common Service Centres (CSCs) to deepen presence in
rural and semi urban markets. The deposits from our Deep Geo branches grew 19% y-o-y while
the disbursements grew 59%.
As a result of our weekly region specific and focused product drives, strategic
partnerships with agri-corporates and digital enablement of processes, our overall rural
loan book grew 17% y-o-y.
We continued to maintain our strong positioning across the cards and payments
businesses as we focused on growing this segment profitably in a manner that meets our
risk and return hurdles. We have built strong partnerships with large players in retail
payments space, that now form the core of our Known to Bank (KTB) strategy through which
we intend to scale up our business further. During the year, we sourced nearly 2 lakh
credit cards through our partnerships with Flipkart and Google Pay. In the UPI space, we
further strengthened our position in fiscal 2020-21 with a market share of 17% as Payer
PSP. The Bank now has partnerships with all the major third- party UPI apps in the
ecosystem with more than 186 million customer VPAs registered as on 31 March, 2021. Our
Mobile Banking platform continues to be recognised as one of the highest rated financial
apps in the country.
Our wealth management business ‘Burgundy' continued to grow strongly with its AUM
growing 45% y-o-y to cross '2 trillion mark. Our vintage team of relationship managers,
wealth specialists and advisors, along with our strong product portfolio offerings helped
to scale up our ‘Burgundy Private' proposition to cover over 1,660 families with
assets of nearly '50,000 crores in just 15 months since its launch.
Our third-party products distribution business in Retail that we had created in fiscal
2019-20 to have a dedicated focus delivered strong 30% y-o-y fee income growth on back of
contextual product launches and enablement of digital processes. In our retail forex
business where we are one of the largest players, we launched outward remittance on mobile
app and fully digital forex card issuance platform to further enhance the customer
proposition.
We have made strong progress in our Digital Banking initiative that we had started in
fiscal 2019-20 with the objective of not only reimagining end-to-end customer facing
propositions, but also to scale up growth and productivity. We have 800-plus people fully
dedicated to digital transformation of the Bank including a strong in-house full stack
technology team of 110 people in roles across design, front-end and back-end development,
DevOps, Quality Assurance etc.
We have adopted OPEN approach towards reimagining customer journeys which involves
rebuilding entire journey with ‘zero' operations orientation using ‘proprietary'
in-house capabilities and delivering solutions that are ‘Ecosystems' capable and
metrics oriented. During the year, we launched bouquet of digital products across
deposits, loans, cards and investments, many of them being industry first like our
cloud-native loan management system built in-house and the full end-to-end digital forex
card proposition. These products have started making contribution to the Bank' sourcing
with close to 1.35 lakh digital SA accounts opened leveraging the video KYC while 71% of
fixed deposits and over 40% of Mutual Funds were sourced digitally in fiscal 2020-21. The
Bank's initiatives on the digital front have been widely recognised and the Bank was
awarded the 'Best Digital Bank' by Asiamoney and Financial Express during the year.
The Bank has been a pioneer in data analytics in Indian banking industry and has built
a dedicated team of over 400 members consisting of data scientists, data engineers and
business analysts with techno functional skillsets. We have been leveraging our strong
data analytics capabilities across the business functions for not only improving
cross-sell, customer experience, risk management and collections but also in fraud
detection, operational optimisation and budgeting. Big Data Lake is now an integral part
of our data analytics landscape and we have made significant progress towards further
enhancing our Big Data Tech Stack with ability to analyse and serve on Cloud. During the
fiscal, we also sourced 72% of credit cards and 57% of personal loans digitally backed by
our big data led analytics and proprietary machine learning models.
In the corporate segment, our focus has been to build granularity and grow the book
profitably, emphasising on segments that offer high growth opportunities and better RAROC.
During the year, our focused segments like Mid-Corporate and MNC delivered 31% and 49%
y-o-y growth. Our CBG which is one of the most profitable segments in Wholesale Bank
delivered strong performance with 13% y-o-y growth in advances.
We continued our focus on deepening relationships with better rated corporates with an
aim of not just lending balance sheet to these clients but also growing our wallet share
of non-credit business like trade, forex and cash management. We have made significant
progress towards becoming the transaction bank of choice for corporates with the share of
non-credit granular fees in overall corporate and commercial banking fee mix increasing to
57% in fiscal 2020-21 from 52% in fiscal 2019-20.
A key area of distinctiveness is our ability to deliver 'One Axis' to our customer. We
are currently one of a kind full-service Wholesale Bank that currently offers varied
solutions across all financial services. From, traditional banking products, debt capital
markets, investment banking to NBFC and Retail banking products like Burgundy wealth
management, salary and trust services, forex and commercial credit cards.
During the year, our various business segments within Retail and Wholesale Bank
collaborated with our subsidiaries to provide solutions to our clients, thereby deepening
the customer relationships further. We have over the last two years strengthened our
capabilities across our subsidiaries by strengthening the senior management teams,
developing innovative product offerings backed by improvement in processes and widening
our distribution reach through physical and digital channels.
The rigour and rhythm and concerted efforts made by teams collectively as One Axis have
started reflecting in the superlative financial performance of our domestic subsidiaries
that together delivered total profits of '833 crores, up 75% y-o-y. Axis AMC continued to
grow faster than the industry to deliver 2x growth in profits while our retail brokerage
subsidiary delivered 10x growth in profits. Axis Capital continued to maintain its
dominance in equity capital markets with 52 deals. Axis Finance too delivered profitable
growth with ROE of 14.60% and healthy capital adequacy ratio of over 20%. Even as our
investments in operating subsidiaries over last two years have remained flat at '1,815
crores, these operating subsidiaries delivered 17% CAGR growth in net worth.
However, our focus still continues to be on further scaling up the subsidiaries so that
they gain higher market share in their respective businesses. During the year, Axis
Securities acquired the customer trading accounts of Karvy Stock Broking to become the
third largest player with total customer base of 3.6 million. We have always believed in
increasing participation in the fast-growing life insurance space and recently completed
the stake acquisition in Max Life Insurance to become a co-promoter in India's fourth
largest insurance company.
GPS Progress
Through these unprecedented times, we have remain committed towards our ambition of
delivering on our medium-term strategic goals under the vectors of Growth, Profitability,
Sustainability. During the year, we continued to invest in several initiatives and
strategic projects in line with our GPS strategy.
Growth
- Led by our focus on building granularity across businesses and strong focus on
execution, we have delivered strong growth across our focused segments
- Our CASA deposits grew 20% with the share of CASA deposits increasing 372 bps to 45%
in overall deposits. Retail SA grew 19% while the CA growth stood at 26%
- Our Corporate loan book including TLTRO grew 16% with significantly higher growth
across our focused segments like Mid-Corporates and MNC
- Our CBG loan growth stood at 13% y-o-y
- Retail disbursements touched all-time highs during the fourth quarter
Profitability
- Net profit grew by 305% y-o-y
- Operating profits grew by 10% with NIMs improving to 3.53%
- Our cost to assets has moderated during the year to 1.96% from 2.09% and we continued
to focus on building cost consciousness across the Bank
- We continued to build granularity in our fee income with segments like third-party
products distribution and transaction banking growing by 30% and 9%, respectively
- Our domestic subsidiaries delivered 75% y-o-y growth in net profits
Sustainability
- In the last two years, we have taken concrete actions towards strengthening the core
around policies, processes, controls, and operations
- We have progressively strengthened our risk management framework and our credit
underwriting processes
- We have made significant progress on legacy issues with the proportion of BB and
below book having steadily declined over the years
- We have been proactive and prudent, and have built significant additional
provisioning buffers of over '12,000 crores with standard asset coverage ratio of 1.95%
As an organisation, we have always believed that our employees are our greatest asset
and true brand ambassadors of our culture and core values. Our employees, especially our
frontline team displayed unbridled enthusiasm, creativity, agility and ownership through
this challenging year. I take great pride in the fact that we were one of the first banks
to set in motion large-scale changes in our working model by introducing rostering across
branches, work from home' across large offices and ensuring hygiene safety and security
across the Bank. We also took the lead in introducing hybrid model of working and
redefining conventional work and jobs beyond full time, on-site employment with the launch
of GIG-A opportunities during the year. The new ways of working provided the much needed
flexibility and added to our productivity.
At Axis, we continued to invest in employee learning and their growth across levels,
businesses, functions and geographies. We also launched several certification and talent
development programmes for our middle management team towards building their leadership
capabilities so that they can shoulder the mantle of spearheading our GPS objectives to
the next level of achievement and success.
The community continues to be a critical stakeholder for us. During the year, the Bank
committed significant funds towards curbing the spread of COVID-19 pandemic. Axis Bank
Foundation played its role by providing relief supplies and facilitating higher standards
of hygiene and medical infrastructure in deep rural areas.
The Foundation also continued its initiatives towards positively affecting the rural
livelihoods by scaling up financial inclusion and skill development programmes to over 0.9
million households as part of its mission to reach 2 million households by 2025.
During the year, we made a conscious and concerted effort to scale up our
Environmental, Social and Governance (ESG)-aligned capabilities and performance by
integrating ESG topics into agendas of pertinent Board Committees. The Bank has
established an ESG Steering Committee comprising Heads of key departments who shall act as
ESG champions within and outside the Bank and help drive key mandates across the Bank. I
am happy to share that the Bank improved its ratings performance across key external ESG
assessment platforms like S&P Dow Jones, MSCI and CDP during the year, even as it
continued to feature in the prestigious FTSE4Good Emerging Index for the fourth
consecutive year in 2020.
Even as we continue to witness the impact of second wave of COVID, I sincerely hope
that the acceleration in vaccination drives and continued fiscal and monetary measures by
government and the regulator would help the economy to recover from this pandemic by H2 of
fiscal 2021-22. We are planning to use this disruption in business to further strengthen
our core. We believe that our building blocks are firmly in place with granularity now
built across businesses, improving operational performance, strong capital and balance
sheet position to counter any unforeseen risks arising out of COVID wave 2. The medium-
term growth drivers remain firmly in place on the back of several initiatives taken by the
government to boost manufacturing and small industries, and recent shift in global
manufacturing and supply chain dynamics towards India.
In such an environment, large banks with healthy operational performance, strong
balance sheet and capital position, superior risk management and operational capabilities
would continue to grow faster than the overall sector.
I reiterate my gratitude to all my colleagues for their relentless and selfless efforts
in keeping the promise of ‘Dil Se Open' to our stakeholders despite all odds. I thank
our external stakeholders for their continued willingness to partner with Axis Bank in its
long-term growth journey.
We as One Axis will continue to challenge ourselves and strive towards building a
distinctive Axis Bank.
Warm Regards,
Amitabh Chaudhry
MD & CEO
  Â
Axis Bank Ltd
Directors Reports
The Board of Directors of the Bank (the Board) have the pleasure of presenting the 27th
Annual Report of the Bank together with the Audited Financial Statements, Independent
Auditors Rs.Report and the Report on the business and operations of the Bank, for the
financial 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 |
707,306 |
640,105 |
10% |
| • Savings Bank Deposits |
204,473 |
173,592 |
18% |
| • Current Account Deposits |
113,276 |
90,114 |
26% |
| Advances |
623,720 |
571,424 |
9% |
| • Retail Advances |
334,514 |
305,400 |
10% |
| • Non-retail Advances |
289,206 |
266,024 |
9% |
| Total Assets/Liabilities |
996,118 |
915,165 |
9% |
| Net Interest Income |
29,239 |
25,206 |
16% |
| Other Income |
14,838 |
15,537 |
(4%) |
| • Fee Income |
10,686 |
11,019 |
(3%) |
| • Trading Profit(1) |
2,547 |
2,420 |
5% |
| • Miscellaneous Income |
1,605 |
2,098 |
(23%) |
| Operating Expenses |
18,375 |
17,305 |
6% |
| Operating Profit |
25,702 |
23,438 |
10% |
| Provision for Tax |
2,217 |
3,277 |
(32%) |
| Other Provisions and Write offs |
16,896 |
18,534 |
(9%) |
| Net Profit |
6,589 |
1,627 |
305% |
| Balance in Profit and Loss account brought forward from previous year |
26,190 |
24,323 |
|
| Amount Available For Appropriation |
32,779 |
25,950 |
|
| Appropriations |
|
|
|
| Transfer to Statutory Reserve |
1,647 |
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 |
29,958 |
24,585 |
|
(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 have
been 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 the
Bank.
Capital Structure
Share Capital
During the year, the Bank raised additional equity capital through issue and allotment
of 23,80,38,560 equity shares of Rs.2/- each of the Bank at a price of Rs.420.10 per
Equity Share, on 11 August, 2020, pursuant to a Qualified Institutional Placement Issue,
in accordance with the relevant provisions of Chapter VI of the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, Section
42 of the Companies Act, 2013 and the relevant Rules made thereunder.
Consequently, the total issued and paid-up equity share capital of the Bank increased
by Rs.47.61 crores and the reserves of the Bank increased by Rs.9,915.41 crores after
charging off issue related expenses. The said funds were raised to further strengthen the
Bank's CET 1 ratio and to ensure that the Bank is well placed to deal with COVID impact on
business from a position of strength, while ensuring that there is adequate capital to
support its growth as the economy revives. The Audit Committee of Board of the Bank (Audit
Committee) at its meeting held on 28 October, 2020, has reviewed and confirmed that the
Bank has utilised the said funds for the above-mentioned purposes and there was no
deviation in utilisation of the said funds.
During the year, the Bank also issued and allotted 40,32,158 equity shares of Rs.2/-
each of the Bank, pursuant to exercise of stock options by some of the Whole Time
Directors/Employees of the Bank and that of its subsidiary companies, under the various
Employee Stock Option Scheme(s).
Pursuant to the above allotments, the total issued and paid-up equity share capital of
the Bank increased by Rs.48.41 crores to Rs.612.75 crores as on 31 March 2021, as compared
to 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) |
10,31,75,065 |
3.37 |
| 2 Life Insurance Corporation of India |
24,48,21,645 |
7.99 |
| 3 General Insurance Corporation of India |
3,08,55,229 |
1.01 |
| 4 The New India Assurance Company Limited |
2,05,91,585 |
0.67 |
| 5 National Insurance Company Limited |
5,49,681 |
0.02 |
| 6 The Oriental Insurance Company Limited |
49,77,520 |
0.16 |
| 7 United India Insurance Company Limited |
9,13,248 |
0.03 |
| Foreign Investors |
|
|
| 8 Overseas Investors (including FIIs/OCBs/NRIs) |
1,76,62,09,517 |
57.65 |
| 9 Foreign Direct Investment (GDR) |
7,57,39,625 |
2.47 |
| Domestic Financial Institutions |
|
|
| 10 Financial Institutions/Mutual Funds/Banks/NBFC/INC/AIF |
60,51,95,660 |
19.75 |
| 11 Others |
21,07,19,877 |
6.88 |
| Total |
3,06,37,48,652 |
100.00 |
Re-classification to "Public" category from "Promoter" category
Three promoter entities of the Bank viz. United India Insurance Company Limited,
National Insurance Company Limited and The New India Assurance Company Limited have
requested the Board of the Bank to reclassify them to "Public" category from
"Promoter" category, in terms of Regulation 31A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, ("SEBI Listing Regulations") as
amended.
The Board at its meetings held on 27 February, 2021, 26 March, 2021 and 28 April, 2021
respectively, considered and approved the said requests, subject to the approval of the
Stock Exchanges, Statutory/Regulatory Authorities and the Shareholders of the Bank, in
terms of the SEBI Listing Regulations.
Listing
The Equity Shares of the Bank and the Unsecured Redeemable Non-Convertible Subordinated
Perpetual Debentures issued by the Bank, on a private placement basis, are listed on
National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The Bonds issued by
the Bank under the MTN programme are listed on Singapore Stock Exchange and the Green
Bonds 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 Stock
Exchange.
The Bank has paid the listing fees to the said Stock Exchanges, in respect of the above
securities, for the financial year 2020-21.
Dividend
In terms of Regulation 43A of the SEBI Listing Regulations, the Bank has formulated and
adopted a Dividend Distribution Policy with the objective of appropriately rewarding
Shareholders through dividends while retaining the capital required for supporting its
future growth. The said Policy was reviewed by the Board at its meeting held on 27 April,
2021 and the same has been hosted on the website of the Bank at
https://www.axisbank.com/shareholders-corner/corporate-governance.
The Diluted Earnings per Share (EPS) of the Bank for the financial year 2020-21 stood
at Rs.22.09 per equity share of Rs.2/- each as compared to Rs.5.97 per equity share of
Rs.2/- each in the previous financial year. The said increase in EPS reflects the Bank's
confidence in its ability to consistently grow earnings over time.
The Reserve Bank of India (RBI), through its notification dated 4 December, 2020 stated
that in view of the ongoing stress and heightened uncertainty on account of COVID-19,
banks should continue to conserve capital to support the economy and absorb losses. The
notification also stated that in order to further strengthen the banks' balance sheets,
while at the same time support lending to the real economy, banks shall not make any
dividend payment on equity shares from the profits pertaining to the financial year ended
31 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 to
not propose any dividend for the year ended 31 March, 2021, in light of the situation
developing around COVID-19 in the country and related uncertainty arising therefrom.
Deposits
Being a banking company, the disclosures relating to deposits as required under Rule
8(5) (v) & (vi) of the Companies (Accounts) Rules, 2014, read with Sections 73 and 74
of the Companies Act, 2013, are not applicable to the Bank.
Ratings of Various Debt Instruments
The details of all credit ratings obtained by the Bank along with any revisions
thereto, during the financial year 2020-21, for all the debt instruments outstanding as on
31 March, 2021, are disclosed in the Report on Corporate Governance, forming part of this
report.
Board of Directors
During the year, the following changes took place in the composition of the Board of
the Bank:
• Pursuant to the recommendation of the Nomination and Remuneration Committee of
Directors (the NRC), the Board on 29 April, 2020, approved the re-appointment of Shri
Rakesh Makhija as an Independent Director of the Bank, for his second term as such, with
effect from 27 October, 2020 up to 26 October, 2023 (both days inclusive) i.e. up to the
expiry of his tenure of 8 years as a director of the Bank, in terms of the provisions of
Section 10A (2A) of the Banking Regulation Act, 1949, after taking into account the
outcome of his performance evaluation. The said re-appointment was approved by the
Shareholders of the Bank at the 26th Annual General Meeting of the Bank held on
31 July, 2020, by means of a Special Resolution. During the said period, Shri Rakesh
Makhija will not be liable to retire by rotation, in terms of the provisions of Section
149 (13) of the Companies Act, 2013.
• Pursuant to the recommendation of the NRC, the Board on 29 June, 2020, approved
the 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 the
Bank, w.e.f. 1 July, 2020, in terms of Article 90 (1) (c) of the Articles of Association
of the Bank
and the provisions of Section 161 of the Companies Act, 2013. The said appointment was
approved by the Shareholders of the Bank, by means of an Ordinary Resolution at the 26th
Annual General Meeting of the Bank held on 31 July, 2020. Shri T. C. Suseel Kumar shall be
liable to retire by rotation, in terms of the provisions of Section 152 of the Companies
Act, 2013.
• Pursuant to the recommendation of the NRC, the Board on 22 July, 2020, approved
the appointment of Smt. Meena Ganesh as an Independent Director of the Bank, for a period
of 4 (four) years, with effect from 1 August, 2020 up to 31 July, 2024 (both days
inclusive). The said appointment was approved by the Shareholders of the Bank, by means of
an Ordinary Resolution passed through Postal Ballot on 9 December, 2020. During the said
period, Smt. Meena Ganesh shall not be liable to retire by rotation, in terms of the
provisions of Section 149 (13) of the Companies Act, 2013.
• Shri Pralay Mondal resigned as the Executive Director (Retail Banking) of the
Bank, with effect from the close of business hours on 14 September, 2020. The Board places
on record its appreciation for the contributions made by Shri Pralay Mondal during his
tenure as the Executive Director (Retail Banking) of the Bank.
• Pursuant to the recommendation of the NRC, the Board on 28 October, 2020,
approved the re-appointment of Smt. Ketaki Bhagwati as an Independent Director of the
Bank, for her second term as such from 19 January, 2021 up to 18 January, 2024 (both days
inclusive) i.e. up to the expiry of her tenure of 8 (eight) years as a Director of the
Bank, in terms of the provisions of Section 10A (2A) of the Banking Regulation Act, 1949,
after taking into account the outcome of her performance evaluation. The said
re-appointment was approved by the Shareholders of the Bank, by means of a Special
Resolution, 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 of
Section 149 (13) of the Companies Act, 2013.
• Pursuant to the recommendation of the NRC, the Board on 28 October, 2020,
approved the appointment of Shri Gopalaraman Padmanabhan as an Independent Director of the
Bank, for a period of 4 (four) years, with effect from 28 October, 2020 up to 27 October,
2024 (both days inclusive). The said appointment was approved by the Shareholders of the
Bank, 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 by
rotation, 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, 2020,
approved the appointment of Shri Ashish Kotecha as an Alternate Director to Shri Stephen
Pagliuca, Non-Executive (Nominee) Director of the Bank, with effect from 1 November, 2020,
in terms of the provisions of Section 161 of the Companies Act, 2013, the relevant Rules
made thereunder. The tenure of Shri Ashish Kotecha as an Alternate Director shall be
co-terminus with that of Shri Stephen Pagliuca, Original Director i.e. up to close of the
business hours on 18 December, 2021, in terms of the Investor Agreement dated 10 November,
2017.
• Shri Rohit Bhagat ceased to be an Independent Director of the Bank, with effect
from the close of business hours on 15 January, 2021, upon completion of the maximum
permissible tenure of 8 (eight) continuous years, in terms of the provisions of Section
10A (2A) of the Banking Regulation Act, 1949. The Board acknowledges the invaluable
contributions rendered by Shri Rohit Bhagat during his tenure as an Independent Director
of the Bank and places on record its deep appreciation for the insightful perspectives and
suggestions 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 the
Non-Executive (Nominee) Director of the Bank, with effect from 22 January, 2021, pursuant
to the guidance received from SUUTI. The Board acknowledges the invaluable contributions
rendered by Shri B. Baburao during his tenure as a Non-Executive (Nominee) Director of the
Bank and places on record its deep appreciation for the insightful perspectives and
suggestions 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, 2021,
approved 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 to
hold office at such up to the date of the ensuing Annual General Meeting, in terms of
Articles 90 (1) (c) of the Articles of Association of the Bank and the provisions of
Section 161 of the Companies Act, 2013. Smt. Vasantha Govindan shall be liable to retire
by 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 28
April, 2021, approved the proposals relating to:
• Re-appointment of Shri Amitabh Chaudhry as the Managing Director & CEO of
the Bank, for a further period of 3 (three) years, w.e.f. 1 January, 2022 up to 31
December, 2024 (both days inclusive). The terms and conditions relating to the said
re-appointment, including remuneration, will be placed for review and approval of the
Board at its meeting to be held in May, 2021, which shall be subject to the approval of
the 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 Meeting,
and who being eligible had offered himself for re-appointment, in terms of the provisions
of Section 152 (6) of the Companies Act, 2013.
Resolution(s) in respect of appointment/re-appointment of the Directors, as aforesaid,
have been included in the Notice convening the 27th Annual General Meeting of
the 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 been
appointed/re-appointed, have the integrity, expertise and experience (including
proficiency), 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 the
relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder, the
Banking Regulation Act, 1949, the Guidelines issued by the RBI and the relevant provisions
of the SEBI Listing Regulations relating to Corporate Governance, as amended, from time to
time.
The Bank has formulated and adopted the Succession Planning Policy for the Board of
Directors and Key Officials of the Bank (the Policy), which has been subjected to an
annual review by the NRC and the Board.
The objective of the Policy is to inter alia assess, identify and nominate suitable
candidates to fill vacancies that may arise for positions of the Non-Executive
Chairperson, Independent Directors, Managing Director & CEO (MD & CEO), Whole-Time
Directors, Group Executives, Key Managerial Personnel and other Key officials of the
Bank/subsidiary companies, from time to time, to plan for succession of the said roles and
to fill any vacancies that may arise out of impending move or retirement or resignation or
sudden exit or for any reason whatsoever in such roles, incumbent or named successors,
significant changes in role accountabilities, substantive changes in the business
parameters and changes to the role holder or successor's aspiration.
The Policy also seeks to identify the competency requirements for the said positions,
the process to identify potential candidates and develop required competencies through
planned training, development and learning initiatives.
The NRC is responsible to the Board for leading the succession planning process in
respect of appointments/re-appointments of Directors, employees in the grade of Senior
Management, 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 of
the Non-Executive (Part-Time) Chairperson of the Bank and the succession planning process
for the post of the Non-Executive (Part-Time) Chairperson/Independent Director is required
to be initiated 6 (six) months prior to the expiry of their current term or in case of
unforeseen circumstances, with immediate effect.
Further, the succession planning process for the post of the MD & CEO and
Whole-time Directors of the Bank is required to be initiated at-least 9 (nine) months
prior to the expiry of their current term or their date of retirement or as soon as the
Bank is informed of the decision of the MD & CEO or the Whole-time Director to resign
or opt for an early retirement from the services of the Bank, as the case may be, or in
case of unforeseen circumstances, with immediate effect.
The Policy also provides for the course of action to be initiated in case of delay or
non-receipt of regulatory/statutory approvals, relating to appointment/re-appointment of
the MD & CEO or the Whole-time Director of the Bank or in case of a sudden vacancy in
the position of MD & CEO or the Whole-time Director of the Bank, caused due to death
or permanent incapacitation or for any other reason whatsoever.
The NRC considers, the skill set, knowledge, regional and industry experience, track
record, expertise and other relevant information and adherence to the fit and proper norms
by each Director, before making appropriate recommendations to the Board with regard to
their appointment/re-appointment, which is designed to provide the Board with Members who
have diverse knowledge, practical experience and requisite set of skills to serve the
business interests of the Bank and enhance the overall effectiveness of the Board.
Wherever necessary, the NRC engages the services of an External Consultant/expert in
the field of succession planning, to identify and assess the suitability of candidates for
the post of a Director of the Bank.
The Bank has also formulated and adopted the Policy on 'Fit and Proper Criteria to
enable the NRC to assess and confirm to the Board that the person who is considered for
being appointed/re-appointed as a Director of the Bank, is compliant with the Fit and
Proper norms, as prescribed by the RBI and the relevant provisions of the Companies Act,
2013, the SEBI Listing Regulations, the Banking Regulation Act, 1949 and the Guidelines
issued by IRDAI, and as such is suitable to be appointed/re-appointed as a Director of the
Bank 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 the
Director, before considering his candidature for appointment/re-appointment as a Director
of 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 discharge
their responsibilities to the best of their abilities, individually and collectively in
order to be eligible for being appointed/re-appointed as a Director of the Bank.
The prescribed information as stated in the forms/declarations/undertakings/consent
given by the Directors (other than that of the Members of the NRC) are placed before the
NRC and those submitted by the Members of the NRC are placed before the Board, for its
review 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 (the
Policy), which aims at providing timely and wholesome orientation and training to its
Directors to ensure that they are well versed with the business, regulatory and
operational aspects of Banking.
The said Policy covers the following:
(i) Induction Program to be conducted for the Directors on their appointment on various
aspects relating to business and operations of the Bank.
(ii) Familiarization program to be conducted for Directors to familiarize them inter
alia with the Bank, their roles, rights, responsibilities in the Bank, nature of industry
in which the Bank operates and the business model of the Bank.
(iii) Continuous Education and Learning Program which includes training
programs/sessions, involving reputed consulting firms/experts, with in-depth expertise in
various areas taking into account the business requirement of the Bank, the existing skill
sets of the Directors and recommendations made by them.
Declaration of Independence
All the Independent Directors of the Bank have submitted the requisite declarations
stating that they meet the criteria prescribed for independence under the provisions of
Section 149 (6) of the Companies Act, 2013 and Regulation 16 of the SEBI Listing
Regulations, which were placed before the Board. The Board has confirmed and taken on
record the declaration of Independence provided by the Independent Directors, after
undertaking due assessment of the veracity of the same. In the opinion of the Board, all
the Independent Directors fulfil the conditions specified under the said norms and are
independent 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, the
Bank has obtained a Certificate from BNP & Associates, Practising Company Secretaries
confirming that none of the Directors on the Board of the Bank have been debarred or
disqualified from being appointed or continuing as Directors of the companies either by
the Securities and Exchange Board of India or the Ministry of Corporate Affairs or any
other Statutory/Regulatory Authorities. The said certificate is annexed as part of this
report.
Key Managerial Personnel
Shri Amitabh Chaudhry, Managing Director & CEO, Shri Rajiv Anand, Executive
Director (Wholesale Banking), Shri Rajesh Dahiya, Executive Director (Corporate Centre),
Shri Puneet Sharma, President & Chief Financial Officer and Shri Girish V. Koliyote,
Company 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 Corporate
Governance provides for evaluation of the performance of the Board, its Committees,
individual Directors and the Chairperson of a company.
The Bank has institutionalised the Board Performance Evaluation Process. The NRC is the
nodal agency for conducting the said performance evaluation. The NRC annually reviews and
approves the criteria and the mechanism for carrying out the exercise effectively.
The methodology used for the annual Board Performance Evaluation, the outcome, progress
made over last year and the proposed action for implementation during the financial year
2021-22, is provided in the Report on Corporate Governance, which forms part of this
report.
Meetings of the Board/Committees
The schedule in respect of the meetings of the Board/Committees, to be held during the
next financial year and for the ensuing Annual General Meeting is circulated in advance to
all the Members of the Board. During the year, 8 meetings of the Board were held and the
gap between the said meetings did not exceed the limit of 120 days, as prescribed under
the relevant provisions of the Companies Act, 2013, the relevant Rules made thereunder and
the 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 Bank,
is 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-Executive
Chairperson and Non-Executive Directors of the Bank and the Remuneration Policy for the
Managing Director & CEO, Whole-time Directors, Material Risk Takers, Control Function
Staff and other employees of the Bank (the Policies), in terms of the relevant provisions
of Section 178 of the Companies Act, 2013, the relevant Rules made thereunder, the SEBI
Listing Regulations relating to Corporate Governance and the Guidelines issued by the RBI,
in 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 Corporate
Governance, which forms part of this report. The said Policies have been hosted on the
website 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 been
disclosed 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 and
one step down subsidiary;
i) Axis Asset Management Company Limited undertakes the activities of managing the
mutual 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, equity
capital markets, institutional stock broking, mergers and acquisition advisory etc.
iv) Axis Finance Limited is an NBFC and carries on the activities of corporate and
structural 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 trade
receivables.
vii) Axis Trustee Services Limited is engaged in trusteeship activities, acting as
debenture trustee and as trustee to various securitisation trusts.
viii) Freecharge Payment Technologies Private Limited is in the business of providing
Merchant acquiring services, payment aggregation services, payment support services, and
business correspondent to a Bank/Financial Institution, distribution of Mutual Funds.
ix) Axis Bank UK Limited is the banking subsidiary of the Bank in the United Kingdom
and undertakes the activities of banking.
x) Axis Capital USA, LLC is a wholly owned subsidiary of Axis Capital Limited
incorporated in USA and provides financial services relating to equity capital market,
institutional stock broking to institutional investors in USA.
Merger of Freecharge Payment Technologies Private Limited (FCPTL) and Accelyst
Solutions Private Limited (ASPL)
On 27 March, 2018, the Board of Directors of ASPL and FCPTL had approved a Scheme for
Amalgamation of ASPL into and with FCPTL. ASPL and FCPTL filed the final petition for
approval of the said merger before the National Company Law Tribunal ('NCLT'). The
appointed date for amalgamation is 7 October, 2017 and the effect of the said merger was
to be given on this date or any other date as may be prescribed by the NCLT. Subsequent to
the final hearing in the matter conducted during the year, FCPTL received the copy of the
order approved by NCLT, Delhi and the same was filed with the Ministry of Company Affairs,
in November 2019.
However, in the case of ASPL, NCLT, Mumbai amended the appointed date of amalgamation
from 7 October, 2017 to 1 April, 2018. Since the Scheme of Amalgamation filed by the FCPTL
was already approved by NCLT, Delhi with the appointed date of 7 October, 2017, the order
of NCLT, Mumbai sanctioning the Scheme of Amalgamation could not be implemented due to
discrepancy in the appointed date, as aforesaid. Therefore, ASPL filed an application on
10 September, 2020 in NCLT, Mumbai to amend the appointed date from 1 April, 2018 to 7
October, 2017 as originally and mutually decided by FCPTL and ASPL and as mentioned in the
said Scheme of Amalgamation. However, since NCLT Mumbai was disinclined to grant
amendment, 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 setting
aside the order of NCLT, Mumbai. As such the said merger will be given effect from 7
October, 2017. The NCLT, Delhi had already approved the scheme of merger on 22 October,
2019. The said merger will be effective from the date of filing of certified copy of the
Order of NCLAT with Registrar of Companies.
Accordingly, accounting impact of the said Scheme has been considered in the
consolidated 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 of
merger with Axis Finance Limited has been approved by NCLT, Mumbai and the certified copy
of the order was received on 23 July, 2020 and approval of the Ministry of Corporate
Affairs (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, United
Kingdom. This transaction is subject to approval of the UK Financial Regulator, the
Prudential Regulation Authority (PRA).
Consolidated Financial Statements
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 read
with Rule 8 of the Companies (Accounts) Rules, 2014, as amended, the Bank has prepared its
consolidated financial statements which forms part of this report. The financial position
and performance of each of the Bank's subsidiary companies is given in the Management
Discussion & Analysis Report and the statement containing the salient features of the
financial statements of the said subsidiary companies of the Bank, which is annexed to
this report.
In accordance with the third proviso to Section 136(1) of the Companies Act, 2013, the
Annual Report of the Bank, containing therein its standalone financial statements and the
consolidated financial statements and all other documents required to be attached thereto
have also been hosted on the website of the Bank
https://www.axisbank.com/shareholders-corner/shareholders- information/annual-reports.
Further, in accordance with the fourth proviso to the said section, the audited annual
accounts of each of the said subsidiary companies of the Bank have been hosted on the
website of the Bank https://www.axisbank.com/shareholders-
corner/shareholders-information/annual-reports.
Any shareholder interested in obtaining a physical copy of the said financial
statements 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 for
inspection by the shareholders of the Bank and Trustees of Debenture holders at the
Registered Office of the Bank during business hours from 11.00 a.m. to 1.00 p.m. on all
working days except Saturdays, Sundays, Bank Holidays and National Holidays.
Related Party Transactions
During the year, the Bank has not entered into any materially significant transactions
with its Promoters, Directors, Management, Subsidiaries or Relatives of the
Directors/Management, which could lead to potential conflict of interest between the Bank
and these parties, other than transactions entered into in the ordinary course of its
business.
Transactions entered into by the Bank with related parties in the normal course of its
business were placed before the ACB. There were no transactions entered with related
parties, which were not in the normal course of the business of the Bank, nor were there
any 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 all
related party transactions, entered pursuant to the omnibus approval so granted, is placed
before the ACB for their review. The Bank has developed a Standard Operating Procedure for
the purpose of identifying and monitoring such transactions.
The Policy on Related Party Transactions has been reviewed by the Audit Committee and
the Board and the same has been hosted on the website of the Bank at
https://www.axisbank.com/shareholders-corner/corporate-governance/ , in terms of the SEBI
Listing Regulations, relating to Corporate Governance.
Employee Stock Option Plan (ESOP)
Since the financial year 2000-01, the Bank has formulated and adopted Employee Stock
Option 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 Board
of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999/Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
2014, as amended. The objective of the said ESOS is to enhance employee motivation, enable
employees to participate, directly or indirectly, in the long-term growth and financial
success of the Bank, to act as a retention mechanism by enabling employee participation in
the 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 26,50,87,000 stock options are
available for grant by the Bank to the eligible Employees/Directors of the Bank and that
of its subsidiary companies. The eligibility and number of stock options to be granted to
such eligible Employees/Directors is determined on the basis of the outcome of their
performance evaluation and such other criteria as may be approved by the NRC/Board, from
time to time.
During the period from February 2001 to January 2019, the Shareholders of the Bank had
approved the grant of stock options, as aforesaid, on seven occasions. Under the first two
ESOS of the Bank and in respect of the grant of stock options made by the Bank up to 29
April, 2004, the option conversion price was set at the average of the daily high-low
price of the Bank's equity shares traded during the 52 weeks preceding the date of
approval of grant by the Board/NRC, prevailing on the Stock Exchange which had the maximum
trading volume of the Bank's equity share during the said period. Thereafter, under the
third and subsequent ESOS of the Bank and in respect of the said grants made by the Bank
on or after 10 June, 2005, the stock option conversion price was changed to the latest
available closing price of the equity shares of the Bank, prevailing on the Stock Exchange
which recorded higher trading volume, on the day prior to the date of approval of grant by
the NRC.
Pursuant to the sub-division of the equity shares of the Bank, the Shareholders of the
Bank at the 20th Annual General Meeting held on 27 June, 2014, also approved
the consequential adjustments to the stock options granted to the eligible
Employees/Directors, under the various ESOS of the Bank, such that all stock options
available for grant (including lapsed and forfeited options available for reissue) and
those already granted but not vested and those vested but not exercised, as on the record
date fixed for the purpose of sub-division, were proportionately converted into options
bearing equity shares of the face value of Rs.2/- each of the Bank and the grant price of
all the outstanding stock options (unvested, vested and unexercised) as on the said record
date for the purpose of sub-division were proportionately adjusted by dividing the
existing 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 said
26,50,87,000 stock options, approved the grant of 29,47,96,853 stock options (including
3,04,10,573 stock options which had lapsed and were forfeited) to the eligible
Employees/Directors, in terms of the various ESOS of the Bank. The said stock options are
non-transferable and vest at rates of 30%, 30% and 40% on each of three successive
anniversaries following the date of respective grant, subject to standard vesting and
other conditions as set out in the respective ESOS of the Bank. The said stock options are
required to be exercised by the concerned eligible Employees/Directors, within a period of
five years, from the date of its respective vesting, in terms of the respective ESOS of
the Bank.
As of 31 March, 2021, out of the said 29,47,96,853 stock options so granted,
23,75,38,932 stock options have been vested, out of which 21,24,76,626 stock options have
been exercised and the balance 2,50,62,306 stock options remain unexercised. Further,
2,68,47,348 stock options remained unvested and 3,04,10,573 stock options had been treated
as lapsed and forfeited.
During the year, the Bank has granted stock options to the eligible employees/directors
of the Bank and that of its subsidiary companies in terms of the ESOS duly reviewed and
approved by the NRC, in terms of the provisions of the SEBI (Share Based Employee
Benefits) 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 the
website 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 Corporate
Governance and it constantly benchmarks itself with best practices, in this regard.
The Quarterly Report on Corporate Governance has been submitted by the Bank to the
Stock Exchanges, in terms of Regulation 27(2) of the SEBI Listing Regulations. The said
reports have been uploaded on the website of the Bank at
https://www.axisbank.com/shareholders-corner/corporate-governance/quarterly-reports.
The Report on Corporate Governance for the financial year 2020-21 along with the
Certificate issued by the Statutory Auditors of the Bank, confirming compliance with the
mandatory requirements relating to Corporate Governance as stipulated under Chapter IV of
the SEBI Listing Regulations, forms part of this report.
The Corporate Governance framework of the Bank incorporates all the mandatory
requirements as prescribed in the SEBI Listing Regulations. The Bank has also adopted the
non-mandatory requirements as recommended in the SEBI Listing Regulations, as detailed in
the Report on Corporate Governance, which forms part of this report.
Information under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013
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
the financial year 2020-21 is disclosed in the Report on Corporate Governance, which forms
part of this report.
Directors' Responsibility Statement
The Board of Directors of the Bank hereby declares and confirms the following
statements, 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 31
March, 2021, the applicable accounting standards had been followed along with proper
explanation relating to material departures.
b) That such accounting policies have been selected and applied consistently and
judgments and estimates have been made that 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, 2021 and of the
profit of the Bank for the year ended on that date.
c) That proper and sufficient care has been taken for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013 for
safeguarding the assets of the Bank and for preventing and detecting fraud and other
irregularities.
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 that
the same were adequate and were operating effectively.
f) That proper system to ensure compliance with the provisions of all applicable laws
was 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 under
Section 92 (3) read with Section 134 (3) of the Companies Act, 2013, and the same can be
accessed 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 respect
of 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 employed
throughout the year and were in receipt of remuneration of more than Rs.1.02 crores per
annum and seventeen (17) employees of the Bank who were employed for part of the year and
were 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 financial
statements of the Bank, including the consolidated financial statements, the auditor's
report and relevant annexures to the said financial statements and reports are being sent
to the Members and other persons entitled thereto, excluding the information in respect of
the said eighty six (86) employees of the Bank containing the particulars as specified in
Rule 5 (2) of the said Rules, which is available for inspection by the Members at the
Registered Office of the Bank during business hours of the Bank up to the date of the
ensuing Annual General Meeting.
Any Member interested in obtaining a copy thereof, may write to the Company Secretary
of the Bank at its Registered Office or at shareholders@axisbank.com .
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 solar
plants across rooftop over 245 branch locations.
(b) Solar power purchase under Power Purchase Agreement (PPA) Model for Banks Business
Continuity Centre (Data Centre), Bangalore ~ 3.50 lacs units p.m.
(c) Centralised Energy Management System (CEMS) augmented to 1,493 branches from
earlier 893 branches to monitor and control energy consumption.
(d) Attain Green Building standard ratings by Indian Green Building Council (IGBC) for
Green Energy at Axis House, Mumbai and Axis House, Noida by implementing the necessary
measures for Energy and operational Efficiency.
(e) Procure 100% Green Power (RE) through Electricity Board (Maharashtra) for large
offices, wherever feasible.
(f) Implement usage of Lithium based Battery Backup for all new UPS installations and
existing replacements.
(g) Implement usage of Invertor Based Air conditioning machines for all Metro and Urban
Branches and use of R32 gas for all Air conditioning installations.
(h) Replacement of conventional lighting to LED lights for all balance Branches within
FY 22.
(i) On Grid Inverter Solution to reduce diesel consumption in rural branches augmented
to 260 branches from earlier 100 branches. Estimated savings in Diesel consumption works
out to ~2.22 lacs litres per annum.
(j) Maintenance of unity power factor through APFC panels in auto mode for optimum use
of power at Axis House, Mumbai and Noida.
(k) Installation of Motion sensors for workstations and common area lighting at Axis
House, Mumbai, Regional Office Bengaluru. Introduce Motion sensor-based lighting in
upcoming Branches and Offices.
(l) Conversion of Food/Wet waste at Axis House, Mumbai, into manure through compost
machine 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 House,
Mumbai.
(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 Select
Large Offices.
(s) Installation of sensors in washbasins to optimise flow of water at Select Large
Offices.
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 Grid
Inverter across rural Branches.
(c) LED light replacement project has been undertaken under amortization model over
period 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 Internet
of Thing (IoT) based remote solar monitoring across 245 Branches.
(f) Expected additional investments ~ Rs.5 crore for Invertor based AC and UPS with
Lithium 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 has
undertaken various technology driven business initiatives to deliver value through
continuous technology adoption and innovation. During the year, a large scale IT
transformation was undertaken to strengthen Bank's technology capabilities further.
(a) Following the COVID-19 pandemic, the Bank has prioritized initiatives across its
digital channels to cope with the change in customer engagement. The Bank has already
delivered products such as ASAP a/c opening, full Video KYC capability for account
opening, PPF account openings, Mutual fund KYC, digital collections on its digital
platforms to improve customer experience.
(b) The Bank actively encouraged large scale Work-From-Home mandate and provided all
enablement necessary to support its employees to efficiently perform their duties. The
Bank triggered enterprise mobility and collaborative tools like MS Teams and Intune,
ramped up VPN/VDI capacity, quick provisioning and allocation of laptops across all
critical employees. In order to provide employees the convenience of using their personal
devices for sales and servicing activities, the Bank rolled out BYOD compatible
applications across products and businesses.
(c) The Bank has embarked on a transformation journey that cuts across all aspects of
IT function and focuses on areas like Engineering excellence - Agility and DevOps, Channel
architecture - Omni-channel experience , Application & data architecture - application
upgrade & advanced analytics capabilities, advancement of enterprise integration, and
standardized & virtualized infrastructure.
(d) While pushing to deliver new customer facing products, the Bank has also
strengthened its infrastructure to maintain high performance and availability standards
expected by customers and regulators. The Bank is re-architecting its technology
infrastructure to be Cloud native, allowing the necessary agility, speed and flexibility
for scale. The Bank has a multi-cloud set up that is supported by a strong governance to
identify applications that benefit from going to cloud, right sizing exercises, and
implementation of right cost controls while continuing to focus on security.
(e) The Bank continues to re-invent and re-invest in technologies including mobility,
cognitive intelligence, application programming interface (API) banking, Robotic Process
Automation and Artificial Intelligence/Machine Learning to develop winning propositions
for its customers. In order to drive seamless integration with partners, Bank's Open API
platform has been further enhanced to onboard partners thereby generating more business
and driving volumes. The Bank has scaled the adoption of robotics process automation and
Artificial Intelligence/Machine Learning augmenting operational efficiency, higher
accuracy and reduction in processing time while serving customers.
(f) The Bank has also undertaken a transformation journey to make the IT team
future-ready. The transformation program will build the foundation for becoming
best-in-class across key areas. The transformation program focuses on achieving 4 key
outcomes - a) deliver tech products faster b) enable critical capabilities c) improve
resilience d) optimize expenditure across engineering excellence, channel architecture,
integration, automation, infrastructure etc. The Bank has seen significant progress across
the targeted outcomes as it continues to build on the initial success.
(g) The Bank continues to pursue a holistic cyber security program with a comprehensive
Cyber Security Policy and Standards based on industry best practices in compliance with
regulatory guidelines. The Bank has deployed its cyber security structure and framework
based on National Institute of Standards and Technology (NIST) Standard. The Bank's cyber
security framework is built and operated around five fundamental areas including Identify,
Protect, Detect, Respond and Recover. The Bank is compliant to ISO27001 and PCIDSS
standards. The Bank has a 24x7 Security Operations Centre and Cyber Security Operations
System.
(h) The Bank has deployed Cyber Security controls to protect its information assets
from unauthorized access, hacking attempts, data loss and has implemented various
detection and monitoring technologies, to proactively detect and respond to any cyber
threats. Some of the controls are as follows:
a) Multifactor authentication has been enabled for users connecting through Remote
access.
b) Secure and isolated environment for Remote access to critical systems were
configured, to prevent sensitive data leak or unauthorized access.
c) Advanced End-Point controls and Data Leakage Prevention (DLP) control to detect and
prevent endpoints being target of cyber-attacks.
d) Spam and Phishing emails protection have been enabled to protect against email-based
cyber-attacks that were rampant during the pandemic.
Directors' Report
e) 24x7 security monitoring along with usage of Cyber Security Threat Intelligence to
detect malicious underground activities against the Bank.
f) In addition the above controls; the Bank has also enabled enhanced monitoring for
Remote users to detect and prevent; any Unauthorized and unusual remote access, User
access to Bank systems from unusual geographies, Concurrent user access from different
locations, etc. and Data Leakage monitoring for Web channel, Email channel and End Points.
ii) The benefits derived like product improvement, cost reduction, product development
or import substitution:
In addition to focusing on developing new age technology products, the Bank continues
to strengthen its core systems and applications with planned upgrades. The infrastructure
is also being upgraded to deliver improved resiliency. The Bank is also exploring open
source products and platforms to provide reliability and flexibility without adding a
significant cost of licensing and support. With initiatives such as Intelligent
Automation, the Bank has created Bot store and AI model store which have led to FTE cost
savings, TAT & error reduction.
iii) In case of imported technology (imported during the last three years reckoned from
the 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 years,
detailed 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 |
18,00,702.00 |
| 19-20 |
USD |
17,00,382.96 |
| 20-21 |
USD |
7,86,852.00 |
| Total |
|
42,87,936.96 |
(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 reasons
thereof:
NA.
The expenditure incurred on Research and Development: Nil Foreign Exchange Earning and
Outgo
The provisions relating to Section 134(3)(m) of the Companies Act, 2013 on particulars
relating to Foreign Exchange Earning and Outgo are not applicable to a Banking Company, as
such 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, as
stipulated under Regulation 34(2) (e) of the SEBI Listing Regulations, is provided as an
annexure to this report.
Risk Management
Pursuant to Regulation 21 of the SEBI Listing Regulations, the Bank has constituted a
Risk Management Committee. The details of the said Committee and its terms of reference
are set out in the Report on Corporate Governance, which forms part of this 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 explained in the Management's
Discussion 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 listed
entities based on their market capitalisation as on 31 March every year, are required to
submit their Business Responsibility Report (BRR) as a part of their Annual Report. The
Bank's BRR describing the initiatives taken by the Bank from an Environmental, Social and
Governance perspective has been hosted on the website of the Bank at
https://www.axisbank.com/shareholders-corner/shareholders-information/business-
responsibility-report. Any Member interested in obtaining a copy of the BRR may write to
the Company Secretary of the Bank at shareholders@axisbank.com or submit a written request
to 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 186
of the Companies Act, 2013, except sub-section (1), do not apply to a loan made, guarantee
given or security provided by a banking company in the ordinary course of its business.
The particulars of investments made by the Bank are disclosed in Schedule 8 of the
Financial Statements as per the applicable provisions of the Banking Regulation Act, 1949.
Corporate Social Responsibility
The Bank has constituted the Corporate Social Responsibility (CSR) Committee of the
Board, in compliance with the relevant provisions of Section 135 of the Companies Act,
2013, read with the Companies (Corporate Social Responsibility Policy) Amendment Rules,
2021, 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 of
the Bank formulated and adopted in terms of the revised CSR norms, as recommended by the
CSR Committee.
The CSR Policy contains the approach and guidance given by the Board taking into
account the recommendations of the CSR Committee, including principles for selection,
implementation and monitoring of the CSR Project(s)/Program(s) and formulation of the
Annual Action Plan. The CSR Policy has been hosted on the website of the Bank at
https://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 assessment
conducted, details of the amount available for set off, average net profits of the Bank
for the past three financial years, prescribed CSR obligation and expenditure, details of
the amounts spent or unspent by the Bank on CSR activities during the year under review,
details of creation or acquisition of capital asset, etc., in line with the revised CSR
norms 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 Indian
Accounting Standards (Ind AS) and prepare standalone and consolidated Ind AS financial
statements with effect from 1 April, 2018. Banks were also required to report the
comparative financial statements for the financial year 2017-18, to be published along
with the financial statement for the year beginning 1 April, 2018. However, the RBI in its
press release issued on 5 April, 2018 deferred the applicability of Ind AS by one year
(i.e. 1 April, 2019) for Scheduled Commercial Banks. Further, RBI in a circular issued on
22 March, 2019 has deferred the implementation of Ind AS till further notice.
In line with the RBI guidelines on Ind AS implementation, the Bank has formed a
Steering Committee comprising members from the concerned functional areas, headed by the
Executive Director (Wholesale Banking). A quarterly progress report on the status of Ind
AS implementation in the Bank is presented to the Audit Committee. During the financial
year 2016-17, the Bank had undertaken a preliminary diagnostic analysis of the GAAP
differences between Indian GAAP vis-a-vis Ind AS.
The Bank has also identified and evaluated data gaps, processes and system changes
required to implement Ind AS. The Bank is in the advanced stage of implementing necessary
changes in its IT system and other processes. The Bank has been holding workshops and
training for its staff, which will continue in the current year. The Bank is submitting
Proforma Ind AS financial statements to RBI on a quarterly basis. The Bank is also
examining impact of Ind AS on business planning, budgeting, taxation, capital planning and
on capital adequacy.
Statutory Auditors
At the 24th Annual General Meeting of the Shareholders of the Bank held on
20 June, 2018, M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Membership
Number 103523W/W100048), were appointed as the Statutory Auditors of the Bank to hold
office as such from the conclusion of the 24th Annual General Meeting until the
conclusion of the 28th Annual General Meeting, subject to the approval of the
Reserve 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, in
terms of Section 30 (1A) of the Banking Regulation Act, 1949, which is effective from the
financial year 2021-22. In terms of the said Circular, the statutory audit of Banks with
asset size of Rs.15,000 crore and above as at the end of 31 March, 2021, shall be
conducted under joint audit by a minimum of two audit firms. Further, in order to protect
the independence of the Statutory Auditor, banks can appoint auditors for a continuous
period 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 the
management to assess the implications on the Bank. The Board will review and approve this
item, and ensure compliance with the substantive/procedural requirements of this directive
and/or clarifications general or specific if any, issued by RBI in this matter at a
subsequent board meeting and also finalise the contents of the AGM notice in relation to
this item at its subsequent meeting.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the relevant
provisions of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the Bank had appointed M/s BNP & Associates, Company Secretaries, Mumbai, to act
as 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 prescribed
in the said Rules and set out in the Secretarial Audit Report, for the financial year
2020-21, which is provided as an annexure to this report.
There are no qualifications, reservations or adverse remarks made by the Secretarial
Auditor of the Bank, in its report. However, the Secretarial Auditor has made an
observation with respect to payment of an amount of Rs.41.43 lacs to the Securities and
Exchange Board of India (SEBI) to settle the matter in respect of an alleged default under
Regulation 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 28
December, 2020 from SEBI in relation to the alleged default under Regulation 7(2)(b) of
the SEBI (Prohibition of Insider Trading), Regulations, 2015. The Bank has without
admitting or denying the findings of facts and conclusions of law submitted a settlement
application 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. 41.43
lacs.
Pursuant to which, SEBI passed a Settlement Order on 15 February, 2021 (the Settlement
Order) and the proposed proceedings to be initiated for the alleged default has been
disposed off and the matter stands settled.
In terms of SEBI circular no CIR/CFD/CMD1/27/2019 dated 8 February, 2019, relating to
Annual Secretarial Compliance Report, the Bank had appointed M/s. BNP & Associates,
Company Secretaries, to conduct the Secretarial Compliance for the financial year 2020-21.
The Bank will submit the Annual Secretarial Compliance Report to the Stock Exchanges
within the prescribed time limit.
Maintenance of Cost Records
Being a banking company, the Bank is not required to maintain cost records under the
provisions 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 Act,
2013, neither the Statutory Auditors nor the Secretarial Auditor of the Bank have reported
any instances of frauds committed in the Bank by its officers or its employees.
Significant and Material Order Passed by Regulators or Courts or Tribunals Impacting
the Going Concern Status and Operations of the Bank
During the financial year 2020-21 no significant and/or material order was passed by
any Regulator, Court or Tribunal against the Bank, which could impact its going concern
status or 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 internal
financial controls relating to its financial statements.
The Board has discussed with the Management of the Bank the major financial risk
exposures and the steps taken by it to monitor and control such exposures, overseen and
reviewed the functioning of the Whistle Blower Mechanism (which is a part of the Bank's
Fraud Risk Management Policy) and the findings in respect of the investigations conducted
on frauds, which were material in nature and the actions taken by the Management, in this
regard.
CEO & CFO Certification
Certificate issued by Shri Amitabh Chaudhry, Managing Director & CEO and Shri
Puneet Sharma, President & CFO of the Bank, for the financial year ended 31 March,
2021, was placed before the Board at its meeting held on 27 April, 2021, in terms of
Regulation 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 of
the Bank, which occurred between the end of the financial year of the Bank to which the
financial 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 challenges
faced due to the outbreak of COVID - 19 Pandemic, ensured continuity in the operations of
the Bank.
The Bank on its part undertook series of pro-active steps right from the inception of
the COVID - 19 Pandemic crisis. The framework of proactive action has been focused on
reducing the heightened risks arising out of the COVID - 19 Pandemic across all facets of
risks impacting the business - safety of staff and business continuity from operational
risk, likely impact on asset quality from credit risk, trading risk due to sharp change in
underlying risk factors in the investment book, liquidity pressure owing to change in the
perception of borrower on cash flows as well as deposit withdrawals, owing to disruptions
under civic lockdown etc.
The actions have been taken on the following five fronts:
(a) Protecting people - issuing and implementing advisories around staff health,
hygiene and safe working environment in offices and branches, quarantine & social
distancing etc. This has been further enhanced by a flexible and responsive stance which
is aligned with the evolving situation on the ground, especially in the context of the
second wave, local authority requirements etc. During the second wave, under the
directions of Central Emergency Response Team (CERT), a war room was set up to ensure help
is provided for hospitalisation, medicine and other support including oxygen concentrators
and a comprehensive resource guide "With You" was made available. Further, to
protect our employees, CERT deployed a vaccination program in partnership for all our
staff members.
(b) Ensuring continuity - testing and deploying business continuity plans, including
driving and scaling up work-from-home initiative. Business operations and availability of
channels such as branches, contact centres and ATM have been monitored closely.
Introduction of Covid framework to facilitate smooth customer transactions even during
lockdown by keeping the risks at acceptable levels.
(c) Protecting operations - putting in place additional controls and monitoring around
key operational risk parameters that could see an increase in a lockdown and
work-from-home environment. This includes parameters around cyber security which are being
tracked closely.
(d) Maintaining liquidity - enhanced monitoring of liquidity position including deposit
mix, deposit withdrawals etc.
(e) Conserving capital-credit advisories around originating and disbursal of new
exposures with enhanced monitoring of existing vulnerable credit exposure. The Bank has
also put in place policies to implement the various regulatory dispensations and
interventions that have been put in place during the course of the COVID - 19 Pandemic by
the government and by the RBI.
The governance around the above has been put in place under the aegis of a CERT headed
by the Executive Director (Corporate Centre) of the Bank, reporting directly to the
Management Committee of the Bank.
The CERT meets regularly to review the situation under each of the said fronts, to
assess the risk profile which required specific interventions and to take appropriate
mitigation 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 rapidly
spread across the globe impacting lives, livelihoods and most significantly putting the
medical infrastructure under tremendous stress.
During these trying times, the Bank, as a responsible corporate citizen, proactively
undertook various steps to mitigate the hardships of the community affected by the
pandemic. This included collaborating with various Government and Local Bodies like the
Municipal Corporations, District Authorities, Police Departments and medical centres - the
frontline warriors, to provide vital medical accoutrements like PPE kits, masks,
sanitizers, ventilators, intubation boxes, thermal guns and other essential apparatus with
the mission to tackle the grim situation. The Bank, during the year covered more than 15
states across the country through this participative approach of endowing relief
materials. The Bank adopted a multi-pronged approach to provide succour to its customers,
employees, business partners and the community at large that integrated both curative and
preventive measures.
The efforts of the Bank were ably buttressed by Axis Bank Foundation (ABF) which
leveraged its network of NGO partners to reach out to the affected communities through a
slew of measures ranging from providing basic food, hygiene supplies and ration kits, to
creating awareness about the pandemic. The ration kits comprising of food, medical and
hygiene supplies were provided to economically weaker households and vulnerable
communities including migrant workers. ABF also initiated local production of masks to
ensure 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 year
ended 31 March, 2021.
(ii) Independent Auditor's Certificate on Compliance with the Corporate Governance
Requirements, under the SEBI Listing Regulations.
(iii) Report on Corporate Governance of the Bank, for the financial year ended 31
March, 2021.
(iv) Disclosure on remuneration pursuant to Section 197 of the Companies Act, 2013 read
with 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 year
ended 31 March, 2021, in terms of the Notification dated 22 January, 2021, issued by the
MCA.
(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 or
continuing 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 and
Regulatory Authorities, Financial Institutions, Stock Exchanges, Registrar and Share
Transfer Agent, Debenture Trustees, Depositories and Correspondent Banks for their
continued support and guidance.
The Board also places on record its appreciation to its valued customers for their
continued patronage and to the Shareholders of the Bank for their continued support.
The Board also expresses its heartfelt thanks and gratitude to each employee and their
families for their continued commitment towards the Bank and its customers, who by
demonstrating strong work ethics, professionalism, teamwork and initiatives helped the
Bank continue to serve its depositors and customers and reinforce its customer centric
image despite the challenging environment.
The Board also expresses its solidarity and gratitude towards medical professionals,
bankers, police, armed forces, and other frontline covid warriors who have cemented their
position as the foremost champions of humanity. We salute their courage, valour and
selflessness in serving the society.
|
For and on behalf of the Board of Directors |
| Place: Pune |
Rakesh Makhija |
| 28 April, 2021 |
Chairman |
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